West V Workers Compensation (Dust Diseases) Board [1999] NSWCC 3 (23 April 1999)

Last Updated: 5 July 1999

CITATION: West V Workers Compensation (Dust Diseases) Board [1999] NSWCC 3

PARTIES: Stanley Richard West

v

Workers Compensation (Dust Diseases) Board

TITLE OF COURT: Compensation Court of NSW

JURISDICTION: Original

MATTER NO/S: NSWCC 4307 of 1998

DELIVERED ON: 23 April 1999

DELIVERED AT: Parramatta

HEARING DATE: 13 November 1998

JUDGMENT OF: Neilson J

NUMBER OF PARAGRAPHS: 25

CATCHWORDS: Workers Compensation Statutes & Delegated Legislation;

Dust diseases legislation - Workers Compensation (Dust Diseases) Act 1942. Worker - Employer. Employee of the Australian Telecommunications Commission/Telecom.

Held: not entitled to claim benefits under State Act.

Telstra Corporation Ltd v Worthing [1999] HCA 12 applied

Commonwealth of Australia v Holland (1991) 24 NSWLR 198 considered.

Costs. Governed by Compensation Court Act 1984 s18.

Statement in Mill's practice [9095.5] disapproved.

REPRESENTATION

APPLICANT/S

Mr A J Leslie QC with Ms A O Leslie instructed by Turner Freeman appeared for the appellant

RESPONDENT/S

Mr M F Holmes QC instructed by McLaughlin & Riordan appeared for the respondent

Mr J McDonnell (Solicitor) Office of the Crown Solicitor appeared for the Attorney General of New South Wales (intervening)

Compensation Court of New South Wales

Matter No 4307 of 1998

Stanley Richard West

v

Workers Compensation (Dust Diseases) Board

23 April 1999

JUDGMENT

NEILSON J

1. This is an appeal from a decision of the Workers Compensation (Dust Diseases) Board made on 8 May 1998. The appeal is made under s8I of the Workers Compensation (Dust Diseases) Act 1942 ("the Dust Act"). The nature of the appeal is a hearing de novo: Workers Compensation (Dust Diseases) Board v Veksans (1993) 32 NSWLR 221; 9 NSWCCR 647. However, there is no dispute about the facts of the case.

FACTS

2. The appellant was born on 25 June 1926. He is currently 72 years old. In 1948 he joined the Post Master General's Department and "remained employed there until 1990". He was employed as a linesman and lines supervisor. He also worked as a cable jointer. In that employment he was constantly exposed to dust from asbestos cement pipes and asbestos cement pits. It is clear from paragraphs 14 and 15 of his affidavit of 22 August 1998 that at the time he retired he was employed by "Telecom". He had no exposure to asbestos other than during his employment with the Commonwealth and with "Telecom".

3. In 1995 he first experienced symptoms of the condition subsequently diagnosed as asbestosis. On 30 July 1997 the appellant commenced proceedings in the Dust Diseases Tribunal of New South Wales ("the DDT") claiming damages from, inter aliis, Telstra Corporation Ltd. On 14 May 1998 Johns J, sitting as the DDT, entered judgment in favour of the appellant against Telstra Corporation Ltd for $65,000 inclusive of costs.

4. On 7 May 1998 the appellant had made an application to the respondent for compensation for disablement under the Dust Act. The appellant is not disentitled to claim such compensation by reason of his receipt of damages for asbestosis from his former employer: CSR Ltd v D'Arcy (1996) 40 NSWLR 721; 14 NSWCCR 201; James Hardie and Coy Pty Ltd v Newton (1997) 42 NSWLR 729; 15 NSWCCR 717. On 8 May 1998, the decision under appeal was made by the respondent which stated that the Dust Act "does not provide compensation for employees of the Commonwealth and subsequently [sic] we cannot proceed with any assistance with your claim".

THE "WORKER" ARGUMENT

5. The first ground of defence raised by the respondent in its Answer to the Notice of Appeal is that it did not err in denying the appellant's application for compensation on the ground that the appellant was an employee of the Commonwealth. Mr Holmes QC, for the respondent, submitted that Telstra Corporation Ltd v Worthing (1997) 42 NSWLR 655; 15 NSWCCR 510 was wrongly decided. That submission was correct: Telstra Corporation Ltd v Worthing [1999] HCA 12.

6. In [8] to [11] of the joint judgment of the High Court, their Honours traced the legislative history of the bodies which took over the telecommunication operations of the former Post Master General's Department. It is clear that at the time the current appellant last worked he was employed by the Australian Telecommunications Commission which commenced to be called "Telecom" on 1 July 1989.

7. The Justices of the High Court rejected the submission that, as a matter of construction, the Workers Compensation Act 1926 and the Workers Compensation Act 1987 did not in their terms apply to the Australian Telecommunications Commission ("the Commission") as an employer. They then turned to the effect of s21(3) of the Telecommunications Act 1975 (Cth) which was to the effect that the Commission was not subject to any liability under any State statute to which the Commonwealth was not subjected. Their Honours continued:

21 As to the 1987 State Act, it contains the express statement in s6(1), as to the Crown being bound in all its other capacities, which has been set out earlier in these reasons. However, a central provision of the legislative scheme established by the 1987 State Act is the requirement, under the sanction of a penalty, that an employer, other than a self-insurer, obtain and maintain in force a policy of insurance which complies with the requirements of the legislation (s155). Further, a self-insurer who holds a licence granted, as the 1987 State Act originally stood, by the State Compensation Board constituted thereunder[1], was obliged, under penalty, to maintain with the New South Wales Treasurer a deposit in an amount determined by that Board (s213).

22 It will require the clearest indication of a legislative purpose to demonstrate that these penal provisions attach to the Commonwealth[2]. No such indication is to be seen in the 1987 State Act. To the contrary, s6(2) states that nothing in that statute renders "the Crown" liable to be prosecuted for any offence. These penal provisions are central to the structure upon which the regulatory scheme established by the State legislation rests.

23 We conclude that the liabilities under the 1987 State Act which are at stake in the present case are not liabilities to which the Commonwealth is subjected. This means that the operation of s21(3) of the Telecommunications Act is attracted.

24 Section 21(3) is to be construed as a declaration of legislative purpose that the law of the Commonwealth shall operate exclusively of State law on the topic. As in Australian Coastal Shipping Commission v O'Reilly[3], s109 of the Constitution then operates upon the State law in question.

25 The overall result with respect to the 1986 injury and the 1988 injury is that the State legislation had no application to the Commission. That being so, there was no relevant liability which passed to Telstra under the successive Commonwealth legislative provisions to which reference has been made.

8. Under s1(1) of the Dust Act, that Act is to be construed with the Workers Compensation Act 1987 ("the Principal Act"). "Employer" is defined in s3 of the Dust Act as meaning "an employer of workers in any industry or process, employment in which exposes the worker to the possibility of contracting a dust disease". The Principal Act used to contain a definition of employer, but that has been transferred to the Workplace Injury Management and Workers Compensation Act 1998. It was contained in the Principal Act at the time the respondent made the decision now under appeal. That definition is:

"employer" includes:

(a) the legal personal representative of a deceased employer, or

(b) a government employer, or

(c) a former employer.

Without limiting the meaning of the expression, an employer can be an individual, a corporation, a firm, an unincorporated body of persons, a government agency or the Crown.

These two definitions can stand together. The definition in the Dust Act does not exclude the reasoning of the Justices of the High Court in Worthing's case.

9. S6 of the Dust Act establishes a Workers Compensation (Dust Diseases) Fund which consists of, inter alia

"all moneys paid by the WorkCover Authority to the board from contributions paid by insurers under and in accordance with the provisions of this section;"

The section goes on to make provision for the board to make each year an estimate of its annual expenditure and for such estimate to be paid to the WorkCover Authority by way of contributions by insurers. The WorkCover Authority determines which insurers or classes of insurers are to make contributions and to assess the amount of such contributions and as to when they are to be paid. Such contributions levied on insurers are to be passed on to employers or to classes of employers. The amounts charged to employers are generally known as the "Dust Diseases Levy", an amount added to each employers annual premium for insurance under the Principal Act.

10. From this Fund is paid all compensation under the Dust Act.

11. Having regard to the context and nature of the system set up by the Dust Act, that Act affects employers who are insured or are required to be insured under the Principal Act. If the Principal Act does not apply, then the Dust Act does not apply. The High Court has held that the Principal Act does not apply to the Commission or "Telecom". Therefore the Dust Act can not apply to the Commission or Telecom.

12. The entitlement to compensation under the Dust Act is given by s8 of that Act. S8(1) is in the following terms:

8(1) Subject to this Act:

(a) where the medical authority certifies that a person is totally or partially disabled for work from a dust disease and that the person's disablement was reasonably attributable to the person's exposure to the inhalation of dust in an occupation to the nature of which the disease was due, such person shall, if the board finds:

(i) that such person was a worker during the whole of the time the person was engaged in such occupation; or

(ii) that such person was a worker during only part of the time the person was engaged in such occupation, and, on the report of the medical authority, further finds that the person's disablement was reasonably attributable to the person's exposure to the inhalation of dust in such occupation during the time that the board has found that the person was a worker in such occupation,

be entitled to an award from the board, and to receive compensation at the prescribed rates from the Fund;

To be entitled to compensation the appellant must be "a worker". A worker must have an employer. The scheme of the Dust Act is that the employer is required to be insured under the Principal Act. The Commission or Telecom was not so required. Therefore the appellant can not be a worker within the meaning of the Dust Act.

13. If that were not the case then the anomaly pointed to by Mr Holmes QC in his written submissions would arise. The scheme of the Act would only work if employers in one industry could be compelled to pay additional contributions to the Fund in respect of employers not covered by the Acts, ie the Commonwealth and the Commission. The Dust Act in its true construction does not allow such additional levies to be imposed. In these circumstances, the Fund would not be properly funded and the system would fail. Accordingly, any construction which allows such a deficiency is not a proper construction of the Dust Act and is to be avoided.

14. For these reasons, the appeal must fail in limine. Most of the time of the hearing was addressed to other issues and, in deference to the arguments of learned counsel I shall recite those arguments, lest the matter go further.

OTHER ARGUMENTS

15. The appellant maintained that he was not entitled to claim compensation from Comcare for the expenses of treatment of his asbestosis and was thus entitled to make a claim under the Dust Act. He relied on the reasoning of the Court of Appeal in Commonwealth of Australia v Holland and anor (1991) 24 NSWLR 198. The leading judgment in that case was delivered by Samuels JA (as his Excellency then was), Priestley and Meagher JJA concurring. As the headnote to that decision makes clear there are two rationes decidendi. The first ratio is that where a person has left the employment of the Commonwealth before seeking medical treatment for an ailment, including asbestosis, he is not an "employee" of the Commonwealth and the ailment can not in such circumstances be an injury sustained "in the course of employment" with the Commonwealth. This holding depends on the proper construction of s5(9) of the Safety, Rehabilitation and Compensation Act 1988 (Cth), in particular, that the word "liability" in that provision means a "liability to pay compensation".

16. The second ratio of Holland's case is that that Commonwealth Act only abolished common law actions for injuries received in the course of employment with the Commonwealth and not for injuries arising out of the employment. This reasoning has been most recently adopted in Mendez v Telstra Corporation Ltd (CA, unreported, 22 October 1998, No 40223/97).

17. The appellant relies, of course, on the first ratio of Holland's case. Mr Holmes QC has submitted that it erroneous and should not be followed and that the correctness of Holland's case lies in the second ratio, albeit that Samuels JA relied principally on the first ratio in his reasons. Mr Holmes submitted that the Court of Appeal failed to construe the Commonwealth Act as a whole, including certain provisions of s53 allowing notices to be given and claims to be made after a person has ceased to be an employee of the Commonwealth. Since a liability to pay compensation can arise only after a notice has been given and a claim made, these provisions would be otiose if the Commonwealth had no liability to pay compensation in any event. The inference I draw from his submission is that "liability" in s5(9) should not be construed as a "liability to pay compensation" but liability occurring for an injury or exposure which may give rise to a future liability to pay compensation.

18. Support for that argument may be found in the reasoning process of the minority of the High Court in Ogden Industries Pty Ltd v Lucas [1967] HCA 30; (1967) 116 CLR 537 (HC); (1969) 118 CLR 31 (PC). See also Geraldton Building Co Pty Ltd v May [1977] HCA 17; (1977) 136 CLR 379. Under s11(2) of the Workers Compensation Act 1926 it has been held that the liability to pay compensation arises at the time of the occurrence of the injury, not at the time of the failure to provide suitable employment: National and General Insurance Co Ltd v South British Insurance Co Ltd [1982] HCA 62; (1982) 149 CLR 327.

19. I find this submission of Mr Holmes an attractive one but it raises the questions (which I need not decide) of whether I can so distinguish Holland's case and whether I should. Considering the strength of the Bench in Holland's case, its unqualified acceptance for many years, and the fact that many litigants, especially in the DDT, have adjusted their rights accordingly, it would be extremely brave for a puisne judge of this Court to decline to follow it.

20. Mr Holmes then argued that the appellant was entitled to claim compensation under the Commonwealth Act, but failed to do so and hence the respondent is entitled to reduce his compensation benefits under the Dust Act to nil, pursuant to s8AA of that Act. The facts to support such a submission have been agreed. The submission is founded on the contention that the recovery by the appellant of damages from Telstra Corporation Ltd, as successor of the Commission or "Telecom", does not preclude the appellant's claiming his treatment and travelling expenses under the Safety, Rehabilitation and Compensation Act 1988 (Cth) because there was no election under s45 of that Act. This submission is noted. I am not greatly persuaded by it, but it is not necessary for me to decide.

COSTS

21. The editor of the Dust Diseases Legislation section of Mills' service, Workers Compensation New South Wales comments on the costs of an appeal under s8I of the Dust Act at [9095.5]. He suggests that "as there is no particular provision that governs the award of costs in respect of appeals under s8I, the rule that costs follow the event, that is the losing party pays the winning party's costs, would seem to apply". I disagree.

22. This Court is created by Statute. It only has powers granted to it by Acts of Parliament. It has a limited inherent jurisdiction. That jurisdiction does not include the power to award costs. At Common Law, no court had power to award costs. The old Common Law may have expanded to give a superior court of record an inherent power to award costs, but such does not extend to an inferior court. This Court's power to award costs must be found in a statute. There is no power to award costs granted by the Dust Act. The power to award costs in appeals under s8I of that Act is granted by the Compensation Court Act, 1984 s18. That section provides:

Section 112 of the Workplace Injury Management and Workers Compensation Act 1998 applies to and in respect of any proceedings in the Court, not just proceedings under that Act.

Section 112(3) of the Workplace Injury Management and Workers Compensation Act 1998 provides that the Court may not order the payment of costs by a person claiming compensation unless the Court is satisfied that the application for compensation was frivilous or vexatious, fradulent or made without proper justification.

23. No such grounds arise in this case. The appellant was required by s8I(1A) to bring his appeal within six months of the respondent's decision of 8 May 1998. He could not merely await the outcome of the appeal to the High Court in Worthing's case. At the hearing the appellant based his case on two binding decisions of the Court of Appeal. He was not to know that the High Court would overrule one of them. In these circumstances, each party should pay his or its own costs of the appeal.

ORDER

24. The appeal is dismissed.

FURTHER SUBMISSIONS

25. I completed writing this judgment on 8 April and my Associate typed it on 9 April. However I was on circuit between Monday 12 April and Wednesday 21 April and hence delivery of the judgment was postponed until today. On returning to Parramatta on 22 April I received from the appellant's solicitors a facsimile transmission of 20 April, enclosing a further written submission on behalf of the respondent and a letter from the appellant's solicitors containing further submissions. These further submissions do not cause me to resile from the reasons I had already written or to change the order I proposed. The respondent's further submissions merely drew my attention to the decision of the High court in Worthing's case and asked me, pari ratione, to hold that the appellant was not entitled to claim under the Dust Act, a path I had already taken. The appellant's further submissions basically amount to this proposition: the appellant had no entitlement to claim under the Safety, Rehabilitation and Compensation Act 1988 (Cth) and therefore is entitled to claim under the Dust Act. The premiss may be erroneous, for reasons I have canvassed in paras [15] to [19], and the argument then arises whether any entitlement under the Federal Statute has been extinguished by the appellant's recovery of damages from Telstra Corporation Ltd, as successor of the Commission or "Telecom". In any event the argument is fallacious: it presupposes that if there be no entitlement under the Federal Act, the State Act must apply. This is a non sequitur: there is no absolute right to compensation, only such rights as granted by statute. If neither Federal not State statute provides a remedy then there is no entitlement.

Mr A J Leslie QC with Ms A O Leslie instructed by Turner Freeman appeared for the appellant.

Mr M F Holmes QC instructed by McLaughlin & Riordan appeared for the respondent.

Mr J McDonnell (Solicitor) Office of the Crown Solicitor appeared for the Attorney General of New South Wales (intervening).

[1] Replaced by the WorkCover Authority of New South Wales constituted under the WorkCover Administration Act 1989 (NSW).

[2] Cain v Doyle [1946] HCA 38; (1946) 72 CLR 409 at 425; State Authorities Superannuation Board v Commissioner of State Taxation (WA) [1996] HCA 32; (1996) 189 CLR 253 at 270, 277, 294; Re Residential Tenancies Tribunal (NSW); Ex parte Defence Housing Authority [1997] HCA 36; (1997) 190 CLR 410 at 427, 472.

[3] [1962] HCA 8; (1962) 107 CLR 46.