Georgiadis v Australian & Overseas Telecommunications Corporation [1994] HCA 6; (1994) 179 CLR 297; (1994) 119 ALR 629; (1994) 68 ALJR 272 (9 March 1994)

HIGH COURT OF AUSTRALIA

GEORGIADIS v AUSTRALIAN AND OVERSEAS TELECOMMUNICATIONS CORPORATION (1994) 179 CLR 297
(1994) 119 ALR 629, (1994) 68 ALJR 272
F.C. 94/007
Number of pages - 24

Constitutional Law (Cth)

HIGH COURT OF AUSTRALIA
MASON CJ(1), BRENNAN(2), DEANE(1), DAWSON(3), TOOHEY(4), GAUDRON(1) AND McHUGH(5) JJ

CATCHWORDS

Constitutional Law (Cth) - Powers of Commonwealth Parliament - Acquisition on just terms - Commonwealth employees - Injured worker entitled to compensation and tight of action for damages at common law - Statutory removal of right of action - Whether acquisition of property other than on just terms - The Constitution (63 and 64 Vict. c. 12), s. 51(xxxi) - Commonwealth Employees' Rehabilitation and Compensation Act 1988 (Cth), s. 44.

HEARING

1993, March 9, 10; 1994, March 9
9:3:1994

ORDER

Answer the question stated to the Full Court as follows:
is s.44 (of the Safety Rehabilitation and Compensation Act 1988 (Cth)) invalid in its application to the plaintiff?
Answer: As to a cause of action that was not statute barred before his action was commenced, s.44 is invalid in its application to the plaintiff. As to a cause of action that was statute barred, unnecessary to answer at this stage.

Order that the defendant pay the plaintiff's costs of the question stated.

Remit the matter to the Supreme Court of New South Wales for determination in accordance with this judgment.

DECISION

MASON CJ, DEANE AND GAUDRON JJ Speaking generally, a person
employed by the Commonwealth or one of its agencies who suffered an
employment injury was, until 1988, entitled to workers' compensation
payments in accordance with the Compensation (Commonwealth Employees)
Act 1971 (Cth) ((1) There was an earlier scheme which commenced with
the Commonwealth Employees' Compensation Act 1930 (Cth) and
continued in various forms until 1971.) and, assuming negligence, was
also entitled to maintain an action for damages at common law ((2)
Note, however, that s.99 prevented any overlap in compensation and
damages payments.). The common law action might become barred in
accordance with a State limitation law if made applicable by s.79 of
the Judiciary Act 1903 (Cth) ((3) See Barton v. Commissioner for
Motor Transport [1957] HCA 50; (1957) 97 CLR 633 at 650; John Robertson and Co. Ltd.
v. Ferguson Transformers Pty. Ltd. (1973) 129 CLR 65 at 88-89, 93-95;
Maguire v. Simpson [1977] HCA 63; (1977) 139 CLR 362 at 376-377.).

2. A new scheme of compensation began on 1 December 1988 when the
substantive provisions of the Commonwealth Employees' Rehabilitation
and Compensation Act 1988 (Cth) ("the Act") ((4) The Act is now
known as the Safety Rehabilitation and Compensation Act 1988 (Cth).
See the Commonwealth Employees' Rehabilitation and Compensation
Amendment Act 1992 (Cth), s.4.) came into force. Sections 1 and 2 of
the Act commenced operation on 24 June 1988. The Act continues the
compensation entitlement of workers who were injured before the scheme
began ((5) See s.124. Note, however, that this entitlement may be
restricted, depending on entitlement under previous legislation.),
but, in some cases, it purports to extinguish the right to sue for
common law damages.

3. The plaintiff, Mr Constantinos Georgiadis, suffered injury in
the course of his employment with the Australian and Overseas
Telecommunications Corporation Limited ("Telecom") on five occasions
before the new compensation scheme came into effect. The last two
injuries occurred on 7 May 1985 and 4 March 1986. He brought an
action for damages in the Supreme Court of New South Wales in respect
of all five injuries, but not before the new scheme began.

4. It would seem that the time for bringing proceedings with respect
to the first three injuries had expired well before Mr Georgiadis
commenced his action. For the moment, those injuries can be put to
one side and, unless otherwise indicated, what follows is concerned
only with the causes of action based on the injuries sustained on
7 May 1985 and 4 March 1986. For convenience, those causes of action
are referred to as though they constitute a single cause. It is
common ground that, unless the Act validly provides otherwise, it is a
live cause of action.

5. By its defence, Telecom pleaded that Mr Georgiadis' cause of
action was barred by s.44 of the Act. That section provides:

"(1) Subject to section 45, an action or other
proceeding for damages does not lie against the
Commonwealth, a Commonwealth authority or an employee in
respect of:
(a) an injury sustained by an employee in the course
of his or her employment, being an injury in
respect of which the Commonwealth or Commonwealth
authority would, but for this subsection, be
liable (whether vicariously or otherwise) for
damages;
...
whether that injury ... occurred before or after the
commencement of this section.
(2) Subsection (1) does not apply in relation to an
action or proceeding instituted before the commencement of
this section."

6. Section 45 of the Act allows an employee who elects to that
effect before any compensation is paid to bring proceedings for
damages for non-economic loss, but only if compensation is payable
under s.24, 25 or 27. Compensation is payable under s.27 only if it
is also payable under s.24. By s.124(3), a person is not entitled to
compensation under s.24 or 25 and, hence, not entitled under s.27, in
respect of a permanent impairment that occurred before the scheme came
into effect, unless he or she was also entitled to a lump sum under
the scheme which applied when the injury was sustained. It is common
ground that Mr Georgiadis was not so entitled.

7. By his reply, Mr Georgiadis asserted that the Act is invalid by
reason that it effects an acquisition of property, namely, his right
to bring an action for damages, other than on just terms as required
by s.51(xxxi) of the Constitution. After his reply was filed, the
proceedings were removed into this Court under s.40 of the Judiciary
Act. When the matter came on for hearing, the Chief Justice stated
the following question for the consideration of the Full Court:

"(O)n the basis of the facts alleged in the statement of
claim ..., is s.44 (of the Act) invalid in its application
to the plaintiff?"

8. It is well established that s.51(xxxi) operates as a
constitutional guarantee and that, for that reason, "acquisition"
and "property" as used in that paragraph are to be construed
liberally ((6) Bank of N.S.W. v. The Commonwealth ("the Bank
Nationalization Case") [1948] HCA 7; (1948) 76 CLR 1 at 349-350; Attorney-General
(Cth) v. Schmidt [1961] HCA 21; (1961) 105 CLR 361 at 370-371; Clunies-Ross v. The
Commonwealth [1984] HCA 65; (1984) 155 CLR 193 at 201-202; Australian Tape
Manufacturers Association Ltd. v. The Commonwealth [1993] HCA 10; (1993) 176
CLR 480 at 509.). In particular, s.51(xxxi) is "not to be confined
pedantically to the taking of title ... to some specific estate or
interest in land recognized at law or in equity ... but ... extends to
innominate and anomalous interests" ((7) Bank Nationalization Case
(1948) 76 CLR at 349 per Dixon J). And "property" as used in
s.51(xxxi) extends to "every species of valuable right and interest
including ... choses in action" ((8) Minister of State for the Army
v. Dalziel [1944] HCA 4; (1944) 68 CLR 261 at 290 per Starke J; see also at 285,
295.), "money and the right to receive a payment of money" ((9)
Australian Tape Manufacturers Association Ltd. v. The Commonwealth
(1993) 176 CLR at 509; Mutual Pools and Staff Pty. Ltd. v. The
Commonwealth, unreported, High Court of Australia, 9 March 1994 at 10
per Mason CJ, 23 per Deane and Gaudron JJ). Clearly, a right to
bring an action for damages for negligence is a valuable right ((10)
See, as to the value of a cause of action for personal injuries which
is lost in consequence of negligence on the part of a solicitor,
Johnson v. Perez [1988] HCA 64; (1988) 166 CLR 351; Nikolaou v. Papasavas, Phillips
and Co. [1989] HCA 11; (1989) 166 CLR 394; Kitchen v. Royal Air Force Association
(1958) 1 WLR 563.). Thus, the question in this case is whether s.44
is a law with respect to the acquisition of that right for a purpose in
respect of which the Parliament has power to make laws within
s.51(xxxi).

9. Telecom and the Commonwealth, intervening, resisted the claim
that s.44 involves an acquisition of property within s.51(xxxi) in two
ways. First, they argued that, so far as the issue in this case is
concerned, s.44 does no more than extinguish a cause of action which
was not sued upon before the new compensation scheme came into effect.
In this context, it was pointed out that, whatever else happened,
neither Telecom nor any one else acquired the cause of action which
Mr Georgiadis lost. The second argument was that s.44 did no more
than modify the limitation period applicable to a cause of action
which vested before the new scheme came into operation.

10. It is clear that "not every compulsory divesting of property
is an acquisition within s.51(xxxi)" ((11) Trade Practices Commission
v. Tooth and Co. Ltd. [1979] HCA 47; (1979) 142 CLR 397 at 408 per Gibbs J; The
Commonwealth v. Tasmania. (The Tasmanian Dam Case) [1983] HCA 21; (1983) 158 CLR 1 at
247 per Brennan J). And as Mason J pointed out in The Tasmanian Dam
Case ((12) (1983) 158 CLR at 145.), there is a distinction between a
taking, which is the subject of the Fifth Amendment to the United
States Constitution and an acquisition, with which s.51(xxxi) is
concerned. His Honour went on to say that to constitute an acquisition
within s.51(xxxi) "it is not enough that (the) legislation adversely
affects or terminates a pre-existing right that an owner enjoys in
relation to his property; there must be an acquisition whereby the
Commonwealth or another acquires an interest in property, however
slight or insubstantial it may be" ((13) ibid. at 145.).

11. There is another aspect of the distinction between a taking and
an acquisition which is significant in the present case. "Taking"
directs attention to whether there has been a divesting, a question
which is answered by looking to the position of the person who claims
that he has been deprived of his property. On the other hand,
"acquisition" directs attention to whether something is or will be
received. If there is a receipt, there is no reason why it should
correspond precisely with what was taken. That is particularly so
with "innominate and anomalous interests" ((14) Bank Nationalization
Case (1948) 76 CLR at 349.). Thus, the fact that neither Telecom nor
any one else now has the cause of action which was previously vested in
Mr Georgiadis is not conclusive of the question whether there has been
an acquisition of property for the purposes of par.(xxxi).

12. Telecom and the Commonwealth relied on the difference between a
taking and an acquisition to argue that the extinguishment of a cause
of action cannot constitute an acquisition. Of course, it will often
be the case that it does not, as, for example, where the cause of
action is extinguished by judgment or by the effluxion of time ((15)
Note, this will only occur if there is legislation which bars the
action rather than the remedy. See, on this general question, The
Commonwealth v. Verwayen (1990) 170 CLR 394 at 405, 456, 473, 486-487,
497.). But the position may well be different in other circumstances.

13. It is often said in relation to constitutional guarantees and
prohibitions that "you cannot do indirectly what you are forbidden
to do directly" ((16) Wragg v. State of New South Wales [1953] HCA 34; (1953) 88 CLR
353 at 387-388. See, with respect to s.51(xxxi), Bank Nationalization
Case (1948) 76 CLR at 349-350; Attorney-General (Cth) v. Schmidt
(1961) 105 CLR at 371. See, generally, Grannall v. Marrickville
Margarine Pty. Ltd. [1955] HCA 6; [1955] HCA 6; (1955) 93 CLR 55 at 78; Caltex Oil (Aust.)
Pty. Ltd. v. Best [1990] HCA 53; (1990) 170 CLR 516 at 522-523.). That maxim is, in
fact, an important guide to construction, indicating that guarantees
and prohibitions are concerned with substance not form. Within that
context, it is relevant to consider, by way of example, a vested cause
of action against the Commonwealth for goods sold and delivered. If
legislation extinguished that cause of action, it would, in substance,
effect its acquisition ((17) See Mutual Pools and Staff Pty. Ltd. v.
The Commonwealth unreported, High Court of Australia, 9 March 1994 at
10 per Mason CJ, 24 per Deane and Gaudron JJ; see also at 61 per
McHugh J), for the Commonwealth, having obtained the goods in
exchange for its promise to pay, would be freed from its liability on
that promise. Accordingly, "acquisition" in s.51(xxxi) extends to
the extinguishment of a vested cause of action, at least where the
extinguishment results in a direct benefit or financial gain (which,
of course, includes liability being brought to an end without payment
or other satisfaction) and the cause of action is one that arises
under the general law. The position may be different in a case
involving the extinguishment or modification of a right that has no
existence apart from statute. That is because, prima facie at least
and in the absence of a recognized legal relationship giving rise to
some like right, a right which has no existence apart from statute
is one that, of its nature, is susceptible of modification or
extinguishment. There is no acquisition of property involved in the
modification or extinguishment of a right which has no basis in the
general law and which, of its nature, is susceptible to that course.
A law which effected the modification or extinguishment of a right of
that kind would not have the character of a law with respect to the
acquisition of property within s.51(xxxi) of the Constitution ((18)
See Health Insurance Commission v. Peverill, unreported, High Court of
Australia, 9 March 1994 per Mason CJ, Deane and Gaudron JJ).

14. So far as the issues in this case are concerned, the effect of
s.44, if valid, is to extinguish a vested cause of action that arose
under the general law. That is so even if the right to proceed
against the Commonwealth is properly identified as a statutory right.
And its effect is to confer a distinct financial benefit on the
Commonwealth and its agencies in respect of their pre-existing
liability for employment injuries falling outside s.45 of the Act.
In our view, the position is no different from that involved in the
extinguishment of a vested cause of action against the Commonwealth
for goods sold and delivered. Doubtless, Mr Georgiadis and other
workers provided their skill and labour on the basis that they were
entitled to damages at common law as well as workers' compensation
benefits if injured as a result of Telecom's negligence. In that
context, the right to damages can realistically be seen as part of the
overall quid pro quo for the work performed. Thus and so far as it
bears on the issues in this case, s.44 is, in substance, if not in
form, a law for the acquisition of causes of action against the
Commonwealth and its agencies which vested in employees before s.44
came into operation but which now fall outside s.45 of the Act.

15. Not every Commonwealth law with respect to the acquisition of
property falls within s.51(xxxi) of the Constitution. It may be
outside that paragraph because, although it effects an acquisition
of property, it is a law of a kind that is clearly within some other
head of legislative power ((19) As to why this is so, see Mutual Pools
and Staff Pty. Ltd. v. The Commonwealth, unreported, High Court of
Australia, 9 March 1994 at 7-9 per Mason CJ, 25-26 per Deane and
Gaudron JJ). That is the case with a law imposing taxation or a law
providing for the sequestration of the estate of a bankrupt. Or it may
be outside s.51(xxxi) because it effects an acquisition of a kind that
does not permit of just terms, as in the case of a law imposing a
penalty by way of forfeiture ((20) See Director of Public Prosecutions
v. Lawler, unreported, High Court of Australia, 9 March 1994 at 2-3 per
Mason CJ, 13-14 per Deane and Gaudron JJ). And, it
may fall outside s.51(xxxi) because it cannot fairly be characterized
as a law for the acquisition of property for a purpose in respect of
which the Parliament has power to make laws. That will generally be
the case with laws directed to resolving competing claims or providing
for "the creation, modification, extinguishment or transfer of rights
and liabilities as an incident of, or a means for enforcing, some
general regulation of the conduct, rights and obligations of citizens
in relationships or areas which need to be regulated in the common
interest" ((21) Mutual Pools and Staff Pty. Ltd. v. The Commonwealth,
unreported, High Court of Australia, 9 March 1994 at 28 per Deane and
Gaudron JJ; see also at 9 per Mason CJ).

16. It cannot be said that a law extinguishing a cause of action
for damages for employment injuries sustained as the result of the
negligence of the Commonwealth or its agencies is so clearly within
some other head of legislative power that it falls outside s.51(xxxi),
as is the case with a law imposing taxation. Nor does s.44 of the Act
effect an acquisition of a kind that does not permit of just terms,
as is the case with a law imposing a penalty by way of forfeiture.
However, the argument that s.44 does no more than modify the
limitation period applicable to a cause of action which vested before
the new scheme began is, in effect, an argument that s.44 is not
fairly characterized as a law with respect to the acquisition of
property within s.51(xxxi).

17. However, it is by no means accurate to describe s.44 as a
law modifying the limitation period applicable to causes of action
with respect to injuries sustained by Commonwealth employees before
the new scheme came into effect. Subject to s.45, which does not
apply in the present case, s.44 puts an end to a cause of action
against the Commonwealth or its agencies if it was not sued upon
before it, s.44, came into effect. Section 44 operated once and
for all as a final measure terminating those causes of action which
fall outside s.45, not as a measure prescribing the time in which
proceedings were to be commenced. Moreover, even if s.44 is
characterized as a law with respect to the rights and liabilities of
Commonwealth employees, on the one hand, and the Commonwealth and its
agencies, on the other, in relation to employment injuries, it does
not follow that it lacks the character of a law with respect to the
acquisition of property for a purpose for which the Parliament has
power to make laws ((22) See, as to the laws which bear more than one
character, Victorian Stevedoring and General Contracting Co. Pty. Ltd.
and Meakes v. Dignan [1931] HCA 34; (1931) 46 CLR 73 at 103-104; Crowe v. The
Commonwealth [1935] HCA 63; (1935) 54 CLR 69 at 94; Herald and Weekly Times
Ltd. v. The Commonwealth [1966] HCA 78; (1966) 115 CLR 418 at 434; Murphyores
Incorporated Pty. Ltd. v. The Commonwealth [1976] HCA 20; (1976) 136 CLR 1 at
8, 20-21; Mutual Pools and Staff Pty. Ltd. v. The Commonwealth,
unreported, High Court of Australia, 9 March 1994 at 27 per
Deane and Gaudron JJ).

18. One consequence of s.51(xxxi)'s operation through
characterization and concern with substance is that there will
inevitably be borderline cases in which the question whether a law
bears the distinct character of a law with respect to the acquisition
of property for a s.51(xxxi) purpose is finely balanced. The present
is such a case. On balance, we have reached the conclusion that s.44
does possess such a distinct character.

19. It may well be that, if s.44 appeared in legislation establishing
a compensation scheme applying to employers and employees generally
(assuming power to enact a scheme of that kind), it would not fairly
be characterized as a law for the acquisition of property for a
purpose for which the Parliament has power to make laws. But when
s.44 is viewed in the context of a scheme which applies only to
Commonwealth employees, it may be fairly characterized as a law for
the acquisition of the causes of action which vested in those
employees prior to the commencement of the new scheme. That
acquisition is for the purposes of that scheme, that is to say, it is
for a purpose for which the Parliament has power to make laws. It is
true that s.44 may be susceptible of other characterizations for other
purposes. For the purposes of s.51(xxxi) of the Constitution,
however, it bears a distinct character as a law with respect to the
acquisition of property within that paragraph ((23) See, generally,
Mutual Pools and Staff Pty. Ltd. v. The Commonwealth, unreported, High
Court of Australia, 9 March 1994 at 8-9 per Mason CJ, 27 per Deane
and Gaudron JJ).

20. The Act provides no compensation whatsoever with respect to the
causes of action which vested before the new scheme commenced and
which, being outside s.45, are, in substance, acquired by s.44.
Accordingly, s.44 is invalid to that extent by reason that it effects
an acquisition of property other than on just terms as required by
s.51(xxxi) of the Constitution.

21. As noted earlier, what has been said thus far concerns only
the two causes of action which were not statute barred before these
proceedings were commenced. The position with respect to a statute-
barred cause of action was not explored in argument. It is arguable
that a cause of action that is statute barred, whether it is the
action or the remedy that is barred, is not a valuable right and,
thus, not property for the purposes of s.51(xxxi). Whatever the
position, the reserved question, as it bears on a statute-barred cause
of action, is largely, if not entirely, academic. It does not require
an answer at this stage.

We would answer the question reserved as follows:
As to a cause of action that was not statute barred before
his action was commenced, s.44 is invalid in its application
to the plaintiff. As to a cause of action that was statute
barred, unnecessary to answer at this stage.

BRENNAN J The plaintiff, Mr Georgiadis, had a claim for damages for
negligence occasioning personal injuries against his employer, the
Australian Telecommunications Commission. By successive legislative
provisions ((24) Telecommunications Act 1975 (Cth), ss.4, 4A (inserted
by Telecommunications Amendment Act 1988 (Cth), s.6); Australian
Telecommunications Corporation Act 1989 (Cth), ss.12, 13;
Australian and Overseas Telecommunications Corporation Act 1991
(Cth), s.11(b).), the Commission's liability became the liability of
the defendant Corporation. On 17 September 1990 the plaintiff
commenced proceedings in the Supreme Court of New South Wales to
enforce his claim. His statement of claim alleges a series of
incapacitating accidents and it may be that some of his claims or part
of his claim would be barred by operation of the general statute of
limitations. Section 44 of the Commonwealth Employees' Rehabilitation
and Compensation Act 1988 (Cth) ("the 1988 Act") ((25) Now called the
Safety Rehabilitation and Compensation Act 1988 (Cth).) was pleaded as
a bar to the whole of the plaintiff's action. The matter was removed
into this Court in order to determine the constitutional validity of
s.44 in its application to the plaintiff's claim. It is unnecessary
to consider whether s.44 had any effect on the plaintiff's "stale"
claims. The validity of s.44 can be tested by reference to its effect
on claims which, s.44 apart, are enforceable against the defendant.
Section 44(1) reads as follows:

" Subject to section 45, an action or other proceeding
for damages does not lie against the Commonwealth, a
Commonwealth authority or an employee in respect of:
(a) an injury sustained by an employee in the course of
his or her employment, being an injury in respect of
which the Commonwealth or Commonwealth authority
would, but for this subsection, be liable (whether
vicariously or otherwise) for damages; or
(b) the loss of, or damage to, property used by an
employee resulting from such an injury;
whether that injury, loss or damage occurred before or
after the commencement of this section."

It is common ground that s.45 has no application to the plaintiff's
claims.

2. The question is whether the extinguishment of the plaintiff's
cause of action is an "acquisition of property on just terms from
any ... person for any purpose in respect of which the Parliament
has power to make laws" within the meaning of that text quoted from
s.51(xxxi) of the Constitution.
Just terms

3. The Commonwealth submitted that, if the extinguishment of the
plaintiff's cause of action amounts to an acquisition of property,
s.44 provides just terms for the acquisition "taking into account the
interests of the community". It was submitted that the plaintiff
could have brought his action after s.44 was enacted but before it was
proclaimed to come into force on 1 December 1988 and that the 1988 Act
merely shortened the limitation period. But it is erroneous to regard
s.44(1) as operating simply to shorten a period of limitation: in
terms it extinguished the causes of action to which it refers that
were in existence when s.44(1) was proclaimed to commence under s.2(2)
of the 1988 Act. The validity of a law must be tested by reference to
its legal operation on proprietary rights ((26) Fairfax v. Federal
Commissioner of Taxation [1965] HCA 64; (1965) 114 CLR 1 at 7; Actors and Announcers
Equity Association v. Fontana Films Pty. Ltd. [1982] HCA 23; (1982) 150 CLR 169 at
216.). If it imposes a burden which is otherwise invalid, it does not
acquire validity merely because an affected person could have acted to
avoid the burden before the law came into force. Further, it was
submitted that the legislative scheme which then came into force
provided monetary and other benefits without proof of negligence and
provided for speedy rehabilitation for injured workers and incentives
for their early return to work. The benefits provided by the 1988 Act
do not provide just terms for the extinguishment of a cause of action
vested in an injured worker. If a worker is entitled at common law to
a lump sum award in damages, it is not within the power of the
Commonwealth under s.51(xxxi) to limit the amount which it or a
statutory authority may have to pay the worker ((27) Johnston Fear and
Kingham and The Offset Printing Co. Pty. Ltd. v. The Commonwealth
[1943] HCA 18; (1943) 67 CLR 314 at 322, 327.) or to delay the worker's entitlement
to payment ((28) The Commonwealth v. Tasmania (the Tasmanian Dam Case)
[1983] HCA 21; (1983) 158 CLR 1 at 291.). In determining the issue of just terms,
the Court does not attempt a balancing of the interests of the
dispossessed owner against the interests of the community at large.
The purpose of the guarantee of just terms is to ensure that the owners
of property compulsorily acquired by government presumably in the
interests of the community at large are not required to sacrifice their
property for less than its worth. Unless it be shown that what is
gained is full compensation for what is lost, the terms cannot be found
to be just. Section 44 purports to extinguish a plaintiff's cause of
action without compensation; it does not provide just terms for the
extinguishment.

Is the plaintiff's claim "property"?

4. The validity of s.44 therefore depends on whether s.44 provides
for an acquisition of property. For reasons which I have given in
Mutual Pools and Staff Pty. Ltd. v. The Commonwealth ((29) Unreported,
9 March 1994.), I would hold that, if the plaintiff's rights against
the Commonwealth were proprietary in nature, the extinguishment of
those rights by s.44 would amount to an acquisition of property. The
Corporation acquired a release from liability in damages to the
plaintiff and as that liability was the correlative of the plaintiff's
claim, the release acquired is of the same nature as the claim
extinguished. What, then, is the nature of a claim in negligence for
damages for personal injury?

5. A plaintiff's claim in negligence causing personal injuries is
a chose in action, as the Court of Appeal decided in Curtis v.
Wilcox ((30) (1948) 2 KB 474.). In that case it was held that a
wife's claim for damages for pre-nuptial negligence was part of her
property ((31) By s.24 of the Married Women's Property Act 1882
(U.K.), "property" was defined to include a thing in action.) for
which she was entitled to sue her husband pursuant to the Married
Women's Property Act. Although such a cause of action is not
assignable, their Lordships rejected the argument that assignability is
the test of whether a claim in negligence was a chose in action ((32)
(1948) 2 KB at 481.) and, in my respectful opinion, rightly so. It is
not by reason of its nature that such a claim is not assignable; it is
for reasons of public policy that the courts have held that such a
claim is not assignable ((33) Trendtex Trading v. Credit Suisse (1982)
AC 679 at 703 per Lord Roskill.), thereby avoiding the evils of
champerty ((34) ibid.; see also per Lord Denning MR in the Court of
Appeal: (1980) QB 629 at 656.). And, as Mason J pointed out in Reg.
v. Toohey; Ex parte Meneling Station Pty. Ltd. ((35) [1982] HCA 69; (1982) 158 CLR
327 at 342-343; see also Australian Capital Television Pty. Ltd. v. The
Commonwealth [1992] HCA 45; (1992) 177 CLR 106 at 165-166.): "Assignability is not
in all circumstances an essential characteristic of a right of
property." It needs no extension of the meaning of "property" in
s.51(xxxi) to comprehend a chose in action for damages for negligence
causing personal injury. That paragraph, which is construed liberally
as befits a constitutional guarantee of just terms ((36) Australian
Tape Manufacturers Association Ltd. v. The Commonwealth [1993] HCA 10; (1993) 176 CLR
480 at 509.), protects common law choses in action which are vested in
an individual ((37) Minister of State for the Army v. Dalziel [1944] HCA 4; (1944)
68 CLR 261 at 285, 290, 295.).

The application of s.51(xxxi)

6. The Commonwealth, pointing to the common law immunity of the
Crown from liability in tort, submitted that the right to sue the
Commonwealth in tort is the creation of Commonwealth law (notably
ss.56 and 64 of the Judiciary Act 1903 (Cth)) and that a cause of
action that is seen to depend on a law of the Commonwealth is
inherently liable to extinguishment by any subsequent law of the
Commonwealth. Assuming, without deciding, that the Commonwealth's
liability in tort is dependent on laws of the Commonwealth, that
liability is not the creature of statute. The liability is created
by the common law and, provided the corresponding common law cause
of action is vested, the person in whom it is vested is entitled to
the protection of s.51(xxxi). It may be - it is not necessary to
decide - that the Commonwealth's immunity in tort was removed by laws
of the Commonwealth but, so long as that immunity is removed, the
causes of action created by the common law and vested in a person are
protected by s.51(xxxi).

7. I would therefore hold that s.44(1) of the 1988 Act attracts the
operation of s.51(xxxi) of the Constitution and, in relation to causes
of action enforceable at the time when s.44(1) commenced, is invalid.
I would answer the question reserved in the same terms as the answer
given by the Chief Justice, Deane and Gaudron JJ

DAWSON J The plaintiff, Mr Georgiadis, commenced an action in
the Supreme Court of New South Wales against the defendant, a
Commonwealth authority, claiming damages in negligence for personal
injuries sustained in the course of his employment by the Australian
Telecommunications Commission, whose assets and liabilities were
transferred to the defendant. In addition to denying negligence, the
defendant pleaded by way of defence that the plaintiff's claim is
barred by s.44 of the Safety Rehabilitation and Compensation Act 1988
(Cth) ("the 1988 Act"). The plaintiff in his reply alleged that the
1988 Act is beyond the power of the Commonwealth Parliament by reason
of s.51(xxxi) of the Constitution. Section 51(xxxi) provides that the
Parliament may make laws with respect to the acquisition of property
on just terms from any State or person for any purpose in respect of
which the Parliament has power to make laws.

2. The matter was removed into this Court under s.40(1) of the
Judiciary Act 1903 (Cth). During the course of proceedings in this
Court the Chief Justice stated a question for the consideration of the
Full Court, namely, whether, on the basis of the facts alleged in the
statement of claim, the 1988 Act is invalid in its application to the
plaintiff.
Section 44 of the 1988 Act relevantly provides:

"(1) Subject to section 45, an action or other
proceeding for damages does not lie against ... a
Commonwealth authority ... in respect of:
(a) an injury sustained by an employee in the course of
his or her employment, being an injury in respect
of which the ... Commonwealth authority would, but
for this subsection, be liable (whether vicariously
or otherwise) for damages;
...
whether that injury, loss or damage occurred before or after
the commencement of this section."

Section 45 of the 1988 Act provides:

"(1) Where:
(a) compensation is payable under section 24, 25 or 27
in respect of an injury to an employee; and
(b)... a Commonwealth authority ... would, but for
subsection 44(1), be liable for damages for any
non-economic loss suffered by the employee as a
result of the injury;
the employee may, at any time before an amount of
compensation is paid to the employee under section 24, 25 or
27 in respect of that injury, elect in writing to institute
an action or proceeding against ... the Commonwealth
authority ... for damages for that non-economic loss.
(2) Where an employee makes an election:
(a) subsection 44(1) does not apply in relation to an
action or other proceeding subsequently instituted
by the employee against ... the Commonwealth
authority ... for damages for the non-economic loss
to which the election relates; and
(b) compensation is not payable after the date of the
election under section 24, 25 or 27 in respect of
the injury.
(3) An election is irrevocable.(
(4) In any action or proceeding instituted as a result
of an election made by an employee, the court shall not
award the employee damages of an amount exceeding $110,000
for any non-economic loss suffered by the employee."

3. Thus s.44 of the 1988 Act removes the common law right of an
employee to claim damages against a Commonwealth authority unless s.45
applies. Section 45 only applies if s.24, 25 or 27 applies ((38)
Safety Rehabilitation and Compensation Act, s.45(1)(a).). Under
s.124(3), ss.24 and 25 do not apply to a person injured before the 1988
Act commenced if "the person was not entitled to receive compensation
of a lump sum in respect of that impairment ... under the (Compensation
(Commonwealth Government Employees) Act 1971 (Cth) ("the 1971 Act")) as
in force when the impairment ... occurred". Under the 1971 Act the
plaintiff was entitled to weekly or other compensation and to pursue a
claim for damages at common law ((39) See the 1971 Act, s.99, between
its commencement on 1 September 1971 and its repeal on 1 December
1988.). However, he was not entitled to a lump sum. A lump sum was
only payable to an employee under the 1971 Act for the incapacities set
out in ss.39-42 of the 1971 Act, which do not include back injuries.
The plaintiff's claim is in respect of a back injury. It follows that
ss.24 and 25 of the 1988 Act do not apply to the plaintiff. Liability
under s.27 of the 1988 Act is dependent upon liability under s.24 of
the 1988 Act.

4. The result is that the plaintiff could, but for the 1988 Act,
claim damages at common law. The 1988 Act purports to extinguish the
plaintiff's claim for damages for his back injury, although it would
allow a common law claim for damages for non-economic loss for a
similar injury occurring after the commencement of the 1988 Act.

5. It may be assumed for the purpose of this decision that the right
to maintain an action for the recovery of unliquidated damages for
personal injury constitutes property for the purposes of s.51(xxxi),
whilst recognizing that it is a personal right which is not capable
of assignment at law or in equity and would, in other contexts, not
be regarded as property ((40) See Poulton v. The Commonwealth (1953)
89 CLR 540 at 602; Hepples v. Federal Commissioner of Taxation (1990)
94 ALR 81 at 102-103.). Although I do not find it necessary
in this case to decide whether the plaintiff's bare right of action
constitutes property, it is appropriate to recognize that, because
s.51(xxxi) forms a guarantee against unjust appropriation, the word
"property" in that paragraph is to be given a generous interpretation.
It extends to innominate and anomalous interests not recognized as
proprietary either at law or in equity ((41) See Bank of N.S.W. v. The
Commonwealth ("the Bank Nationalization Case") [1948] HCA 7; (1948) 76 CLR 1 at
349-350; The Commonwealth v. Tasmania (The Tasmanian Dam Case) [1983] HCA 21; [1983] HCA 21; (1983)
158 CLR 1 at 246-247.).

6. But having said that, it is also necessary to observe that
s.51(xxxi) is concerned, not with the acquisition of financial benefit
or advantage, but with the acquisition of property. Property's worth
is not the same thing as property and the divesting of a proprietary
right is not the same thing as acquiring it. The divesting of a
proprietary right may amount to a taking, and were s.51(xxxi) to
contain a prohibition against the taking of property without just
compensation as does the Fifth Amendment in the United States, the
situation would be different. But the emphasis in s.51(xxxi) is on
acquisition and "there must be an acquisition whereby the Commonwealth
or another acquires an interest in property however slight or
insubstantial it may be" ((42) The Tasmanian Dam Case (1983) 158 CLR
at 145 per Mason J See also Reg. v. Ludeke; Ex parte Australian
Building Construction Employees' and Builders Labourers' Federation
[1985] HCA 84; (1985) 159 CLR 636 at 653; Australian Capital Television Pty. Ltd. v.
The Commonwealth [1992] HCA 45; (1992) 177 CLR 106 at 166, 198.).

7. The plaintiff's argument is that by extinguishing his right of
action against the defendant, the defendant acquired a benefit in the
form of the reduction of its liability to the plaintiff so that, in
effect, it acquired the plaintiff's right of action. I am unable to
accept that argument. For the reasons which Toohey J and I gave in
Mutual Pools and Staff Pty. Ltd. v. The Commonwealth ((43) Unreported,
9 March 1994.), any benefit or financial advantage derived by the
defendant was not in the form of property. The plaintiff's right of
action was extinguished, not acquired.

8. The plaintiff placed reliance upon a passage in the judgment of
Deane J in The Tasmanian Dam Case in which he said ((44) (1983) 158
CLR at 283.):

"Where, however, the effect of prohibition or regulation is
to confer upon the Commonwealth or another an identifiable
and measurable advantage or is akin to applying the
property, either totally or partially, for a purpose of the
Commonwealth, it is possible that an acquisition for the
purposes of s.51(xxxi) is involved. The benefit of land
can, in certain circumstances, be enjoyed without any active
right in relation to the land being acquired or exercised:
see, e.g., Council of the City of Newcastle v. Royal
Newcastle Hospital ((45) [1957] HCA 15; (1957) 96 CLR 493; (1959) 100 CLR 1.).
Thus, if the Parliament were to make a law prohibiting any
presence upon land within a radius of 1 kilometre of any point on
the boundary of a particular defence establishment and thereby
obtain the benefit of a buffer zone, there would, in my view, be
an effective confiscation or acquisition of the benefit of use
of the land in its unoccupied state notwithstanding that
neither the owner nor the Commonwealth possessed any right
to go upon or actively to use the land affected."

But in that passage, as I understand it, his Honour is referring to an
effective acquisition of the land or rights in the land, that is to
say, the acquisition in effect of rights of a proprietary nature. I
do not understand his Honour to be saying that the acquisition of a
financial advantage equivalent to the worth of the land or the rights
in it would be the same thing as the acquisition of the land or those
rights for the purpose of s.51(xxxi).

9. For these reasons, I would hold that the 1988 Act is not invalid
in its application to the plaintiff and would answer the question
raised in the negative.

TOOHEY J On 2 October 1992 there was an order for the removal into
the Court of:

"the cause constituted by the Notice of Appeal and the
Notice of Contention in proceedings numbered 15392 of 1990
in the New South Wales Supreme Court, Common Law Division".

In the course of the hearing the Chief Justice stated a question for
the consideration of the Full Court, namely, whether on the basis of
the facts alleged in the statement of claim, s.44 of the Commonwealth
Employees' Rehabilitation and Compensation Act 1988 (Cth)
("the Act") ((46) The Act is now known as the Safety Rehabilitation
and Compensation Act 1988 (Cth); see the Commonwealth Employees'
Rehabilitation and Compensation Amendment Act 1992 (Cth).) is invalid
in its application to the plaintiff.

2. The proceedings began with an action for damages for negligence
by the plaintiff, Mr Georgiadis, against his employer, the Australian
Telecommunications Corporation, a statutory body established by
the Telecommunications Act 1975 (Cth) ((47) Prior to the enactment of
the Telecommunications Amendment Act 1988 (Cth), the applicant was
employed by the Australian Telecommunications Commission whose assets
and liabilities were transferred to the Corporation upon the coming
into operation of the amending Act. The Commission had assumed the
relevant assets and liabilities of the Postmaster-General's Department
on enactment of the Telecommunications Act 1975 (Cth).). It is
alleged in the statement of claim that between 1974 and 1986 the
plaintiff suffered personal injuries in the course of his employment.
The defendant, which is the statutory successor to the employer
including its liabilities ((48) See Australian Telecommunications
Corporation Act 1989 (Cth); Australian and Overseas Telecommunications
Corporation Act 1991 (Cth).), pleaded in its defence to the statement
of claim that the plaintiff's claim "is barred by statute, to wit
Section 44 of the Commonwealth Employees Rehabilitation and
Compensation Act 1988".
Section 44 of the Act reads:

" (1) Subject to section 45, an action or other
proceeding for damages does not lie against the
Commonwealth, a Commonwealth authority or an employee in
respect of:
(a) an injury sustained by an employee in the course
of his or her employment, being an injury in
respect of which the Commonwealth or Commonwealth
authority would, but for this subsection, be liable
(whether vicariously or otherwise) for damages; or
(b) the loss of, or damage to, property used by an
employee resulting from such an injury;
whether that injury, loss or damage occurred before or
after the commencement of this section.
(2) Subsection (1) does not apply in relation to an
action or proceeding instituted before the commencement of
this section."

The plaintiff's action was not instituted before the commencement of
s.44.

3. In lieu of an action for damages, the Act introduced a scheme
of compensation providing weekly payments for incapacity ((49) s.19.)
and, in relation to permanent impairment, lump sums ((50) s.24.),
interim payments ((51) s.25.) and certain additional sums for
non-economic loss ((52) s.27.).

4. Where compensation is payable for permanent impairment and but
for s.44(1) there would be liability for non-economic loss, an
employee may elect to institute an action against the Commonwealth for
damages for that non-economic loss rather than be compensated pursuant
to the statutory scheme. The election is irrevocable. Section 44(1)
does not then apply in relation to that action; the damages which
may be awarded by a court for non-economic loss are limited to
$110,000 ((53) See generally s.45.).

5. But a person is not entitled to compensation in respect of a
permanent impairment unless he or she was entitled to a lump sum in
respect of that impairment "under the 1971 Act as in force when the
impairment ... occurred" ((54) s.124(3)(b)(iii).). The "1971 Act" is
a reference to the Compensation (Commonwealth Government Employees) Act
1971 (Cth) ((55) The 1971 Act was originally called the Compensation
(Commonwealth Employees) Act. It became the Compensation (Australian
Government Employees) Act upon enactment of an amending act of the same
name in 1973. The present title was inserted by the Compensation
(Commonwealth Government Employees) Amendment Act 1976.)
which the Act repealed. The plaintiff was not entitled to a lump sum
for permanent impairment to his back under the 1971 Act. He was
therefore not entitled to receive compensation of a lump sum for
that impairment under the Act. Accordingly he was not entitled to
compensation for non-economic loss, such compensation being available
only where "an injury to an employee results in a permanent impairment
and compensation is payable in respect of the injury under
section 24" ((56) s.27(1).). And because compensation is not payable
for permanent impairment under the Act, the plaintiff may not elect to
claim damages for non-economic loss pursuant to s.45 of the Act.

6. The plaintiff contends that the extinguishment of his common
law action for damages for non-economic loss (and the deprivation
of his entitlement to full recovery of economic loss, for he would
only have been able to recover weekly payments of compensation and
medical expenses) constitutes an acquisition of property from him
within the meaning of s.51(xxxi) of the Constitution, with a
consequent obligation for the payment of just terms for that
acquisition. The scheme of compensation available to the plaintiff,
it is said, does not amount to just terms.

7. It is accepted, for the purpose of resolving the constitutional
issue, that immediately prior to the passing of the Act the plaintiff
had a right of action against the defendant in respect of his
injuries, including an entitlement to damages for non-economic loss.
The capacity of a person to bring a suit against the Commonwealth,
whether in contract or in tort, appears in s.56 of the Judiciary Act
1903 (Cth). Section 64 of the Judiciary Act ensures that in an action
against the Commonwealth "the rights of parties shall as nearly as
possible be the same ... as in a suit between subject and subject".
The Telecommunications Act established the Australian
Telecommunications Corporation (and the Commission before it) as a
body corporate, capable of being sued in its corporate name ((57)
ss.4, 21.). The defendant was incorporated under the Corporations Law
of the Australian Capital Territory ((58) Australian and Overseas
Telecommunications Corporation Act 1991 (Cth).).

8. As the argument was presented, the first step must be to inquire
whether in truth the right of action available to the plaintiff before
the Act was property. Overshadowing this inquiry is the wider
question whether the extinguishment of a right of action such as
existed here is within the general conspectus of s.51(xxxi).

9. As to the immediate inquiry, what the plaintiff had was a right
of action in tort against the defendant. Such a right is regarded as
a legal chose in action ((59) Halsbury's Laws of England, 4th ed.,
vol.6, par.8.). That a chose in action is ordinarily property is not
debatable ((60) Minister of State for the Army v. Dalziel [1944] HCA 4; (1944) 68
CLR 261 at 285, 290, 295; Bank of N.S.W. v. The Commonwealth ("the
Bank Nationalization Case") [1948] HCA 7; (1948) 76 CLR 1 at 349; The Commonwealth
v. Tasmania (The Tasmanian Dam Case) [1983] HCA 21; (1983) 158 CLR 1
at 246-247.). However, a right of action for the
tort of conversion has been treated as "incapable of assignment either
at law or in equity" ((61) Poulton v. The Commonwealth (1953) 89 CLR
540 at 602.). Lord Wilberforce observed in National Provincial Bank
Ltd. v. Ainsworth ((62) [1965] UKHL 1; [1965] UKHL 1; (1965) AC 1175 at 1247-1248; see also The
Queen v. Toohey; Ex parte Meneling Station Pty. Ltd. [1982] HCA 69; (1982) 158 CLR 327
at 342; Australian Capital Television Pty. Ltd. v. The Commonwealth
[1992] HCA 45; (1992) 177 CLR 106 at 165-166.):

"Before a right or an interest can be admitted into the
category of property, or of a right affecting property, it
must be definable, identifiable by third parties, capable
in its nature of assumption by third parties, and have some
degree of permanence or stability."

This statement must be read in light of the decision of the
House of Lords in Trendtex Trading v. Credit Suisse ((63) (1982) AC
679.) where Lord Roskill (with whom Lord Edmund-Davies, Lord Fraser of
Tullybelton and Lord Keith of Kinkel agreed), speaking of litigation in
relation to failure to honour a letter of credit, said ((64) ibid. at
703.):

"The court should look at the totality of the transaction.
If the assignment is of a property right or interest and
the cause of action is ancillary to that right or interest,
or if the assignee had a genuine commercial interest in
taking the assignment and enforcing it for his own benefit,
I see no reason why the assignment should be struck down as
an assignment of a bare cause of action or as savouring of
maintenance."

10. This dictum was applied by Needham J in Re Timothy's Pty. Ltd.
and the Companies Act ((65) (1981) 2 NSWLR 706.) and was referred to
by Young J in Beard v. Baulkham Hills Shire Council ((66) (1986) 7
NSWLR 273 at 281.). And it may be noted that in Compania Colombiana
de Seguros v. Pacific Steam Navigation Co. ((67) (1965) 1 QB 101 at
121-122.) Roskill J, as his Lordship then was, saw no difficulty in
upholding the assignment of a right of action in a personal injury case
to an insurer.

11. However, the issues before the Court do not involve an
assignment; assignability is relevant only for the light it throws
on the concept of property. The plaintiff had a right to receive a
payment of money by way of damages. The term "property" in s.51(xxxi)
"extends to innominate and anomalous interests" ((68) Bank
Nationalization Case (1948) 76 CLR at 349 per Dixon J). Consistent
with the view of the majority in Australian Tape Manufacturers
Association Ltd. v. The Commonwealth ((69) [1993] HCA 10; (1993) 176 CLR 480 at 509.)
, that right must be regarded as constituting "property" for the
purposes of s.51(xxxi). But it is the chose in action which
constitutes property. Whether money answers that description does not
arise in the present case. That matter is discussed in the judgment of
Dawson J and myself in Mutual Pools and Staff Pty. Limited v. The
Commonwealth ((70) Unreported, High Court of Australia, 9 March 1994.).

12. However, it does not follow that the defendant acquired that
property from the plaintiff. It must be accepted that s.51(xxxi)
is a constitutional guarantee of just terms and should be liberally
construed ((71) Dalziel (1944) 68 CLR at 276, 284-285;
Attorney-General (Cth) v. Schmidt [1961] HCA 21; (1961) 105 CLR 361 at 370-372; Trade
Practices Commission v. Tooth and Co. Ltd. [1979] HCA 47; (1979) 142 CLR 397 at 403;
Clunies-Ross v. The Commonwealth [1984] HCA 65; [1984] HCA 65; (1984) 155 CLR 193 at 201-202;
see also Street v. Queensland Bar Association [1989] HCA 53; (1989) 168 CLR 461
at 527.). And it must be accepted also that it is the substance
not the form of the impugned law that is to be considered. A merely
circuitous device to avoid the constitutional guarantee will not be
upheld ((72) Bank Nationalization Case (1948) 76 CLR at 349-350;
Trade Practices Commission v. Tooth and Co. Ltd. (1979) 142 CLR
at 407; Cole v. Whitfield [1988] HCA 18; (1988) 165 CLR 360 at 399-400;
Hematite Petroleum Pty. Ltd. v. Victoria [1983] HCA 23; (1983) 151 CLR 599 at
633, 662-663; Philip Morris Ltd. v. Commissioner of Business
Franchises (Vict.) [1989] HCA 38; (1989) 167 CLR 399 at 433.). Nevertheless, as
Dawson J and I said in Australian Tape Manufacturers Association
((73) (1993) 176 CLR at 528.):

"(F)or the paragraph to apply it must be possible to
identify an acquisition of something of a proprietary
nature. The mere extinction or diminution of a proprietary
right residing in one person does not necessarily result in
the acquisition of a proprietary right by another ((74) A
distinction between deprivation of property and acquisition of

property

was made by the Privy Council in Govt. of Malaysia v. Selangor Pilot
Assoc. (1978) AC 337 especially at 347-348.).
Giving full effect to these principles, the result is that there
was no acquisition by the defendant of a proprietary right. It is
unnecessary to consider those decisions in which a compulsory
divesting of property has been held not to be an acquisition within
s.51(xxxi) or to identify a principle which allows those cases to be
distinguished from others in which a compulsory divesting has been
held to have occurred ((75) See Trade Practices Commission v. Tooth
and Co. Ltd. (1979) 142 CLR at 408.). The right to bring a suit
against the Commonwealth in tort is conferred by Commonwealth
legislation and it is hard to see how a law which affects that right,
even a law diminishing or extinguishing it, can fall within

s.51(xxxi).

The Act effects no acquisition of property by the Commonwealth. As
was said in The Queen v. Ludeke; Ex parte Australian Building
Construction Employees' and Builders Labourers' Federation ((76)
[1985] HCA 84; (1985) 159 CLR 636 at 653.):
"there is nothing in the Act that provides for the
acquisition of those rights - they may be extinguished, but
not acquired".

13. No doubt the defendant has benefited from the operation of s.44
of the Act in that a person in the position of the plaintiff can no
longer recover damages for non-economic loss. But that falls far
short of saying that there was an acquisition of property by the
defendant. The dichotomy between extinguishment and acquisition
cannot be pressed too far; the two are not necessarily incompatible.
But, in the end, as Mason J said in The Tasmanian Dam Case ((77)
(1983) 158 CLR at 145.):

"To bring the constitutional provision into play ... there
must be an acquisition whereby the Commonwealth or another
acquires an interest in property, however slight or
insubstantial it may be."

It is not possible to identify the acquisition of an interest in
property by the defendant. What has happened is that a right which
once existed no longer exists. It was said by the defendant that few
persons stood to be affected by the provision. That may be so but it
cannot be a touchstone by which to determine whether there has been an
acquisition of property from the plaintiff. However, as I have
concluded that there was no such acquisition it is unnecessary to
dwell on this aspect.

14. It follows that s.44 of the Act is not invalid in its application
to the plaintiff.

McHUGH J This action was commenced in the Supreme Court of New
South Wales but was removed into this Court under s.40(1) of the
Judiciary Act 1903 (Cth). Pursuant to s.18 of that Act, Mason CJ
has stated the following question for consideration by the Full Court:
on the basis of the facts alleged in the statement of claim of the
plaintiff is s.44 of the Commonwealth Employees' Rehabilitation
and Compensation Act 1988 (Cth) ("the 1988 Act") invalid in its
application to the plaintiff? More specifically, the issue for
determination is whether the 1988 Act acquired the property of the
plaintiff contrary to s.51(xxxi) of the Constitution. That paragraph
empowers the Parliament of the Commonwealth to make laws for the
acquisition of property on just terms from any State or person for
any purpose in respect of which the Parliament has power to make laws.
The plaintiff alleges that the 1988 Act provided for the acquisition
by the Commonwealth of the plaintiff's right to sue the defendant for
damages for back injuries which he received during the course of his
employment with the defendant's predecessor. If the predecessor of
the defendant was liable to the plaintiff, that liability became a
liability of the defendant by virtue of s.11 of the Australian and
Overseas Telecommunications Corporation Act 1991 (Cth).

The nature of the issues
2. The plaintiff alleges that, during the period February 1974 to
March 1986, he suffered five injuries to his back in the course of
his employment. The last injury occurred on or about 4 March 1986.
Weekly compensation payments in respect of those injuries were
received by the plaintiff pursuant to the provisions of the
Compensation (Commonwealth Employees) Act 1971 (Cth) ("the 1971 Act").
On 17 September 1990, the plaintiff commenced a common law action for
damages for negligence in respect of these injuries against the
defendant's predecessor in the Supreme Court of New South Wales. The
negligence relied on was a breach of the employer's common law duty to
take reasonable care for the safety of its employees. If the facts in
the statement of claim filed in that Court are true, they establish
that, before the enactment of the 1988 Act, the plaintiff had a common
law right of action for damages against the defendant's predecessor
even if part of the cause of action was statute barred by operation
of the Limitation Act 1969 (N.S.W.). In its statement of defence,
however, the defendant alleges that the whole of the plaintiff's
claim is barred by s.44 of the 1988 Act. The plaintiff has filed a
reply which alleges that the 1988 Act is unconstitutional because it
breaches the terms of s.51(xxxi) of the Constitution.

Relevant legislative provisions

3. The 1988 Act extinguishes all rights to sue the Commonwealth
or a Commonwealth authority for damages for injuries sustained in
the course of employment with the Commonwealth or a Commonwealth
authority. In place of those rights is substituted a statutory
scheme of compensation which provides for lump sums for permanent
impairment ((78) ss.24, 25.), weekly payments for incapacity ((79)
s.19.), medical expenses ((80) s.16.) and sums for non-economic loss
((81) s.27.). According to the second reading speech ((82)
Commonwealth, House of Representatives, Parliamentary Debates
(Hansard), 27 April 1988 at 2191-2195.) explaining the Commonwealth
Employees' Rehabilitation and Compensation Bill 1988, the purpose of
the proposed Act was to "provide incentives for injured employees to
return to work as soon as possible" and to "provide greater powers in
relation to rehabilitation". These objectives were said to be the
Commonwealth's response to a 700 per cent increase in government
expenditure on workers' compensation over the decade between 1976 and
1986. The Minister attributed the increase to inefficiencies in the
1971 Act and to long delays in the court system in bringing negligence
actions on for hearing. Both factors were said to provide
disincentives for injured workers to return to work and to encourage
them to maximise the extent and duration of their injuries. The
Minister stated that the new Act was an attempt to reverse this
position by encouraging speedy rehabilitation.

4. The 1988 Act was assented to on 24 June 1988. By proclamation
published on 1 July 1988, the commencement date for most provisions
was fixed as 1 December 1988. The Act does not apply to any action
instituted before the commencement date. But this does not assist
the plaintiff - his action was commenced over 20 months after the Act
became law.
Section 44 provides:

"(1) Subject to section 45, an action or other
proceeding for damages does not lie against the
Commonwealth, a Commonwealth authority or an employee in
respect of:
(a) an injury sustained by an employee in the course
of his or her employment, being an injury in
respect of which the Commonwealth or Commonwealth
authority would, but for this subsection, be
liable (whether vicariously or otherwise) for
damages; or
(b) the loss of, or damage to, property used by an
employee resulting from such an injury;
whether that injury, loss or damage occurred before or after
the commencement of this section.
(2) Subsection (1) does not apply in relation to an
action or proceeding instituted before the commencement of
this section."

5. Section 45 provides for an employee to elect between compensation
under the Act and damages at common law for non-economic loss. That
section provides:

"(1) Where:
(a) compensation is payable under section 24, 25 or 27
in respect of an injury to an employee; and
(b) the Commonwealth, a Commonwealth authority or
another employee would, but for subsection 44(1),
be liable for damages for any non-economic loss
suffered by the employee as a result of the
injury;
the employee may, at any time before an amount of
compensation is paid to the employee under section 24, 25 or
27 in respect of that injury, elect in writing to institute
an action or proceeding against the Commonwealth, the
Commonwealth authority or other employee for damages for
that non-economic loss.
(2) Where an employee makes an election:
(a) subsection 44(1) does not apply in relation to an
action or other proceeding subsequently instituted
by the employee against the Commonwealth, the
Commonwealth authority or the other employee for
damages for the non-economic loss to which the
election relates; and
(b) compensation is not payable after the date of the
election under section 24, 25 or 27 in respect of
the injury.
(3) An election is irrevocable.
(4) In any action or proceeding instituted as a result
of an election made by an employee, the court shall not
award the employee damages of an amount exceeding $110,000
for any non-economic loss suffered by the employee."

Section 124 relevantly provides:

"(1) Subject to this Part, this Act applies in
relation to an injury, loss or damage suffered by an
employee, whether before or after the commencing day.
...
(3) A person is not entitled to compensation under
section 24 or 25 in respect of a permanent impairment, or
under section 17 in respect of the death of an employee,
being an impairment or death that occurred before the
commencing date, if:
(b) the person was not entitled to receive
compensation of a lump sum in respect of that
impairment or death:
...
(iii) in any other case - under the 1971 Act as
in force when the impairment or death
occurred."

6. The 1971 Act did not provide for a lump sum payment for permanent
impairment to the back. Because the plaintiff's injuries were
sustained before the commencing date of the 1988 Act and he was not
entitled to a lump sum payment under the 1971 Act, he falls within
s.124(3)(b)(iii). Thus, he has no right to sue at common law for
damages for his injuries and no right to obtain a lump sum payment
under the 1988 Act for his disabilities. In his case, s.45 does not
qualify the operation of s.44. Consequently, he no longer has any
right to sue the defendant at common law for damages in respect of his
injuries. His remedies are confined to weekly payments for incapacity
and medical expenses under the 1988 Act.

Section 51(xxxi) of the Constitution

7. In my opinion, s.44 of the Act in its application to the plaintiff
was not a law with respect to the "acquisition of property from any
... person for any purpose in respect of which the Parliament has
power to make laws" ((83) Constitution, s.51(xxxi).). This is so
notwithstanding that the 1988 Act extinguished the liability of the
defendant to pay damages to the plaintiff in respect of his injuries.
It is true that, as a result of that Act the plaintiff has been
deprived of a chose in action, and a chose in action is property for
the purposes of s.51(xxxi) of the Constitution ((84) Minister of State
for the Army v. Dalziel [1944] HCA 4; [1944] HCA 4; (1944) 68 CLR 261 at 290.). Furthermore, the
defendant has gained a corresponding benefit of commensurate value.
However, the Commonwealth authority has not acquired the property of
the plaintiff. This is because the right of the plaintiff to bring his
action was dependent upon federal law and was always liable to be
revoked by federal law. If a right is dependent upon a federal law enacted under a power other than s.51(xxxi), and can be extinguished under that power, then that extinguishment will not fall within the terms of s.51(xxxi). To use the words of Dixon CJ in Burton v. Honan ((85) [1952] HCA 30; (1952) 86 CLR 169 at
180.), "the whole matter lies outside the power given by s.51(xxxi)"
of the Constitution.

The liability of the Commonwealth in tort

8. At common law the Crown was not liable to be sued in an action
for tort ((86) Farnell v. Bowman (1887) 12 AC 643.). This was the
consequence of the common law maxim that "the king can do no wrong"
((87) Quick and Garran, The Annotated Constitution of the Commonwealth,
(1901) at 805.). Nor did a petition of right lie in respect of a
claim for damages for personal injuries arising from a tort committed
by the Crown or a Crown employee ((88) Attorney-General v. De Keyser's
Royal Hotel [1920] UKHL 1; (1920) AC 508 at 523; Viscount Canterbury v. The Queen
(1843) 4 State Tr NS 767 at 778.). In The
Commonwealth v. New South Wales ((89) (1923) 32 CLR 200.), the Court
held that s.75(iii) of the Constitution conferred jurisdiction on the
Court to hear an action in tort against the Commonwealth. But the more
widely accepted view is that the Commonwealth's liability in tort
arises from s.64 and perhaps s.56 of the Judiciary Act ((90) See
Maguire v. Simpson [1977] HCA 63; (1977) 139 CLR 362; The Commonwealth v. Evans Deakin
Industries Ltd. [1986] HCA 51; (1986) 161 CLR 254 at 263-264; Breavington v. Godleman
[1988] HCA 40; (1988) 169 CLR 41 at 68-69 per Mason CJ, 101-105 per Wilson and
Gaudron JJ, 117-118 per Brennan J, 139-140 per Deane J, 151-153 per
Dawson J, 169 per Toohey J See also Cowen and Zines, Federal
Jurisdiction in Australia, 2nd ed. (1978) at 35-38; Wynes, Legislative
Executive and Judicial Powers in Australia, 5th ed. (1976) at 455-461.).
At all events, I do not think that s.75(iii) of the Constitution is
the source of the liability of the Commonwealth. I agree with the view
of Dixon J in Werrin v. The Commonwealth ((91) [1938] HCA 3; (1938) 59 CLR 150 at
167.) "that the right of the subject to recover from the Crown in
right of the Commonwealth, whether in contract or in tort, is the
creature of the law which the Federal Parliament controls". If the
Judiciary Act is the source of the Commonwealth's liability, then, in
the light of s.78 of the Constitution, it is difficult to see why the
Commonwealth cannot extinguish any accrued right of action in tort
against itself. Section 78 provides that the Parliament "may make laws
conferring rights to proceed against the Commonwealth or a State in
respect of matters within the limits of the judicial power". If s.78
is the source of power to enact ss.56 and 64 of the Judiciary Act, as I
think is the case ((92) cf. Maguire (1977) 139 CLR at 370, 404-405. I
cannot accept the restrictive reading given to s.78 in The Commonwealth
v. New South Wales (1923) 32 CLR 200.), it would also seem to
authorise laws repealing or modifying laws conferring rights to proceed
against the Commonwealth. It is hardly to be supposed that once the
Parliament makes the Commonwealth liable to be sued for its conduct in
any particular field, the Parliament has no power to abolish or modify
the right to proceed against the Commonwealth in that field. Moreover,
if s.78 is the source of ss.44, 45 and 124 of the 1988 Act, as I think
it is, no question of complying with s.51(xxxi) arises. That
paragraph is conferred subject to the Constitution, including s.78.

The conditions of employment of the plaintiff

9. However, even if s.78 does not authorise the enactment of ss.44,
45 and 124 of the 1988 Act, the Parliament has power to regulate the
conditions of employment of its employees and that includes the power
without paying compensation to abolish or modify any accrued rights
of its employees, as employees, to bring actions for damages against
the Commonwealth. The power of the Parliament to enact laws
regulating the conditions of employment of Commonwealth employees
and to legislate for a comprehensive scheme of injury compensation
for Commonwealth employees is not open to doubt. Whether the source
of the power is s.52(ii), or a combination of ss.51, 61, 78 and
51(xxxix), of the Constitution, the Parliament has power to enact such
laws in substitution for or in addition to any common law rights or
duties which might otherwise exist. The plenary power to legislate
with respect to the conditions of employment of Commonwealth public
servants carries with it the power to grant, withhold or abolish any
condition or right otherwise arising out of the employment including
any condition or right arising under the common law. Any such
condition or right may be altered prospectively or
retrospectively ((93) R. v. Kidman [1915] HCA 58; (1915) 20 CLR 425; Polyukhovich v.
The Commonwealth [1991] HCA 32; (1991) 172 CLR 501 at 714-715, 717-720.).

10. The obligation of the defendant's predecessor to take reasonable
care for the safety of the plaintiff was one of the conditions of the
employment contract between that authority and the plaintiff. Any
breach of the condition gave rise to a breach of contract as well as
a tort ((94) Jury v. Commissioner for Railways (N.S.W.) [1935] HCA 29; (1935) 53 CLR
273 at 290; Davie v. New Merton Board Mills Ltd. (1959) AC 604 at 619.).
Indeed, the 1971 Act expressly recognised the right of an employee
to take proceedings against the Commonwealth at common law ((95)
s.99.). However, the right to take those proceedings arose from the
operation of the Judiciary Act. Without that Act, the plaintiff had no
cause of action against the Commonwealth. The Commonwealth can only be
made liable in action for damages for personal injury if the Parliament
has legislated to make it liable. Thus, the common law rights of the
plaintiff against the defendant's predecessor were enforceable only as
federal law and depended on the authority of the Parliament of the
Commonwealth. Because under the Judiciary Act the rights of the
Commonwealth and its employees "shall as nearly as possible be the same
... as in a suit between subject and subject" ((96) s.64.), the
plaintiff had the right, before the 1988 Act was passed, to bring an
action for damages in respect of his employment injuries at any time
during the period of limitation in force in the place where the action
was commenced. But this does not mean that the Parliament could not
alter the right of the plaintiff to bring an action for damages for
personal injury without complying with s.51(xxxi).

11. For the reasons which I gave in Health Insurance Commission v.
Peverill ((97) Unreported, 9 March 1994.), it is clear that the
Parliament could alter the conditions of employment of employees of the
Commonwealth at any time. It could alter those rights even after an
employee had fulfilled the conditions which gave rise to any particular
right ((98) See Dodge v. Board of Education of Chicago [1937] USSC 141; (1937) 302 US
74; Peverill, unreported, 9 March 1994.). If the 1988
Act had abolished the rights to weekly payments and medical expenses
conferred by the 1971 Act, no question of the acquisition of property
for the purpose of s.51(xxxi) could have arisen. Participants in a
field which is regulated by legislation have no constitutional right
to the continuation of any legislative scheme or any part of it ((99)
Lynch v. United States [1934] USSC 132; (1934) 292 US 571 at 577; F.H.A. v. The
Darlington, Inc. [1959] USSC 2; [1959] USSC 2; (1958) 358 US 84 at 91; Connolly v. Pension Benefit
Guaranty Corp. [1986] USSC 31; (1986) 475 US 211 at 227.). Parliament can alter or
withdraw the rights in its discretion.

12. If the Commonwealth had retrospectively abolished the common law
duty of care which it owed to its employees, it would be difficult
to see how such legislation could amount to an acquisition of the
property of the plaintiff for the purpose of s.51(xxxi) of the
Constitution even though his right of action had accrued. Such a law
would do no more than retrospectively change the duty of care of the
Commonwealth. It would not be a law for the "acquisition of property
... for any purpose in respect of which the Parliament has power to
make laws". Even on the most liberal construction of that paragraph,
it is difficult to see how the retrospective abolition of an element
of a cause of action can constitute an acquisition of property for the
purpose of the paragraph. No doubt the law would have the effect that
the plaintiff's chose in action - his right of action - had become
worthless. But unless every extinguishment of a cause of action
against the Commonwealth is to be regarded as an acquisition of
property by the Commonwealth, I do not see how the law would attract
the operation of s.51(xxxi). The Court must look at the substance
of the matter to determine whether an extinguishment is in fact an
acquisition. But, when that analysis is complete, the distinction
between extinguishment and acquisition is a real distinction for the
purpose of s.51(xxxi) ((100) The Commonwealth v. Tasmania (The
Tasmanian Dam Case) [1983] HCA 21; (1983) 158 CLR 1 at 145; Reg. v. Ludeke; Ex parte
Australian Building Construction Employees' and Builders Labourers'
Federation [1985] HCA 84; (1985) 159 CLR 636 at 653.). If a right against the
Commonwealth is subject to alteration or revocation, its alteration or
extinguishment does not constitute an acquisition of property.

13. If the conclusion is correct that, under its power to regulate the
employment of Commonwealth employees, Parliament can retrospectively
abolish the Commonwealth's duty of care without complying with
s.51(xxxi), even in a case where a plaintiff alleges a breach of that
duty, it must follow that the Parliament can abolish a cause of action
for breach of duty, accrued before the commencement of the 1988 Act,
without complying with s.51(xxxi). The employee's right to bring
an action for damages against the Commonwealth or a Commonwealth
authority in respect of an injury sustained in the course of
employment before 1988 was not a right standing outside federal law.
It derived, as I have said, from the Judiciary Act. It was not
comparable to a right of action which a Commonwealth employee might
have against a third party and which did not depend on federal law.
What basis then is there for concluding that the Parliament could
not modify the operation of the Judiciary Act by enacting ss.44, 45
and 124 of the 1988 Act? Even if s.78 of the Constitution did not
authorise the enactment of those sections, the general power to make
laws with respect to the employment of Commonwealth employees surely
did so.

14. The right to bring an action against the Commonwealth or one of
its authorities was as much a condition of employment as the duty of
the Commonwealth or the authority to maintain a safe system of work.
Furthermore, the right was one which arose from breach of another
condition of employment - the right to have a safe system or place of
work. Although, prior to the enactment of the 1988 Act, the Judiciary
Act enabled employees of the Commonwealth to enjoy common law
rights of action for employment injuries, those rights like other
federal rights of employment could be recalled, prospectively or
retrospectively. Once it is recognised that the Parliament may
legislate retrospectively, it follows that the Parliament could
abolish any accrued rights to sue for damages.

15. It may be, as counsel for the plaintiff suggested, that the
extinguishment of the plaintiff's right of action was the result of a
legislative oversight. But whether or not that suggestion is correct,
what the Parliament has done was within its powers. The 1988 Act
simply provides for a new and comprehensive scheme of compensation
for employment injuries in substitution for the earlier scheme which
depended on the interaction of the 1971 Act and the common law. The
social philosophy of the 1988 Act is that a scheme of statutory
compensation is more likely to promote the rehabilitation of injured
employees than a scheme which involves an unlimited common law right
of an action for damages for employment injury. To achieve that end,
the 1988 Act places stringent conditions on the maintenance of common
law actions and imposes a "cap" on the amount of damages that can be
awarded for non-economic loss ((101) s.45(4).). In so far as injuries
occurring before the commencement of the 1988 Act were concerned, the
Act permits a common law action to be brought provided that the
employee was entitled to a lump sum payment under the previous
legislation in respect of the injury that was the subject of the
action. However, actions in respect of pre-1988 Act injuries are also
subjected to the "cap" of $110,000 for damages for non-economic loss.

16. No doubt the provisions of the 1988 Act are significantly
different in material respects from the scheme which operated as the
result of the 1971 Act and the common law right of action. But they
simply substitute one legislative scheme for another. It may be that
some, perhaps many, employees are worse off under the 1988 Act than
they were under the 1971 Act and the common law. But that cannot
affect the validity of the legislation. The 1988 Act in abolishing
rights of action in respect of pre-Act injuries which had been
commenced before 1 December 1988 did not acquire rights which were
beyond the reach of the Parliament. It merely altered or extinguished
rights which were conferred by the 1971 Act and the Judiciary Act.
Altering or extinguishing those rights - even accrued rights - did not
effect an acquisition of property for the purpose of s.51(xxxi) of the
Constitution.

Order
17. The question in the case stated should be answered no.