Victorian WorkCover Authority v Michaels [2010] HCATrans 112 (23 April 2010)

Last Updated: 28 April 2010

[2010] HCATrans 112

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Melbourne No M113 of 2009

B e t w e e n -

VICTORIAN WORKCOVER AUTHORITY

Applicant

and

DAVID MICHAELS

Respondent

Application for special leave to appeal

GUMMOW J
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 23 APRIL 2010, AT 2.13 PM

Copyright in the High Court of Australia

MR B.W.WALKER, SC: May it please the Court, I appear with my learned friend, MR M.F. FLEMING, for the applicant. (instructed by Minter Ellison)

MR R.P. GORTON, QC: If the Court pleases, I appear with MR S.A. SMITH for the respondent. (instructed by Slater & Gordon)

GUMMOW J: Yes, Mr Walker.

MR WALKER: Your Honours, this is a short and focused point which, when it was raised at trial, was regarded as bereft of authority. It now suffers, in our submission, from an authority which is a most remarkable extension of a statutory definition of cover. The remarkable aspects of the extension is that somebody has been regarded as having been injured in the course of employment by reason of events that occurred not in intervals between what might be called hours of actual work, to adapt language from the authorities, but before the period of employment commenced at all; indeed, at a time when, it is common ground, he was at liberty to do or not to do anything he pleased either in relation to the future employment or in relation to anything else he pleased to do.

CRENNAN J: Had the contract of employment been entered?

MR WALKER: The contract of employment had been entered. The instrument had been executed. It called for a period of employment, for employment to commence at some time in the future. Of course, a question arises, as Justice Crennan has just noted, as to whether that could play any part in the understanding of the statutory expression. Hitherto it has never been suggested it could. The reasoning in the Court of Appeal does not include the proposition that an executory obligation to commence at a time in the future, either fixed or capable of being fixed by later events, rendered you there and then in the course of employment; rather, there was a borrowing – a misborrowing, as we have put it – from what might be called the interval cases which, importantly, culminate in this Court so far in Hatzimanolis of this notion of activities incidental to the duties called for by the employment.

Because, as analysed by this Court in Hatzimanolis, accessibly general expressions would produce most unusual anomalous and counter-intuitive outcomes, such as regarding somebody as being injured if, at the encouragement of their employer, they visited a doctor after work hours, the High Court held in Hatzimanolis that for the intervals between fixed or stipulated hours of work during your period of employment – I stress “during your period of employment” – it was necessary to show that the activity in question, be it playing recreational sport or reading books for possible purchase in a bookshop, was activities which expressly or impliedly the employer had induced or encouraged the employee to do, that is, to spend that interval or interlude – to quote from 173 CLR 484 – “at a particular place or in a particular way”. That was in order to prevent what the Court saw would otherwise be a wholly inapt extension of cover which remained described by the phrase “in the course of employment”, arising out of or in the course of employment.

In our submission, the commonality of this question around the jurisdictions of the country makes it of general importance. Even more importantly, this is, as is well known, an attribute of employment and compensation for injuries which is of great social importance. But why in particular the error by the Court of Appeal is one which ought to be corrected by this Court following a grant of special leave is that this is an area which preternaturally lends itself to the drawing of bright lines. It needs to be known, what are the injuries for which a policy, a statutory obligation, to compensate will answer. As we have drawn to attention in our written submissions, there is intended to be a correlated obligation to pay premium calculated by reference to remuneration.

Now, it is one thing to talk about remuneration per week when, of course, you are not working every hour of the week. That is how the interval cases arise, “I’m paid $100 a week, but I’m only working 9.00 to 5.00 five days a week”. Outside those hours 9.00 to 5.00 a question might arise governed by cases like Hatzimanolis, have you been injured in the course of employment? But that is during a period where there is remuneration provided upon which premium can be calculated. What do we do about a period where all we have is an executory obligation for employment to commence at some time in the future, there is no remuneration payable to you with respect to any part of the period during which you suffered that injury?

CRENNAN J: But it was accepted, was it not, before the Court of Appeal that he was a worker for the purposes of the legislation?

MR WALKER: That is clear and your Honours have seen some perhaps late repentance of that acceptance in our argument. That is no objection to special leave, with respect. It means that there may be one less arrow in a quiver. In our submission, it was only a matter of law which ought to be permitted to be canvassed because it would be beneficial for principle for all the defining characteristics necessary for the statutory cover to be examined at once. But, in our submission, the point on course of employment alone is easily sufficiently generally important. It is one which involves the drawing of a bright line in a way which, in our submission, this statute requires. When I say “this statute”, it is to be recalled that the legislative requirements sanctions criminally in relation to the payment of premium come from cognate legislation which is expressly part of a package of legislation all to be read together.

GUMMOW J: What do you say about Mr Gorton’s written submissions at paragraphs 5 and 6 on page 52 and paragraph 11 as to your bright line?

MR WALKER: Yes. As to 5 and 6, it is true, with great respect, that by reason of section 52 of the Act the question being confined to a question of law was whether or not it was open to the trial judge. In our submission, this emphasises the suitability of this case as a vehicle to advance the proper interpretation, as we put it, of the statutory expression because the facts are not contested. They are extremely clear in relation to the priority, that is, the antecedent nature of the browsing in the bookshop neither induced nor encouraged in any particular way. He did not have to be at that bookshop. He did not have to be at any bookshop. He did not have to be there then, so far as we were concerned; not induced or encouraged by us.

Useful in the same way, of course, as any preparation in advance of an employment period may be for you to discharge your employment duties when they become binding on you, whether it is physical fitness for a person who is an athlete or an artist or whether it is intellectual or academic currency if you are a professional, for example. Now, hitherto, no one has ever suggested that injuries that occur in the course of those matters, which in a very broad sense are of course incidental to your fitness to discharge your employment obligations, are being suffered in the course of your employment. They are being suffered literally and, we submit for the purposes of this statute, before your employment commenced.

Once one can say that, then as a matter of English and as the scheme of the Act requires in relation to calculating premium upon remuneration indicates, the bright line has to be located at the beginning of the period of employment. That is why we say there is a misborrowing of the tests considered and qualified in Hatzimanolis from the so-called interval cases. They stand on the other side very plainly of the bright line because they are within the period of employment, albeit outside the hours or place of usual attendance for work.

CRENNAN J: In terms of the bright line, is it not a problem that what he was actually doing was something he was required to do?

MR WALKER: No, he was not required to be at a bookshop; he was not required to browse.

CRENNAN J: He was required to undertake research.

MR WALKER: Which could be done in any way that appeared necessary to him. He could have sat at home and done it on the internet. He could have satisfied himself that the last course he had prepared was sufficiently up to date after having checked some matters on the web. He did not have to be at the bookshop. That is the force in the interval cases, that is the force of the proposition expressed by this Court, about being induced or encouraged to be at a particular place or to be undertaking a particular activity.

Now, the questions that Justice Crennan has asked, with great respect, really highlight the great usefulness of this Court considering this matter because at the moment there is Hatzimanolis which was really not considered by the Court of Appeal, though it had been cited, and on the other hand there is this case which has opened the way for activities to be regarded as giving rise to injuries suffered in the course of employment, notwithstanding they are simply preliminary to a period of employment commencing at all. It is not to be overlooked that notwithstanding an executory promise to enter into employment at some time in the future, events – and we know of one in this case, the SARS epidemic actually meant the course was called off – events may intervene between the promise to become employed and the commencement of the period of employment and parties mutually rescind, or a breach be committed so that by the prospective employer, accepted by the prospective employee, so as to bring the contract to an end before any employment commences.

Then, in our submission, the strain on the language to say that an injury was nonetheless suffered in the course of employment when the contractual relations between the parties show beyond any doubt that the employment never started at all and never will start, is, in our submission, an indication that there is something wrong, something requiring correction by this Court, in the approach taken to these straightforward facts. May it please the Court.

GUMMOW J: Yes, Mr Gorton.

MR GORTON: If the Court pleases. As is outlined in our summary of argument, the question before the Court of Appeal was, was it open to the trial judge to make the finding that he did? We say it was clearly open to the trial judge to make that finding. There was, and there is no argument about this, a contract that existed between the respondent and Victoria University on 30 April when he suffered his injury, he the respondent. In accordance with that contract, a date was fixed for delivery of teaching services starting on 7 May and also in accordance with that contract there was an obligation on Mr Michaels to take preparatory steps to ensure that the course that he was to teach overseas starting on 7 May was suitable and up to date.

He was therefore authorised and encouraged by his employer to undertake research work, which he was doing. It is not material that he might have undertaken that research work on 1 May rather than 30 April or that he might have undertaken it at home rather than where he did. The trial judge accepted his evidence that he was in the bookshop researching for the purposes of his course and, therefore, he was doing something that he was not only encouraged by his employer to do but required by the terms of his employment contract to do. We say, in the terms of this contract and this employment requirement there is no doubt that he would fall within any of the tests that have been looked at by the High Court or any other court as to what is in the course of employment.

The hope expressed by Mr Walker of some bright line being drawn is, despite the best will in the world of any court that makes a decision about this, if it follows all the authorities, as I am sure it would, it is necessarily going to say that in the end it becomes a matter of fact and evaluation and judgment of the circumstances of the particular case whether something is or is not in the course of employment. There are many references in the authorities to the general undesirability of trying to write additional lines into the legislation in a way that is to provide a statutory interpretation benefit. We say no bright line would be drawn by this Court making a decision in this case. The Court would say, either in this case and for the facts of this case, the injury did or did not arise out of the course of employment.

It seems that an initial stage of the applicant’s argument was that no circumstance even remotely similar to this has ever been previously confronted by a court. The determination that the respondent was a worker in accordance with the Act accorded with the R & M Johns Case where a person was found to be in the course of his employment before he had started work after he had entered into a contract to start work. So that it is the decision that was made by the Court of Appeal and by Judge Bowman in the County Court, accorded with prior authority, that you can have, depending on the circumstances of the case, a course of employment injury arising before actual work has started under a contract.

The proposition that there is something to be drawn from premium and remuneration is of no significance, in our submission. The requirement to have a contract of work cover insurance applies when an employer enters into an engagement so that a worker/employer relationship is created. If the remuneration under that contract is anticipated to be less than $7,500 a year, no premium is paid. If it is going to be more than that, premium is paid. Assuming Victoria University had no other employees, there was an obligation on it to take out a contract of insurance under the WorkCover Insurance Act the moment it signed the contract on 28 April. Nothing is

going to alter or change the obligations to take out such a policy or to pay the appropriate remuneration under them.

We say that when you look at the factual circumstances in this case, as set out in the applicant’s submission and added to in the respondent’s submission, it is clear that the decision of the trial judge and the Court of Appeal was correct and that nothing will be significantly added to the law if this matter is reviewed by the High Court.

GUMMOW J: Thank you, Mr Gorton. Mr Walker?

MR WALKER: Your Honours, you have section 83 of the Accident Compensation Act in the bundle. It follows, of course, significantly, the critical section 82 and it lends various deemed positions to be regarded as showing that an injury arises out of or in the course of employment. It is a bright line exercise in each one of those categories. One of those categories, paragraph 83(1)(c), shows legislative attention being cast specifically at:

attendance at any school for the purposes of any trade, technical or other training which the worker is required to attend –

et cetera. Attention has been given in a deeming provision, deeming something to arise out of or in the course of employment, to instructional requirements and bright lines are drawn; it has to be at a school, something that answers the description of a school. It is not just the updating which is required of the academic in this case. Similarly, “travelling for the purposes of a worker’s employment” is by section 83(2)(b) defined in such a way as to cause the familiar bright line of the difference between travelling to and from work and other forms of travel.

The fact is that in Hatzimanolis the way in which this Court approached the arguments which they were there considering was clearly to consider – see page 482 of the report – whether what was being proffered by way of a reading would be “an unacceptable extension of the course of employment”. In that case, their Honours said that would be so if it was within the course of employment:

whenever the employer had authorized, encouraged or permitted the employee to spend the time during an interval between periods of actual work at a particular place or in a particular way.

Our case is an a fortiori, surely, unacceptable extension. There is no particular place, there is no particular work and there is, of course, no interval between periods of actual work. That is why, in the page from which I earlier quoted in Hatzimanolis from this Court’s reasons, it was

thought necessary in an interval case to inject the more rigorous requirement that the employer had induced or encouraged, not merely permitted, and repeating the requirement that it be at a particular place and in a particular way. This case does not answer any of those requirements for an interval case at all.

There is no indication in the statute to the contrary – see section 83, there is immediate context to the contrary – that a case which is a pre-employment injury ought to be treated less rigorously by way of extending the notion of “course of employment” than a case which is an interval case. Hatzimanolis stands as this Court’s authority on an interval case. If the Court of Appeal’s decision stands as an authority on an antecedent to employment case, we have the entirely anomalous appearance of it being less rigorous when it is before the employment has even started. May it please the Court.

GUMMOW J: Thank you.

Having regard to the findings of fact made by the primary judge we are not satisfied that there is the necessary foundation for any appeal to this Court on a question of law respecting the construction of the statutory expression “in the course of employment” in the Accident Compensation Act 1985 (Vic). Special leave is refused with costs.

We will adjourn to reconstitute.

AT 2.37 PM THE MATTER WAS CONCLUDED