W.B.K. Pty. Ltd. v Grogan[1997] QCA 246

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Brisbane

Appeal No. 5437 of 1996

[WBK P/L v. Grogan & Anor.]

BETWEEN:

W.B.K. PTY. LTD. ACN 009 935 059

(Third Party) Appellant

AND:

GLORIA CHARLOTTE GROGAN

(Plaintiff) First Respondent

AND:

COMMONWEALTH OF AUSTRALIA

(Defendant) Second Respondent

Appeal No. 5441 of 1996

[Cth of Aust. v. Grogan & Anor.]

BETWEEN:

COMMONWEALTH OF AUSTRALIA

(Defendant) Appellant

AND:

GLORIA CHARLOTTE GROGAN

(Plaintiff) First Respondent

AND:

W.B.K. PTY. LTD. ACN 009 935 059

(Third Party) Second Respondent

Davies J.A.

McPherson J.A.

Fryberg J.

Judgment delivered 12 August 1997

Separate reasons for judgment of each member of the Court; Davies and McPherson JJ.A. concurring as to the orders made; Fryberg J. dissenting.

APPEALS ALLOWED AND ACTION DISMISSED.  GROGAN TO PAY THE COSTS OF THE COMMONWEALTH OF AUSTRALIA AND W.B.K. PTY. LTD. HERE AND BELOW.

CATCHWORDS: STATUTORY INTERPRETATION - employee fell entering work premises occupied by the Commonwealth and suffered personal injury - employee sought to sue the Commonwealth for damages - Safety Rehabilitation and Compensation Act 1988 (Cth) required an employee to elect in writing to institute a proceeding against the Commonwealth for damages for economic loss - whether the employee had, in terms required by the Act, made an election to institute a proceeding - whether employee had no cause of action against the Commonwealth.

Commonwealth of Australia v. Flabiano & Anor. (unreported, No. 40264, delivered 26 September 1996)

Sargent v. ASL Development Ltd. (1974) 131 C.L.R. 634

Scarf v. Jardine (1882) 7 App.Cas. 345

Safety Rehabilitation and Compensation Act 1988 (Cth), ss. 44, 45.

Counsel: Mr. J. A. Logan for W.B.K. Pty. Ltd.

Mr. R. W. Gotterson, Q.C., with him Mr. P. G. Bickford for Commonwealth of Australia

Mr. M. J. Drysdale for Grogan

Solicitors: Quinlan Miller & Treston for W.B.K. Pty. Ltd.

Australian Government Solicitor for Commonwealth of Australia

Barwicks for Grogan

Hearing Date: 17 February 1997

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Brisbane

Before Davies J.A.

McPherson J.A.

Fryberg J.

Appeal No. 5437 of 1996

[WBK P/L v. Grogan & Anor.]

BETWEEN:

W.B.K. PTY. LTD. ACN 009 935 059

(Third Party) Appellant

AND:

GLORIA CHARLOTTE GROGAN

(Plaintiff) First Respondent

AND:

COMMONWEALTH OF AUSTRALIA

(Defendant) Second Respondent

Appeal No. 5441 of 1996

[Cth of Aust. v. Grogan & Anor.]

BETWEEN:

COMMONWEALTH OF AUSTRALIA

(Defendant) Appellant

AND:

GLORIA CHARLOTTE GROGAN

(Plaintiff) First Respondent

AND:

W.B.K. PTY. LTD. ACN 009 935 059

(Third Party) Second Respondent

REASONS FOR JUDGMENT - DAVIES J.A.

Judgment delivered 12 August 1997

By a District Court plaint signed and filed on 14 June 1994 the first respondent Gloria Charlotte Grogan sued, or purported to sue the appellant, the Commonwealth of Australia, for damages for personal injury sustained by her when she fell entering premises occupied by the appellant.  It was common ground that the first respondent was an employee of the appellant and it was alleged by her, but not admitted by the appellant that the injury was sustained in the course of her employment.  The second respondent, who was joined as a third party in the action, was the lessor of the premises.

The appellant made an application in the action for separate determination of the questions:

1. whether the first respondent had, in terms of s. 45 of the Safety Rehabilitation and Compensation Act 1988 (Cth) ("the Act"), made an election to institute a proceeding against the appellant for damages for non-economic loss;

2. when was any such election made and, in particular, whether such an election was made prior to the institution of these proceedings;

3. if no such election was made or, if made, was made after the institution of these proceedings whether, on the true construction of ss. 44 and 45 of the Act, the second respondent has no cause of action against the appellant.

The learned District Court judge decided the first and second of these questions in the first respondent’s favour by concluding that she had elected in writing to institute proceedings within the meaning of s. 45 when her solicitor signed the plaint on her behalf on or about 14 June 1994 before the proceedings were instituted.  Her Honour made consequential orders against which the appellant appeals (Appeal No. 5441 of 1996).  The second respondent also appeals against these orders (Appeal No. 5437 of 1996) and since its interests are identical to the appellant's I will deal with the first-mentioned appeal as deciding both.

The question argued below and in this Court concerns primarily the construction of s. 45 of the Act.  Section 44 provides that, subject to s. 45, an action for damages against the Commonwealth for an injury sustained by an employee in the course of her employment does not lie.  Section 45 then provides:

"(1) Where:

1. compensation is payable under section 24, 25 or 27 in respect of an injury to an employee; and

2. the Commonwealth, a Commonwealth authority, a licensed corporation 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, the licensed corporation or other employee for damages for that economic loss.

3. Where an employee makes an election:

1. 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, the licensed corporation or the other employee for damages for the non-economic loss to which the election related; and

2. 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 an action or proceeding instituted as a result of an election made by an employee, the Court shall not award the employee damages for an amount exceeding $110,000.00 for any non-economic loss suffered by the employee."

Unless the present action is one which comes within s. 45, s. 44 will make it incompetent if the respondent’s injury was sustained in the course of her employment.  The question then is whether the action comes within s. 45.

The appellant says that it does not because, to do so:

1. the action must be one "subsequently instituted"^[1] "as a result of an election"^[2];

2. those phrases require an election in writing "to institute an action against the Commonwealth ... for damages"^[3] made before proceedings are instituted; and

3. there was no such election in writing.

It was common ground that there was no document which could arguably constitute the election in writing other than the plaint.  However the respondent contends, and the learned primary Judge held that the plaint is a document by which the respondent elected to commence the proceedings and that the signing of the plaint constituted the election.  Alternatively, the respondent contends that the filing of the plaint constituted the making of that election.  The respondent also submits that the construction contended for by the appellant does not accord with the overall legislative intention.

The only authority in point is a recent decision of the New South Wales Court of Appeal in Commonwealth of Australia v. Flabiano and Anor.^[4]  The question in that case was whether the Commonwealth, who was joined as a third party in an action for damages for personal injury, could plead s. 44 by way of defence.  The Court held that it could because there was no election in writing pursuant to s. 45 and consequently no action lay against the Commonwealth in respect of that injury.  It held that the institution of proceedings by the plaintiff was not such an election and appeared to assume that, in this case, her Honour had held that it was.  As appears from what I have said, her Honour did not hold that the institution of proceedings was an election, but that signing of the plaint was.

The Court of Appeal, in holding that the institution of proceedings in that case was not an election, relied on the indicia in s. 45 now relied on by the appellant, the two phrases to which I have referred.  But they relied on them, not to prove that the election must precede the institution of the proceedings, but that it must be express, the institution of proceedings, it was said, being merely conduct from which an election may be inferred.

I agree that institution of proceedings can never be an election to institute those proceedings within the meaning of s. 45; the institution of proceedings must be subsequent to and as a result of the election.

It does not follow from this that the signing of the plaint, and possibly even its filing if that did not constitute institution of the proceedings, could not have been an election in writing to institute the action.  It seems plain on the face of the plaint that the respondent was aware of her rights under s. 45 and that she intended, in instituting the proceedings, to commence an action for damages for non-economic loss within the meaning of s. 45.  Paragraph 7 of the plaint, in particular, alleges that she "sustained ‘non-economic loss’ as that term is defined in s. 45".  That document could, in form, constitute a writing in which an election under s. 45 is made and the act of signing it was consistent only with an intention to institute proceedings.

Neither the plaint nor the substance of its contents was communicated to the Commonwealth before these proceedings were instituted.  It was argued by the appellant that such communication was necessary; indeed that the election was not complete until it occurred.  In support of this argument the appellant relied on statements of principle of Lord Blackburn in Scarf v. Jardine^[5] and Mason J. in Sargent v. ASL Development Ltd.^[6]

It does seem to be implicit in s. 45 that the election in writing would be communicated to the Commonwealth.  That section applies only where compensation is payable under ss. 24, 25 or 27^[7] and the election is made before any amount of compensation is paid under any of these sections.^[8]  And, where an election is made, compensation is not payable under any of these sections after the date of the election.^[9]  Although the employee is required by s. 47 to notify Comcare in writing of the institution of proceedings, the above provisions do appear to imply a requirement to communicate the writing to the Commonwealth and the phrase which I have underlined appears to imply that that communication is part of the election.

Subsection (3) provides that an election is irrevocable.  That, in any event, appears to be a requirement for an effective election.  It would be inconceivable, in my view, for the law to annex that effect to the signing or filing of a plaint known only to the first respondent and her legal advisers.  It may not have been necessary for the signed plaint to have been sent to the appellant before proceedings were instituted.  It may have been sufficient if the appellant had known of its signing before that date.  But unless and until the fact of her having done that unequivocal act was known to the other party there was no election.^[10]  There was therefore no election before these proceedings were instituted.  It follows that this action does not lie and should be dismissed.  There is nothing in the context of s. 45 or in the Act generally which is inconsistent with this conclusion.

Before this Court and, it appears, below, the first respondent sought orders based on findings that she had made an election pursuant to s. 45 after the institution of these proceedings.  However such orders would not be orders in these proceedings which must be dismissed because no such election was made before they were instituted.  For any such election to have effect now, proceedings would have to be instituted and, because of the time which has elapsed since the first respondent suffered her injury, it would need to be established that the first respondent’s cause of action was not complete until that election had been made.

Although arguably para. (c) of the questions which the appellant sought to have determined would allow consideration of these questions, because no conclusion reached in respect of them could result in an order made in this action the first respondent might, if this Court considered them, be left with an adverse conclusion but no order against which she could appeal.  I would therefore be disinclined, in this appeal, to express any view on them.

I would allow the appeals and order that the action be dismissed.  The first respondent should pay the costs of the appellant and the second respondent here and below.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Brisbane

Before Davies J.A.

McPherson J.A.

Fryberg J.

Appeal No. 5437 of 1996

[WBK P/L v. Grogan & Anor.]

BETWEEN:

W.B.K. PTY. LTD. ACN 009 935 059

(Third Party) Appellant

AND:

GLORIA CHARLOTTE GROGAN

(Plaintiff) First Respondent

AND:

COMMONWEALTH OF AUSTRALIA

(Defendant) Second Respondent

Appeal No. 5441 of 1996

[Cth of Aust. v. Grogan & Anor.]

BETWEEN:

COMMONWEALTH OF AUSTRALIA

(Defendant) Appellant

AND:

GLORIA CHARLOTTE GROGAN

(Plaintiff) First Respondent

AND:

W.B.K. PTY. LTD. ACN 009 935 059

(Third Party) Second Respondent

REASONS FOR JUDGMENT - McPHERSON J.A.

Judgment delivered 12 August 1997

I agree with the reasons given by Davies J.A.  I also agree that the appeals should be allowed, and with the other orders proposed by his Honour for disposing of the appeals and the action.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Brisbane

Before Davies J.A.

McPherson J.A.

Fryberg J.

Appeal No. 5437 of 1996

[WBK P/L v. Grogan & Anor.]

BETWEEN:

W.B.K. PTY. LTD. ACN 009 935 059

(Third Party) Appellant

AND:

GLORIA CHARLOTTE GROGAN

(Plaintiff) First Respondent

AND:

THE COMMONWEALTH OF AUSTRALIA

(Defendant) Second Respondent

Appeal No. 5441 of 1996

[Cth of Aust v. Grogan & Anor.]

BETWEEN:

COMMONWEALTH OF AUSTRALIA

(Defendant) Appellant

AND:

GLORIA CHARLOTTE GROGAN

(Plaintiff) First Respondent

AND:

W.B.K. PTY LTD. ACN 009 935 059

(Third Party) Second Respondent

REASONS FOR JUDGMENT - FRYBERG J.

Judgment delivered 12 August 1997

In all but one crucial aspect of this matter, I agree with the reasons of Davies J.A.  Unfortunately, that one aspect affects the outcome of the appeal.

It does not seem to me that an election under s. 45 of the Safety, Rehabilitation and Compensation Act 1988 ("the Act") must be communicated to the Commonwealth.

In Sargent v. ASL Developments Ltd,^[11] Stephen J., with whom McTiernan J. agreed, drew attention to the distinction which exists between elections involving a choice between contractually conferred rights and other instances of election.  Dicta in that case and others concerning the question whether communication is an element of an election must be read with that distinction in mind.  I do not think such dicta have any direct relevance to the analysis of the election referred to in s. 45 of the Act.

The right to elect conferred by that section exists only where compensation is payable^[12] under s. 24, 25 or 27.  An election may be made at any time before an amount of compensation is paid under any of those sections in respect of the injury in question.  Those sections impose liability to pay compensation on Comcare, a body established by s. 68 and incorporated by s. 74 of the Act.  Comcare is constituted by the "Chief Executive Officer", a statutory position which is sui generis.^[13]

Under s. 45(2), where an employee makes an election, compensation is not payable after the date of the election under s. 24, 25 or 27 in respect of the relevant injury.  For that reason, Comcare has a clear interest in knowing of the election.  But Comcare is a distinct legal personality from the Commonwealth.^[14]  Unless and until it is sued, the Commonwealth has no interest in whether there has been an election under s. 45.  Until that happens, the Commonwealth is not a "party" to anything, except possibly the contract of employment, which is unaffected by s. 44 and 45 of the Act.  It is inappropriate to treat it as one might the "other party" to a contract which provided for a right of election.  I see nothing in the statutory provisions which suggests that it need ever receive a copy of the writing by which the election is made or otherwise be informed of the election; much less do I see anything which would require this to take place either before the commencement of proceedings or as an essential ingredient in the election process.

That leaves the question whether communication of the election to Comcare is part of the election process or alternatively a step which must be taken before the commencement of proceedings.  As already observed, Comcare has an interest in knowing of an election.  In the ordinary case, no problem will arise, for ordinarily, action will be commenced, and Comcare will be notified of it, promptly after the making of the election.^[15]  Where this does not happen, any compensation paid by Comcare is recoverable by it.^[16]  Any attempt to abuse the system provided by the Act by making an election and then accepting compensation for an extended period without commencing proceedings, would probably give rise to an estoppel.  It seems to me that the possibility of a delay between the making of the election and the institution of proceedings is insufficient to ground an implication that Comcare must be notified of the election before the proceedings are commenced.  There is nothing in the wording of the Act to suggest that notifying Comcare is an inherent part of the election.

Finally, there is the appellants' argument based on s. 45(3) of the Act, which provides that an election is irrevocable.  That is a statutory characteristic imposed on the election, not a quality which the maker must give it.  Presumably, the justification for the proposed construction is the possibility that some plaintiffs might be tempted for some reason to try to reverse an election after it was made.  The implication seems to be that the Act should not be interpreted so as to encourage forgery.  This seems a highly improbable scenario and one which in my view does not warrant making the implication proposed.  This argument would carry slightly more weight were it based on s. 45(2)(a) of the Act (which requires the action to be commenced after the election).  It might be argued that only if plaintiffs are required to communicate the election before they commence proceedings can Comcare have a check on compliance with the Act.  In my view the possibility of fabrication is remote.  Formalism should not rule the day.  There is no need for the election to be communicated to Comcare before the proceedings against the Commonwealth are instituted.

In my judgment, the respondent made the election under s. 45 when her solicitor signed the plaint on her behalf with knowledge of the right of election.

I would dismiss both appeals with costs.