Contribution orders under s.7(4) of the Workers' Compensation Act 1926 (NSW) cannot extend to lump sums paid in redemption under s.15(1); contribution is limited to compensation for which there is a statutory liability.
Later decisions that cite Gosper v Christopherson
GOSPER v. CHRISTOPHERSON [1986] HCA 28; (1986) 160 CLR 423
No. F.C. 86/026
Workers Compensation (N.S.W.)
High Court of Australia
Mason(1), Wilson(1), Brennan(1), Deane(1) and Dawson(1) JJ.
CATCHWORDS
Workers' Compensation (N.S.W.) - Worker contracting disease by gradual process - Shearer having successive employers - Redemption of order for weekly compensation payments - Lump sum payment - Contribution - Liability to contribute - Some employers unwilling to participate - Workers' Compensation Act 1926 (N.S.W.) ss. 7(4), 15(1).
HEARING
1986, May 7; June 3. 3:6:1986DECISION
MASON, WILSON, BRENNAN, DEANE and DAWSON JJ.: These appeals from the Court of Appeal of New South Wales were heard together. They arise from an application made by Mr D.K. Warburton, a "worker" for the purposes of the Workers' Compensation Act 1926 (N.S.W.) ("the Act"), to the Workers' Compensation Commission of New South Wales for the determination of the liability of, and amount of compensation payable by, H.T. & E.I. Christopherson (hereafter "the respondents"). When the matter came on for hearing before His Honour Judge McGrath in the Workers' Compensation Commission, it was compromised after the evidence of the worker and of some medical practitioners was taken. Without objection, it was found that the worker had suffered a disease, namely, tenosynovitis and carpal tunnel syndrome contracted in the course of his employment as a shearer, that his employment by the respondents was a factor contributing to that disease, and that the disease was of such a nature as to be contracted by a gradual process. It was also found that the respondents were the last employers who employed the worker in an employment to the nature of which his disease was due. The worker was thus found to be entitled to compensation pursuant to s.7(4) of the Act, the first paragraph of which reads -
2. The award of $2 per week was merely a formal foundation for the
substantial term of the compromise, namely, that a lump sum of
$40,000 should
be paid in redemption of the liability for compensation pursuant to s.15 of
the Act. That section provided, inter
alia:
" (1) Subject to this Act, the liability in
respect of any weekly payment may, with the
consent of the worker, be redeemed either in
whole or in part by the payment of a lump sum,
determined by the Commission, having regard to
any dispute as to liability to pay compensation
under this Act and the injury, age, and
occupation of the worker at the time of the
occurrence of the injury, as well as to his
diminished ability to compete in an open labour
market.
(1A) Where the Commission determines a lumpHis Honour determined with the consent of the worker that the employers' liability to make weekly payments of compensation under the award might be redeemed in whole by a lump sum payment of $40,000. McGrath J. further found that
sum under subsection (1) and the worker agrees
that payment of the lump sum should also redeem
any liability to make a payment under section 10
or 16 in respect of the injury, payment of the
lump sum also redeems any liability to which the
agreement of the worker relates."
" the worker consents to the said redemption andIn due course, the respondents' liability to make weekly payments of compensation to the worker was redeemed by the payment of that amount of $40,000.
further agrees that the said payment shall redeem
the whole of the employers liability under
section 16 and the whole of the employers
outstanding and/or future liability under section
10."
3. The respondents had joined a number of parties who had employed the worker
during the twelve months preceding his incapacity,
claiming contribution from
them under the second paragraph of s.7(4):
" Any employers who, during the twelve monthsSome of the parties whom the respondents had joined agreed to contribute to the lump sum. The present appellants, who were among the parties so joined, did not agree to contribute.
preceding a worker's incapacity, employed him in
any employment to the nature of which the disease
was due, shall be liable to make to the employer
by whom compensation is payable such
contributions as, in default of agreement, may be
determined by the Commission."
4. When the respondents sought from the Court an order for contribution against each of the appellants, his Honour refused the applications. He held that a determination of the lump sum for which a liability in respect of weekly compensation might be redeemed under s.15(1) was not an award of compensation. He took the view that an application for a contribution order in respect of a lump sum paid by way of redemption was beyond the scope of s.7(4). On appeal to the Court of Appeal, the Commission's order was set aside by majority (Glass and Samuels JJ.A., Priestley J.A. dissenting). The Court ordered that the matter be remitted to the Compensation Court of New South Wales to make an appropriate contribution order. The Compensation Court is constituted under the Compensation Court Act 1984 (N.S.W.) and, by force of s.15(1) of that Act and s.5 and Schedule 2 of the Workers' Compensation (Amendment) Act 1984 (N.S.W.), is now invested with the jurisdiction under ss.7(4) and 15 of the Act previously vested in the Commission.
5. Although the power to make an order for contribution under the second paragraph of s.7(4) may be exercised in respect of weekly payments of compensation for which the last employer is liable, it does not necessarily follow that the power may be exercised in respect of a lump sum which that employer pays a worker in redemption of his liability to make weekly payments of compensation. The lump sum amount for which a liability in respect of weekly payments may be redeemed is not to be equated with the weekly payments which the employer whose liability is redeemed would otherwise be liable to pay. The relevant distinction does not arise from the difference between a lump sum and weekly payments, but from the difference in nature between a statutory liability of an employer to pay compensation (whether by way of weekly payments or lump sum) and a statutory option to pay or to refrain from paying a lump sum determined by the Court for the purpose of redeeming the liability to pay compensation.
6. There can be no doubt that a contribution order under s.7(4) can be made with respect to both compensation by way of lump sums and compensation by way of weekly payments. Lump sum payments are payable under ss.8, 10, 10A, 10B and 16 and each of those payments is properly to be described as "compensation". Indeed, s.6(1) defines "compensation" to include "medical and death benefits prescribed by this Act", those benefits being payable under ss.8, 10 and 10A. A liability is imposed on an employer to make the payments of the several classes of compensation provided for in the Act: see ss.7(1),(1A), 8(1), 10(1), 10A(1), 10B(1), 16. An order for the payment of compensation under any of those sections is an order enforcing the statutory liability. By contrast, a determination pursuant to s.15(1) of the amount of a lump sum which may be paid in redemption of a liability to pay compensation enforces no liability.
7. An employer is not obliged to make a lump sum payment by way of redemption
in the amount determined by the Court, though the
Court has a jurisdiction to
determine with the worker's consent an amount which, if paid, redeems the
liability. In John While &
Sons P/L v. Changleng (1985) 2 NSWLR 163, Mahoney
J.A. commented (at pp 166-167) that on the true construction of s.15(1) -
" ... the provision contemplates the redemption of
the liability in question 'by the payment of a
lump sum', ie, it contemplates that the liability
is redeemed and so extinguished by the act of the
employer in paying to the worker, with the
worker's consent, a sum determined by the
Commission. The function of the Commission in
that process is, and is only, to determine the
sum payment of which may cause the process of
redemption to operate. On this view, the section
does not authorize the Commission to order
redemption and, consequently, to force an
unwilling employer to redeem."
8. We respectfully agree. Section 15(1) makes it clear that before the
liability for compensation is redeemed, there must be both
the consent of the
worker and the actual making of the payment, the latter being at the option of
the employer. Redemption can occur
only with the concurrence of employer and
employee and a determination by the Court. As there is no liability to pay a
lump sum
determined pursuant to s.15(1), that sum is not "compensation" which
is payable under the first paragraph of s.7(4) of the Act.
9. It was submitted, however, that an order for contribution may be made under the second paragraph of s.7(4) whether or not the lump sum is "compensation": the second paragraph of s.7(4) speaks only of "such contributions, in default of agreement (as) may be determined by the Court". However, the second paragraph must be construed in its context. The first paragraph of s.7(4) imposes a liability to pay compensation on the last employer; the second paragraph then confers on "the employer by whom compensation is payable" a right to seek contribution from previous employers. The second paragraph is complementary to the first, so that the liability imposed by the first paragraph on the last employer may be shared by the previous employers. But as a lump sum determined pursuant to s.15(1) is not compensation payable by the last employer - there being no liability to pay it - no order for contribution towards a lump sum can be made under s.7(4).
10. In the Court of Appeal, Samuels J.A. thought that the procedure followed in apportioning liability among concurrent tortfeasors might be adopted for apportioning liability among the last employer and previous employers for payment of a lump sum by way of redemption. But that procedure is inappropriate, for the last employer is not under a liability to pay a lump sum and, a fortiori, neither is any previous employer. The appeals must be allowed.
11. We would add that, as at present advised, we are not persuaded that this conclusion makes the redemption provisions of the Act unworkable in a case where a number of previous employers are liable to make contributions in respect of compensation payable by the last employer pursuant to s.7(4) and some of those employers do while others do not desire redemption to take place. Section 15(1) provides that a liability in respect of weekly payments may be redeemed "either in whole or in part", and it may be possible, at least by consent, to frame an order effectively enabling the last or a previous employer or employers to redeem so much of the last employer's liability to pay weekly compensation as corresponds with the proportion of that liability in respect of which he or they would bear the ultimate burden pursuant to any order for contribution. These matters were not, however, fully canvassed in argument and we refrain from expressing a concluded view in relation to them.
ORDER
Appeals allowed with costs against the respondents H.T. & E.I. Christopherson.Order that the orders of the Court of Appeal of the Supreme Court of New South Wales be set aside and in lieu thereof order that the appeal to that Court be dismissed with costs.