FEDERAL COURT OF AUSTRALIA

Seafarers Safety, Rehabilitation and Compensation Authority v Associated Steamships Pty Ltd [2019] FCAFC 232

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be allowed.

2.    The orders of the primary judge made on 29 March 2019 be set aside.

3.    The matter be remitted to the primary judge for determination of the Respondent’s claim for equitable compensation.

4.    The Respondent pay the Appellant’s costs of the appeal as taxed or agreed.

5.    Orders 1-5 are to take effect as if pronounced on 6 January 2020.

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

REASONS FOR JUDGMENT

THE COURT:

Introduction

1    The question in this appeal concerns the proper construction of s 128 of the Seafarers Rehabilitation and Compensation Act 1992 (Cth) (‘the Act’). The Act regulates the provision of workers’ compensation to persons injured whilst employed on ‘prescribed ships’ in the Australian coasting trade. It provides a no fault compensation scheme of an administrative nature which bears some similarity to the scheme in place for Commonwealth public servants and others under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (‘SRC Act’).

2    In this appeal, an employee, Mr Gregory O’Donnell, died from a disease (metastatic squamous cell carcinoma) which was said to have been contributed to in a material degree by his employment with more than one ship operator and on many prescribed ships across a period of some 22 years. Much of his work had been done on the decks of the ships and therefore under the tropical sun. His deceased estate and his widow, Mrs Yolanda O’Donnell, pursued separate claims under the Act against one of these employers—the present Respondent—which eventually settled the claims by agreeing to pay the estate the sum of $20,000 and Mrs O’Donnell the sum of $300,000.

3    Despite its agreement to pay that sum, the Respondent claimed that Mr O’Donnell had used sunscreen whilst in its employ. Nevertheless, it made the two payments of $20,000 and $300,000 as part of what was referred to in this Court as a ‘commercial settlement’. The Respondent then sought contribution from two other ship operators who had also employed Mr O’Donnell during the relevant period on prescribed ships on the basis that they too should share some of the responsibility for what had occurred. It pursued this claim under s 128 of the Act which permits the recovery of contribution from other employers in certain circumstances. We return to its detail later in these reasons but for now it is sufficient to know that one of the conditions precedent to its enlivenment is that the employer seeking contribution should have ‘paid compensation’.

4    The short question in this appeal is whether the Respondent can be said, by its payments of $20,000 and $300,000 under the ‘commercial settlement’, to have ‘paid compensation’. Its submission to the primary judge was that the sums it paid to the estate and Mrs O’Donnell answered the everyday meaning of the word ‘compensation’ in s 128. Against that it was put by the Seafarers Safety, Rehabilitation and Compensation Authority (‘the Appellant’ or ‘the Authority’) that, construed in context, the word ‘compensation’ in s 128 must mean ‘compensation under the Act’. The primary judge upheld the Respondent’s construction, held it entitled to obtain contribution under s 128 and ordered the Appellant to pay it $181,450: Associated Steamships Pty Ltd v Seafarers Safety, Rehabilitation and Compensation Authority [2019] FCA 434.

5    Both of the other employers against whom the Respondent’s claim for contribution was theoretically directed long ago ceased to exist and the Appellant, in circumstances shortly to be explained, had assumed their liabilities under the Act including any that they might have had to the Respondent under s 128.

6    The Appellant now appeals from the orders made by the primary judge. In our opinion, for the reasons which follow, the primary judge erred in his Honour’s construction of s 128 and ‘compensation’ does mean ‘compensation under the Act’ as the Appellant submits. Since the payments made by the Respondent to the estate and Mrs O’Donnell did not discharge any liability it had to them under the Act it was not entitled to obtain contribution from the Appellant under s 128. The orders of the trial judge should therefore be set aside and the matter remitted to his Honour for further determination. The Respondent must pay the Appellant’s costs of the appeal as taxed or agreed.

Facts

7    Between 1972 and 1994 Mr O’Donnell was employed as a seafarer on various ships operating along the Australian coastline. His duties were varied and included servicing and repairing hatches, sandblasting rust off the deck, joining and splicing ropes, and brushing, hosing and painting decks. He also spent some time in the wheelhouse steering. Apart from his indoor duties at the wheel, his other duties were performed largely outdoors and generally between 7am and 5pm. More importantly, they were conducted beneath the tropical sun which exposed Mr O’Donnell over his working life to large amounts of solar radiation. Subsequently, he developed squamous cell carcinoma, basal cell carcinoma and solar keratosis. On 24 March 2012, he succumbed to metastatic squamous cell carcinoma.

8    Mr O’Donnell served on many ships during his career but the ship he spent more time on than any other was the TNT Carpentaria, an Australian flag bulk carrier involved in the transport of bauxite. He worked on this vessel between July and August 1986 and between November 1986 and February 1994 on over 30 voyages. On board the TNT Carpentaria Mr O’Donnell was employed by the present Respondent for a period of 1,441 days which represented 39.2% of the time he had worked on all ships between 1972 and 1994 (whether ‘prescribed’ or not).

9    On 5 July 2010, some years after he had retired as a seafarer, Mr O’Donnell made a claim on the Respondent for compensation under the Act. His claim was for permanent impairment and for non-economic loss (being pain and suffering, loss of expectation of life, or loss of the amenities or enjoyment of life: s 3). Although dated 5 July 2010, the claim was not served on the Respondent until about 9 March 2011. Under the Act, it is the employer which initially determines whether it is required to pay compensation but it must make this decision within specified timeframes failing which it is taken to have refused the claim. In this case, the Respondent did not determine Mr O’Donnell’s claim within the required time and was therefore taken to have refused it (on 6 May 2011). Further provision is then made for an employee to apply for a reconsideration of such a decision by the employer. Mr O’Donnell sought such a reconsideration on 9 June 2011. On 8 November 2011, almost five months later, the Respondent affirmed its earlier decision to refuse the claim. The evidence before this Court does not reveal whether the Respondent gave reasons for refusing the claim at that time but it was legally bound to give reasons as soon as practicable: s 77(1)(b). Whether it did so then or not, it is apparent from subsequent events that the reasons the Respondent gave for refusing the claim were these: the Respondent did not know the circumstances of Mr O’Donnell’s employment by it on the TNT Carpentaria and there was no medical evidence that the circumstances of his service on the TNT Carpentaria caused his skin cancers or contributed to them in a material degree.

10    Mr O’Donnell had a further right to apply for a review of the Respondent’s decision before the Administrative Appeals Tribunal (‘the Tribunal’) which he duly lodged on 11 November 2011. Before that proceeding could be heard, Mr O’Donnell passed away. The existence of Mr O’Donnell’s original claim was not, however, affected by his death as service of the claim had already occurred: s 64(2). The conduct of this proceeding was then taken over by the executor of Mr O’Donnell’s estate, Mrs O’Donnell.

11    In a case where an employee dies leaving persons who were totally or partially dependent upon the deceased employee, s 29 creates an entitlement in such dependent persons to make their own claim for compensation. On 2 May 2012, Mrs O’Donnell made a claim on the Respondent alleging she was fully dependent on Mr O’Donnell. The Respondent once more did not deal with her claim within the prescribed timeframe and, on 30 July 2012, this second claim relating to Mr O’Donnell was taken by force of s 72(5) to have been refused. Mrs O’Donnell sought a reconsideration of her claim by the Respondent on 22 October 2012 which appears to have been refused. Mrs O’Donnell then commenced a separate proceeding before the Tribunal seeking a review of that decision on 21 November 2012.

12    While both reviews were pending, an agreement was reached between the Respondent and Mrs O’Donnell in her capacity as executor of the estate and also in her own capacity as a dependent claimant to resolve both claims, the former for $20,000 and the latter for $300,000. These sums were paid to Mrs O’Donnell many months later. Pursuant to the terms of the settlement both review proceedings in the Tribunal were dismissed by consent. As a matter of formality, it should be noted, this left in place the anterior deemed decisions of the Respondent to refuse both claims. When looked at from the perspective of formal legality, it is not possible therefore to characterise the payments which the Respondent made as compensation which had been determined under the Act to be due. What had been determined under the Act, to the contrary, was that the Respondent was not obliged to pay the estate or Mrs O’Donnell anything.

13    As alluded to above, Mr O’Donnell had also worked for several other shipping lines during his career. These included John Burke & Co Limited (‘Burke’) for whom Mr O’Donnell had worked on board the Alagna and the Sid McGrath, and Portsmith Stevedoring Co Pty Limited (‘Portsmith’) for whom he had worked on board the Pera, the Albany and the Leichhardt. Each of these ships was ‘prescribed’ and hence potentially regulated by the Act. The Respondent now sought to recover contribution from Burke and Portsmith towards the payments of $300,000 and $20,000 it had made on the basis that Mr O’Donnell’s employment with them had also materially contributed to his death.

14    Both of these shipping lines, however, had ceased to trade by that time and, indeed, their names had been removed from the register of corporations so that they no longer existed in any relevant sense. Because they had ceased to exist this state of affairs was deemed by s 3 to be a ‘default event’:

“default event”, in relation to an employer, happens when:

(a)    the employer:

…

(v)    if the employer is a body corporate—ceases to exist; … and

(b)    the employer is unable to meet the employer’s liabilities under this Act.

15    Once a default event occurred in relation to the employment of Mr O’Donnell the effect of s 4(3) was that he was ‘taken to be employed by the Fund’. The details and purposes of the Fund are not presently material but what does matter is that its functions are presently vested in the Appellant, which is a statutory entity constituted under Pt 8 of the Act. For the purposes of the Act, it follows that any claim which could have been made on Burke or Portsmith if either had then existed was instead required to be made against the Appellant. In effect, it is the successor to the liabilities of Burke and Portsmith.

16    In that capacity, the Appellant took the view that the Respondent had not paid the $300,000 and $20,000 as compensation under the Act since the only determinations made under the Act were the Respondent’s refusal of both claims. Accordingly, the Respondent was not entitled to bring a claim under s 128 against it in respect of the liabilities of Burke or Portsmith. When it became apparent that that this was the posture the Appellant was going to adopt, there were some further factual developments. By s 78(1) an employer is permitted, on its own initiative, to reconsider an earlier determination even if there has been an appeal which has been completed (which was the situation in this case by virtue of the proceedings in the Tribunal having been dismissed by consent). In late 2015, nearly 18 months after it had paid the sums of $300,000 and $20,000 under the ‘commercial settlement’, the Respondent exercised this power and concluded that it was liable to pay compensation in respect of Mr O’Donnell’s death although it stopped short of determining any particular amount of money which it might be required to pay.

17    The Respondent does not submit in this Court, however, that this rearguard action had the legal consequence of transforming the payments made by it into compensation paid under the Act if they did not already bear that character. Thus this belated administrative action is not alleged to have any legal consequences for this appeal and need be mentioned only for the purposes of completeness. In effect, it is a remedial cul-de-sac which has come to nothing.

18    The Respondent then sued the Appellant in the Court below for contribution under s 128. The parties at trial agreed that if the Authority were held liable to pay contribution then it should be held liable in the sum of $181,450. Given that consensus, there were only two issues remaining before the primary judge for resolution: (a) whether the Respondent had paid compensation within the meaning of s 128; and (b) whether the Respondent was entitled to equitable contribution from the Appellant for the discharge of a shared liability. The primary judge resolved (a) in the Respondent’s favour and did not need to resolve (b). In this Court the Respondent did not file a notice of contention seeking to uphold the primary judge’s conclusions on the basis of the claim for equitable contribution. Instead, the parties agreed that if the primary judge’s conclusions on the proper construction of s 128 were reversed the matter would need to be remitted to his Honour or another judge of this Court to deal with that issue, including whether such a claim is maintainable.

The scheme of the Act

19    The Act erects a no fault compensation scheme under which the compensation payable is determined administratively rather than judicially. Its operation and structure bear upon the construction of s 128. Important concepts under the Act for its application to Mr O’Donnell are those of an employee, an injury, and a disease.

Employees, seafarers and prescribed ships

20    An ‘employee’ is defined to include, relevantly, a seafarer: s 4(1) para (a) of the definition of ‘employee’. As at 9 March 2011 when Mr O’Donnell made his claim a ‘seafarer’ was defined in s 3 to include ‘a person employed in any capacity on a prescribed ship’. ‘Prescribed ship’ was defined to be a ship ‘to which Pt II of the Navigation Act [1912 (Cth)] applies but does not include a Government ship.’ Without lingering excessively on the detail, the effect of s 10 of the Navigation Act 1912 (Cth) was to apply Pt II of that Act to ships which were registered in Australia, engaged in the coasting trade or where a majority of the crew were Australian residents and the operator had a connexion with Australia.

21    Over the whole period of his employment Mr O’Donnell had been employed as a seafarer on 19 ships but only 16 of these had been ‘prescribed ships’ within the meaning of s 3. Consequently, in respect of the three ships which were not prescribed ships Mr O’Donnell was not a ‘seafarer’ nor consequently an ‘employee’ who could claim under s 39(1). In relation to his employment on the other 16 ships, however, he was relevantly a seafarer and hence an ‘employee’.

Injury and disease

22    The central provision, so far as injuries and diseases are concerned, is s 26(1) which is contained in Pt 2 Div 1 and which provides:

Compensation for injuries

(1)    If an employee suffers an injury that results in his or her death, incapacity for work, or impairment, compensation is payable for the injury.

23    This general rule is then fleshed out in Div 2 of Pt 2 which deals with compensation for injuries resulting in death; Div 3, which deals with injuries resulting in incapacity to work; and Div 4, which deals with injuries resulting in permanent impairment. Mr O’Donnell’s claim for permanent impairment was made under s 39(1) in Div 4. That subsection provides:

Compensation for injuries resulting in permanent impairment

(1)    If an injury to an employee results in a permanent impairment, compensation is payable to the employee for the injury.

24    It will be seen that both ss 26(1) and 39(1) speak in terms of an ‘injury’ which results in the impairment. The word ‘results’ requires a causative link between the ‘injury’ and the claimed condition (such as incapacity for work, death, or permanent impairment): K&S Freighters Pty Ltd v McQueen-Thomas [2018] FCA 1518; 163 ALD 501 at 512 [49] per Collier J. However, more important in the present context is the causation requirements concealed within the word ‘injury’ itself. That word is defined in s 3 in these terms:

“injury” means:

  (a)    a disease; or

(b)    an injury (other than a disease) suffered by an employee, being 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), being an aggravation that arose out of, or in the course of, that employment;

but does not include anything suffered by an employee as a result of reasonable disciplinary action taken against the employee, or failure by the employee to obtain a promotion, transfer or benefit in connection with his or her employment.

25    Leaving to one side for now the reference to ‘disease’ in subpara (a), it will be seen that the concepts of ‘injury’ in subpara (b) and the ‘aggravation’ of an injury in subpara (c) are both attended by a necessity that the injury or aggravation be one which arises out of, or at least in the course of, the employee’s employment. There is then a different causation test secreted within the reference in subpara (a) to a ‘disease’. ‘Disease’ is defined in s 3 in these terms:

“disease” means:

(a)    any ailment suffered by an employee; or

(b)    the aggravation of any such ailment;

being an ailment or an aggravation that was contributed to in a material degree by the employee’s employment.

26    A disease will therefore be present where there is an ailment (or an aggravation of an ailment) which was contributed to in a material degree by the employee’s employment. This is a different test of causation to that which applies to injuries which are not diseases (e.g., arising out of or in the course of employment). But in any event, because ‘injury’ is defined to include ‘disease’ both tests are incorporated by reference each time the word ‘injury’ is used in the Act.

27    The scheme therefore is that it must be shown in the case of an injury (not being a disease) that:

(a)    it arose out of or in the course of the employee’s employment; and

(b)    the claimed condition (incapacity for work, death, or permanent impairment) resulted from that injury.

In the case of a disease it must be shown that:

(a)    the ailment was contributed to in a material degree by the employee’s employment; and

(b)    the ailment (being therefore a disease and therefore an injury) was an injury which resulted in the claimed condition (incapacity for work, death, or permanent impairment).

Claims

28    No compensation is payable under the Act unless and until an employee or someone on their behalf makes a claim under s 63: s 63(1). The claim must be lodged with the employer: s 63(2). In relation to a claim for permanent impairment the employer must determine the claim within 30 days of receiving the claim (which period may be extended in some circumstances): s 73A(1). If no determination is made within that period the claim is taken to have been refused: s 73A(6). The employee may seek a reconsideration of the employer’s decision under Pt 6. Generally speaking this reconsideration must be carried out within 60 days otherwise it too is taken to have been refused: s 79. The 60 day period may be extended in some circumstances. There is a further right to appeal to the Administrative Appeals Tribunal for a review: s 88. Similar provisions exist in relation to claims arising from death and dependency.

Application to Mr O’Donnell

29    Mr O’Donnell’s initial case was a claim for impairment resulting from an injury constituted by a disease. Consequently, he would have been entitled to compensation under s 39(1) for permanent impairment if it were demonstrated that his permanent impairment resulted from his skin cancers and that these in turn were contributed to in a material degree by his employment.

30    In the case of diseases, it is inherent in the idea that an employee’s ailment might be contributed to in a material degree by the employee’s employment, that the ailment might have been contributed to in that fashion by employment with more than one employer. For example, in this case it is possible that Mr O’Donnell’s disease had been contributed to in a material degree by his employment by each of the entities which had employed him on the 16 prescribed ships. The fact that employment with one employer had contributed in a material degree to Mr O’Donnell’s disease by no means implied that other employers had not so similarly contributed.

31    Further, the amount of compensation payable in a case of incapacity caused by a disease is in no way affected by whether there is more than one employer against whom such a claim might conceivably be brought. The amount in such a case is fixed by a process of assessment undertaken under ss 39(2)-(9). There is no need to set these provisions out. The important point is that they do not, at any point, delimit the liability of the employer to its share in terms of responsibility if there be present a disease which has arisen from employment with multiple employers. The liability of the employer under s 39 is, therefore, to pay all of the compensation to which the employee is entitled as if that employer were solely responsible for the disease. This operation of ss 39(2)-(9) is confirmed by s 25 which provides:

Compensation to be paid in full

Subject to subsection 29(4) and sections 30 to 37 (inclusive), 47, 55, 58 and 139, compensation in respect of an injury must be paid in full by an employer whose employment has made a material contribution to the injury.

32    These provisions therefore create a situation, especially acute in the case of diseases, where multiple employers may be said to have contributed to a disease in a material degree. The employee may make a claim on any one of these employers and, where this is done, that individual employer is obliged to pay the full of amount of the compensation payable in respect of that disease regardless of its particular share of responsibility. It is then s 128 which allows each employer’s share of the liability to be determined but only in downstream contribution proceedings between the various employers. In effect, the Act operates so that an employee does not need to be caught up in debates between multiple employers about their respective share of responsibility for the injury or disease. That concession of convenience to an employee is accompanied, however, by an entitlement in an employer to have the employee identify, upon request, other such employers, and to refuse to deal with the claim until that request is satisfied (unless the failure to do so was with reasonable excuse): s 126.

The proper construction of s 128

33    Section 128 provides:

Shared liability

If:

(a)    an injury suffered by an employee arises out of, or in the course of, the employee’s employment with more than one employer; and

(b)    one of the employers has paid compensation to the employee in respect of the injury;

the employer who paid the compensation may, by an action in a court of competent jurisdiction, recover from the other employer or employers an amount equal to the compensation paid multiplied by the proportion of the contribution to the injury made by the employment of the other employer or employers.

34    The Appellant says that the word ‘compensation’ in s 128 means ‘compensation under the Act’. Since the Respondent had dismissed both the estate’s claim for compensation and Mrs O’Donnell’s dependency claim and whereas the Tribunal had dismissed both of their ensuing appeals by consent, it followed that whatever the Respondent had paid Mrs O’Donnell could not have been paid under the Act. Consequently, the Appellant could not be liable under s 128 for the precondition in s 128(b) had not been met.

35    In more detail, the first step in this argument was as follows: the liability of the Respondent to pay compensation to an employee under the Act was contingent upon it having made a determination under s 24: ‘The liability of an employer to pay compensation to a person under this Act is the liability of the employer to pay the amount or amounts that the employer determines, in accordance with this Act, to be payable to the person’. Until such a determination was made the employer had no liability to pay anything. A determination under s 24 was required to be in writing (s 127) and where such a determination was made the Respondent was bound to pay the compensation within 30 days of the date of the determination: s 130(1). In this case, the Respondent did not at any time prior to making the payments of $300,000 and $20,000 make a determination that any amount was payable either to the estate or to Mrs O’Donnell. Consequently, it had no liability to pay compensation to either under the Act. Thus the payments cannot have been payments of compensation under the Act and those payments cannot have operated to have discharged any liability that the Respondent had arising from the Act.

36    The second step was that this mattered because s 128 only applied to compensation which had been paid under the Act. It was true that s 128 referred to ‘compensation’ rather than ‘compensation payable under this Act’ but it was inevitable that those words were imported into s 128 by its use of the expression ‘an injury suffered by an employee’ in ss 128(a) and (b). This phrase was defined in s 6 to be ‘a reference to an injury suffered by the employee for which compensation is payable under this Act’. Thus the injury referred to in s 128 had to be an injury for which ‘compensation is payable under this is Act’. When that definition was brought to account the word ‘compensation’ appeared in s 128 four times. The first two occurrences arose from its importation via s 6 and were explicitly a reference to compensation payable under the Act. The third and fourth references were to the bare word ‘compensation’ and did not explicitly advert to ‘compensation payable under the Act’. However, the word ‘compensation’ was to be given a uniform meaning throughout s 128. Thus, ‘compensation’ had to be construed as ‘compensation under the Act’ to avoid incoherence within s 128 itself.

37    The Respondent submitted that these contentions should be rejected for the reasons which were given by the primary judge. His Honour’s approach was essentially as follows. First, the word which appeared in s 128 was ‘compensation’ and this was an ordinary word with an ordinary meaning. The two payments of $300,000 and $20,000 paid by the Respondent to the estate and Mrs O’Donnell were clearly compensation in this ordinary sense, whatever else one might say. Secondly, the question therefore became whether in construing s 128 that the ordinary meaning should be displaced in favour of the narrower meaning suggested by the Appellant, namely that ‘compensation’ meant ‘compensation under the Act’. Necessarily this required a consideration of the terms of the Act. Thirdly, his Honour saw the Act as containing within it two distinct schemes, one concerned with the award of compensation to persons making claims such as employees, and the other a more particular scheme dealing only with rights of contribution between employers. Fourthly, whilst it was true that if the definition of ‘injury suffered by an employee’ in s 6 were applied to that expression in s 128 it would most likely mean that the references to compensation in s 128 should be read as references to ‘compensation under the Act’, the definition in s 6 was part of the general scheme his Honour identified as dealing with claims by employees and was inapplicable to s 128 which was part of the more particular scheme dealing with claims by employers for contribution. In that regard, it was to be noted that the definition in s 6 was expressed only to be applicable to the extent that the Act did not indicate a contrary intention. Fifthly, since the definition in s 6 was not to be imported into s 128, the word ‘compensation’ should be given its ordinary meaning in that provision which was therefore broad enough to include the payments which the Respondent had made. Finally, the Respondent was therefore entitled to recover contribution from the Appellant under s 128.

38    We do not accept that this construction is, with respect, correct. It may be accepted as orthodox in statutory interpretation that part of a statute may be characterised as being specific in nature and that, in such a case, it may often be legitimate to construe those parts as prevailing over other parts of the same statute which are of a more general nature. For example, in Anthony Hordern & Sons Ltd v Amalgamated Clothing & Allied Trades Union of Australia [1932] HCA 9; 47 CLR 1 (‘Anthony Hordern’) the former Commonwealth Court of Conciliation and Arbitration had made an award in the clothing industry which required the employers bound by it to give preference to women who were members of the respondent union over women who were not. As Evatt J explained at 12, the point of this provision was to prevent the rise of sweat shops in which non-unionised women employees were exploited.

39    The Conciliation and Arbitration Court had a specific power to include in an award a clause requiring employers to give preference to unionised labour in s 40 of the former Commonwealth Conciliation and Arbitration Act 1904 (Cth). However, s 40 had been interpreted in such a way that it could not be used so as to allow preference to be given to one set of union members over another. The employer submitted that the provision gave preference to female members of the union over male members of the union and hence could not be justified under s 40. A majority of the High Court accepted this proposition. However, there was also a general power given to the Arbitration Court by ss 24(2) and 38(a) to hear and resolve industrial disputes and the union sought to argue that even if the clause could not be justified under s 40 it was authorised by these more general provisions. The employer denied this and its counsel, Mr Robert Menzies QC, submitted that s 40 was a ‘code’ whose strictures would be idle if resort could be had to the general power ss 24(2) and 38(a) to outflank them. The High Court agreed. At 7, Gavan Duffy CJ and Dixon J said this of the ability of the general power to be used to outflank the restrictions imposed on the particular power:

But, in our opinion, the general power of the Court does not authorize his order. The order deals with preference of members of an organization over other persons in employment, and over that subject a limited and qualified power is specifically given by sec. 40. Extensive and unfettered as the authority of the Court of Conciliation and Arbitration to award preference in settlement of a dispute might have been in virtue of its general power, yet, when sec. 40 expressly gives a special power, subject to limitations and qualifications, surely it must be understood to mean that the Court shall not exercise an unqualified power to do the same thing. When the Legislature explicitly gives a power by a particular provision which prescribes the mode in which it shall be exercised and the conditions and restrictions which must be observed, it excludes the operation of general expressions in the same instrument which might otherwise have been relied upon for the same power.

McTiernan J reached a similar conclusion at 20. Starke and Evatt JJ dissented on the operation of s 40.

40    A similar conclusion was reached in David Grant & Co Pty Ltd v Westpac Banking Corporation [1995] HCA 43; 184 CLR 265. In that case, specific provision was made in Pt 5.4 of the former Corporations Law (Vic) for the circumstances in which the time for compliance with a statutory demand might be extended and these did not include any power to extend where the 21 day compliance period had already passed. The question was whether the general power to extend time in s 1322 (which was not so limited) could nevertheless be used to extend that time. Gummow J, with whom all of the other Justices agreed, held applying Anthony Hordern that it could not.

41    The question of whether one set of provisions provides a code so that more general provisions in a statute do not apply therefore requires a consideration of the terms of the statute and for an assessment to be made of whether such a negative implication may be drawn. The primary judge identified the general scheme as consisting principally of Pt 2 (which deals with claims by employees for compensation) but also including some other provisions such as s 6. On the other hand he identified the particular scheme as being contained principally in s 128 (which is located in Pt 9) and s 25 (which is located in Div 3 of Pt 1). His Honour took some comfort in that conclusion from the fact that Pt 9 is headed ‘Miscellaneous’ as is Div 3 of Pt 1, that is to say, ss 25 and 128 both appeared in sections of the statute headed ‘Miscellaneous’ (although not in the same part of the Act).

42    We do not agree that s 128 is part of such a code (or ‘scheme’ as the primary judge called it). As its heading suggests, s 128 deals with the topic of ‘Shared liability’. An employer suing under it must demonstrate three things:

(a)    that there is an injury suffered by an employee which arose out of, or in the course of, the employee’s employment with more than one employer;

(b)    that it has paid compensation to the employee in respect of the injury; and

(c)    the proportion of the contribution to the injury made by the employment by the other employers.

43    In such a suit, a respondent employer may resist the suit by negativing any of these three matters. That is, it may seek to show that the employee was not injured at all, that the injury did not arise from their employment, or that the first employer has never paid compensation. It may also contest its level of contribution. What it may not do, however, is allege that the compensation which was paid was not reasonable. Such an allegation finds no foothold in s 128 which could give it any consequence. Consequently, the respondent-employer has no entitlement to contest the quantum of the underlying principal liability determined by the employer who has paid the employee’s claim.

44    At least where an employee has elected not to pursue their common law rights (cf s 55), the liability of an employer to pay compensation to an employee is largely regulated by Pt 2. Taking the example of a death claim where the deceased worker left a dependant, this is regulated by Pt 2 Div 2 (‘Injuries resulting in death’). Subsections 29(1) and (3) provide:

Compensation for injuries resulting in death

(1)    This section applies if an injury to an employee results in the employee’s death.

…

(3)    If the employee dies leaving dependants some or all of whom were, at the date of the employee’s death, wholly dependent on the employee:

(a)    subject to this section and to sections 28 and 30, compensation of $412,000 is payable for the injury; and

(b)    that compensation is payable for the benefit of those dependants.

The Court was told that as at the date of Mr O’Donnell’s death, the sum of $412,000 had been indexed to $458,958.51.

45    Like every stipulation in Pt 2 the compensation obligation is expressed in the passive voice and omits any reference to or by whom the compensation is to be paid. The obligation thus created is inchoate. Section 24 makes clear that this inchoate obligation is crystallised into an obligation on the employer actually to pay compensation on the happening of an event, namely, a determination by the employer of the amount which is to be paid. It provides:

Liability to pay compensation

The liability of an employer to pay compensation to a person under this Act is the liability of the employer to pay the amount or amounts that the employer determines, in accordance with this Act, to be payable to the person.

46    Thus, at least as far as s 24 is concerned, the only compensation paid under the Act is compensation determined by an employer to be payable. Specific machinery is then provided in Pt 5 for the making of such ‘determinations’ and, as already noted, a review structure is erected in Pt 6 with the employer performing an initial reconsideration which may be followed by a review by the Administrative Appeals Tribunal. In both case, what results is still a ‘determination’.

47    Thus, continuing with the example of s 29 and the situation of a deceased employee leaving behind a dependant, the employer has no liability to pay anything unless (a) there is an injury which results in death; (b) compensation is payable under s 29(3); and, (c) the employer determines an amount of compensation to be paid under s 24.

48    Returning then to s 128, it would be surprising if a provision headed ‘Shared liability’ could generate a liability in an employer under a claim for contribution when it would have had no liability under the Act if a claim had been directly made upon it by the employee. Put another way, common sense suggests that an employer against whom a claim for contribution is made under s 128 ought to be able to defend itself by denying that a claim could have been made against it under the Act. Were it otherwise, it would mean that that employer’s liability would turn upon the fortuitous circumstance of whether the claim was made on it first (in which case it could refuse the claim) or instead made on it under s 128 by way of contribution (in which case this would not be open to it). This would tend to suggest that where s 128(a) refers to ‘an injury suffered by an employee’ it is most likely referring to an injury suffered by an employee for which compensation is payable under the Act. In fact, s 6 defines ‘an injury suffered by an employee’ to be a reference to ‘an injury suffered by the employee for which compensation is payable under this Act’ unless the contrary intention appears.

49    The primary judge thought that s 6 did not apply to s 128 (that is, there was a contrary intention exhibited by the Act). His Honour’s analytical motive for this reading is clear: if s 6 were applied to s 128(a) it would be very difficult to contend that the reference to compensation in s 128(b) could be other than a reference to compensation under the Act for so to conclude would involve giving the word ‘compensation’ two different meanings in one section, an unlikely outcome.

50    The difficulty with this approach, with respect, is that it has the unexpected consequence that an employer against whom a claim for contribution under s 128 is made cannot avail itself of the defence that the injury was not one for which compensation was payable under the Act. And this is so even if it could have refused the claim on that basis had the primary claim been made against it.

51    To give a concrete example, it may be noted that a claim for compensation for an injury which involves an incapacity for work (under Pt 2 Div 3) is not payable, by virtue of s 38(1), if the employee has reached the pension age. It would be anomalous if an employer defending a contribution claim under s 128 were not permitted to point out that it could not be liable because of s 38(1). But this is the consequence if s 128(a) is not read in light of the definition s 6. Far from s 128 exhibiting an intention that the definition in s 6 should not apply to it, the contrary seems to us to be the case.

52    Once that conclusion is reached, however, it is inevitable that the reference to compensation in s 128(b) must be a reference to compensation payable under the Act. For, at this point, one knows that s 128(a) through s 6 is referring to compensation payable under the Act and to read ‘compensation’ in s 128(b) as having a broader meaning would mean the word had two different meanings in the same provision which, in this case at least, would appear to be an unjustifiable construction. Consequently, ‘compensation’ in s 128 means ‘compensation under the Act’.

53    We note for completeness the High Court’s decisions in Joyce v Australian United Steam Navigation Company Ltd [1939] HCA 31; 62 CLR 160 and Union Steamship Company of Australia Pty Ltd v King [1988] HCA 55; 166 CLR 1 both of which were concerned with predecessor to the Act, the Seamen’s Compensation Act 1911 (Cth). That statute contained a provision (s 5) preventing a seaman who obtained compensation under it from obtaining ‘compensation’ independently of that Act; in practical terms, the object of the provision was to ensure that a seaman could not recover common law damages or workers’ compensation under a State Act if he had already recovered under the Commonwealth statute. Given that context, it was held that ‘compensation’ in s 5 was at large. In the context where s 5 was regulating remedies outside the Act this is unsurprising. These decisions are irrelevant to the present issue.

54    This disposes of the primary judge’s construction of s 128. At the hearing of the appeal, the Respondent also submitted, in the alternative, that if the definition in s 6 did apply to s 128, then the word ‘payable’ simply meant ‘able to be paid’. On this view, it was enough that compensation had been paid and that, at least in principle, could have been paid under the Act if a determination had been made. It was not necessary for the payment itself in fact to have been made under the Act (or, implicitly, for there to have been a determination).

55    We reject this submission. The expression ‘compensation is payable under this Act’ in s 6 is not a reference to an ability or potentiality for compensation to be paid under the Act. Rather, it means compensation which is due to be paid. The Macquarie Dictionary defines ‘payable’ as meaning in law ‘imposing an immediate obligation on the debtor’ and the Oxford Dictionary says much the same and that it means of a sum of money that it ‘is to be paid; due, owing, [or] falling due.’ Thus when the Act says that compensation is payable under it this is a normative statement rather than one descriptive of a range of potentialities; when a tax bill is said to be payable one is not being told that it is capable of being paid, one is being told that it is to be paid.

56    For all of these reasons, the reference to compensation in s 128(b) is a reference to compensation which is payable under the Act. Because the only liability the Act actually imposes on an employer is the liability referred to in s 24 to pay the amount of compensation determined by it, it follows that the compensation referred to in s 128(b) can only be compensation which the employer has paid under a formal determination by it (or by the Tribunal on review) to pay. If, as here, there has been no such determination then s 128 is not enlivened.

57    We should say for completeness that one part of the rationale for the primary judge’s construction of s 128 was a desire to facilitate the settlement of claims under the Act. Before this Court the Appellant submitted that there was no place for such a view. Its submission was that each of the decisions contemplated by the Act—the initial decision by the employer, the reconsideration decision and the review by the Tribunal—were administrative decisions which required the performance of actual administrative functions to discharge. So for example, the Act required the employer to determine whether an employee was incapacitated for work and, if so, what the extent of the incapacity was. There could, on this view, be no room for a concept such as a commercial settlement.

58    It has been accepted that the SRC Act constitutes a code in relation to compensation such that it is not possible for an employer and employee to reach a contractual accommodation which is not contemplated by it. For example, in Behan v Australian Telecommunications Corporation (1990) 26 FCR 337 (‘Behan’) it was held that the Corporation could not reach an agreement to commute its periodic compensation liability to a lump sum liability because this was not contemplated by the statute. There are obiter dicta to similar effect in Dowell Australia Ltd v Archdeacon [1975] HCA 29; 132 CLR 417 at 425 per McTiernan J and Australian National Railways Commission v Commission for Safety Rehabilitation and Compensation of Commonwealth Employees (1992) 35 FCR 344 at 353 per von Doussa J. None of these concerned the Act but the Full Court has recently expressed the view that much of what is understood about the SRC Act may be applicable to the Act: Commonwealth v Snell [2019] FCAFC 57; 370 ALR 1 at 11 [34].

59    If employers and employees were entirely at liberty contractually to deal with the rights generated by workers’ compensation statutes then it is easy to see that this could result in the undermining of the policy of the legislation. It would be tolerably clear, for example, that a provision in an employment contract by which an employee agreed they were not entitled to make claims for compensation under the Act would be void on the basis explained in Behan.

60    The application of that principle in this case would focus attention on the bargain struck between the Respondent on the one hand, and the estate and Mrs Donnelly on the other. The Appellant submitted that the payments which had been made of $300,000 and $20,000 were well below what the Act required. The liability of the Respondent to pay compensation to the estate was governed by s 39 which provided how claims for permanent impairment were to be assessed. It required the Respondent to assess the degree of Mr O’Donnell’s permanent impairment as a percentage and then apply that to a statutory maximum. In the case of Mrs O’Donnell’s dependency claim it would have been necessary to assess whether Mrs O’Donnell was fully dependent on Mr O’Donnell or whether she was partially dependent. Under s 29 if she were partially dependent it would have then been necessary for the Respondent to assess what she had lost as a result of the death of her husband and to award an ‘appropriate’ sum under the statutory maximum applying in the case of a claimant who was fully dependent.

61    Both of these processes would have involved the exercise of a power of assessment which had no fixed outcome and which may, perhaps loosely, be described as discretionary. Those discretions did not yet arise in this case because at the relevant time the Respondent had not determined itself to be liable to pay compensation. Had it done so in relation to both claims then these processes of assessment would have arisen. If that had occurred then there might have been occasion to consider the more subtle question of whether an employer may agree to a particular answer to these discretionary questions and within what limits. Although it may be that the approach in Behan means that this cannot be done we would leave for an occasion in which the question actually arises any definitive determination of whether the exercise of such processes of discretionary assessment cannot be the subject of compromise. It should go without saying that even if such a compromise were possible it would be legally inefficacious unless and until embodied in a decision made under the Act.

Conclusion

62    The appeal should be allowed with costs, the orders of the primary judge set aside and the matter remitted to his Honour for further determination. The question of what should be done in relation to the costs of the hearing below should be left to the primary judge to determine when he thinks it appropriate to do so.

63    Although it was faintly submitted by the Appellant that the matter, if the appeal were allowed, ought to be remitted to a different judge of this Court, no sufficient reason arises for such an order.

Associate:

Dated:    17 December 2019