Baker v Rothmans of Pall Mall (Australia) Ltd [1999] NSWCA 245

New South Wales Court of Appeal CITATION : Baker v Rothmans of Pall Mall (Australia) Ltd [1999] NSWCA 245 FILE NUMBER(S) : CA 40111/98 HEARING DATE(S) : 9 July 1999 JUDGMENT DATE : 10 August 1999

PARTIES : Robert Baker - Appellant Rothmans of Pall Mall (Australia) Pty Ltd - Respondent JUDGMENT OF : Sheller JA at 1; Giles JA at 2; Davies AJA at 22

LOWER COURT JURISDICTION : Compensation Court LOWER COURT FILE NUMBER(S) : 17927/96 LOWER COURT JUDICIAL OFFICER : Truss CCJ

COUNSEL : Appellant - M J Ward Respondent - J P Sewell SOLICITORS : Appellant - Ward Maxwell & Co Respondent - HIH Winterthur Workers Compensation (NSW) Pty Ltd CATCHWORDS : WORKERS COMPENSATION - s 106E(1) - can not commence court proceedings until 12 weeks after a claim for compensation is duly made - whether mandatory. DECISION : Appeal dismissed with costs.

THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

CA 40111/98 CC 17927/96

SHELLER JA GILES JA DAVIES AJA

Tuesday 10 August 1999

BAKER v ROTHMANS OF PALL MALL (AUSTRALIA) LTD

JUDGMENT

1 SHELLER JA: I agree with Giles JA. 2 GILES JA: The appellant alleged that he had been injured over the years 1993 to 1996 inclusive in the course of his employment by the respondent. On 6 December 1996 he filed an application for determination in the Compensation Court. He claimed weekly payment of compensation, and lump sum payments for permanent injury and by way of compensation for pain and suffering. According to the particulars, the lump sum payments for permanent injury claimed under s 66 of the Workers Compensation Act 1987 ("the Act") were in respect of "10% permanent impairment of the back", "15% permanent impairment of the neck", and "15% permanent impairment of the left arm at or above the left elbow". 3 At that time s 106E(1) of the Act, since repealed, provided - "106E(1) A worker cannot commence court proceedings in respect of compensation under section 66 until: (a) 12 weeks after a claim for the compensation is duly made; or (b) if the person on whom the claim is made has, within that 12 weeks, proceeded to deal with and decide the claim with reasonable promptness and duly applied under section 131 for reference of the matter to a medical panel - 14 days after the medical panel has given its certificate under that section; whichever is later. However, this subsection does not prevent the commencement of court proceedings by a worker in respect of compensation under section 66 after a period of 16 weeks has elapsed since a claim for compensation was duly made, so long as the worker has responded to any offer of settlement made to the worker during that period."

4 By s 106E(7) court proceedings could nonetheless be commenced "in such circumstances (if any) as may be prescribed by the regulations". 5 The making of a claim for compensation was regulated by s 92 of the Act and cl 39 of the Workers Compensation (General) Regulation 1995 ("the Regulation"). By s 92 the claim had to be in writing, and in the case of a claim under s 66 of the Act to be accompanied by such medical certificates or other documents as were prescribed by the regulations. By cl 39(4) of the Regulation a claim for compensation under s 66 of the Act had to be accompanied by a medical certificate (or report) of the kind referred to in s 73 of the Act, that is, a report or certificate of a medical practitioner certifying that the worker had suffered a loss, being a loss mentioned in the Table of Disabilities in Division 4 of Part 3 of the Act, or the extent of the loss for the purposes of determining the amount of compensation payable for the loss. 6 The appellant had served documents purporting to be claims for compensation in September 1995 and April 1996. They were not accompanied by any report or medical certificate, and no report or medical certificate at all was served prior to commencement of the proceedings. By notice of motion filed on 5 June 1997 the respondent applied for an order that the application for determination be struck out, on the ground that the proceedings in the Compensation Court had been commenced in contravention of s 106E(1). 7 The notice of motion was heard by Truss CCJ. Her Honour recorded the respondent's submission that s 106E was mandatory and had to be strictly complied with, and that the appellant did not dispute that there had been a failure strictly to comply with it. She said that the appellant submitted that, notwithstanding non-compliance, the court had a discretion to determine, if appropriate, that a claim for compensation had been duly made. After discussion of authorities and other material on which the appellant relied, her Honour held that the claim for compensation under s 66 had not been duly made and, although not in terms, accepted the respondent's submission that compliance with s 106E was mandatory. She ordered that the application for determination be struck out so far as it claimed compensation under s 66 of the Act. 8 The appellant appealed. By s 32 of the Compensation Court Act his appeal was limited to error in point of law, and the ground of appeal was that her Honour erred in law in holding that the requirements of s 106E of the Act were mandatory. 9 The difficulties in the distinction between mandatory statutory requirements and statutory requirements regarded only as directory have long been recognised. The traditional distinction was between a requirement which must be strictly complied with and a requirement which need only be substantially complied with (Woodward v Sarsons (1875) LR 10 CP 733 at 746 per Lord Coleridge CJ). In more recent times the distinction has been between a requirement non compliance with which invalidates that which follows and a requirement non compliance with which does not have that consequence (Clayton v Heffron (1960) 105 CLR 214 at 247 per Dixon CJ, McTiernan, Taylor and Windeyer JJ; Victoria v The Commonwealth (1975) 134 CLR 81 at 161-2; Hunter Resources Ltd v Melville (1988) 164 CLR 234 at 248-50 per Dawson J). The question of substantial compliance may still arise on the latter distinction, however, because there may be invalidity in the absence of substantial compliance. 10 Where there may be validity despite total non compliance or invalidity despite substantial compliance, the observation of Hope JA in McRae v Coulton (1986) 7 NSWLR 644 at 661 must be endorsed - "In Tasker v Fullwood [1978] 1 NSWLR 20 at 23-24, this Court suggested that it could be misleading to seek first to categorise the statutory requirements and then to decide what their effect was. The statute has to be construed and the result of any non-compliance with the statutory requirement determined by reference to that construction. This may result in the requirement falling into either the mandatory or the directory category, but that categorisation is the end of the inquiry and not the beginning."

11 In the present case there had been neither strict nor substantial compliance with s 106E, since on no view could service of a medical report some weeks after 6 December 1996 (as occurred) be regarded as, or as completing, due making of a claim for compensation twelve weeks prior to that date. The time default was intractable, and the question was whether on the proper construction of s 106E(1) the non compliance invalidated the commencement of the proceedings so far as compensation was claimed under s 66 of the Act. 12 In my view guidance to the answer to the question is provided by the decision of this Court in Hill v Bolt (1992) 28 NSWLR 329. By s 48 of the Motor Accidents Act 1988 the claimant was obliged to co-operate fully in respect of the claim with the person against whom the claim was made and that person's insurer, and in particular to comply with any reasonable request by the other person or that person's insurer to furnish specified information or produce specified documents. Section 48(3) provided - "(3) The duty under this section applies only until court proceedings are commenced in respect of the claim but if the claimant fails without reasonable excuse to comply with this section, court proceedings cannot be commenced in respect of the claim while the failure continues".

One of the questions was whether proceedings commenced whilst failure to provide information or documents continued were not validly commenced. 13 Section 48 was seen as part of a scheme addressed to promoting the early settlement of litigation, specifically to enable an insurer, if it saw fit, sufficiently to inform itself so that it could make a reasonable offer to settle the claim before court proceedings began. It was held that proceedings commenced whilst failure to provide information or documents continued were not validly commenced, and should be struck out. 14 Kirby P said (at 331) - "The prohibition upon the commencement of proceedings is directed at the proceedings themselves. It is expressed in mandatory terms requiring that such proceedings ' cannot be commenced'. Especially in their statutory context, those terms should not be read down. Assuming (as I have always doubted) that there is a viable distinction between 'mandatory' and 'directory' provisions of legislation, I would certainly categorise this unusual provision as mandatory. The Court must give effect to the will of parliament expressed in such unusually strong, mandatory language."

15 Priestley JA, with whom Mahoney JA agreed, said (at 336-7) - "In Woods v Bate (1986) 7 NSWLR 560, McHugh JA, with whom Hope JA agreed, said that (at 567): '… Speaking generally, … the proper approach is to regard a statutory requirement, expressed in positive language, as directory unless the purpose of the provision can only be achieved by invalidating the result of any departure from it, irrespective of the circumstances or resulting injustice.' Applying that test to the provision here in question, it seems relatively plain that unless a mandatory meaning is given to the words, one of the basic purposes of Pt 5 will be seriously interfered with. The language itself seems to me to be relative clear and to convey the mandatory rather than the directory idea. Further, on the assumption that the respondent has a just claim, injustice will not be done as a result of the interpretation of the Act which seems to me to be the preferable one, because s 52 of the Act gives the court liberal powers so far as extensions of time are concerned. The existence of these powers is a matter relevant to the construction of s 48(3)."

16 Section 106E(1), together with s 106E(2) and surrounding sections restricting commencement of court proceedings claiming weekly payments, compensation for pain and suffering, and hospital, medical and other expenses, was part of a broadly similar scheme. The evident objective of the scheme was to promote the settlement of claims before commencement of court proceedings. In relation to a claim under s 66 of the Act, the employer or its insurer was to be apprised of the workers' claim, and would have the report or certificate of a medical practitioner conforming with the manner in which a claim for compensation under s 66 would be assessed on which the worker relied, well before the commencement of proceedings. The employer or its insurer would then have twelve weeks within which to consider the claim and if thought appropriate respond to it, without the necessity for court proceedings. If the response brought reference to a medical panel, the restriction on commencing court proceedings was extended. 17 While evident from the provisions themselves, this purpose is confirmed by the second reading speech for the Workcover Legislation Amendment Bill (Hansard 6 December 1995 pp 4255-58), in which it was said that s 106E would extend to all lump sum disability claims under s 66 of the Act the existing provisions providing a three month non-litigation period after lodgment on the employer of an industrial deafness claim, provisions "designed to allow a reasonable opportunity for the employer's insurer to assess the claim and, if applicable, to refer a dispute on the matter to a medical panel" (at 4256). 18 Section 106E(1) also used similar language to that found in s 48(3) of the Motor Accidents Act. The worker "cannot commence court proceedings". The language was as clear, strong, and mandatory or conveying "the mandatory rather than the directory idea" as the language in s 48(3), and its effect could only have been underlined by s 106E(7). When the legislature said that, absent a claim for compensation duly made by a stated time, a worker could not commence court proceedings, it would fly in the face of the clear legislative will to hold that the worker nonetheless could commence court proceedings. 19 The appellant submitted that Hill v Bolt should be distinguished because the decision in that case was in part founded on the power under s 52 of the Motor Accidents Act to extend the three year limitation period for the commencement of legal proceedings for damages (see the penultimate sentence in the passage from the judgment of Priestley JA set out above). The concern must have been that the claimant should have some protection in the event that the special limitation period expired before he realised that, by ignorance, error or misapprehension, the court proceedings had not been validly commenced. I do not think there is the same or similar occasion for protection in a case such as the present. The appellant said that amendments to the Act in 1997 reduced the level of compensation he could claim in fresh proceedings. If so, that was the subsequently expressed will of the legislature, and is not a reason to distort the meaning and effect of s 106E. 20 In my view, although the case was concerned with a different statutory requirement, what was said in Hill v Bolt applies with respect to s 106E(1). If the test of mandatory or directory be applied, the words are clear. The worker cannot commence court proceedings until a stated period after a claim for the compensation is duly made. That is not so much a statutory requirement as an express prohibition, in mandatory language, and unless it be regarded as mandatory the purpose of the provision will be undermined. If the mandatory/directory test be put aside, and it be asked simply what s 106E(1) means, the result is the same. 21 I propose that the appeal be dismissed with costs. 22 DAVIES AJA: I agree with Giles JA. _________________

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.