FEDERAL COURT OF AUSTRALIA

Romero v Farstad Shipping (Indian Pacific) Pty Ltd [2014] FCA 439

THE COURT ORDERS THAT:

1.    The application is dismissed.

2.    Subject to any further order (in accordance with paragraph 55 of the accompanying reasons for judgment), the applicant pay 85% of the respondent’s costs.

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

REASONS FOR JUDGMENT

Introduction and overview

1        The applicant, Ms Romero, was an employee of the respondent company, Farstad Shipping (Indian Pacific) Pty Ltd (“Farstad”) from 2010 to 2013. She worked as a maritime officer aboard its supply vessels, the “Far Scandia” and the “Far Swan”. Those vessels transport material to oil and gas platforms in Bass Strait and in and about the northwest shelf, respectively.

2        From 23 November to 4 December 2011, Ms Romero worked as a second officer aboard the “Far Swan” under the ship’s master, Captain Cameron Martin.

3        Ms Romero alleges that during her time aboard the Far Swan, she was subjected to bullying and vilification by Captain Martin. Specific allegations in this respect are outlined further at [12] below.

4        Ms Romero departed the Far Swan because she considered her position on the vessel to be untenable given the breakdown in her relationship with Captain Martin. On returning home to Hobart, Ms Romero was contacted by Ms Barker. Ms Barker is employed in Farstad’s human resources section. Ms Barker offered, and Ms Romero accepted, a position on a course related to anchor-handling. That course was conducted in Western Australia. After completing that course, and subsequent to a complaint by Ms Romero to Farstad about Captain Martin’s conduct on the Far Swan, Ms Romero was interviewed by Ms Barker and Ms Anderson. Ms Anderson is also involved in human resources for Farstad. Mr Barrow was present for some of the interview. Mr Barrow is a human resources manager for Farstad. This interview occurred on 16 December 2011. It was conducted shortly after Ms Romero had arrived in Melbourne from Perth on the notorious “red eye” flight. She was offered a day room in a hotel to recuperate, but was content to be interviewed. The interview dealt with Captain Martin’s conduct on the Far Swan and his interactions with Ms Romero. As much of Captain Martin’s interactions with Ms Romero were based on his view of her alleged inadequacies, the issues of Ms Romero’s confidence or lack thereof and seamanship skills or lack thereof were canvassed at the interview. In the circumstances, at times, it appears that those issues were canvassed a little more strongly than need be the case, as is discussed later in these reasons at [33] and [39].

5        Ms Romero alleges that Captain Martin’s treatment of her aboard the Far Swan and the treatment she received from human resources personnel at Farstad following the making of a complaint against Captain Martin constitute the following wrongful conduct by Farstad against her:

    a breach of s 14(2) of the Sex Discrimination Act 1984 (Cth) (“the SDA”);

    a breach of her contract of employment with Farstad, specifically:

(a)    a failure by Farstad to comply with its Workplace Harassment and Discrimination Policy (“the Policy”); and

(b)    Farstad’s breach of an implied term of mutual trust and confidence in the employment relationship between itself and Ms Romero.

The sex discrimination claim

6        The sex discrimination claim advanced by Ms Romero has been through several iterations from her originating application to her counsel’s closing submissions. Initially, Ms Romero claimed a breach by Captain Martin and Mr Barrow, Ms Barker and Ms Anderson of s 14(2) of the SDA; and a breach of s 94 by Mr Barrow, Ms Barker and Ms Anderson.

7        Claims of victimisation under s 94 were not pursued by Ms Romero’s counsel in oral submissions. Rather, the sex discrimination claim was confined to a breach of s 14(2)(d) by Captain Martin. Section 106(2) of the SDA extended the s 14 breach to Farstad; that is, to Mr Barrow, Ms Barker and Ms Anderson.

8        Section 14(2) of the SDA provides that:

It is unlawful for an employer to discriminate against an employee on the ground of the employee’s sex, sexual orientation, gender identity, intersex status, marital or relationship status, pregnancy or potential pregnancy, breastfeeding or family responsibilities:

(a)    in the terms or conditions of employment that the employer affords the employee;

(b)    by denying the employee access, or limiting the employee’s access, to opportunities for promotion, transfer or training, or to any other benefits associated with employment;

(c)    by dismissing the employee; or

(d)    by subjecting the employee to any other detriment.

9        Section 5(1) of the SDA outlines what constitutes sex discrimination for the purposes of the Act:

For the purposes of this Act, a person (in this subsection referred to as the discriminator) discriminates against another person (in this subsection referred to as the aggrieved person) on the ground of the sex of the aggrieved person if, by reason of:

(a)    the sex of the aggrieved person;

(b)    a characteristic that appertains generally to persons of the sex of the aggrieved person; or

(c)    a characteristic that is generally imputed to persons of the sex of the aggrieved person;

the discriminator treats the aggrieved person less favourably than, in circumstances that are the same or are not materially different, the discriminator treats or would treat a person of a different sex.

10        For the purposes of the SDA, the “hypothetical question” is therefore whether Captain Martin treated Ms Romero less favourably than he treated or would have treated a male second officer on the Far Swan; see Employment Services Australia Pty Ltd v Poniatowska (2010) [2010] FCAFC 92 at [115] per Stone and Bennett JJ. Ms Romero, as the applicant, bears the onus of proof, and resolution of the issue comes down not to a “mere mechanical comparison of probabilities”, but to “an actual persuasion of [the] occurrence or existence [of discrimination] before it can be found” (see Briginshaw v Briginshaw (1938) 60 CLR 336 per Dixon J at 361).

11        The phrase “by reason of” in s 5(1) necessarily implies a causal connection between the sex of the complainant and the less favourable treatment by his or her discriminator (see Human Rights and Equal Opportunity Commission v Mount Isa Mines Ltd (1993) 46 FCR 301, 322 per Lockhart J; see also Purvis v New South Wales (2003) 217 CLR 92, 142-44 per McHugh and Kirby JJ).

12        Ms Romero relies upon a number of alleged actions of Captain Martin to establish that he engaged in unlawful sex discrimination against her. According to Ms Romero (as expressed in her contentions of fact and law and affidavit and oral evidence), Captain Martin:

    “spoke to her in a hostile and belligerent manner”;

    “failed to complete her induction or provide appropriate on-board training”;

    “undermined her efforts to stay onboard [the] Far Swan”;

    “treated her in an abrasive and dismissive manner although she was the second officer”;

    “ignored her professional assessment of safety equipment”;

    “ignored her chain of command [and] lead other crew members into thinking she had mismanaged ship equipment”;

    “demeaned her in front of other crew members”;

    “portrayed her as incompetent in front of other crew members”;

    “refused to acknowledge her assessment of a dangerous situation on the platform in circumstances where a less senior male crew member’s assessment of the danger was acknowledged at a later stage”;

    “failed to give her proper and general information relating to her management of the ship when she asked for information”;

    “placed her under undue pressure with intent to cause her to lose confidence in [herself]”;

    “berated and put her down when making a platform approach”;

    “referred to her as incompetent in front of another crew member without the proper process of assessment”;

    “reported her as incompetent to the Ship Manager and Human Resources Manager without proper basis”;

    “told her she had a mental health problem”;

    “ordered her off the bridge when she was entitled to be there”; and

    “created a hostile and aggressive environment whereby she felt unsafe and left the ship”.

13        Ms Romero contends that all of these behaviours occurred “in circumstances where there was no such conduct by Mr Martin towards male officers or crew members”.

14        Farstad submits that the conduct listed at [12] above either did not occur or did not occur so as to amount to a detriment; or, in the alternative, that Captain Martin would have behaved equivalently towards male crew members aboard the Far Swan and thus that any claim of sex discrimination must fail.

15        Under cross-examination, Ms Romero admitted that although Captain Martin was “extremely nasty with [her]”, he was not “nasty to [her] in some manner that was specific to her gender”. Ms Romero conceded that Captain Martin “didn’t ever say anything that was a gender associated with it”.

16        Captain Martin gave evidence about his 21 December 2011 meeting with Mr Barrow, Ms Barker and Ms Anderson, at which he allegedly described Ms Romero as “an older female who was under stress”. Captain Martin could not recall whether he had said these words specifically but refuted any notions of sex discrimination based on this accusation regardless. He gave the following evidence:

Was that your view as at 21 December regarding Ms Romero and – while she was on board Far Swan? --- She was certainly a female and was certainly exhibiting to my mind signs of stress at the time on several instances – several specific occasions. She appeared and said to me that she was stressed, so I think that would be a fair description.

Because gender was relevant to you, wasn’t it? --- No, sir.

It wouldn’t matter whether she was female or male, would it? --- Absolutely not, sir. This is the 21st century. I refute entirely your imputation that I was treating Lisa in any way different because she was a female.

17        The behaviour referred to at [12] above did not appear to me to be engaged in on account of Ms Romero’s gender. Likewise, Captain Martin’s contentious assessment of Ms Romero as “incompetent” is an assessment of her performance and does not go to her gender. I found Captain Martin to be a credible witness. The poor relationship between Captain Martin and Ms Romero was the result of an escalating personality clash rather than any sex discrimination on Captain Martin’s part. Ms Romero, as noted above at [15] above, did not assign a gender basis to Captain Martin’s concerns.

18        In respect of Ms Romero’s allegation that Captain Martin did not acknowledge her assessment of a dangerous situation and then acknowledged a similar assessment by a male crew member at a later stage, I accept Captain Martin’s evidence that at the time of Ms Romero’s assessment, he did not understand her concerns as serious or as justifying an immediate investigation. His taking her report about equipment known as the “fast rescue craft” to be a “pre-existing minor condition, a characteristic of the boat rather than a defect” satisfactorily explains his delay in acknowledging Ms Romero’s concerns. I do not accept Ms Romero’s contention that this was an act of sex discrimination.

19        As a result of the clash between Captain Martin and Ms Romero, Captain Martin wished to have Ms Romero removed from the Far Swan. This desire may have been personal, rather than professional; however, this does not imply that it was an act of sex discrimination. Rather, I take the view that by the time Ms Romero left the Far Swan the relationship between Ms Romero and Captain Martin had deteriorated to a point where Captain Martin felt there was “no option” but to source a relief second officer.

20        Equally, I do not find Captain Martin’s observation of Ms Romero as “an older female under stress”, if this is indeed what he said, to be anything more than a factual statement; she was indeed a female, and based on her own evidence in chief, was under considerable stress while on the Far Swan. As Lockhart J put it in Mount Isa Mines, “[t]he answer [to a claim of sex discrimination] may be more complex and involve a number of matters which on analysis may or may not reveal discriminatory conduct on the ground of sex” (at 322).

21        Finally, I accept the contention of counsel for Farstad that Ms Romero has a tendency towards an “exaggerated perception” of certain situations and that in the case of Captain Martin, she overreacted to “a relatively simple interpersonal conflict”. This case bears a strong factual resemblance to that of Wiggins v Department of Defence (2006) 200 FLR 438, in which McInnis FM summed up his findings as to the perceived sex discrimination against a Navy officer thus (at 467):

[I]n the absence of persuasive corroboration and against the backdrop of strong denials from a witness who accept to be a witness of truth… I am not satisfied that the applicant has discharged the onus of proof in relation to the SDA claims.

22        Ms Romero has not satisfied the onus on her to make out any sex discrimination claim for which Captain Martin is responsible contrary to s 14(2) of the SDA. Consequently, there can be no vicarious liability on the part of Farstad Shipping in accordance with s 106 of the SDA. The claim of sex discrimination is rejected.

Breach of contract claims

(a) the Policy

23        Ms Romero submits that Captain Martin’s conduct constituted harassment and/or discrimination within the meaning of the Policy (as defined in [5] above); and that Farstad failed to comply with the Policy in response to Ms Romero’s complaints about Captain Martin.

24        Counsel for Ms Romero directed the Court towards to relevant parts of the Policy in opening. Among these were the following statements:

Farstad Shipping seeks to establish a workplace culture where all employees are treated fairly and with respect and dignity… Farstad Shipping will handle complaints promptly, with confidentiality, impartiality and with sensitivity to the complainant’s needs… [Farstad Shipping will] ensure employees making complaints of workplace harassment and discrimination are not disadvantaged in their employment conditions or opportunities.

All employees shall be made aware of the Company’s Human Rights and Equal Opportunities Policy and the contents of this Workplace Harassment and Discrimination Procedure document. The Policy and Procedure shall be promoted and distributed at all levels of the organisation as part of the employee’s induction and on an ongoing basis. Posters outlining the Policy and appropriate contact numbers shall be clearly displayed in the workplace. Regular education programs shall take place for all employees. Managers shall be trained in the principles of EEO and their responsibilities under the Policy and Procedure.

The Company will establish, train and maintain Harassment and Discrimination Contact Officers to provide employees throughout the business with access to people with whom they can discuss concerns about workplace harassment and discrimination and receive guidance on the options available to deal with their issues. The Contact Officer’s primary role is to help staff members resolve their issues themselves. If that fails to manage the situation, however, then the Contact Officers can help the staff member to explore other options including making a formal complaint…

The employee must decide what action they want to take in terms of resolving the problem in an effective and acceptable manner. The options available include taking informal action to resolve the complaint themselves, including talking to the alleged harasser and, if required, requesting that the Contact Officer or Manager be present; requesting the Manager to discuss the concern with the alleged harasser to revolve the complaint informally; instigating a formal complaint and investigation under the Workplace Harassment and Discrimination procedure, and initiating a general grievance/complaint through their line management…

If the employee decides to go ahead with a formal complaint they need to lodge the complaint in writing with their Manager… the employee’s Manager must investigate the complaint… The investigator will interview the complainant; the alleged harasser; other appropriate employees/witnesses. The investigating Manager will take a record of interview with the complainant, the alleged harasser and any witnesses. The parties to a complaint and any witnesses should be given the opportunity to peruse, correct and sign their record of interview…

On completion of the investigation, the investigating Manager will produce a confidential written report. The report should outline the nature of the complaint; the steps taken in the investigation process; the outcome of any conciliation; and recommendations which may include remedial/disciplinary action or a file-note that the allegations were unsubstantiated…

(Emphasis added)

25        Ms Romero contends that she did not make a formal complaint under the Policy with respect to Captain Martin’s behaviour and that she was not fully advised of her options in accordance with the Policy. In addition, she says that the 16 December 2011 meeting between herself, Mr Barrow, Ms Barker and Ms Anderson was replete with questioning and investigative practices not in compliance with the Policy.

26        Farstad rejected the notion that the Policy formed a part of Ms Romero’s contract of employment with the company. In the alternative, it submits that even if the Policy was incorporated into the contract it was not breached either by the conduct of Captain Martin or by Mr Barrow, Ms Barker and Ms Anderson as “it could not operate so as to prevent Farstad from proceeding with a workplace investigation into a matter it considered raised safety concerns in the absence of permission, agreement or a formal complaint by Ms Romero”.

27        As a preliminary question, I am required to decide whether the Policy formed a part of Ms Romero’s contract of employment with Farstad. If the Policy does not form a part of the contract, breach of it by Captain Martin and any of Mr Barrow, Ms Barker or Ms Anderson is irrelevant. It is Ms Romero’s case that the Policy did in fact form part of her contract of employment.

28        The issue of whether a company’s policies form part of its contracts of employment with its staff is a vexed one and depends largely on the circumstances of any given case. In Goldman Sachs JBWere Services Pty Ltd v Nikolich (2007) 163 FCR 62 at [29], a majority of the Full Court (Black CJ and Marshall J; Jessup J dissenting) recognised that the test was “objective. What matters is what the language used, in context, would have led a reasonable person… to believe” (see also Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193 at [43] per Lindgren J). As Black CJ said at [30] in Nikolich, in the context of a statement in a policy favouring a “family approach” to the work environment:

The difficulty is that the statement in issue is not explicitly contractual in its language and could be seen as merely aspirational. It appears in a document of mixed content and purposes and, although these include contractual purposes, at least the primary repository of the employment contract is unambiguously elsewhere. The context is, however, decisive… if the statement that the firm “will take every practicable step to provide and maintain a safe and healthy work environment for all people” were no more than an aspirational representation, imposing no obligation on the maker, it would be seen as an exercise in hypocrisy. The statement is a reflection of, and is central to, WWU’s expression of the “culture” of the firm and its approach to its staff, and its aspirations about the approach the employees will take to each other. The language used, taken in the context as a whole, points to the statement embodying a contractual obligation and the trial judge was correct in holding that it was a term of the contract.

29        Conversely, in Commonwealth Bank of Australia v Barker (2013) 214 FCR 450 (“Barker FC”), Jacobson, Lander and Jessup JJ held that the breach of a particular workplace policy in that case did not amount to a breach of the implied term of a contract as the policy was not part of the respondent’s contract of employment. This was due to a reservation or qualification attached to the policy in that particular case, as explained by Jessup J at [347]-[348].

30        As was the case in Nikolich, there is much in Farstad’s Policy that could be described as “aspirational”. The fact that new Farstad employees are made to sign the Policy is not decisive in rendering it a contractual document (see Nikolich at [121]). There is nothing in the Policy itself which suggests that its terms are terms of Farstad’s contracts of employment with its employees or are otherwise expressly or impliedly incorporated within them. There is quasi-contractual language on the first page of the Policy, saying that Farstad “will… handle complaints, meet all legal and statutory obligations and ensure employees… are not disadvantaged in their employment conditions or opportunities”. However, such language is insufficiently specific so as to amount to a binding contractual obligation. It has a predominantly aspirational quality. I find that it is not specifically incorporated as part of Ms Romero’s contract of employment.

31        Even if the Policy was incorporated as part of Ms Romero’s contract of employment, the Court is not satisfied that Farstad breached the Policy. In closing, counsel for Ms Romero stressed the following points:

        There had been no appointment of a Contact Officer and no explanation to Ms Romero of her options under the Policy;

        There had been a failure to properly investigate Ms Romero’s claims and to properly document their investigation;

        There had been a lack of impartiality in the investigation, in the sense that Captain Martin was interviewed first;

        There had been an interview on 16 December 2011 which involved an assessment of Ms Romero’s competence which was in conflict with a relevant Enterprise Agreement and which, Ms Romero contends, proves the impartiality of Farstad in its investigation of her claim; and

        There had been a failure to ensure that Ms Romero was not disadvantaged by the decision as to her study being funded by Farstad.

32        As counsel for Farstad submitted, employers, in conducting an investigation, are “obliged to act in a practical manner, and not to embark on a judicial hearing or police style examination of the circumstances” (Gera v Commonwealth Bank of Australia Ltd (2010) 201 IR 26 at 36-37). As Heerey J put it in Schaale v Hoechst Australia Ltd (1993) 47 IR 249 at 252, “[e]mployers are not required to have the skills of police investigators or lawyers”. Rather, it is the totality of the circumstances which must be considered in order to formulate the standard; see Byrne v Australian Airlines Ltd (1995) 185 CLR 410 at 430 (Brennan CJ, Dawson and Toohey JJ).

33        Here, the Court does not consider that the behaviours Ms Romero’s counsel cited in closing submissions constituted evidence of an improper investigation or one that was not otherwise in accordance with the Policy. While aspects of the 16 December 2011 meeting may be considered inappropriate by the overzealous examination of Ms Romero’s competency and future, and while the evidence gathering and note-taking on the parts of Mr Barrow and Ms Barker were questionable, the Court does not consider that Farstad’s human resources personnel breached the Policy. At no time was Farstad acting in anything other than a “practical manner”. Ms Romero plainly made a complaint about Captain Martin’s behaviour aboard the Far Swan; whether it was formal or not is irrelevant. Investigations, while imperfect, were undertaken and a written report of the findings produced to Ms Romero’s lawyer at the time, Ms Anna Crotty. On the first limb of her breach of contract claim, Ms Romero has failed to make out her case.

(b) the implied term

34        Ms Romero also presses a claim for breach of contract based upon “an implied term that the respondent would not, without reasonable cause, conduct itself in a manner likely to destroy or seriously damage the relationship of confidence and trust between it and the applicant”. Ms Romero contends that the content of that duty required Farstad to act in accordance with its Policy and “in doing so, to act fairly and impartially so as to meet its duties of loyalty, confidentiality and mutual trust”.

35        The question of whether Australian contract law recognises an implied term of mutual trust and confidence in employment contracts is currently before the High Court in Barker v Commonwealth Bank of Australia [2014] HCA Trans 73-74. I am bound by the Full Court’s ruling on this issue in Barker FC. In that case, reviewing the English and Australian authorities, Jacobson and Lander JJ (Jessup J dissenting) held at [13] that there is an implied term of mutual trust and confidence in Australian employment contracts.

36        Their Honours at [94] made reference to policy considerations, including the “nature of the relationship between employer and employee”, which indicated the necessity of such an implied term; the “content of the duty must be moulded according to the nature of the relationship and the facts of the case” (at [108], citing Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 102 per Mason J (as his Honour then was)).

37        The Full Court held that the implied duty of cooperation, long accepted by the High Court (see Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596) could serve as an “alternative approach” to considering an implied duty of trust and confidence. In Secured Income Real Estate, Mason J (at 607) summarised the duty of cooperation as “a duty to cooperate in the doing of acts which are necessary to the performance by the parties or by one of the parties of fundamental obligations under the contract”. His Honour continued (at 607-08):

[T]he question arises whether the contract imposes a duty to co-operate on the first party or whether it leaves him at liberty to decide for himself whether the acts shall be done, even if the consequence of his decision is to disentitle the other party to a benefit. In such a case, the correct interpretation of the contract depends… not so much on the application of the general rule of construction as on the intention of the parties as manifested by the contract itself.

38        The Full Court’s summation of the implied duty in Barker FC was informed by the facts before the Court in that matter. Those facts are far removed from the current factual setting. Mr Barker was a long term employee of the Commonwealth Bank. Accordingly, the Bank was required to “take positive steps” to “consult… about the possibility of redeployment and to provide him with the opportunity to apply for alternative positions” (per Jacobson and Lander JJ at [112]). Conversely, Ms Romero was not a long term employee of Farstad and at no point was there any suggestion that her career was to be terminated following her complaining about Captain Martin. Rather, the evidence suggests that each of Mr Barrow, Ms Barker and Ms Anderson attempted to persuade Ms Romero to return to sea as soon as possible. Ms Romero preferred not to do so. I do not consider that Farstad’s conduct in respect of Ms Romero in any way breached either an implied duty of trust and confidence or an implied duty to cooperate.

39        Aspects of the investigation into Captain Martin’s conduct were unfortunate and regrettable, particularly some of the lines of inquiry pursued at the 16 December 2011 meeting into Ms Romero’s competence on the Far Swan and into her maritime career more generally. Some of the “records of interview” (required by the Policy and presumably as part of any duty of cooperation) were scant at best, including the exhibited “Post-It” notes taken by Ms Barker in a telephone conversation with Ms Romero on 2 December 2011.

40        I do not find, however, that any lapses in judgment on the part of Farstad in pursuing its investigation into Ms Romero’s complaints against Captain Martin were so severe so as to have breached the standard in Barker FC. They did not strike at something fundamental to the heart of the continuation of the employer/employee relationship. Nor do I find, contrary to closing submissions on Ms Romero’s behalf, that there was “a lack of impartiality in the investigation” or that Mr Barrow and Ms Barker, as “primary witnesses”, should not have been conducting the investigation. Each of Captain Martin and Ms Romero was questioned as to various incidents which occurred aboard the Far Swan and each had an opportunity to discuss these with Farstad management, notwithstanding certain aspects of Ms Romero’s questioning which I have already deemed unfortunate and inappropriate.

41        Finally, turning to the issue of Ms Romero’s further study, and the deferral of a decision by Farstad as to the funding of that study, I do not find that any relevant conduct of Farstad in any way breached any duty of trust and confidence or cooperation. I do not accept Ms Romero’s evidence that she had been guaranteed funding for such study by Mr Barrow. Mr Barrow made it clear that the funding depended on board approval; although he was hopeful that he would be able to secure the requisite funding, it was by no means certain. Nor do I accept that the discussion which took place about Ms Romero’s options for further study at the 16 December 2011 meeting was in any way punitive on Farstad’s part. Rather, I accept the evidence of Ms Barker that attempts were made to address Ms Romero’s “crisis of confidence” by bringing her back to sea as soon as possible. An email sent to Ms Barker by Ms Romero on 7 December 2011 concurs with the good sense of that approach.

42        Accordingly, the Court finds no breach of Ms Romero’s contract of employment by Farstad, on the assumption of the existence of the relevant implied duty. The second limb of Ms Romero’s contract claim also fails.

The jurisdictional point

43        As a preliminary point, Farstad contends that s 54(1) of the Seafarers Rehabilitation and Compensation Act 1992 (Cth) (“SRCA”) is a complete bar to the applicant’s case. That section provides as follows:

Subject to section 55, a person does not have a right to bring an action or other proceedings against his or her employer, or an employee of the employer in respect of:

(a)    an injury sustained by an employee in the course of his or her employment, being an injury in respect of which the employer would, apart from this subsection, be liable (whether vicariously or otherwise) for damages; or

(b)    the loss of, or damage to, property used by an employee resulting from such an injury.

44        Section 55 of the SRCA permits a person to make an election as to damages for any non-economic loss from an employer. Per s 55(4):

If an employee makes an election:

(a)    subsection 54(1) does not apply in relation to an action or other proceeding subsequently instituted by the employee against the employer or another employee for damages for the non-economic loss to which the election relates; and

(b)    compensation is not payable after the date of the election under section 39, 40 or 41 in respect of the injury.

45        “Injury” is defined by s 3 of the SRCA and includes a physical or a mental injury.

46        Farstad submits that Ms Romero’s claims “can only be understood as arising from an injury”. So the argument ran, the appropriate forum for such claims is the Seafarers Safety, Rehabilitation and Compensation Authority (“Seacare”). Ms Romero has lodged a similar claim with Seacare, but contends that s 54 of the SRCA does not bar claims for breach of contract, and was instead introduced to target “pure” personal injury claims in negligence.

47        In Australian Education Union v Department of Education and Children’s Services (2012) 248 CLR 1, the High Court noted that “[t]he process of construction begins with a consideration of the ordinary and grammatical meaning of the words of the provision having regard to their context and legislative purpose” (at [26] per French CJ, Hayne, Kiefel and Bell JJ). The consideration of the ordinary words of s 54 of the SRCA convey the meaning that it was designed to deal with claims in respect of negligence for personal injuries sustained in the course of employment and not those sustained as a consequence of treatment which breaches the SDA or an employment contract.

48        It is uncontroversial that one may have access to extrinsic material in interpreting a statute (see s 15AB of the Acts Interpretation Act 1901 (Cth); see also CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408 per Brennan CJ, Dawson, Toohey and Gummow JJ), provided, of course, that such materials do not “displace the clear meaning of the text of a provision” (Northern Territory v Collins (2008) 235 CLR 619 at [99] per Crennan J). At the very least, if a statute is ambiguous, a Court is open to have regard to Parliamentary intentions. In this respect, the second reading speech of the Seafarer’s Rehabilitation and Compensation Bill 1992 (Cth) is instructive:

Common law negligence actions are counter-productive to the fundamental objective of helping injured employees rebuild their lives and return to employment as quickly as possible. Accordingly, the new legislation… will restrict common law actions against an employer or fellow employee to non-economic losses and cap the amount of damages that a court may award.

49        Similar sentiments were expressed by members at the second reading of the Commonwealth Employees’ Rehabilitation and Compensation Bill 1988 (Cth) (“CERC Bill”), where “the common law negligence action which bases its entitlement on proof of fault” was deemed “a costly, inefficient and inappropriate mechanism for compensating injured workers”.

50        It is plain that Parliament did not intend the SRCA to have the effect which Farstad prefers, namely, to bar a breach of contract claim to which injury is largely incidental. So much was accepted by the South Australian Full Court (Doyle CJ, White and Kelly JJ) in respect of the Workers Rehabilitation and Compensation Act 1986 (SA) in State of South Australia v McDonald (2009) 104 SASR 344 at [196] and [204]. Counsel for Farstad contended that Mr McDonald’s contract claim was only permitted so far as it related to issues of tenure. I disagree. The central focus of s 54 matters is to ask what is being claimed. Ms Romero claims a breach of the SDA. That claim alone gives this court jurisdiction. Her contractual claims come under its accrued jurisdiction: Re Wakim; Ex parte McNally (1999) 198 CLR 511 at [229] per Kirby J.

51        The SRCA is directed towards personal injury claims brought under common law. As counsel for Ms Romero noted, it would be a curious result indeed if someone whose employment contract had been breached, but did not suffer an injury, could recover damages under the SRCA, but someone who did suffer an injury in the same circumstances was not able to do so.

52        The Court disagrees with Farstad’s contention that Ms Romero’s claims can only be understood as arising from an injury. While not as practically useful to her, the applicant also seeks declaratory relief and an apology pursuant to s 46PO(4) of the Australian Human Rights Commission Act 1986 (Cth). The Court finds her claim not to be “in respect of” an injury, but instead, “in respect of” an alleged breach of the SDA and in respect of an alleged breach of her employment contract.

53        Section 55 of the SDA does not apply to this case. Consequently, Farstad’s reliance on the principle in Gosbell v ADI Ltd [2001] NSWSC 354 at [7] falls away; there is no requirement for election in this case and s 54 does not apply to bar Ms Romero’s claim for damages.

Conclusion and costs

54        For the above reasons, the application should be dismissed. Ms Romero should pay 85% of Farstad’s costs. This figure reflects the fact that Farstad did not succeed on the preliminary point. The assessment of 85% is made having regard to the time which the Court considers was wasted in pursuit of an unmeritorious preliminary point.

55        During the course of the trial, I raised with counsel the prospect that whatever the result, I would take further submissions on costs. In order to save the parties any further expenses, and to reflect what the Court considers to be a reasonably obvious outcome in respect of the appropriate cost burden, it considers it unnecessary to specifically invite further submissions before making a costs order. However, if either party has an issue with the 85% cost assessment, the Court will entertain very brief submissions strictly within seven days from the publication of these reasons. The Court particularly stresses that the time limit is a strict one and in the absence of such submissions, the matter will be considered as at an end.

Associate:

Dated:    6 May 2014