FEDERAL COURT OF AUSTRALIA

Woodside Energy Ltd v Zaghloul [2015] FCAFC 135

THE COURT ORDERS THAT:

1.    The appeal is dismissed.

2.    The appellant is to pay the respondent’s costs.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

the court:

1    Dr Hassan Zaghloul commenced employment with the appellant, Woodside Energy Ltd (Woodside) in March 2008. Dr Zaghloul claims that during his employment, he was harassed, intimidated and bullied and that by reason of that conduct, for which he says Woodside is responsible, he has suffered severe chronic major depressive disorder.

2    On 27 August 2012, Dr Zaghloul commenced an application in this Court for damages against Woodside in respect of that alleged workplace injury. Later, Dr Zaghloul claimed workers’ compensation payments under the Workers’ Compensation and Injury Management Act 1981 (WA) (the Compensation Act) in respect of that alleged workplace injury. He then elected to retain his common law claim for damages against Woodside and registered that election under the Compensation Act on 20 February 2013. He was notified that his election was registered on 25 February 2013.

3    The issue in this appeal is whether it is now possible for this Court to award Dr Zaghloul damages in respect of his alleged workplace injury. The answer to that question depends upon the proper construction of s 93K(4) of the Compensation Act, as it applied at the relevant time. That section has subsequently been amended.

4    Section 93K(4) of the Compensation Act provided as follows:

(4)    Damages in respect of an injury can only be awarded if –

(a)    the worker elects, in the manner prescribed in the regulations, to retain the right to seek the damages; and

(b)    the Director registers the election in accordance with the regulations; and

(c)    court proceedings seeking the damages are commenced within –

(i)    the period of 30 days after the Director gives the worker written notice that the Director has registered the election; or

(ii)    any further time provided for in the regulations to allow for things to be done before court proceedings are commenced;

and

(d)    the court is satisfied that the worker’s degree of permanent whole of person impairment is at least 15%.

5    Woodside has contended that on the proper construction of s 93K(4)(c), for the Court to have power to award him damages, Dr Zaghloul was obliged to commence his application for damages against Woodside within the 30 day window commencing on 25 February 2013 – the date he was notified that his election was registered. Woodside went on to contend that because Dr Zaghloul had commenced his application for damages on 27 August 2012 – which was before the commencement of the prescribed 30 day window - the Court was precluded from awarding him damages in respect of his claim.

background

6    As mentioned, on 27 August 2012, Dr Zaghloul commenced his application in this Court for damages against Woodside.

7    In his statement of claim, Dr Zaghloul has alleged that he had entered into an employment contract with Woodside in March 2008. Dr Zaghloul alleged further that Woodside owed him a duty to take reasonable care to ensure that he was not harassed, intimidated and bullied by its employees or agents. Dr Zaghloul contended that Woodside’s employees engaged in a campaign of harassment, intimidation and bullying against Dr Zaghloul and that he was subjected to verbal abuse and shouting by his superiors and was intimidated and threatened by his superiors. Dr Zaghloul claimed that by reason of the conduct of its employees, Woodside had acted in breach of its duty of care and that, as a consequence, he has suffered a severe chronic major depressive disorder and has suffered mental harm and physical injury. He claims damages in respect of that injury.

8    Dr Zaghloul also pleaded in his statement of claim that Woodside had engaged in misleading or deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth) and that by reason of this misleading or deceptive conduct, he had suffered the mental harm and consequential physical injury, of which he complained in relation to his cause of action for breach of duty of care.

9    On 1 November 2012, Woodside filed a defence to Dr Zaghloul’s statement of claim.

10    On 5 December 2012, Dr Zaghloul made claims for weekly payments under the Compensation Act.

11    On 20 February 2013, Dr Zaghloul’s election to claim damages under s 93K(4) of the Compensation Act was received by the Director, Conciliation (the Director).

12    On 25 February 2013, the Director notified Dr Zaghloul that she had registered his election.

13    As mentioned, this is an important fact in the context of the issue upon which this appeal turns.

the proceeding before the primary judge

14    On 12 May 2014, Woodside filed an amended interlocutory application dated 9 May 2014 pursuant to which it sought an order that the question of whether the Court could award damages against Woodside in tort or contract in respect of mental or physical injury suffered by Dr Zaghloul be heard and determined as a separate question.

15    Woodside also sought an order that the whole of Dr Zaghloul’s proceeding be dismissed insofar as Dr Zaghloul claimed damages in tort or contract in respect of the mental or physical injury suffered by him. Other relief was also sought, but that is not relevant to this appeal.

16    In support of the interlocutory application, Woodside relied upon an affidavit of Ms Young, a lawyer for Woodside’s solicitors. Ms Young’s evidence discloses that the registration of Dr Zaghloul’s election recorded that his degree of permanent whole of person impairment was 57%. That is a fact relevant to s 93K(4)(d) because it shows that his injury was sufficiently serious to satisfy that provision of the Compensation Act.

17    The primary judge ordered that the question of whether the Court could award damages in tort or contract in respect of mental or physical injury allegedly suffered by Dr Zaghloul be tried as a separate question. The primary judge determined that question in Dr Zaghloul’s favour and held that the Court had the power to award Dr Zaghloul the damages he claimed.

18    In coming to that decision, the primary judge found that Dr Zaghloul’s claim fell to be considered in accordance with the Compensation Act as in force prior to 1 October 2011. The primary judge noted that the question of construction before him had been considered and determined by the Court of Appeal of the Supreme Court of Western Australia (Newnes JA dissenting) in the case of St John of God Health Care Inc v Austin (2014) 46 WAR 208 (Austin).

19    In Austin, Pullin JA, with whom Murphy JA agreed, found that on the proper construction of s 93K(4)(c) of the Compensation Act, a court was not precluded from awarding damages in circumstances where a party had commenced a proceeding seeking the damages prior to the Director notifying the party of the registration of that party’s election to retain the right to seek damages at common law.

20    The majority held that s 93K(4) did not preclude a court from awarding damages provided that the court proceedings claiming the damages were commenced no later than 30 days after the Director gave the party written notice that the Director had registered the election.

21    In Austin at [9] and [10], Pullin JA observed as follows:

9    Section 93K of the WCIM Act, as it stood at the relevant time, was designed to require promptitude by a worker wishing to claim common law damages. There is no doubt that the word “within” may mean “during”: see Ward v Walton (1989) 99 FLR 21 at 25. However, there are many cases where, in circumstances requiring promptitude by a claimant in either giving notice or bringing proceedings, the argument that the appellant advances has been dismissed. An early example is found in Earl of Morton’s Trustees v Macdougall [1944] SC 410. In that case, legislation provided that compensation for damage done to a tenant’s crops by game should not be recoverable from the tenant’s landlord unless notice in writing of the claim was given to the landlord “within one month after the expiration of the calendar year…in respect of which the claim is made”. Notice was given by a tenant in December of the year in which the tenant's claim was made. The tenant’s landlord argued that notice had to be given, and could only be given, in January of the following year. That argument was rejected by the Court of Session, which held that the word “within”, when applied to a period of time, “most usually” meant “before the end of” that period (at 413). Therefore, notice before January was notice before the end of January. The same type of reasoning has been applied in Australian cases where legislation required promptitude in the bringing of proceedings: see Ward v Walton; Watson v WorkCover Queensland [2006] 1 Qd R 587; Dickin v BHP Billiton Ltd [2004] VSC 215; Yamamori (Hong Kong) Ltd v CTG Pty Ltd (1992) 109 FLR 249; see also the English case of R v Inland Revenue Commissioners; Ex parte Knight [1973] 3 All ER 721 at 727-728. The word “within” meaning “before the end of” or “no later than” has also been adopted in other contexts: see Plumor Pty Ltd v Handley (1996) 41 NSWLR 30 at [34] per McClelland CJ. Adopting that meaning here gives effect to the scope and purpose of the section read in the context of the legislation as a whole.

10    The appellant was unable to refer to any superior court case supporting its submissions that the section should be construed as requiring proceedings to be commenced during the 30 day period referred to. The appellant submitted that, because the word “period” appeared in s 93K and not in the legislation in the other cases, and because s 93K stipulated a sequence of procedural steps to be followed by an injured person wishing to preserve his or her right to recover common law damages, that the section could be distinguished from the “different statutory provisions in different contexts” construed in the other cases. That is no basis for distinguishing the other cases which, one way or another, involve the construction of statutory provisions that refer to a period of time and stipulate a sequence of events to be followed by a claimant. Earl of Morton’s is an example.

22    Newnes JA, in dissent, observed at [33] to [35] as follows:

33    In my opinion, the words “within the period of 30 days” clearly mean that the proceedings must be commenced within the 30 day period immediately after the worker is given notice of the registration of his or her election. That is, the proceedings must be commenced after the notice is given but not later than 30 days after it is given. That is made plain by the stipulation that the proceedings must be commenced within “the period” of 30 days after the notice is given.

34    That construction is consistent too with the Minister’s Second Reading Speech on the Workers’ Compensation Reform Act 2004 (WA), in which, having described the procedure now contained in Div 2 of Pt IV of the Act for a worker to elect to retain the right to seek damages, the Minister said:

Upon the worker receiving notification of the registration of the election, he or she will be required to lodge a writ within 30 days or in accordance with the District Court rules.

35    I do not accept the respondent’s contention that s 93K(4)(c)(i) is to be understood to mean simply “not later than” 30 days after the worker is given notice of registration of the election; that is, that the proceedings can be commenced at any earlier time. I do not consider the cases relied on by the respondent support that construction. While it can readily be accepted that the word “within” may, in a particular statutory context, mean simply “not later than” the time or event specified, the meaning it bears must, of course, depend upon the context. We were not referred to any cases where the precise language used in s 93K(4) has arisen for consideration and my own research has not unearthed any. The cases relied upon by the respondent depended upon provisions in different terms and in different contexts.

23    At [43] to [45], Newnes JA went on to observe:

43    In the present case, the relevant provisions of the Act are not only in different terms but they are concerned with a quite different issue to those cases; namely, to deter actions for damages being brought in respect of workplace accidents where the claim is below the statutory threshold. Once it is established that the threshold has been satisfied and an election to retain the right to seek damages registered, s 93K(4)(c) then requires any action for damages to be instituted promptly.

44    If the respondent’s argument were to be accepted it would mean that an action for damages could be commenced long before it was established that the statutory threshold was satisfied, so long as the action did not proceed to judgment before the requirements of s 93K(4)(a) and (b) had been fulfilled. In light of the legislative purpose, that cannot, in my view, have been intended. It could not have been intended by the legislature that a worker might commence proceedings in the hope or expectation that the statutory threshold would be met and the requirements of s 93K(4)(a) and (b) fulfilled so that the ability to obtain relief by an award of damages would arise before judgment in the action. On the contrary, speculative litigation of such a nature seems to me the complete antithesis of what was contemplated by the legislature. It is not, in my opinion, an answer to say that an employer might (inevitably at some cost) be able to obtain an order staying such an action pending notice by the Director of registration of an election by the worker.

45    Nor, in my view, is it to the point that in a particular case the limitation period for an action for damages might run out before the requirements of s 93K(4) have been fulfilled. That is simply the balance that has been struck by the legislature.

24    The primary judge said that he preferred the view expressed by Newnes JA. The primary judge went on to say that the presence of the words, “the period of”, after the word “within” and before the phrase, “30 days after”, and the fact that s 93K(4) of the statute prescribed a sequential process, were other indicia which supported the observations of Newnes JA. The primary judge also referred to the fact that there were dissenting judges in two of the cases referred to by the majority, which favoured the view subsequently adopted by Newnes JA.

25    However, the primary judge went on to observe at [122] and [123]:

122    However, I am not prepared to conclude that the majority judgment in Austin is plainly wrong. It is a matter upon which minds may differ and have differed. That this is so is not a sufficient basis to decline to follow a decision of an intermediate appellate court on the same question: Transurban City Link Ltd v Allan (1999) 95 FCR 553 at [29], citing with apparent approval Magman International Pty Ltd v Westpac Banking Corporation (1991) 32 FCR 1 at 20. Those decisions concern the Full Court not departing from another Full Court decision in such circumstances. It is more the case where a single judge is confronted by a decision of a Full Court or other intermediate appellate court.

123    Accordingly, I must follow Austin and decide the separate question in the affirmative, namely that the Court can award such damages to the applicant.

grounds of appeal

26    Woodside has appealed from the orders of the primary judge.

27    The amended notice of appeal relied on three grounds of appeal, but each ground of appeal contended, in effect, that the majority decision of the Court of Appeal of the Supreme Court of Western Australia in Austin, was plainly wrong, that this Full Court should consider the question of the proper construction of s 93K(4) afresh and, in doing so, it should adopt the dissenting view expressed by Newnes JA.

ANALYSIS

28    The appellant contended that in contrast to the majority judgment, the dissenting judgment of Newnes JA paid close attention to the statutory text and context, including the legislative history and extrinsic materials.

29    We have, for the following reasons, come to the view that although there is much to be said in support of the alternative view, it cannot be said that the view expressed by the majority in Austin is “plainly wrong”.

30    Section 93K(4), the statutory provision which is the subject of controversy in this case, appears in Pt IV of the Compensation Act. Part IV of the Compensation Act is entitled “Civil proceedings in addition to or independent of this Act”.

31    Part IV of the Compensation Act is divided into divisions. The first division is headed “General” and contains a number of provisions which are of importance to the construction of the Compensation Act and, in particular, to the construction of s 93K(4). The second division is headed “Constraints on awards of common law damages”. Section 93K(4) forms part of the second division, and is to be found in Subdiv 3 of Div 2 and is headed “2004 scheme”.

32    A number of sections which are found in Div 1 are of importance in the construction of s 93K(4) within the context of the Compensation Act as a whole. Section 86 of the Compensation Act is of significance because it provides that:

Except as expressly provided by this Act, nothing in this Act affects any liability that exists independently of this Act.

33    Further, s 92 and s 93 of the Compensation Act are also of particular significance because each of these sections recognises the prospect that an injured worker may have causes of action in respect of his or her workplace injury against both his or her employer and a third party who may be liable for that injury. These sections contemplate that the injured worker will bring proceedings which make claims for damages against both the employer and the third party, and the sections make provision for adjusting rights between the parties so as to diminish double recovery.

34    In that context, it is of importance to observe that the constraint upon the award of damages sought to be effected by s 93K(4) of the Compensation Act only applies in relation to the awarding of compensatory damages against the worker’s employer, and not in relation to the awarding of damages against any other potential defendant referred to in s 92 and s 93 of Div 1 of Pt IV of the Compensation Act: see, s 93B of the Compensation Act. Also, s 93B(3) of the Compensation Act provides, in effect, that the restrictions in s 93K(4) do not apply in relation to the awarding of exemplary or punitive damages, even in respect of a claim made against an employer.

35    We refer to these provisions in the context of considering the impact of the construction contended for by Woodside on the operation of the legislation as a whole. In this regard, it is important to recall that Pullin JA in Austin, after having referred to a number of cases in which arguments similar to that advanced by Woodside had been rejected, ultimately supported his construction of s 93K(4) on the basis that that construction “gives effect to the scope and purpose of the section read in the context of the legislation as a whole”.

36    On the construction contended for by Woodside, an injured worker with a claim against both his employer and a third party defendant would only be able to obtain damages against both defendants if the proceeding against those parties was commenced within the 30 day window period prescribed by s 93K(4), notwithstanding that the restriction upon the award of damages referred to in s 93K(4) only applied in relation to the awarding of damages against the employer and not against the third party defendant. Alternatively, on Woodside’s contention, the injured worker could commence an action against the third party defendant and then, commence a second action against the employer during the 30 day window period after the notification of the registration of the injured worker’s election. This is plainly an unsatisfactory outcome, which is avoided on the construction adopted by the majority in Austin.

37    In the cases referred to by Pullin JA in Austin, the courts had regard to the effect of competing constructions upon the operation of the legislation as a whole in deciding between those competing constructions. The fact that one or other of the constructions might lead to an anomalous or unsatisfactory result was relied upon by the courts in determining the preferable construction. Thus, for example, in the case of Ward v Walton (1989) 99 FLR 21, Asche CJ referred to one of the constructions as giving rise to a result that is “arbitrary” and has “no rational basis”. Gallop J in that case referred to one of the competing constructions as leading to “absurdity”.

38    Although Pullin JA’s judgment in Austin did not expressly state why the construction he favoured gave “effect to the scope and purpose of the section read in the context of the legislation as a whole”, it is easy to infer that the considerations which weighed with Pullin JA reflected considerations of the nature referred to in [36] above, which had weighed with the courts in the cases to which Pullin JA referred.

39    This approach to the construction of a statutory provision in the context of legislation as a whole is, in our view, consistent with the approach identified by the High Court in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69]:

The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined “by reference to the language of the instrument viewed as a whole”. In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that “the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed”. Thus, the process of construction must always begin by examining the context of the provision that is being construed. (Footnotes omitted.)

40    Whilst, as we have said, there is much to be said in support of the views expressed by Newnes JA, it is also the case that his Honour’s judgment is also open to the criticism that, in seeking to construe s 93K(4) in the context of the whole of the legislation, his Honour dealt with policy considerations exclusively by reference to an injured worker’s claim against his or her employer, without regard to the provisions of wider ambit in Div 1 of Pt IV of the Compensation Act. This omission also leaves his judgment open to the criticism that in relying upon the statement of the Minister in the Second Reading Speech, reliance was placed on “extrinsic materials before exhausting the application of the ordinary rules of statutory construction”: Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252 per French CJ, Gummow, Hayne, Crennan and Kiefel JJ at [33].

41    It follows that we are not persuaded that the decision of the majority in Austin is plainly wrong. As Greenwood J has observed in BHP Billiton Iron Ore Pty Ltd v The National Competition Council (2007) 162 FCR 234 at [84]:

That minds might differ on a question is not a foundation for a conclusion that a decision supported by exposed reasons for judgment after full argument, is plainly wrong.

42    There is a further important consideration. It is apparent from the authorities provided to us that the Supreme Court of Western Australia is called upon not infrequently to construe the Compensation Act and has considerable experience and expertise in that regard. This Court would not lightly conclude that a decision of the Court of Appeal of the Supreme Court of Western Australia with such experience and expertise in relation to the construction of the Compensation Act, was “plainly wrong”.

43    It follows that the primary judge did not err.

44    The appeal is dismissed.

45    The appellant is to pay the respondent’s costs.

Associate:

Dated:    16 September 2015