DISTRICT COURT OF QUEENSLAND

1. [1]
   This is an application for leave under section 298 of the Workers Compensation and Rehabilitation Act 2003 to commence a proceeding notwithstanding that section 275 of that Act has not been complied with.

2. [2]
   The facts are a little unusual but in reasonably narrow compass so far as is relevant for this application. The applicant at some time, which is a little uncertain, between the 4th and the 10th of October, 2004, suffered an injury to his back in the course of his employment. There is some evidence to suggest he attended a doctor in relation to this injury on the 7th of October, 2004, and if that is correct the injury must have been suffered before then. However, there remains some doubt as to the exact date of the injury.

3. [3]
   The applicant applied for and was apparently paid compensation. In February 2005 he underwent surgery on his spine. This was not particularly successful in his case. According to the report of an orthopaedic surgeon who provided an assessment to the respondent, which is quoted in the notice of assessment exhibited to Ms Cameron's affidavit in the proceedings, when the applicant was reviewed in June 2005 he had ongoing severe right leg and back pain. Dr Williams assessed him as then having achieved maximal medical improvement and that there were no further options for intervention. He considered that the applicant's capacity for returning to any form of employment would be exceedingly limited.

4. [4]
   The applicant was born on the 12th of November, 1981 and was therefore 23 at the time this was written. On the 17th of June 2005 the respondent issued a notice of assessment in respect of the injury. It assessed the degree of permanent impairment attributable to the injury at 10 per cent and assessed a WRI of 10 per cent. It included an offer of lump sum compensation in the sum of $17,462.50, which was no doubt calculated in accordance with the requirements of the Act and Regulation.

5. [5]
   The applicant purported to accept this offer by a notice dated the 21st of June 2005, a copy of which is also exhibited to Ms Cameron's affidavit. He completed the form sent to him by WorkCover by ticking the box, "Accept the offer", signed the form, dated it 21 June 2005 and sent it back to WorkCover where it was received apparently on the same day. The applicant was subsequently paid the amount referred to in the notice of assessment and offer of lump sum compensation.

6. [6]
   On the 23rd of March, 2007 the applicant commenced proceedings in the Supreme Court against the respondent claiming damages for negligence, or in the alternative, a declaration that he is entitled to pursue a common law action for damages against the employer in relation to this injury. This alternative claim was on the basis that there had been no effective election undertaken and the purported election was void as a result of mental illness of the applicant, or was voidable and has been avoided by him. That action has been defended and the respondent's position in that action is inter alia that the purported election was valid and effective and prevents the applicant under the Act from pursuing an action for common law damages. That action in the Supreme Court has not yet come to trial and the issue has not yet been resolved by the Supreme Court.

7. [7]
   However, a difficulty has arisen for the applicant in that the limitation period is about to run out. If it runs out it appears that if the applicant is subsequently successful in the Supreme Court in the alternative relief sought by way of a declaration, it will be of no use to the applicant because the employer will have a good defence under the Limitation Act.

8. [8]
   Under the Workers Compensation and Rehabilitation Act 2003, which I refer to conveniently as the 2003 Act, it is clear that the Limitation Act provisions still apply.  See section 236.  Section 236 is subject to section 302 of the 2003 Act, which provides that: "A claimant may bring a proceeding for damages for personal injury after the end of the period of limitation allowed for bringing a proceeding for damages for personal injury under the Limitation of Actions Act 1974 only if" one of a number of things has happened before the end of the limitation period and the claimant complies with section 295. 

9. [9]
   There is, however, a further time limit as to when the proceeding must be brought in subsection (2). One of the things which satisfies paragraph (a) of subsection (1) is the Court giving leave under section 298.

10. [10]
    In Phipps v. Australian Leisure and Hospitality Group Ltd [2007] QCA 130, Keane JA said at [8] that section 302 of the Act:  "Provides for the alteration of the period of limitation which might otherwise adversely affect a claimant who is obliged to take time to conform to the requirements of the Act.” 

11. [11]
    Accordingly the applicant has applied for leave under section 298 of the 2003 Act, which provides in the following terms:

1. "(1)
   Subject to section 296, the claimant may start the proceeding if the Court, on application by the claimant, gives leave to bring the proceeding despite non-compliance with the requirements of section 275. 

2. (2)
   The order giving leave to bring the proceeding may be made on conditions the Court considers necessary or appropriate to minimise prejudice to the insurer from the claimant's failure to comply with the requirements of section 275."

The proceeding referred to in subsection (1) means the proceeding referred to in section 295, that is a proceeding in a Court for damages by a claimant. 

12. [12]
    Section 296 sets out some requirements before a claimant may start a proceeding, one of which is that the Court has made an order under, relevantly, section 298. If an order is made under that section it is still necessary to comply with section 296 but the limitation period will be extended under section 302.

13. [13]
    It is clear that the applicant has not complied with section 275, so whether the power exists under section 298 depends on whether the applicant is a claimant. An order can only be made in relation to a claimant and on application by a claimant. The respondent submitted that the applicant was not a claimant and that therefore the order could not be made.

14. [14]
    Section 233 of the 2003 Act defines "claimant" as: "A person entitled to seek damages." That leads reasonably quickly to section 237 of the Act which is in part 2 of chapter 5 which is headed, "Entitlement Conditions". Section 237(1) provides: "The following are the only persons entitled to seek damages for an injury sustained by a worker -". There is then a list of five paragraphs, but in this case it is sufficient to note that included in the list is a worker if the worker has received a notice of assessment from the insurer for the injury: section 237(1)(a)(i). That has been satisfied by the applicant in the present case.

15. [15]
    However, subsection (2) on which the respondent relied provides: "The entitlement of a worker, or a dependent of a deceased worker, to seek damages is subject to the provisions of this chapter." Reference was also made to subsection (3) but that in certain circumstances excludes an entitlement arising under subsection (1)(a)(ii) to seek damages. Subsection (5) provides:

"To remove any doubt, it is declared that subsection (1) abolishes any entitlement of a person not mentioned in the subsection to seek damages for an injury sustained by a worker."

16. [16]
    The respondent submits that it is not sufficient, for a person to be entitled to seek damages, for the person to satisfy the requirements of section 237(1), and submits that it is necessary to go on and satisfy the further requirements set out in the chapter. Reference may be made to section 235 which provides that the provisions of chapter 5 are provisions of substantive law.

17. [17]
    In addition, it may be noted that in Bonser v. Melnacis [2003] 1 QdR 1 the Court said at para [41] in relation to the WorkCover Queensland Act 1996 (the 1996 Act) which was the legislative predecessor of the 2003 Act:

"We should therefore accept the respondent employer's submission that the combined effect of the scheme introduced by the WorkCover Act (with particular reference to s 253, s 262 and s 203) effectively abolishes any entitlement on the part of an injured worker to commence proceedings against the employer and that such a right comes into existence only upon compliance with the prescribed steps.  Those steps in the present case would include the obtaining of an assessment, followed by an election (assuming that the assessment was of more than a nil disability) either to accept lump sum compensation or to seek damages.  Comparison may again be drawn with the section 45 election under the ComCare Act where the need for a specific identifiable election is recognised before rights of action are obtained."

18. [18]
    That suggests that at least under the 1996 Act an election to seek damages was part of what one was required to do before one obtained a right to commence proceedings against an employer. However, there are some differences between the wording of the 1996 Act and the wording of the 2003 Act. Nevertheless section 239 of the 2003 Act does refer to the similar election under the 2003 Act. That section provides relevantly:

"(1) This section applies if a worker's notice of assessment states that -

1. (a)
   the worker's WRI is less than 20 per cent; or

2. (b)
   the worker has an injury that does not result in any WRI of the worker.

2. (2)
   If, in the notice of assessment, the worker is offered a payment of lump sum compensation under chapter 3, part 10, division 3 for the injury, the worker is not entitled to both -

1. (a)
   payment of lump sum compensation for the injury; and

2. (b)
   damages for the injury."

19. [19]
    In the present case, as I've indicated, that section applies because the applicant's notice of assessment provided that the applicant's WRI was less than 20 per cent. The applicant was offered a payment of lump sum compensation under chapter 3, part 10, division 3 and, the respondent says, has accepted payment of lump sum compensation so that he is not entitled to damages for the injury.

20. [20]
    The applicant, however, submitted that there had been no valid election, that a payment was not a payment of lump sum compensation for the injury unless that had been made in response to an election, that is a valid and effective election, and that does seem to follow from the terms of section 188(4) of the 2003 Act.

21. [21]
    Reference may also be made to section 243 of the Act, which applies to this applicant because he is a person mentioned in section 237(1)(a)(i). Section 243 applies in relation to an urgent need for the claimant to start a proceeding for damages. That is as I have indicated the situation here. It says that section 276 provides a way for the claimant to satisfy section 302(1)(a)(ii), but also that the claimant may, under section 298, seek leave to start a proceeding for damages for an injury without complying with section 295. It goes on to provide, however, that if leave mentioned in subsection (3) is given, a proceeding started by leave is stayed until the claimant complies with section 295. That would appear to apply in the present case if leave is given, so that any proceeding to be commenced will be stayed until section 295 has been satisfied.

22. [22]
    In Phipps, to which I referred earlier, the issue before the Court of Appeal was whether a proceeding which had been commenced contrary to the requirements of section 237 and section 250 of the 2003 Act had to be struck out in circumstances where there was good reason to think that, although a notice of assessment had not already issued in favour of the plaintiff, there would be one issuing in the near future.  Essentially the question was whether the proceeding was necessarily irredeemably bad because it had been commenced contrary to the requirements of the statute.  That proposition which had been accepted by the Judge at first instance was rejected by the Court of Appeal. 

23. [23]
    Keane JA, with whom Muir JA agreed, said at [16]:

"The language of section 237 and section 250 is quite different from the proscription in section 275 of the Act.  The difference is between a statutory abolition of the entitlement to seek damages at all, otherwise than in compliance with the conditions of the statute, and a statutory prohibition on commencing an action ...

[17] In my respectful opinion, section 237 and section 250 go to the substantive entitlement of a claimant to recover damages. ...

Nevertheless, the reasoning in [Berowra Holdings Pty Ltd v. Gordon [2006] HCA 32] does contain authoritative instruction in relation to the determination of this case notwithstanding my view that section 237 and section 250 go to the appellant's entitlement to recover damages from the respondent. 

[18] The first point to be made here is that neither section 237 nor section 250 of the Act purports to prohibit the Court from continuing to entertain a claim brought contrary to those provisions.  What those provisions do is ensure that an action brought in disconformity with those provisions cannot succeed because the fact of the disconformity means that no liability can be established in the action against the defendant.  While the disconformity exists, the defendant can be under no liability in damages to the plaintiff.

[19] To reach this conclusion, it is not necessary to square the requirements of the Act with the elements of a right of action of common law:  it is sufficient that section 237 and section 250 of the Act clearly deny the entitlement of a claimant to seek damages otherwise than in conformity with the applicable provisions of the Act.  That is a matter of substantive entitlement."

24. [24]
    Although his Honour was dealing with a somewhat different point, in my opinion the reasoning in that decision is of some assistance in resolving the matter in the present case, particularly, the emphasis on the specific words adopted by the statute in particular sections.

25. [25]
    It cannot be the case that the pertinent person can only be a claimant, as submitted by the respondent, if all of the requirements of chapter five are met. One of those is section 275 and the whole point of section 298 is to allow someone who has not complied with section 275 to start a proceeding. So, "claimant" cannot be limited to someone who has complied with section 275.

26. [26]
    It seems to me that section 237(2) cannot, therefore, operate as a limitation on who can be a claimant. If one looks at chapter five as a whole, it is apparent that a large number of sections speak of a person as being a claimant who satisfies some part of section 237(1). Each of sections 241, 244, 249, 253, 257 and 261 refer to various people who satisfy the various paragraphs of section 237(1) as "claimants"; even if there are other provisions of the Act which impose restrictions on their commencing a proceeding or, indeed, seeking damages.

27. [27]
    The best example of that is that section 250, which was said in Phipps to impose a restriction on the right to seek damages and which does so in terms, does so in respect of a person described as "the claimant."  It seems to me that the wording of section 250 is inconsistent with the proposition that a person only qualifies as a claimant if the person has satisfied all the requirements of chapter five to seek damages for the injury. 

28. [28]
    I suspect that the intention was that the definition of "claimant" was intended to be read in connection with the terms of section 237(1), so that a claimant was a person who was entitled in accordance with that provision to seek damages for an injury. That will be consistent with the fact that subsection (5) confirms that everyone else's right to seek damages has been abolished by, specifically, that subsection.

29. [29]
    Section 239, on the other hand, does not speak expressly of a person who is entitled to seek damages. I should say, perhaps, before I come to that, that I should express some tentativeness about this analysis, in that I confess that there are some aspects of the operation of the 2003 Act that I feel that I really do not understand.

30. [30]
    On of those is, as I have just pointed out, the effect of section 250 which provides a limitation on a person who is defined as a person who is entitled to seek damages, as to whether such a person may seek damages for the injury.

31. [31]
    Section 250 applies to a person mentioned in section 237(1)(b): Section 249. That is, a worker whose injury has not been assessed for permanent impairment, if the worker's application for compensation was allowed. However, section 250 provides that the claimant may seek damages for the injury only if the insurer gives the claimant a notice of assessment.

32. [32]
    Once the notice of assessment is given then the worker will no longer fall under paragraph (b) of Section 237(1) but will fall under paragraph (a), as a person who has received a notice of assessment for the injury.

33. [33]
    In these circumstances, it is a little difficulty, in view of the terms of section 250, to see just why section 237(1)(b) is there, unless, perhaps, its function is to support section 251, although even then the wording of section 250 is, perhaps, a little curious. However, as I say, this is not an issue that arises directly in the present case and I note that the Court of Appeal in Phipps did not seem to find anything obscure or difficult about the interrelationship between sections 237 and 250.

34. [34]
    As I say, section 239 does not, in terms, speak of an entitlement to seek damages. What it speaks of is that a worker is not entitled to both payment of a lump sum compensation for the injury and damages for the injury. In other words, it is speaking about what a worker is entitled to recover, not what a worker is entitled to seek.

35. [35]
    In my opinion, it is not part of the definition of claimant. Accordingly, it is not necessary to show that a person is entitled to damages for the injury for the purposes or in accordance with section 239, for a person to be "entitled to seek damages for the injury," in order to satisfy the definition of "claimant" in section 233.

36. [36]
    In my opinion, it is sufficient to satisfy the requirements of section 237(1), at least in the case of a person who falls, as this applicant does, within paragraph (a) of subsection (1). Accordingly, I find that the applicant is a claimant. In these circumstances it is not necessary for me to find that the applicant is a person who is entitled to damages for the injury because the applicant has not received or was not entitled to receive a payment of lump sum compensation for the injury because there had not been an effective election.

37. [37]
    In my opinion, whether the applicant is a "claimant" for the purpose of section 298 does not depend on the determination of this question. I was not asked to determine this issue; indeed, senior counsel for the applicants specifically disavowed an intention to have me determine it.

38. [38]
    Further, there is no evidence before me to support the conclusion that any purported election was ineffective on the ground of unsoundness of mind on the part of the applicant at the time. It may be that an inference could be drawn from the circumstances under which the election occurred. Given that the applicant was 23 and that he had just suffered an injury which would effectively destroy his working capacity, apparently permanently, and that he was being offered as an alternative to common law damages a lump sum of about $17,500, it might be thought that any worker would be out of his mind to accept the offer.

39. [39]
    However, I was not asked to draw an inference on that basis as to the applicant's state of mind at the relevant time, and the position is simply that this is an issue in the Supreme Court and therefore it is one that I should not decide: see Hydronic Industries Pty Ltd v Taylor (1979) 5 QL 313.  If the respondent is correct and prevails on this issue in the Supreme Court, the result will be that section 239(2) will prevent recovery of common law damages in any action to be commenced in this Court pursuant to any leave given under section 298.

40. [40]
    The proceedings will then become pointless and should probably be struck out, but I should not decide at this stage that the proceedings will necessarily be pointless and that there would therefore be no point in allowing leave to commence such proceeding on the basis that if it were commenced it would be susceptible to being struck out.

41. [41]
    If that were the situation there probably would be no point in granting leave, but I do not think that I should decide that the notice of election, which was in fact signed and sent in by the applicant, was effective and that, therefore, the applicant has received the payment which qualifies as a payment of lump sum compensation for his injury and that he is therefore not entitled to damages for the injury under section 239(2), as well as, perhaps, on the ordinary principles of the law of election.

42. [42]
    If leave is given it seems to me that there will be no action commenced at once and any action which is commenced once the statutory requirements have been satisfied will be stayed until further requirements are satisfied. That ought to allow plenty of time for the issue to be resolved in the Supreme Court.

43. [43]
    In these circumstances I cannot identify any prejudice to the respondent in allowing the action to be commenced, and no particular prejudice was relied on on behalf of the respondent. The respondent's argument, apart from the fact that the applicant was not a claimant, was essentially that any such proceedings would be a waste of time because the applicant will be bound to fail.

44. [44]
    However, I think that is the issue that I ought not to decide and I should leave to the Supreme Court to decide. If the respondent is successful on that issue in the Supreme Court, that would mean that the proceeding would be a waste of time. However, if the applicant is unsuccessful in the Supreme Court, then it will mean that the applicant will be able to pursue that claim in the proceeding which I have allowed to commence and will not be prevented, and will not lose the benefit of that claim by having the Limitation Act run against him.

45. [45]
    Even if that is, in a sense, a contingent benefit, it is, I think, something of value and in circumstances where there is no good reason not to grant leave and where section 298 was obviously specifically intended to accommodate the difficulty arising by the imminent expiration of the limitation period, as indicated by section 243(3) referred to earlier, it seems to me on balance that if I have power to give leave to commence a proceeding, it is appropriate to grant that leave.

46. [46]
    In those circumstances there will be leave to the applicant under section 298 to commence a proceeding in this Court against the employer, notwithstanding non-compliance with section 275.

47. [47]
    I think the appropriate course is to make an order in terms of paragraphs one and two of the originating application. Ultimately, no issue was taken on behalf of the respondent as to the date of the injury. It was accepted that there was only one event and only one relevant injury and the point was whether, as a result of the purported election, the applicant was prevented from suing in respect of that injury.

48. [48]
    Accordingly, I think, an order in terms of paragraphs one and two of the originating application would be sufficient.

[Later that day, after hearing further submissions]

49. [49]
    I will formally vacate the order that I made this morning with a view to substituting this order as the appropriate form of order and the appropriate conditions in the light of the reasons that I expressed this morning.

50. [50]
    I have some sympathy with the respondent's position in circumstances where this was apparently the first case where this particular issue has arisen. The Act is relatively new and the situation is certainly unusual. However, there is not a particular reason why the applicant should be put to additional cost because of that. At the end of the day, the applicant's position has been vindicated and, because of the existence of section 276, it would have been possible had that section been used to have avoided the necessity to make an application under section 298. That is the whole purpose of section 276. In those circumstances, I think the respondent should pay the applicant's costs.

51. [51]
    I will order the respondent pay the applicant's costs of the application and I will adjourn any question of assessment for the time being. So that will mean that the order can be made in terms of the draft order. I will just add: Adjourn any question of assessment to a date to be fixed.