FEDERAL COURT OF AUSTRALIA

Linfox Australia Pty Ltd v O’Loughlin [2018] FCAFC 173

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

2.    The appellant pay the respondent’s costs of the appeal, to be taxed in default of agreement.

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

REASONS FOR JUDGMENT

THE COURT:

1    This is an appeal from orders made by a single judge of this Court by which a decision of the Administrative Appeals Tribunal was set aside. The Tribunal had affirmed the decision of the appellant, Linfox Australia Pty Ltd, made in early 2014, to revoke a prior grant of workers’ compensation to the respondent, Mr Kym O’Loughlin.

2    Mr O’Loughlin had sustained a serious injury on 7 September 2010 from a physical altercation with a mechanic at a service station while he was in the process of delivering petrol to the service station for one of Linfox’s petrol supplier customers. The revocation by Linfox, which was upheld by the Tribunal, was based on a view taken of the relevant provisions of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (SRC Act) that Linfox had never been liable because of the way in which Mr O’Loughlin’s injury was sustained. The primary judge took a different view, which Linfox now challenges.

3    The key issue before the Tribunal was whether Mr O’Loughlin’s injury occurred “in the course of his employment”, as required by the SRC Act. His entitlement to compensation turned on the interpretation and thereby the application of the following four provisions of that Act (reproduced in full later in these reasons):

(1)    s 14, which provides for liability to pay workers’ compensation for an “injury” suffered by an employee;

(2)    s 5A(1)(b), which defines “injury” to mean an injury “arising out of, or in the course of … employment”;

(3)    s 6(1)(b), which relevantly provides:

Without limiting the circumstances in which an injury to an employee may be treated as having arisen out of, or in the course of, his or her employment, an injury shall be treated as having so arisen if it was sustained: …

(b)    while the employee was at the employee’s place of work, for the purposes of that employment … ; …

(4)    s 6(3)(a), which relevantly provides that s 6(1)(b) does not apply where an employee sustains an injury while at a place referred to in that subsection “if the employee sustained the injury because he or she voluntarily and unreasonably submitted to an abnormal risk of injury”.

4    As may be seen, s 6(1) enumerates circumstances in which an injury is to be treated as meeting the definition of “arising out of, or in the course of … employment”. It is possible that an injury may meet the general definition of “arising out of, or in the course of … employment” independently of s 6(1), while also falling within the scope of one of the circumstances enumerated by s 6(1) (remembering that the operation of s 6(1) is subject to exclusion where s 6(3)(a) applies). This is what happened in Mr O’Loughlin’s case. The Tribunal found that:

(1)    Mr O’Loughlin’s injury had arisen in the course of his employment as required by s 5A(1)(b);

(2)    the injury had been sustained while at his place of work, for the purposes of his employment, thus also falling within s 6(1)(b); and

(3)    he had voluntarily and unreasonably submitted to an abnormal risk of injury, such that s 6(3)(a) applied to exclude the operation of s 6(1)(b).

5    The Tribunal took the view that Mr O’Loughlin could not avoid the application of ss 6(1)(b) and 6(3)(a), regardless of the independent finding that his injury was sustained in the course of his employment. On that basis, it held that, by virtue of s 6(3)(a), his injury could not be treated as having arisen in the course of his employment and was not compensable.

6    Mr O’Loughlin appealed under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) on a question of law. The primary judge held that the Tribunal erred in applying s 6(3) and set its decision aside. His Honour considered that no occasion arose to have regard to s 6 if the injury met the definition in s 5A(1)(b) in its own terms. To do otherwise, his Honour observed, would be contrary to the evidently facultative and non-restrictive purpose of s 6.

7    Linfox challenges his Honour’s conclusion. It does not press a separate ground of appeal concerning an unsuccessful notice of contention before his Honour. The appeal can be decided on the narrow question of statutory construction as to whether the primary judge erred in concluding that s 6 was not engaged. For the reasons that follow, the conclusion reached by his Honour was correct.

The key provisions of the SRC Act

8    Section 14 of the SRC Act imposes a liability to pay workers’ compensation upon the federal government workers’ compensation body, Comcare, and upon a “licensed corporation” under Pt VIII of that Act. Linfox is such a licensed corporation, such that references to Comcare in the SRC Act are taken to be references to Linfox by virtue of s 4(10A).

9    Section 14 provided, as at the time of Linfox’s decision to revoke Mr O’Loughlin’s entitlement to workers’ compensation in early 2014 (and still provides):

14    Compensation for injuries

(1)    Subject to this Part, Comcare is liable to pay compensation in accordance with this Act in respect of an injury suffered by an employee if the injury results in death, incapacity for work, or impairment.

(2)    Compensation is not payable in respect of an injury that is intentionally self-inflicted.

(3)    Compensation is not payable in respect of an injury that is caused by the serious and wilful misconduct of the employee but is not intentionally self-inflicted, unless the injury results in death, or serious and permanent impairment.

10    Without any limiting definition of “injury” for the purposes of s 14(1), an employer’s liability to pay workers’ compensation would not be confined by any nexus to work or the workplace. That nexus and limitation comes from the definition of “injury” in s 5A. Relevantly, s 5A(1) provided (and still provides):

5A    Definition of injury

(1)    In this Act:

injury means:

(a)    a disease suffered by an employee; or

(b)    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; or

(c)    an aggravation of a physical or mental injury (other than a disease) suffered by an employee (whether or not that injury arose out of, or in the course of, the employee’s employment), that is an aggravation that arose out of, or in the course of, that employment;

but does not include a disease, injury or aggravation suffered as a result of reasonable administrative action taken in a reasonable manner in respect of the employee’s employment.

11    The definition of injury in s 5A(1)(b), taken alone, is capable of giving rise to a number of nuanced debates on the scope of the phrases “arising out of … employment” and “in the course of … employment”. The meaning of those phrases, and like phrases, have a long history in workers’ compensation cases. However, the legislature may be seen to have eliminated a number of areas of potential controversy by expressly expanding the ambit of both phrases for the purposes of the SRC Act beyond what has been historically recognised in the jurisprudence. This is achieved by s 6(1). That provision sets out a number of situations in which an injury to an employee “shall be treated” as having arisen out of, or in the course of, his or her employment.

12    Section 6(1) was amended between the time of the original grant of compensation in 2010, and the revocation by Linfox in 2014. In making that revocation decision, Linfox applied the version of s 6(1) that was in force in 2014, as did the Tribunal in conducting merits review of that decision. Before the primary judge, Linfox maintained that the version of s 6(1) in force in 2014 should be applied. Mr O’Loughlin said that the 2010 version should apply, but that it made no difference to his argument as to which version was relied upon. The primary judge had regard to both versions: see [7], [21], [52], [72]-[74].

13    While only s 6(1)(b) is directly relevant to this appeal, the remaining paragraphs of s 6(1) are important to reproduce because they illustrate the provision’s general expansionary ambit. The version of s 6(1) that was in force in 2014, which has not changed since, includes a range of circumstances that may otherwise have given rise to disputes as to whether an injury was compensable:

6    Injury arising out of or in the course of employment

(1)    Without limiting the circumstances in which an injury to an employee may be treated as having arisen out of, or in the course of, his or her employment, an injury shall, for the purposes of this Act, be treated as having so arisen if it was sustained:

(a)    as a result of an act of violence that would not have occurred but for the employee’s employment or the performance by the employee of the duties or functions of his or her employment; or

(b)    while the employee was at the employee’s place of work, for the purposes of that employment, or was temporarily absent from that place during an ordinary recess in that employment; or

(c)    while the employee was temporarily absent from the employee’s place of work undertaking an activity:

(i)    associated with the employee’s employment; or

(ii)    at the direction or request of the Commonwealth or a licensee; or

(d)    while the employee was, at the direction or request of the Commonwealth or a licensee, travelling for the purpose of that employment; or

(e)    while the employee was at a place of education, except while on leave without pay, in accordance with:

(i)    a condition of the employee’s employment by the Commonwealth or a licensee; or

(ii)    a request or direction of the Commonwealth or a licensee; or

(iii)    the approval of the Commonwealth or a licensee; or

(ea)    while the employee was travelling between the employee’s place of work and a place of education for the purpose of attending that place in accordance with:

(i)    a condition of the employee’s employment by the Commonwealth or a licensee; or

(ii)    a request or direction of the Commonwealth or a licensee; or

(iii)    the approval of the Commonwealth or a licensee; or

(f)    while the employee was at a place for the purpose of:

(i)    obtaining a medical certificate for the purposes of this Act; or

(ii)    receiving medical treatment for an injury; or

(iii)    undergoing a rehabilitation program provided under this Act; or

(iv)    receiving a payment of compensation under this Act; or

(v)    undergoing a medical examination or rehabilitation assessment in accordance with a requirement made under this Act; or

(vi)    receiving money due to the employee under the terms of his or her employment, being money that, under the terms of that employment or any agreement or arrangement between the employee and the Commonwealth or a licensee, is available, or reasonably expected by the employee to be available, for collection at that place; or

(g)    while the employee was travelling between the employee’s place of work and another place for the purpose of:

(i)    obtaining a medical certificate for the purposes of this Act; or

(ii)    receiving medical treatment for an injury; or

(iii)    undergoing a rehabilitation program provided under this Act; or

(iv)    undergoing a medical examination or rehabilitation assessment in accordance with a requirement made under this Act; or

(h)    while the employee was, at the direction or request of the Commonwealth or a licensee, at a place:

(i)    outside Australia and the external Territories; and

(ii)    declared by the Minister by legislative instrument to be a place to which this paragraph applies; or

(i)    while the employee was:

(i)    at the direction or request of the Commonwealth or a licensee, at a place outside Australia and the external Territories; and

(ii)    a member of a class of employees declared by the Minister by legislative instrument to be a class to which this paragraph applies.

14    Subsections 6(1A), (1B), (1C), (2) and (3) then operate to further define or confine the ambit of s 6(1). Only s 6(3) is presently relevant:

Subsection (1) does not apply where an employee sustains an injury:

(a)    while at a place referred to in that subsection; or

(b)    during an ordinary recess in his or her employment;

if the employee sustained the injury because he or she voluntarily and unreasonably submitted to an abnormal risk of injury.

15    The chapeau to s 6(1) did not change between 2010 and 2014, nor did s 6(3) change, but the words in paragraph (b) of s 6(1) changed from:

while the employee was at the employee’s place of work, including during an ordinary recess, for the purposes of that employment;

to:

while the employee was at the employee’s place of work, for the purposes of that employment, or was temporarily absent from that place during an ordinary recess in that employment;

16    The difference is immaterial in this case, because there was no issue of an injury occurring during a recess, whether at the place of work or during a temporary absence. It is therefore appropriate to decide this appeal upon the basis of the version of s 6(1) that was in force in 2014, and remains in force now.

Before the Tribunal

17    Mr O’Loughlin’s case before the Tribunal was that the circumstances of his injury engaged the operation of both s 6(1)(a) and (b). In other words, it was submitted that his injury should be treated as having arisen in the course of his employment either because it was sustained as a result of an act of violence that would not have occurred but for his employment (s 6(1)(a)) or because it was sustained while he was at his place of work, for the purposes of his employment (s 6(1)(b)). Mr O’Loughlin accepted that the exclusion in s 6(3) was capable of applying for the purposes of s 6(1)(b), but denied that he had voluntarily and unreasonably submitted to an abnormal risk of injury. Presumably, his reliance on s 6(1) was at least in part motivated by the risk that the Tribunal might conclude that s 5A(1)(b) did not apply in its own terms.

18    Linfox’s case before the Tribunal was that:

(1)    Mr O’Loughlin’s injury could not be treated as arising out of or in the course of his employment either independently of s 6(1) or if s 6(1) applied;

(2)    s 6(1)(a) did not apply;

(3)    s 6(1)(b) did apply; and

(4)    s 6(3) applied.

19    In its reasons, the Tribunal rejected the submission that Mr O’Loughlin’s injury arose “out of his employment” under the first limb of s 5A(1)(b), observing that the evidence did not disclose the required causal link between his injury and his employment. The Tribunal nevertheless accepted the submission that Mr O’Loughlin’s injury arose “in the course of his employment” under the second limb of s 5A(1)(b). The Tribunal did so by reference to the High Court’s decision in Kavanagh v The Commonwealth (1960) 103 CLR 547. In Kavanagh at 559, Fullagar J explained that the words “in the course of his employment” do not import causation, and ought not to be regarded as meaning anything more or less than “arising while the worker is engaged in his employment”. In this regard, the Tribunal placed weight on the fact that at the time that he sustained the injury, Mr O’Loughlin was doing precisely the work he was engaged to do on behalf of Linfox, which was to deliver fuel supplies to service stations.

20    The Tribunal therefore made findings that were sufficient to engage the definition of “injury” in s 5A(1)(b), without resort to s 6(1). However, the Tribunal accepted a submission by Linfox that the application of s 6 was mandatory. It held that it would be inconsistent with the entire scheme of the SRC Act if an employee were able to choose not to rely on s 6 so as to avoid the exclusion in s 6(3). The Tribunal observed that Mr O’Loughlin did not take issue with that interpretation. Rather, Mr O’Loughlin’s case was that s 6(3) could only apply if the evidence disclosed that the employee was aware of an unusual risk of injury and deliberately, rather than thoughtlessly, engaged in the conduct. Thus, the result in the Tribunal turned on the meaning to be given to s 6(3), without there being any issue as to whether s 6(1) should necessarily, and in all cases, apply in the first place.

21    The Tribunal then considered case law and the submissions of the parties on s 6(1). It rejected the submission that Mr O’Loughlin’s injury fell within s 6(1)(a) because it did not accept that the injury was sustained as a result of an act of violence that would not have occurred but for his employment or the performance of the duties or functions of his employment. However, it did accept for the purposes of s 6(1)(b) that the injury was sustained while Mr O’Loughlin was at his place of work for the purposes of his employment.

22    The Tribunal turned to the question of whether s 6(1)(b) was excluded by s 6(3). It found that Mr O’Loughlin’s injury was sustained because he voluntarily and unreasonably submitted to an abnormal risk of injury. Applying s 6(3), it therefore held that Mr O’Loughlin’s injury could not be treated as having arisen in the course of his employment. Accordingly, the Tribunal affirmed the decision made on behalf of Linfox to revoke liability for Mr O’Loughlin’s injuries.

Before the primary judge

23    The primary judge overturned the Tribunal’s decision because, paraphrasing parts of his Honour’s reasons at [77]-[80]:

(1)    the starting point is s 14 because that section, and that section alone, imposes liability to pay compensation;

(2)    when s 14, read with s 5A, applies according to its terms, such that there is no dispute to put to rest or to quell about whether or not an injury arose “out of, or in the course of … employment”, no occasion arises to have regard to s 6;

(3)    to read s 6 in this way is consistent with the description of the provision as “facultative” by the High Court in Canute v Comcare [2006] HCA 47; 226 CLR 535 at [8] (albeit in obiter);

(4)    if s 6 is not read in that way, it would be exhaustive rather than facultative, at least when s 6(1)(b) applies, and would have a restrictive and exhaustive effect contrary to its evident purpose;

(5)    no issue arises as to an election by an employee between s 6(1) applying or not applying; and

(6)    the Tribunal therefore erred by holding that s 6(3) operated to deprive Mr O’Loughlin of an entitlement to compensation.

24    In substance, the primary judge found that s 6(1)(b), as confined by s 6(3)(a), had no application to Mr O’Loughlin’s case because his injury independently met the definition in s 5A(1)(b) of “arising out of, or in the course of … employment” without resort to s 6(1).

Appeal to the Full Court

25    The legal effect of the opening phrase in s 6(1), “[w]ithout limiting the circumstances in which an injury to an employee may be treated as having arisen out of, or in the course of, his or her employment”, is central to the disposition of this appeal. It is not in dispute that this phrase is to be read as meaning that s 6(1) does not limit the circumstances in which s 5A(1)(b) applies. Nor is it in doubt that the paragraphs to s 6(1) are to be taken as being conclusive, when any of them do apply, on the topic of whether s 6(1) provides the necessary circumstantial nexus to employment for an injury to be compensable. The live question is whether, whenever s 6(1)(b) can apply, it must be applied, such that if the exclusion in s 6(3) also applies, there is no scope for an injury to be compensable.

26    Linfox principally relies on the mandatory language of “shall” as it appears in the chapeau to s 6(1). Linfox submits that this means that whenever one of the paragraphs of s 6(1) can apply, they shall apply, and therefore must apply. Correspondingly, Linfox submits that if the limitation in s 6(3) applies, that too must apply.

27    Linfox’s argument cannot succeed. It ignores the express preservation of the operation of s 5A(1)(b) by the use in s 6(1) of the phrase “[w]ithout limiting the circumstances in which an injury to an employee may be treated as having arisen out of, or in the course of, his or her employment”. That phrase clearly reinforces the primary judge’s conclusion that s 6 is “facultative”. As his Honour correctly held, it is designed to “put at rest disputes which may otherwise arise”. Insofar as s 6(1) provides that certain circumstances “shall” be treated as meeting the definition in s 5A(1)(b), this is no more than a mode of giving effect to s 6(1) when resort to it is needed. It does not make s 6(1) mandatory if an injury otherwise meets the definition in s 5A(1)(b).

28    The primary judge explained at [79] of his reasons that the scheme of the SRC Act is such that the Tribunal was obliged to commence with s 14 and to consider whether any general exclusions applied, such as those in s 14(2) and (3). It was then obliged to consider whether the circumstances in which Mr O’Loughlin was injured gave rise to a right to compensation by the application of the relevant definition of “injury” in s 5A(1)(b), aided to the extent necessary by the extended operation of that provision furnished by s 6. While that approach is generally going to be required, there may be circumstances in which it will be appropriate to consider “injury” before considering any exclusion under s 14(2) or (3), such as where an adverse determination on the existence of a compensable injury is fatal to a claim without regard to any other exclusion. However, at the point at which “injury” is considered, the facultative role of s 6 in that process is such that s 6(1A), (1B), (1C), (2) and (3) are nothing more than limits on the extent to which resort could be had to s 6(1).

29    It follows that once, as in this case, s 5A(1)(b) has been found to apply by its own terms, giving rise to the conclusion that the circumstantial definition of “injury” has been met, there is no need for a decision-maker to take any additional step to ascertain whether an alternative pathway to reaching that conclusion under s 6 could be established. This conclusion does not preclude the Tribunal from making such a determination in the alternative. A conclusion that s 5A(1)(b) has been met cannot be undone by any finding that, had the s 5A(1)(b) threshold not been met, the threshold under s 6 would not have been met either.

30    The primary judge was correct to conclude that the Tribunal erred in applying the restriction in s 6(3) in circumstances where there was no need to resort to s 6(1). It follows that the primary judge’s principal conclusion was correct and, for that reason, the appeal must fail.

A collateral issue

31    The ambit of “injury”, as defined in s 5A(1)(b), is relevantly expanded by the operation of s 6(1)(b) to encompass circumstances in which the employee was, without needing any greater nexus to any employment activities, simply at the employee’s place of work for the purposes of that employment, or was temporarily absent from that place during an ordinary recess in that employment. However, by the operation of s 6(3), this expansion does not extend to circumstances in which the employee sustained the injury because he or she voluntarily and unreasonably submitted to an abnormal risk of injury, whether at the place of work or temporarily absent.

32    The primary judge read down s 6(1)(b), in both the version in force in 2010, and the version in force in 2014 (and now), so that it was confined in operation to recesses from employment. On his Honour’s reasoning, s 6(1)(b) as presently in force does not apply in accordance with its express language to a situation in which an employee was “at the employee’s place of work, for the purposes of that employment”. With respect to his Honour, that reading down is not supported by the legislative history, which can be traced back to the introduction of the provision in substantially the same terms in the then-named Commonwealth Employees’ Rehabilitation and Compensation Act 1988 (Cth).

33    The breadth of the right to workers’ compensation has waxed and waned with legislative changes over time. As demonstrated by the comparison between the versions of s 6(1)(b) that were in force in 2010 and in 2014, set out at [15] above, the scope of that right was narrowed in 2007 to exclude recesses away from the workplace, and broadened again in 2011 to restore that coverage. At all times, however, the concept of “at the employee’s place of work, for the purposes of that employment” was retained. It is a concept that has been deliberately enacted in s 6(1)(b) and this Court must therefore strive to find work for it to do.

34    One basis for reading down s 6(1)(b) is the notion that it is difficult to conceive of an injury sustained at the employee’s place of work, for the purposes of that employment, that would not fall within the terms of s 5A(1)(b), so as to require resort to s 6(1)(b). However, it is not productive to theorise in a factual vacuum. What matters is that s 6(1)(b) has useful, facultative work to do when a doubt as to the application of s 5A(1)(b) emerges. Once it is appreciated that an event that occurs “while the employee was at the employee’s place of work, for the purposes of that employment” may not always fall within the ordinary meaning of “arising out of, or in the course of … employment”, it must also be accepted that s 6(1)(b) facilitates wider scope for compensation for an injury.

35    The link of being present for the purposes of employment must still be met for the first limb of s 6(1)(b) to apply, but that may be seen to be a different, and possibly lower, threshold to meet in some cases than the ordinary meaning of “arising out of … employment” or “in the course of … employment”. This interpretation gives effect to all the words in s 6(1)(b). It also gives effect to the evident purpose of s 6, which is to put definitional disputes to rest and to quell collateral controversies. In this way, the focus of a workers’ compensation fund can be kept squarely on its central purpose of covering injuries that have a sufficient nexus to employment, without getting bogged down in arid definitional disputes.

Conclusion

36    The appeal must be dismissed with costs.

Associate:

Dated:    12 October 2018