Legal Herald - by Craig Hill

Arbitration - Legal Herald

Damages For A Risk Of Injury Where Damages Already Paid

January 3rd 2009 09:09

In Muscat v Comcare [2008] AATA 872, the Administrative Appeals Tribunal (AAT) considered whether an employee was entitled to compensation under the Safety, Rehabilitation and Compensation Act 1988 (SRC Act) in circumstances where he had settled an action for damages against the Commonwealth in the Dust Diseases Tribunal of NSW (DDT).

In making its decision, the AAT looked at the nature of the settlement of the damages action and considered the concept of 'injury' for the purposes of the SRC Act.

PREVIOUS ACTION FOR DAMAGES

Mr Muscat had filed a statement of claim in the DDT on 25 August 1999 claiming damages for a number of injuries including, relevantly, asbestosis and increased risk of developing lung cancer.

As part of Mr Muscat's claim, he sought an order for further damages pursuant to section 11A of the Dust Diseases Tribunal Act 1989 (DDT Act). Section 11A was noted to be a provision peculiar to the DDT which allowed Mr Muscat to re-open his claim for damages without having to re-visit the issue of liability if he developed certain nominated diseases, including lung cancer, in the future.

On the day of settlement of the damages action, in which judgment was entered against the Commonwealth in the sum of $165,000 inclusive of costs, an amended statement of claim was filed, which omitted any claim pursuant to section 11A of the DDT Act.

ISSUE BEFORE THE AAT

There was no dispute that Mr Muscat had developed lung cancer and that his exposure to asbestos, whilst employed by the Commonwealth, was a material contributing factor.

Comcare argued, however, that the settlement entered into by Mr Muscat in the DDT resulted in his receiving damages in respect of lung cancer and therefore section 48 of the SRC Act operated to prevent the payment of compensation under that Act.

Mr Muscat argued that any damages awarded for the increased risk of developing lung cancer were not damages 'in respect of an injury in respect of which compensation was payable'.

The AAT was therefore required to consider whether Mr Muscat did recover damages in respect of an injury, lung cancer, in respect of which compensation was payable under the SRC Act.

AAT'S DECISION

The AAT noted that the SRC Act defined 'injury' as:

1. A disease suffered by an employee; or
2. An injury (other than a disease) suffered by an employee, that is a physical or mental injury arising out of, or in the course of, the employee's employment.

The AAT referred to the High Court decision in Canute v Comcare (2006) 225 CLR 535 at 540 regarding the concept of 'an injury':

'At this juncture, three things may be observed about the concept of 'an injury'. First, the Act does not oblige Comcare to pay compensation in respect of an employee's impairment; it is liable to pay compensation in respect of 'the injury'. Secondly, the term 'injury' is not used in the Act in the sense of 'workplace accident'. The definition of 'injury' is expressed in terms of the resultant effect of an incident or ailment upon the employee's body. Further, the term 'injury' is not used in a global sense to describe the general condition of the employee following an incident. The Act refers disjunctively to 'disease' or 'physical or mental' injuries and, at least to that extent, it assumes that an employee may sustain more than one 'injury''.

The AAT accepted that, at common law, damages could not be assessed until actual loss or damage was suffered: Scarcella v Lettice and Anor (2000-01) 51 NSWLR 302 at 306.

The AAT also considered the phrase 'in respect of', which was held by Justices Deane, Dawson and Toohey in Workers' Compensation Board of Queensland v Technical Products Pty Ltd (1988) 165 CLR 642 at 653 to '[gather] meaning from the context in which it appears and it is that context which will determine the matters to which it extends'. The AAT quoted the following passage from that decision:

'The most that can be drawn from these decisions dealing with differently worded provisions is that the use of the phrase 'in respect of' does not, of itself, extend the meaning of an expression such as 'damages in respect of injury to any worker' so as to include damages payable to a person other than the worker'.

The AAT considered that the passage could be rephrased to state that the phrase 'in respect of' does not of itself extend the concept of injury as a result of one disease, for example, asbestosis to another disease, namely lung cancer, although both had the same cause, being exposure to asbestos.

It was held that the head of damage in the statement of claim, the risk of developing lung cancer, was peculiar to the DDT and could not affect the definition of 'injury' under the SRC Act.

The AAT found that the decision in Canute made it clear that 'injury' in the terms of the SRC Act means 'the resultant effect of an incident upon an employee's body' and that in Mr Muscat's case the injuries were asbestosis and lung cancer. The AAT was not satisfied that the damages received by the employee in the DDT for a head of damage otherwise unquantifiable, being a risk of injury, did not result in part of the damages being awarded 'in respect of' the actual injury when it did occur.

The AAT therefore determined that Mr Muscat was entitled to compensation for permanent impairment resulting from the disease of lung cancer, assessed at 70% whole person impairment, and that he was also entitled to weekly compensation pursuant to section 19 on the basis of a total incapacity for work (and that section 23(1A) of the SRC Act applied).

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Court Of Appeal Clarifies Scope Of Appeals Against Acquittal

December 27th 2008 05:37

The New South Wales Occupational Health & Safety Act (Act) permits the prosecutor to appeal to a Full Bench of the Industrial Court of New South Wales, against a verdict of acquittal. This is an exception to the normal principles of criminal law. Recently the New South Wales Court of Appeal was called upon to consider the scope of the orders which the Full Bench can make in determining such an appeal.

The case (Bros Bins Systems Pty Limited v Industrial Court of New South Wales [2008] NSWCA 292) is another example of the type of long running litigation to which, it appears, the Act is prone. The difficulty arises because of the need to reconcile two competing principles of interpretation – on the one hand, the need to give a broad or generous construction to legislation that is designed to secure a public benefit and, on the other hand, the need to follow an approach of strict construction because the Act is also penal in nature.

Bros Bins operated a business involving the removal of industrial rubbish. The company owned a number of trucks that were specially fitted with a hydraulic bin mechanism. One of the trucks required repair and for that purpose was taken to Tibby Rose Auto, an auto repair business. An employee of Bros Bins (Mr Wood) drove the truck to the premises of Tibby Rose Auto and remained there whilst the vehicle was worked on by an employee of Tibby Rose Auto.

During the course of the repairs, the bin mechanism was raised. Some time later it fell, killing an employee of Tibby Rose Auto. It was accepted that another employee of Tibby Rose Auto had touched a control lever that caused the mechanism to descend.

Bros Bins was charged under what is now section 10(2) of the Act, which requires that a person who has control of plant (to any extent) that is used by people at work must ensure that the plant is safe and without risks to health.

At first instance, the trial judge (Marks J) acquitted Bros Bins on the basis that the truck was not "plant" for the purposes of the Act. Whilst the truck was at the premises of Tibby Rose Auto, it represented the product of work processes carried out by Tibby Rose Auto and it was not a fixture, implement or apparatus used in the carrying on of the work.

The prosecutor brought an appeal to a Full Bench of the Industrial Court. The prosecutor argued that the word "plant" in the Act should not be given a narrow meaning, and the mere fact the truck was being repaired did not mean that it was not plant.

Bros Bins argued that if such a view was to be accepted it would be impossible for a company to have an item of machinery or equipment repaired by a third party without breaching the Act. In effect the company could only discharge its obligation if it had the plant fixed before it was given to the repairer. Such an absurd result could not have been intended by Parliament. It might be thought that, at a common sense level, this argument has much to commend it.

The Full Bench did not agree and concluded that the vehicle constituted "plant" under the Act. The Full Bench set aside the acquittal and directed that the matter be returned to Marks J for rehearing.

At the rehearing, the company was found guilty. A subsequent appeal to the Full Bench was unsuccessful.

The company then applied for a review of the decision by the New South Wales Court of Appeal. The Court of Appeal possesses a supervisory jurisdiction under which it may quash a decision of the Full Bench if that decision is affected by jurisdictional error.

Bros Bins argued that jurisdictional error occurred in two ways, namely:

1. the Full Bench's conclusion that the truck constituted plant under the Act; and
2. the right of appeal against acquittal does not permit the Full Bench to remit the matter for re-trial to a single judge of the Court.

On the first ground, the Court of Appeal concluded that even if the Full Bench had been in error, the mistake was not jurisdictional in nature and so the Court of Appeal had no capacity to intervene.

However, Bros Bins was successful on the second ground. The Court of Appeal held that the right against double jeopardy is such a powerfully entrenched right within our law, that it can only be abrogated by the express will of Parliament. Parliament had expressed its will to permit an appeal against acquittal (and so to abrogate double jeopardy), but if it had been Parliament's intention that the consequence of a successful appeal could be a rehearing, then this would have been made clear within the legislation. It was not.

The Court of Appeal ordered that the re-trial conducted before Marks J was beyond jurisdiction and the results of it were void. The matter was sent back to be fully determined by the Full Bench.

The course of this litigation is a further indication that the jurisprudence relating to the operation of key provisions of the Act may have become unbalanced and that the penal aspect of the legislation is not sufficiently taken into account. It is difficult, again at a common sense level, to accept that a person who seeks to get a vehicle repaired should be penalised because of an accident that the repairer has caused.

It is noteworthy that the recommendations of the advisory panel (referred to in the Report on National Harmonisation of OHS Laws) have made it clear that the model national OHS legislation should not allow appeals from acquittal. The recommendations of the panel also state that a right of appeal against conviction and/or sentence should exist to the relevant State Supreme Court and, thereafter, to the High Court. This measure would serve to prevent any tendency toward unrealistically absolute interpretations of the Act.

Article by Deacons Solitors, Australia

106

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Scrapped Work Choices Legislation and Unfair Dismissal Laws

November 21st 2008 23:04

Australian law firms are expecting the Federal government's upcoming move to end Work Choices legislation, in favour of Labor's new industrial relations law, will bring an influx of employment-related work. Unfair dismissal changes have historically prompted a significant number of clients to seek legal advice, according to Baker & McKenzie partner Michael Michalandos. He expects his workflow to increase if a new bill scrapping the legislation is passed by Parliament in late November. He pointed to how

"The last changes were so wide-ranging that they impacted on every employer - like dramatic changes to unfair dismissal rights in 2006. For example, employees were denied access to unfair dismissal rights if they lost their jobs on the grounds of a genuine redundancy. If these rights are reinstated, allowing employees to challenge a redundancy-based termination, then I expect that we will see an increase in this kind of work," he said.

At the moment Michalandos has not seen a major change in the type of work he receives, such as advising on termination and restructuring, setting up executive work contracts and policies.

If the bill were passed the firm would undertake both billable and non-billable work. "Our clients would expect us to provide them with base-level information regarding the changes without charge. This would come in the form of training sessions and document summaries. However, I also expect an increase in billable work but this would be balanced against non-billable hours reviewing the legislation," he said.

He said clients are cautious at the moment and treat redundancies as a last resort. Their first reaction is usually to review flexible work options and other forms of cost-cutting, such as job-sharing, part-time work, and reducing remuneration where necessary.

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