Short v Michaliczac[1998] QDC 106

[Before McMurdo D.C.J.]

[Mary Short and Peter John Michaliczac and Tracey Maree Michaliczac and Galaxy Investment Pty Ltd]

BETWEEN:

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REASONS FOR JUDGMENT

BETWEEN:

AND

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REASONS FOR JUDGMENT - McMURDO D.C.J.

Delivered the 22nd day of May, 1998

The first-named first defendant has brought a summons requesting that the plaintiff's action against the first defendants be struck out for want of compliance with ss. 132 and 182D of the Workers' Compensation Act 1990, (the Act).

The plaintiff has brought a summons requesting that the name of the first defendant be struck out and a new first defendant, namely Peter John Michaliczac, be added and that the plaintiff be at liberty to amend its pleadings accordingly.

All parties agree it is sensible to deal firstly with the summons brought by the first-named first defendant.

The Application to strike out the plaintiff's action against the first defendants

The plaintiff claims damages for personal injuries suffered by her on 28 December 1986 when she slipped and fell in the course of her employment. She alleges that the first defendants were her employers and leased the premises where the business was conducted from the second defendant. The plaintiff claims damages for negligence, breach of contract and/or breach of statutory duty from the first defendant, and damages for negligence from the second defendant. The plaint alleges that the plaintiff suffered personal injuries during the course of her employment with the first defendants.

It is therefore alleged by the plaintiff that she suffered an injury within the meaning of the Act.

The plaintiff applied for and received Workers' Compensation benefits from 3 January 1997 and continuing.

Section 182D(1) of the Act allows access to common law damages if no previous offer of lump sum compensation has been made under s. 132 of the Act, only if the board gives the plaintiff a certificate under s. 182D of the Act. The section should be set out in full:

It is common ground that at no time has the plaintiff ever been offered or received lump sum compensation under s. 132 of the Act; that at no time has the plaintiff ever applied for or received a certificate from the board under s. 182D of the Act; and that the plaintiff's injuries are not a “serious injury” within the meaning of s. 182A(2) of the Act.

Counsel for the second defendant and counsel for the plaintiff submit that s. 182D of the Act is procedural or directory rather than mandatory.

The only case to which I have been referred which has considered s. 182D(1) of the Act is the unreported decision of His Honour Judge McGill D.C.J., Wilkie v. Doce Pty Ltd. 2137/97, delivered 17 September 1997. His Honour was asked to rule, pursuant to r. 231A of the District Court Rules, on a question of law, namely, whether the pleaded defence, that the plaintiff was not entitled to seek damages until she obtained a certificate pursuant to s. 182D of the Act, was a good ground of defence.

The case involved an injury prior to the commencement of s. 182D(1) of the Act on 1 January 1996 and a subsequent exacerbation of that injury.

His Honour noted at 4:

His Honour held that the exacerbation subsequent to 1 January 1996 did not mean that the plaintiff was seeking “damages at law” for that exacerbation, as the plaintiff was pursuing rights or causes of action against her employer in respect of injuries suffered prior to 1 January 1996. It was not alleged the exacerbation of those injuries was caused by any fault on the part of the defendant but rather that the earlier fault of the defendant prior to 1 January 1996 caused the later exacerbation. On the particular facts of that case, which do not apply here, His Honour ruled the defence pleaded pursuant to s. 182D(1) was not a good defence.

With respect, I agree with his Honour's interpretation of s. 182D(1). The plain wording of s. 182D(1) makes it clear that the plaintiff cannot seek damages at law for her injury as pleaded, unless the board gives her a certificate under this section.

An application to strike out a plaintiff's action should only be granted in a very clear case: Woods v Wilson (1902) 19 WN (NSW) 147.

Such action was taken in Hill v. Bolt (1992) 28 NSWLR 329 (NSW Court of Appeal) which was followed by Newton D.C.J. in Young v. Nominal Defendant & Ors 18 Qld. Lawyer Reps. 21.

In Young (supra), the plaintiff had failed to comply with s. 37(1) of the Motor Accident Insurance Act (1994)(Qld) (that Act) which was in these terms:

Section 39(5) of that Act allowed a claimant to bring a proceeding in a Court for damages based on a motor vehicle accident only if certain pre-conditions were met or-

Newton D.C.J, does not seem to have been asked to consider any application pursuant to s. 39(5)(c) Motor Accident Insurance Act (1994) and, in striking out the action for want of compliance with s. 37(1), noted in passing that the plaintiff was not prevented from subsequently pursuing her rights.

The same provisions of the Motor Accident Insurance Act (1994) were considered in the unreported decision of His Honour Judge Forde in Hardacre v. Jensen & Suncorp General Insurance Limited 5102/97, delivered 27 January 1998. In that case the plaintiff failed to deliver the required notice prior to the commencement of the action and the defendant sought to strike out the action. The plaintiff was given leave to file a summons pursuant to s. 39(5)(c) for leave to bring the proceedings despite non-compliance with the requirements of Division 3 of the Act. If leave were not given, the plaintiff's action would have been statute barred. His Honour held that pursuant to s. 39(5)(c) of that Act, the failure to comply with s. 37(1) before bringing an action could be cured once an application was made pursuant to s. 39(5)(c), by retrospective order of the Court. He found the provisions of that Act were not mandatory. He distinguished Fitzpatrick v. Jackson [1989] 2 Qd.R. 542 where the provisions of s. 95 of the Public Trustee Act 1978-1981, requiring the consent of the Public Trustee before a prisoner could bring an action of a property nature or for the recovery of any debt or damage, were held to be mandatory and that consent of the Public Trustee could not be given by the Court nunc pro tunc. His Honour was satisfied that he ought to grant such retrospective leave in that case.

Unlike s. 39(5)(c) of the Motor Accident Insurance Act (1994), the Workers' Compensation Act 1990 makes no provision for any application to a court to give leave to bring the proceeding where there has been no compliance with the requirements of s. 182D.

Section 182D(3) sets out the circumstances in which the board may only and must give the worker a certificate.

Section 182D(4) of the Act allows the board to issue the worker with a conditional certificate in circumstances which include where there is an urgent need to bring proceedings for damages, presumably to cover a situation where a statutory time limit is at risk of expiring. Proceedings are then stayed until the board makes the certificate unconditional which it must do once the conditions set out in 182D(3) are satisfied.

If the board is unable to make a decision about a matter in ss 182D(3), the board must refer the matter to a medical assessment tribunal. A worker may appeal from a decision made by the board under sub-section 3(a) but there is no appeal from a decision of a medical assessment tribunal.

Statutes of limitations are procedural laws, whilst statutes which extinguish civil liability and destroy a cause of action are substantive laws: see McKain v. R W. Miller & Co (SA) Pty Ltd (1991-92) 174 CLR 1 at 41.

Counsel for the second defendant argues that because there are no provisions under the Act to give a Court discretion to remedy the irregularities, s. 182D should be construed as procedural. He gives by way of example a case where a worker consults a solicitor on the final day of the limitation period and who would be unable to issue proceedings until he obtained a conditional certificate. Section 182D(4) however, clearly envisages the board issuing conditional certificates where there is an urgent need.

He also argues a distinction can be drawn between the terms of s. 182D and the provisions of the Motor Accident Insurance Act 1994. The clear words of s. 182D are that “A worker who has not received an offer of lump sum compensation under s. 132 may seek damages at law for an injury suffered after the commencement (i.e. after 1 January 1996) only if the board gives to the worker a certificate under this section.” (my underlining) This plainly prohibits the commencement of proceedings until the board has issued a certificate. Unlike the provisions of the Motor Accident Insurance Act (1994), there is no provision for Courts to remedy any failure to comply with 182D(1). The failure of the plaintiff to obtain the certificate means the plaintiff cannot seek damages at law until the board gives her a s. 182D certificate or conditional certificate. Until that pre-condition is met, the first defendant's civil liability is extinguished. If the plaintiff's action against the first defendants is struck out, the plaintiff is not statute barred from then obtaining the certificate of the board and re-issuing proceedings.

In David Grant & Co Pty Ltd v. Westpac Banking Corporation (1994-1995) 184 CLR 265 at 277, the meaning of the term “may only” within s. 459G of the Corporations Law (Vict) was discussed by the High Court. Section 459G required that an application to set aside a statutory demand “may only” be made within 21 days after the service of the demand. Section 1322(4)(d) of the Corporations Law (Vict) allowed the court to extend periods for the doing of any act. Despite that section, the High Court held that s. 459G Corporations Law (Vict) imposed a time requirement as an essential condition to the right to apply to set aside a statutory demand and was not qualified by s. 1322(4)(d). Of course, the meaning of each statute must turn very much on its own words.

This case is properly distinguishable from the retrospective granting of leave to sue a bankrupt as occurred In re Saunders (a bankrupt) [1997] Ch. 60 or the retrospective granting of leave to wind up a company in insolvency as in Emanuele v. Australian Securities Commission (1997) 188 CLR 114.

Section 182D(1) is mandatory in form and is not merely procedural. The plaintiff has not obtained the certificate or conditional certificate of the board and is therefore not entitled to seek damages at law for an injury suffered after 1 January 1996. Civil liability is extinguished until that pre-condition is met. The application on behalf of the first-named first defendant must, in my view, be successful.

The second-named first defendant was married to the first-named first defendant, but they are now divorced. She is now separately represented, although no one appears for her on these applications. I am told by Mr. Everson, who appears on behalf of the plaintiff, that she is consenting to the orders sought by the plaintiff. If the first-named first defendant's application is successful, should it also be successful on the part of the second-named first defendant?

Counsel for the second defendant argues that the first defendant should remain as a defendant as her name is on the lease entered into between the second and first defendants and the second defendant has issued a notice seeking indemnity and contribution against her. The plaint clearly alleges against both first defendants that the plaintiff is entitled to damages in negligence, for breach of contract and breach of statutory duty during the course of her employment: see paragraph 14 of the plaint.

If the application brought by the first-named first defendant is successful, it must be so in respect of both first defendants, who the plaintiff alleges were her employers at the relevant time. Until the plaintiff has a s. 182D certificate, she cannot seek damages against the second-named first defendant for an injury suffered (which arises out of the course of the plaintiff's employment if the employment was a significant contributing factor to the injury) after 1 January 1996.

The plaintiff's action against both first defendants should be struck out.

The second defendant's claim for contribution or indemnity against the first defendants

The second defendant has an existing claim for contribution or indemnity under s. 6 of the Law Reform Act 1995. This will be rendered nugatory once the action against the first defendants is struck out.

The second defendant argues that s. 182D of the Act does not apply to it as it was not the employer of the plaintiff, but the owner of the business premises. Section 182A(1) of the Act provides:

Section 182D therefore applies to a worker who comes within s. 182A(1) as the plaintiff plainly does.

Section 182D(1) is not specifically limited to an action against an employer. It prohibits the worker from seeking damages at law for an injury suffered after 1 January 1996, which arises out of the course of the worker's employment if the employment was a significant contributing factor to the injury, without a certificate under s. 182D. The plaintiff's action against the second defendant is exactly that: damages at law for a work-related injury suffered after 1 January 1996. It may be, therefore, that in those circumstances, the plaintiff is prohibited from seeking damages at law for an injury suffered after 1 January 1996, not only against her employer, the first defendants, but also against the owner of the work place, the second defendant. The second defendant did not, however, join in the application of the first-named first defendant so it is unnecessary for me to come to a concluded view on this.

Is the second defendant entitled to issue a third party notice?

The second defendant sought leave during the hearing of these applications to issue a third party notice against the first defendant.

Section 6 of the Law Reform Act (1995) provides:

The second defendant's difficulty is that until the plaintiff has the certificate of the board under s. 182D, the first defendants are not liable in respect of any damage suffered by the plaintiff. In Brambles Construction Pty Ltd v. Helmers (1965) 114 CLR 213; Canberra Form Work v. Civil and Civic (1992) 67 FLR 66; and Guyder v. Lipscombe Brisbane Service Motors and Lyons [1966] Qd.R. 24 the courts interpreted the words “if sued” as used in the equivalent of s. 6 of the Law Reform Act (1995) as meaning “who would if sued at any time have been liable - that is held liable.” These are all cases concerned with statutory time limits. The statute of limitations which operate against a plaintiff do not operate against a defendant tortfeasor in an action for contribution. In this case the plaintiff may not seek damages until she has the certificate of the board under s. 182D of the Act. Until that time the employer first defendants are not liable “in respect of the same damage”.

In Commonwealth of Australia v. Flaviano (1996) 40 NSWLR 199, the New South Wales Court of Appeal held that as s. 44 of the Safety Rehabilitation and Compensation Act 1988 (Cth) prevents an employee from suing the Commonwealth for damages for personal injury in the course of employment, the Commonwealth cannot be required pursuant to the Law Reform (Miscellaneous Provisions) Act 1946 s. 5(1)(c) to make a contribution to another tort feasor who is liable for that same damage. Section 44 of that Act provides that subject to s. 45 “an action or other proceeding for damages does not lie against the Commonwealth in respect of an injury sustained by an employee in the course of his or her employment Pursuant to s. 45, once certain criteria are met, an employee may at any time before compensation is paid to the employee in respect of that injury, elect in writing to institute an action or proceeding against the Commonwealth.

Counsel for the second defendant argues that Flaviano (supra) can be distinguished from the present case as s. 44 of the Safety Rehabilitation and Compensation Act 1988 (Cth) destroys the cause of action, in the absence of a written election to the Commonwealth. He submits s. 182D(1) of the Act does not do this.

Whilst s. 182D(1) does not specifically destroy the cause of action, it does mean that the plaintiff “may seek damages at law for an injury suffered (after 1 January 1996) only if the board gives to the worker a certificate under this section.” Until the plaintiff has the necessary certificate pursuant to s. 182D(1) of the Act, the employers, the current first defendants, are not persons who “would, if sued, have been liable as a joint tort feasor in respect of the same damage”. Their civil liability is extinguished until that - pre-condition is met. Until the plaintiff has the s. 182D certificate of the board, there can be no cause of action against the first defendants. As Kelly SPJ said in Fitzpatrick v Johnson (supra) at 548 “leave could not properly have been granted to join the second respondent as a party to the action as it is not possible to join a party to an action which is a nullity.” The current first defendants therefore do not come within the class of persons who can be joined as third parties pursuant to s. 6 of the Law Reform Act 1995.

I refuse to grant leave to the second defendant to make an application to issue a third party notice. Had such an application been made, I would have refused it.

The plaintiff's application

The plaintiff has also brought an application that the first defendants' names be struck out and a new first defendant, namely Peter John Michaliczac, be added to these proceedings. As the action against the first defendants is to be struck out, this application must fail and is dismissed.

I propose the following orders:

4. I dismiss the plaintiff's summons filed 24 March 1998.

The plaintiff's application

The plaintiff has also brought an application that the first defendants' names be struck out and a new first defendant, namely Peter John Michaliczac, be added to these proceedings. As the action against the first defendants is to be struck out, this application must fail and is dismissed.

I propose the following orders: