Berowra Holdings Pty Ltd v Gordon; Brighton Und Refern Plaster v Boardman

[2006] HCATrans 107

[2006] HCATrans 107

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S473 of 2005

B e t w e e n -

BEROWRA HOLDINGS PTY LTD

Appellant

and

RODNEY JOHN GORDON

Respondent

Office of the Registry
  Sydney  No S479 of 2005

B e t w e e n -

BRIGHTON UND REFERN PLASTER PTY LIMITED (UNDER EXTERNAL ADMINISTRATION AND/OR CONTROLLER APPOINTED)

Appellant

and

SCOTT RAYMOND BOARDMAN

Respondent

GLEESON CJ
GUMMOW J
KIRBY J
HAYNE J
HEYDON J
CRENNAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 8 MARCH 2006, AT 10.19 AM

Copyright in the High Court of Australia

__________________

MR B.W. WALKER, SC:   May it please the Court, I appear with my learned friend, MR P.L. PERRY, for the appellant Berowra Holdings.  (instructed by Lyons Barnett Kennedy)

MR J.E. SEXTON, SC:   May it please the Court, I appear with my learned friend, MR P.A. REGATTIERI, for the respondent, Mr Gordon.  (instructed by Peacocke Dickens & Price)

MR R.S. TONER, SC:   May it please the Court, I appear with my learned friend, MR M.J. JENKINS, for Brighton Und Refern.  (instructed by Rankin Nathan)

MR M.I. BOZIC, SC:   May it please the Court, I appear with my learned friend, MR D.M. SHOEBRIDGE, for the respondent, Mr Boardman.  (instructed by Taylor & Scott)

GLEESON CJ:   Will it be convenient to hear Mr Walker and Mr Toner first?

MR BOZIC:   May it please the Court.

GLEESON CJ:   Yes, Mr Walker.

MR WALKER:   Your Honours, may I go directly to the statute in question, the matter in hand depending on statutory interpretation?  Your Honours have been given extracts from Reprint 8 of the Workers Compensation Act 1987. May I take you in that document to the page numbered at its foot 114 to section 151C first? In subsection (1) of that section a class of person is described by reference to other concepts created by other provisions of the Act which are not presently material, namely, “A person to whom compensation is payable under this Act”.

Each individual in that class is then the subject of a statement concerning what might be characterised as a right.  The actual language is; such a person “is not entitled to commence court proceedings for damages”, et cetera, and at the heart of the argument for my client is the meaning to be given in the facts which may or may not require its extended application to that expression, “is not entitled to commence”.

GLEESON CJ:   What was supposed to be going on during that period of six months, Mr Walker?  Was there some process of alternative dispute resolution or something?

MR WALKER:   Yes, not by formal process but, I gather, by earnest cogitation of the merits of settlement and money now rather than litigate and money later.

KIRBY J:   But there was no statutory procedure for compulsory conciliation or discussion?

MR WALKER:   No, but of course the prospective litigation, which Parliament hoped in some cases would be nipped in the bud, itself, as your Honours are all well aware, included at the time and still include what are sometimes called court annexed arbitrations.

KIRBY J:   It is also relevant, as Justice Mason suggested, that common law entitlements had been abolished and then restored and this was part of the package of the restoration.

MR WALKER:   Yes, part of the package, quite so.  Now, it is not part of my argument to cavil at phrases like “restoring common law rights”.  Your Honour has, with respect, correctly captured what the President referred to and it is certainly the parlance that has been employed.  It is probably not common law rights and there was not much of a restoration, but this is a new package politically introduced as being in substitute for a former perceivably less generous regime in favour of injured plaintiffs.

KIRBY J:   But more generous than abolition.

MR WALKER:   That is the political spin, your Honours.

KIRBY J:   No, this is part of the history.  We are trying to give meaning to the statute and ‑ ‑ ‑

MR WALKER:   Your Honour, my point is simply that all statutory packages are adjusted from time to time.  Your Honours, in section 151C(1) the concept of what in the second reading speech was called understandably a delay – occasionally we use the grander expression, not really different, moratorium – is provided to be six months from a particular time.  That time is described as “since notice of the injury was given to the employer”.  On our researches, that notion of notice of the injury picks up from cognate legislation, namely the Workplace Injury Management and Workers Compensation Act 1998 in section 254, a requirement that workers notify injuries “as soon as possible” and, I paraphrase, certainly before they leave the employment in which they suffered the alleged injury.

HAYNE J:   The operation of subsection (1) is cut back by subsection (2).

MR WALKER:   Which is a very important part of any appreciation of the statutory package.  Before I go to subsection (2), I have just made a reference off to the provision which dealt with notices of injury.  That is a provision – I do not offer this as an aid to interpretation but as an understanding of the general context – which itself had explicitly referred to possibilities of a failure to give such a notice in accordance with those requirements as being a bar or not, and stipulated for special circumstances allowing for what would otherwise be a bar being lifted.  In subsection (2) ‑ ‑ ‑

KIRBY J:   Just before we get to (2), subsection (1) and the language used, “is not entitled”, it is a somewhat soft expression compared, for example, to the Legal Profession Act 2004, which is referred to in the submissions of the respondent, which says “must not commence or maintain any proceedings”, or saying “the District Court may not hear” or “shall have no jurisdiction”, or matters of that kind.  This “is not entitled” strikes the reader first up as about the softest expression that could be chosen.

MR WALKER:   It would not be the softest.  One could imagine, for example, though with a degree of appal, legislation framed in these terms “a plaintiff should not commence”.  Now, that would be very soft.  We submit that in fact that is really the phrase, the meaning of which underlies the respondent’s position – the Court of Appeal’s error.  I am not concerned, I cannot entirely seek to refute what Justice Kirby has just said of the available repertoire of familiar phrases of what I am going to call, I hope not tendentiously, prohibition is not entitled to, conveys first nothing penal, nothing immoral about breach.  It does something rather more important, favourable to our position, namely, it says that there is nothing which the organs of state which recognise and enforce rights should be involved in.  There is a lack of entitlement to commence.

GLEESON CJ:   The same phrase is used in 151D.

MR WALKER:   Yes, to which I am about to come.  In 151C(2) there is a carve out from the class of person.  A person is described in subsection (1) as lacking the entitlement to commence.  The carve out describes people by reference to an event which, to return to the Chief Justice’s question about perceived mischief, the intention of the delay or moratorium rather supports the proposition that the six months is designed to be what I will call a useful or practical period in a public statute applying to all sorts of individuals and individual cases, but in broad brush style describing cases where in the public interest there should be an attempt to settle before litigation commences.  One can spot that from the nature of the exclusions because where:

the employer wholly denies liability in respect of the injury –

although it is notorious that scarcely prevents there from being a compromise it certainly is not promising, at least at the outset.  In paragraph (b) where there is an admission of so-called:

partial liability in respect of the injury –

not entirely a clear concept, but, nonetheless being so partial that the would‑be plaintiff:

is dissatisfied with the extent –

of the admission.

HAYNE J:   Does it matter when that denial or partial admission occurs in relation to the notice of injury?

MR WALKER:   It does not seem to from the text of section 151C.  That text seems to require simply that the one or other of paragraphs (a) and (b) states of affairs have come about or occurred, as the statute puts it, in order that you be entitled, so they must occur then you may start.  That rather suggests that it is the whole of subsection (1) which is swept away by the occurrence of those events, so far as section 151C is concerned.  I have already referred to the different but related issues raised by section 254 of what is known as the WIMA Act, that is the Workplace Injury Management and Workers Compensation Act 1998.

KIRBY J:   Can I just return to “is not entitled to”?  I mean, the process of interpretation is partly an impressionistic and intuitive response to words, to how the mind plays on words, and when one sees that expression one says, “Well, who says they are entitled to?”, and then the answer comes back, “Ordinarily a citizen or an individual in this country is entitled to invoke the courts”.  So that on one view “is not entitled to” is simply counterpoising what otherwise is the entitlement of people with claims to approach the courts to have the resolution of them.  I am not sure where that leads, but at least one possibility might be that it leads to the conclusion, well, all this is doing is negativing that, but otherwise the usual rules of law as to waiver and other such things still continue to apply.  Do you get what I am saying?

MR WALKER:   Yes, I do.

KIRBY J:   We will have to come to the waiver and all that later on but your point is once you have breached the “prohibition” you are out, but the other possibility is that the softer expression of the formulae “is not entitled to” is merely negating what is otherwise the entitlement of individuals in a rule of law society to approach the courts and pursue entitlements for wrongs.

MR WALKER:   Yes, although of course, this is a statutory regulation of matters which, notwithstanding the contrast between compensation and damages, is nonetheless on both sides regulated, on one side entirely created by statute‑made law, and statute‑made law commonly, not always, commonly carries with it the extent, including limitations of rights to approach tribunals or courts for the enforcement of the statutory created rights or possibilities.

GUMMOW J:   Does it not come down to the question as to whether 151C(1) contracts the jurisdiction?

MR WALKER:   Your Honour, in one sense, yes, but only in the sense that ‑ ‑ ‑

GUMMOW J:   If it does, it has to be clearly expressed.  Project Blue Sky is not about this realm of discourse.  It is all about administrative law.

MR WALKER:   Your Honour, in our submission, jurisdiction is not a complete answer to the proper analysis of what was raised in this case.  There is no question, for example, that Judge Woods had jurisdiction ‑ ‑ ‑

GUMMOW J:   To determine whether he had jurisdiction, I understand that.

MR WALKER:   To do what he did, including for example, granting leave for the filing of a defence to raise this point.  Now, that is somewhat more than simply jurisdiction to decide that he did not have jurisdiction.

GUMMOW J:   If it was in an inferior court prohibition would go, would it not?

MR WALKER:   That would be the way to test it, yes, your Honour.  There would be no prohibition against ‑ ‑ ‑

GUMMOW J:   This would apply in inferior courts, would it not?

MR WALKER:   Yes, very much so.  Very much so.  Prohibition, of course, would not go against a judge setting out to do what Judge Woods did, so that jurisdiction, in our submission, is a concept requiring a more specific description before it becomes an analytical aid here.  As soon as you become more specific about it, one is in effect asking the question, as we have tried to put it in our written submissions, namely, did the court have a power residing perhaps in a procedural discretion, which is what the President of the Court of Appeal seems to have thought at a passage where I am going to come in order, we hope, to expose error - do they have a procedural discretion which bespeaks a power for consequences to flow from proceedings which Parliament has said a person was not entitled to commence?

Now, your Honours will have noticed that in that last expression I said “was not entitled to commence” because all these issues will come up after the event.  Some of them will come up, one would have thought, often they will come up after the six months delay period has expired in any event.  Some of them may even come up after a three year limitation period has expired in any event.  They certainly may come up after steps have been taken in proceedings.  Now, yes, jurisdiction is a concept which is engaged, but in that specific sense of has the Court got a power to deny that a consequence of disentitled commencement is that nothing can be invoked thereafter in the proceedings to the detriment of the defendant, that is, without the defendant’s out‑of‑court consent.

GUMMOW J:   Who takes the point?  Does the Court take the point, or the adverse party?

MR WALKER:   In our submission, that raises an acute difficulty including for our position because, although as a general command of a kind that we say is for the general public interest and manifestly not for the private interest of peoples in defendants position, and therefore the law is one of a kind which it might be thought the judicial arm should be astute to see observed, particularly as the public interest in question concerns litigation lists.  On the other hand, against us is the spectacle that poses of a judge intervening, as it were, for the very decided benefit of one party in litigation governed by a statute where it is for the parties, ordinarily, as the learned President said in the Court of Appeal, to take the positions they claim they are entitled to take under the statute law governing the proceedings.

HAYNE J:  But if it is an inquiry that is to be made by the Court, it is a very complex inquiry as is evidenced most plainly by 151C(2).

MR WALKER:   It might be in a particular case.  Now, in our case it is not.  One is reminded of case management in older and brisker times where interrogation from the Bench at a directions hearing would rapidly have shown whether there was any complexity or not.  “Mr Jones, do you take the point that subsection (2) has engaged?”  “No.”  Then in that case why should this Court not observe the commandment in subsection (1) or the lack of entitlement in subsection (1) and you stand ‑ ‑ ‑

GUMMOW J:   That is the point.  Is not the command addressed to the Court?

MR WALKER:   I am sorry.  Your Honour is right to pick me up on that, with respect.  In terms it is not a command to the court.

HAYNE J:   Or if it were a command to the Court in 151C(1) it would be likewise a command in 151D(1).

MR WALKER:   To which I am about to have to come.  Yes, your Honour, yes.  It is in terms not a command to the court.  Rather, it is the stripping away of a right ‑ that is, the entitlement to commence proceedings, that step, of course, being the step by which the force of law, including compulsion posed by the threat of default judgment and all the other procedures engaged by Court Rules applying and, in our submission, it follows that a lack of entitlement to commence court proceedings is a lack of entitlement to engage the process by which the defendant is subject to that compulsion.

GUMMOW J:   What is the product of a disobedience to the requirement addressed to litigants?

MR WALKER:   As your Honours have seen, we argue that that product is inevitably – that is, in every case, including some which are very different factually from ours, but the same answer should be given in all of them, namely, that steps taken thereafter because they ought not receive any imprimatur of the court, if it is perceived that they have mistakenly so received the imprimatur of the court that should be undone.  Hence, there should always be the summary dismissal with or without a pleading if this is a matter that requires to be pleaded rather than a procedural discretion such as the one exercised in this case, namely a procedural discretion not to permit leave to amend.

I will come to why that was a curious way for the Court of Appeal to decide this case when I come to the reasons.  But, in our submission, in answer to Justice Gummow’s question the product of disobedience is that in order that the lack of entitlement be honoured by the courts, there should be nothing which calls in aid a right and a correlative obligation on a defendant from the proceedings blessed by the courts.

GUMMOW J:   Well, forget about blessing ‑ ‑ ‑

MR WALKER:   Enforced by the courts.  There was entry of judgment in this case, your Honour, and that is why we have raised the issue specifically.

GUMMOW J:   Do we get to the cult of nullity.  That is what I am worried about.

MR WALKER:   Your Honour will have noticed that we have not yet used that word.

GUMMOW J:   I know.  It tends to set off alarm bells.

MR WALKER:   Clearly the – well, the argument below does.  The judgment at first instance does.  The old authorities which are still appropriately called in aid do use those words but when one says of something that it is a nullity or that it is void that gives rise to another set of questions which require more specificity than simply those general descriptions in what senses it says that it is null and void.  For example, does it mean that one can walk in and do what would otherwise be a scandalising contempt because this is not really a court sitting to administer judicial power at all.  The answer to that, no, of course it is not null and void in that sense.  That goes back, for example, to the question of so‑called jurisdictional points.  There is, of course, the proper valid engagement of judicial power exercised by Judge Woods when he did what he did, just as there was in the Court of Appeal, whatever the result ought to have been in the Court of Appeal.

KIRBY J:   But given that the section is not addressed to the court, as other sections such as 151F are, but to the litigant, what is your submission in relation to a matter which has passed into judgment and perhaps been enforced and recovered and then five years or 10 years later or even two weeks later a point is raised concerning the plaintiffs having illegitimately commenced these proceedings?

MR WALKER:   As a backstop, and not very helpfully at least for my position, I confess, there would be the other statutory provisions governing such extreme cases such as time limits for restitutionary causes of action, but ‑ ‑ ‑

KIRBY J:   There is no specific statutory revision in the District Court Act, is there, that says notwithstanding any flaw of a procedural kind before a judgment the judgment shall have full force and effect in accordance with its terms.  I wonder if the constitutional provision ‑ ‑ ‑

MR WALKER:    There is a provision about irregularities but we are not engaged in that area here.  The answer to your Honour’s question is that subject to other limitations the cases that your Honour raises acutely, and they are very extreme cases, acutely give rise to the issue of waiver and estoppel which is the second issue in this case.  In our submission, it is easy to discern a large difference in principle between the position of a person who seeks to raise a point, albeit late, in a court system where the raising of points, albeit late, is part of the system, and on the other hand, a person who has allowed money to change hands, positions to change before taking a point concerning whether that money has been paid under what might be called a mistake of fact or law.

KIRBY J:   These are the alarm bells that Justice Gummow referred to. Section 118 of the Constitution requires “Full faith and credit” to be given to the “judicial proceedings of every State”. It may be that you can, as it were, draw a distinction between the proceedings at an earlier stage and when they have passed into judgment, I am not sure, but it is a way of testing your proposition in a provision which is directed not to the court but to the litigant, and it seems to leave it to litigants to sort out their entitlements inter se rather than as other sections such as 151F which acutely present the problem of where a court does not obey the command of Parliament.

CRENNAN J:   If a defendant does not raise the point and six months goes by or an even longer period in a sense the plaintiff has lulled into a false sense of security about the proceeding and the integrity of the proceeding because if a defendant raises it in a defence prior to the effluxion of the six months say, well a plaintiff can just simply wait and start again.  But if a defendant raises it very late in the piece it is a different situation, is it not, Mr Walker, although as I understand your argument you seem to be saying a defendant can raise it as - however late the defendant raises it it is a good point?

MR WALKER:   Yes, your Honour has correctly understood what I will call the hard nature of our position.  The two different cases that your Honour raises, the point being raised before the six month period has expired and the point being raised after the six month period has expired, is one neat pair.  You can add some more to it which I will add, as it were, against myself in a moment, which acutely give rise to the issue discussed but not held in any dispositive way by the Court of Appeal in this case concerning estoppel and waiver.

Now, however, can I step back from abstractions and hypotheticals to page 65 of the appeal book where in paragraph 6, which continues over the page onto page 66, one sees a factor which sticks out as raising very acutely what content ought to be given to the expression “not entitled to commence”.

As one can see, the sequence that leads Justice Mason to suspect something is extremely evocative, because it shows that there was commencement.  We can see that that occurred, paragraph 3, on 23 November, just four days before the date, 27 November, which by reference to “commenced proceedings” divided the relevant world into those who had to meet a 15 per cent permanent impairment threshold and those who did not, a matter which notoriously was intended to have a real biting effect on the number of such claims, allied with election provisions of great moment to a package, a legislative scheme regulating recourse to compensation or damages as the case may be.

KIRBY J:   Well, it is clear that it is intended to have an impact.  The question is, what is the impact?  At least arguably the fact that there is this juxtaposition in the statute and the consequence of your interpretation is a parade of horribles; that you then naturally read the interpretation down because, had the parade of horribles been intended, Parliament would have said “a court may not” or “must not”.

MR WALKER:   Well, your Honour, what we are faced with in this case is a person who says, “Although I commenced, not entitled to do so, by having commenced, I become entitled to avoid the 15 per cent permanent impairment threshold”.

KIRBY J:   Well, there is some support for that in that Legal Profession Act which says, “You will not commence or maintain”, so that Parliament has addressed the point that, once having got over the impermissible commencement and having commenced and no point having been raised against it, which would be very unsettling to procedures ‑ ‑ ‑

MR WALKER:   Your Honour, I am not putting my point clearly enough about commencement.  Commencement of the litigation, the date when you did it, was critical to whether or not you were caught by the statute law commencing on 27 November – commencement, not maintaining.  The mere act, the instant act of commencing litigation means you are caught, or  not.

KIRBY J:   Yes, but if your theory of the statute is right, you can raise this at any time, at least up to judgment and possibly after judgment, and then you have Justice Crennan’s problem.

MR WALKER:   Yes, but I am seeking, step by step, to address the question Justice Crennan has raised for me, which we accept is a problem; of course it is.  My first point is commencement of litigation is – and we do not have to hypothesise; we have it actually operating in this case.  No wonder Justice Mason said what he said in paragraph 6.  We have a case here where, for one purpose, the point of commencement entitles someone to statutory immunity, statutory immunity from a change which would otherwise govern proceedings, and yet the person who claims that entitlement is in the same breath, and was the same breath by Parliament, told that they belong to a class which was not entitled to commence.

Now, in our submission, for courts to start positing cases which might be considered to be hard lines for a plaintiff, first of all, of course requires an assumption that the plaintiff is, I will call it innocent of the lack of entitlement when they commence.  That ought not to be assumed at all, and Parliament has not expressed any words suggesting that there is going to be a division between innocently mistaken plaintiffs on the one hand and what I will call calculating – I do not mean that in any moral aspersion sense – or fully rational risk-taking plaintiffs on the other hand.

GUMMOW J:   Have you looked at section 4 of the Statute of Frauds?

MR WALKER:   Yes, your Honour.

GUMMOW J:   It says “no action shall be brought unless”.

MR WALKER:   Yes.

GUMMOW J:   That was rapidly in the 18th century turned into something that had to be pleaded by a defendant.

MR WALKER:   Yes.

GUMMOW J:   Now, if the New South Wales Parliament wants to achieve the results you say it should and cut down people’s rights, there is something to be said for the view that that should spelled out properly and not left in this dog’s breakfast legislation.

MR WALKER:   Yes.  Whenever one is confronted with statutes in this form one recalls statements, including from this Court and recently, about the pity or the unfortunate state of affairs whereby the statute does not say ‑ ‑ ‑

GUMMOW J:   I would add to that, section III of the Limitation Act 1623:

all Actions . . . fhall be commenced . . . within the Time -

turned into a defence.  That is the way the laws approached this sort of provision for hundreds of years.  The message might not have dawned in New South Wales Parliamentary Counsel’s Chambers but it is about time it did.

MR WALKER:   Yes.  We now have to deal with the position created by this statutory wording and I accept that in dealing with it our position has to grapple with the matters that Justice Gummow has drawn to attention.

HAYNE J:   Developed in that way because of the adversarial nature of the procedures of the courts.

MR WALKER:   The point that is made, with respect, powerfully by Justice Mason in this case.  I accept that as well.  This is a statute about litigation.  It is not a statute about rights which have meaning outside a court.  This is a statute explicitly about litigation.  I accept that entirely, your Honour.

HAYNE J:   In which jurisdictional facts - what you say are jurisdictional facts are within the knowledge of the parties and are not susceptible, readily, of inquiry by a court.

MR WALKER:   Some may appear on a pleading but I accept that insofar as ‑ ‑ ‑

HAYNE J:   But the moment you say it appears on a pleading.

MR WALKER:   Some will appear.  Obviously, the date of ‑ ‑ ‑

GUMMOW J:   We are talking about inferior courts, Mr Walker.

MR WALKER:   Yes, your Honour, we are, but in this case a court of pleading, or it is a court which has pleadings.

GUMMOW J:   You cannot construe the section by reference to the highest example.

MR WALKER:   No.  Of course, I seek to use that in aid of my argument as well, namely, extreme cases of what I will call inconvenience or demerit in what I will call a commercial sense is not a test, necessarily, of how this ought to be understood as being intended to operate or to use the Blue Sky approach, was it a purpose of these words ‑ ‑ ‑

GUMMOW J:   Blue Sky is not about court jurisdiction.

MR WALKER:   I accept that entirely, your Honour, but it is about statutory interpretation and it is only on that broader higher plane that I am invoking the notion that the Court obviously will ask, was it a purpose of these words enacted against the tradition which includes the old section 4 of the Statute of Frauds and the judicial dealing with that and the fact that it is about litigation and the fact that litigation is still, by and large, adversarial, for all of those reasons one still asks, against that background, when it is said that somebody is not entitled to commence, can a court thereafter proceed in relation to matters arising in the proceedings?

I am going to have to make that good, in the proceedings.  Can a court thereafter proceed to give the person who was not entitled to commence everything which would have come to somebody entitled to commence.  Furthermore, to enforce it by favourable adjudication and order of a court, thereby, at least in theory, enlisting the Executive arm for writs of execution and the like, so that the force of the State is enlisted in a way which describes or actually defines the nature of a right – a legal right, at least – namely, that functionally understood it is that which entitles you to the recognition, protection and enforcement mechanisms of the judicial and Executive arms of government.

In this case the plaintiff has persuaded the Court of Appeal that he is in precisely that position.  Nothing is distinguishable between what flows from what he was not entitled to do and what would have flowed had he commenced a little later.  It is when one goes to paragraph 6, and those timing questions there, that the matter becomes acute in this case because it is quite clear that there would have been quite different substantive issues on the merits between the parties had he not done that which he was not entitled to do.

HAYNE J:   The timing question to which you point is one which suggests the need to give the closest attention by those drafting the new legislation to the transitional provisions that are to bring it in.

MR WALKER:   Yes, of course.  Section 151D, to which the Chief Justice has referred, is of some significance.  It raises at least a possibility which is another of those that we need to confront when seeking to deal with the point raised against us by Justice Crennan.

GLEESON CJ:   Does it extinguish the cause of action?

MR WALKER:   If it does so, only in a sense which is not permanent because there is a leave provision.  It does not in terms ‑ ‑ ‑

KIRBY J:   Where is that leave provision?

MR WALKER:   It is at the end of subsection (2).

KIRBY J:   But that is very limited circumstances enlivening the leave.

MR WALKER: But what I am saying is it is leave. In other words, this is not an inflexible bar. That is my only point. Now, the section does not in terms extinguish a cause of action like section 63 of the Limitation Act 1969 (NSW).

KIRBY J:   Yes, but people can make mistakes.  To be human is to err, to miscalculate the day, to mistake the day before which is the day after which.  I remember well when I was a young solicitor for insurance companies, I would tell them, “You have a defence”, and they would often say to me, “We will not take that.  We don’t consider that appropriate to take that point.”  That is how litigation is conducted, or was.

MR WALKER:   Your Honour, there is no point in our position, contrary to insurance companies for their own reasons, sending cheques to claimants.  The question is the compulsory involuntary engagement against them of court process when the proceedings in question were proceedings which the plaintiff was not entitled to commence.  Now, “not entitled to commence” has not been expressed here by any words which include, for example, “except by mistake”.

HAYNE J:   But you speak as though the defendant has no remedy if the proceeding is brought before time has elapsed.

MR WALKER:   I do not, your Honour, and I am going to try and develop that when I come to Justice Mason’s reasons.  They do have a remedy.  The way in which those remedies can be raised, the way in which they should be adjudicated, in our submission, give rise to the following conclusion.  That the superstructure to be erected by the respondent’s argument onto these relatively simple words of section 151C(1) by way of qualification are too great ultimately for the simple words “is not entitled to commence” to bear and that it tips over.  I will come to that in a moment. 

I was about to say, one of the awful prospects that Justice Crennan’s questions raises is, six months passes, the point has not been taken in a case commenced without entitlement to commence it, then three years elapses before the point comes to be adjudicated, so that you have a defendant taking a position which is not nice, namely, “You were too early and now you are too late”. 

Now, one answer to that, of course, is that the legislature has provided the leave of the Court to relieve against the too late answer, but that of course is a discretion.  Our hard answer to it is simply that must be the result of this scheme that Parliament has provided in an area which juggles, perhaps more by illusion than reality, so‑called common law rights and statutory no fault liability schemes, forces people to go into one stream or another by a number of different devices and requires them to have resort, whether as a triumph of hope over experience we do not know, to opportunities to think about settlement before you settle down to litigation.

GUMMOW J:   Is this expression “court proceedings” defined anywhere?  Which courts?

MR WALKER:    I think the answer is no, your Honour, but ‑ ‑ ‑

GUMMOW J:   Do we apply the Acts Interpretation Act, do we, in some way to produce New South Wales courts?

MR WALKER:    May I take that on notice, your Honour?  I am sorry, I think there is a definition of “proceedings”.  There is certainly a definition of “court”.  I am not sure whether I can simply put the two together.

GUMMOW J:   Where is the definition of “court”?

MR WALKER:    I am sorry, your Honour, I do not know.  In section 151D ‑ ‑ ‑

HAYNE J:   The test that lies behind the question is what would happen if you instituted a proceeding in the courts of Victoria against a defendant found within the jurisdiction?

MR WALKER:    In our submission, section 151C speaks about proceedings in New South Wales courts, however “court” is defined, not in Victorian courts.

GUMMOW J:   So it does not go to the nature of the right, does it?

MR WALKER:    It does not look that way, your Honour.

GUMMOW J:   Or suggestive of a defence?

MR WALKER:    In our submission, that is a problem of federation which ‑ ‑ ‑

GUMMOW J:   That is right.  It should be in the forefront of the mind.

MR WALKER:    Yes, your Honour, but we are trying to argue about the consequences in this case of what, of course I can cheerfully say, is imperfectly drawn a legislation in a traditional form, the tradition being one that should long since have been abandoned, namely, to leave it to the courts to work out consequences.

GUMMOW J:   Maybe the courts had better start saying, “This is just a duty of imperfect obligation and go away”.

MR WALKER:    Your Honour, that is a judicial solution, however, one, in our submission, of despair.

GUMMOW J:   “Come back with a better effort”, and in the meantime do not think you have cut down on people’s rights.

MR WALKER:    I do not know whether that means that New South Wales Parliament will speak as Telstra speaks this morning, your Honour, but seriously, no, the court should not take that approach because, for better or worse – one can easily prefer worse – the situation has been achieved in the case law whereby, even on matters as requisite of bright line language as jurisdiction, there is still a requirement to interpret the words purposively, using presumptions against the removal of what would otherwise have been liberties or rights of particular kinds, all of which are engaged in this case, and then to work out the answer to the question that lawyers and litigators could easily have asked parliamentary counsel but they were not consulted in order to ask it, namely, “And what happens if this scheme has a misstep along the way?  What happens if a form by which an election is to be made has a glitch in it?  What happens if there is a misprint at government level and not a mistake at the solicitor’s level?  What happens if somebody misses by a day?” et cetera, et cetera, “What happens if somebody talks about date of receipt rather than date of sending?” et cetera. 

Now, all of those are questions which could usefully be asked in parliamentary counsel’s chambers, and probably even more usefully asked in ministers’ advisers’ rooms.  However, they were not, and the courts have, since probably before section 4 of the Statute of Frauds first raised such a question, had to grapple with the question as to a consequence about which Parliament did not speak, whether or not they had it in their minds, what is the purpose to be gleaned from the words chosen?

Now, in our submission, the court cannot simply say, “This is a matter which is left undetermined by statute, therefore, we can’t do anything”, because in truth the court’s duty to decide a case requires them to say, “Where does this state of the law leave the parties in the particular dispute?”, and in this case the question is, “Where does it leave the parties?”, where at first instance there was no judgment sought, let alone obtained by the plaintiff.

KIRBY J:   I thought you said there was an interim judgment.

MR WALKER:   At first instance there was no judgment sought, let alone obtained by the plaintiff.  I will come to that.  What they have now is a judgment entered pursuant to Rules of Court engaged in proceedings which it is held they were not entitled to commence.

HEYDON J:   But they were trying to get one that day in front of Acting Judge Woods.

MR WALKER:   The actual application, as we read it, was not entertained by Judge Woods.  We, the defendant, were seeking dismissal of the proceedings.  They were in a position - on the facts which they were adhering to that day they were in a position to be seeking judgment.

KIRBY J:   Under the District Court Rules, and I realise you have arguments about the Rules as against the statute, but under the District Court Rules in an ordinary case, if there is acceptance of an offer does the judgment follow as of course or does it still require a judicial order?

MR WALKER:   No, the judgment may be directed to be entered.

KIRBY J:   So it requires intervention of the judge?

MR WALKER:   It is an application to the court.  Subrule 3(7) of Part 19A is conveniently set out on page 68 of the application book at line 50.

HEYDON J:   I am not understanding your point, Mr Walker.  In the Dubbo sittings listed before Judge Sorby, this matter was set down, in effect, for trial.  Your client had applied for a rehearing because the arbitration was not satisfactory to it.

MR WALKER:   That is right.  In that sense ‑ ‑ ‑

HEYDON J:   They wanted a judgment from Judge Sorby.

MR WALKER:   I am sorry, your Honour, no.  I should have made myself clear.  There was no application pursuant to – as I understand the record.  I was not there.  I cannot find any trace of an application for entry of judgment pursuant to subrule 3(7) of Part 19A.  That is all I mean by not seeking judgment.  Of course they were seeking - by judgment on the merits they were seeking at any trial to get judgment in their favour.  I am sorry, I should have made that clear.  I am only talking about the entry of judgment flowing from the application of the rules engaged by the commencement of the proceedings in light of the so-called accepted offer, that is all.

KIRBY J:   You say you cut that off before the pass, before it was too late by your application for the enforcement of section 151C?

MR WALKER:   Yes, by the words that passed between the parties’ legal representatives the evening before and I have to come to the way in which that matter appears to have been litigated, at first instance and in the Court of Appeal, in order to elaborate that point.  I have taken your Honours to the statutory provisions and I should now complete that by going to the Rules of Court which were at all stages the subject of debate.

If I may just take your Honours to the extract which is contained on page 68, the only ones we need to emphasise are subrule 3(3) in Part 19A where your Honour sees that there is a stipulation – this is obviously an entrenchment on what would otherwise be the liberty of a person at common law in making an offer.  It is stipulated that if there is a time expressed for the limitation of acceptance then it “shall not be less than 28 days”.  Then under subrule (5), a prohibition on the withdrawal of an offer “unless the Court otherwise orders”.  That is the Rule which gave rise to the application for leave to withdraw, or as it is put rather oddly in the motion, an application for an order to withdraw.

Then under subrule (7) there is that to which I went in correcting my misstatement in answer to Justice Heydon, namely, there is a special right available in events which will come about only because of the Rules, that is, they exist because of the Rules, they have their status because of the Rules. Where that status is true at a particular time then the plaintiff, for example, in this case, would have been entitled to make an application under subrule (7) for the entry of “judgment accordingly”, that is, so as, for example, to order the payment of money, as it were, by way of damages in the agreed sum and, presumably, also to be paid in the agreed manner.

We therefore have this notion of an entitlement to commence in a statutory scheme where we know that commencement of proceedings is something of real moment for the particular scheme - see the engagement of section 151H by reference to commencement by a particular date or not and see in particular the way in which section 151D again refers to commencement as that which is not to be permitted except with leave of the court after a certain time.

Now, one says of 151D, if the arguments raised on behalf of the respondent be correct, what is the status of a case – a proceeding commenced in breach of or without the entitlement referred to in section 151D where the defendant takes the point?  Is it truly to be said that a discretion arises or not, or is it simply a matter of rule - to use other language, is the proceeding simply incompetent as one the plaintiff is not entitled to maintain because the plaintiff was not entitled to commence?  To put it another way, why would one distinguish between maintaining a proceeding and commencing a proceeding if that which is necessary to maintenance, namely, commencement, is something which the law said you were not entitled to do?

Now, against the background of those difficulties raised by the notion that one would apply to 151D, the same approach as the respondent wants to apply to 151C, can I take your Honours to the way in which the matter seems to have been presented at first instance, and then the Court of Appeal and then to the passage which we say shows error in the Court of Appeal.  At first instance, the nature of the arguments appears simply to have been in effect a supposed barring effect of 151C.  Could I draw to your Honours’ attention that at page 46, line 29, there is reference to an amended defence?  For some reason I cannot explain, that is not in the book.  I can tell your Honours that amended defence materially simply raises 151C.  It was the subject of course of the reversal of the order granting leave for its filing, for the amendment ‑ ‑ ‑

GUMMOW J:   Well, could we be supplied with it?

MR WALKER:   Yes, your Honour, we will have that done straightaway.  Now, at page 48 one picks up at line 32 from a quotation from Mr Justice Glass and at line 43 in a quotation from Lord Penzance and at line 50 in the judge’s only words that the concepts of nullification, avoidance and invalidation were ‑ ‑ ‑

GUMMOW J:   What was Howard v Bodington about?

MR WALKER:   Your Honour, I cannot answer that immediately.  I have got it, not in court.  I do not think it is on all fours with litigation entirely, that is, the word “proceedings” I think does not necessarily – I do not think it is speaking only of curial proceedings.  May I check that, your Honour? 

On top of page 49 his Honour is going through reasoning and raises, and I quote, “for example” whether the offer of compromise can “come within normal rules of contract”.  That seems to be the only reference below in the disposition of the case to the notion that is now largely informing the written submissions of the respondent against us in this Court.  It does not appear to have been argued that there was, as it were, a completed cause of action in contract that had come about before the judge came to be considering this motion and which was either discretionary or as a matter of right a reason why the motions should be dismissed.

At the foot of page 49, about line 45 through to line 55, your Honours see the way in which the judge pulled all of this together.  Having gone for the characterisation of a nullity, his Honour then says:

Therefore these proceedings should be dismissed.

That seems to follow from it being a nullity, and the effect of:

the offer of compromise being part of the proceedings has not validity –

The offer has no validity, has no status, as it were:

can be withdrawn.

His Honour appears to be meaning can be withdrawn either pursuant to leave of the court, which he then proceeds to give in a sequence of sentences by which he pronounces orders introduced by the phrase “for completeness”.  By the time we got to the Court of Appeal obviously things had shifted a bit.

HAYNE J:   Just before you go to that, the amended defence that you are having copied was put on, was it, in satisfaction of what was understood to be the requirement of the Rules to plead specifically any matter alleged to make the claim not maintainable?

MR WALKER:   Yes, undoubtedly.  That is an important pleading requirement.  Whether one could without a pleading raise the point however is another question.  The answer is, of course you could upon receipt of the statement of claim.  You could have written asking that it be discontinued and for default of satisfactory response one could have sought summary dismissal without a pleading.  So it is not the case that without a pleading the point cannot be raised.  It is the point that in a pleading you are obliged to raise such points.  The question of the defence, however, is referred to briefly by the President at pages 67 and 68 in paragraph 17:

an Amended Defence was filed pleading the contravention -

but, as the President notes, that filing:

occurred without the requisite consent of the plaintiff or leave of the Court. 

In other words, Rules of Court prevented a defence from simply being put on so we have here the Court of Appeal – I do not know whether this was the respondent’s position or not, there is no trace of that – certainly saying Rules of Court were engaged and had to be complied with or at least that seems to be what is being said by that observation. 

At page 69, having noted the Rules, in paragraph 21 starting at line 20, the President notes an important concession.  There is an acknowledgment by the present respondent:

that the defendants [that is our] capacity to nullify any settlement by obtaining leave to withdraw the Offer itself, is not precluded by the plaintiff’s prior acceptance of that Offer on 21 May 2003. 

That is consistent with what one sees as apparently not argued before Acting Judge Woods, namely, it does not seem to have been said that there was a common law consensus ad idem so as to form a binding contract at common law regardless of defects under the Rules, nor does it seem to have been argued that there was a contract made by reason of the acceptance of something which it would be too late to seek leave to withdraw.  To the very contrary and very explicitly it was acknowledged that if leave to withdraw could be obtained then subject, obviously, to the other arguments which then occupy the court, that in itself would not preclude nullification of “any settlement”.

KIRBY J:   If the proceedings were not a nullity then an essential ingredient in the reasoning of the primary judge was missing and the exercise of his power miscarried.

MR WALKER:   I am not taking a point that the Court of Appeal went beyond its powers as the learned President observes at the end of his reasons in entering the judgment which the disposition of the case appeared to require.  We did not get special leave for that.  We did not seek special leave for that.  It is not part of my argument.  I am simply observing.  I observe that because it shows how thoroughly and completely the respondent’s position depends upon the operation of Rules of Court in proceedings he was not entitled to commence.  He does not have some parallel common law position.  I will come back to that in a moment.

At the foot of page 69 there is in paragraph 26, clearly adverted to by the court, an argument by my learned friend for the respondent about what I will call temporal sequence, that is, it is an argument about a discretion for leave to be granted to withdraw in an event which is noted, namely, that it had been “accepted before any effective withdrawal was communicated”.

Paragraph 26 has to be reconciled with 21.  In our submission, the only possible reconciliation is that what was being argued was that the so‑called acceptance was simply a discretionary reason, not a bar, not a rule, not a common law entitlement, a discretionary reason why there should not be leave granted, it having already been acknowledged that if that discretionary argument failed, leave could be granted, a withdrawal could be accomplished, as required, with leave by the Rules of the Court and that would of itself, subject to the other arguments, I stress, subject to the other arguments, nullify a settlement.

Now, there are, of course, important other arguments which were what mainly divided the parties.  Can I take your Honours to page 75, paragraph 46 where his Honour refers to matters which have already been raised with me by members of this Bench.  Could I simply identify the last sentence of paragraph 46 which fastens upon section 151C(2) as one which, in our respectful submission, is wrong.  What section 151C(2) does - far from confirming that the section is of a nature that unless the parties take the point, the point is not there - is to show the only two cases where the lack of entitlement does not cover the position.

Parliament referred to the only two cases and in terms which do not include mistaken belief by the plaintiff or impatience by both plaintiff and defendant to box on, “Look, we do not deny liability, we just want to find out how much, we do not want to wait six months, what does the New South Wales Parliament know about our capacity to organise our own commercial business?”  So that is not counted in subsection (2) and neither for that matter is the notion of a plaintiff’s mistake, not that this case can be said to be about a plaintiff’s mistake.

One can say the same thing about the neighbouring section 151D.  That supplies the only way in which the non‑entitlement to commence in that position, at the other end of the time scale, is to be lifted, that is, by leave of the court, not by mistake, not by, in our submission, the parties deciding to proceed differently.

On page 76, therefore, the conclusion is reached at paragraph 49 which is based upon his Honour having preferred the opposite alternative, the other alternative of the two alternative ways of characterising such provisions which were discussed by Sir Anthony Mason in the passage from Verwayen that has been noted in our written submissions.  Unlike a limitation ‑ ‑ ‑

GUMMOW J:   Which paragraph of your written submissions, Mr Walker?

HEYDON J:   Paragraph 28?

MR WALKER:   Yes.  At that passage Sir Anthony is, of course, talking generally but with particular reference to a limitation period of the familiar barring at the end of a period kind.  Of course, in that case, that kind of limitation period, I am bound to observe it looks a bit like 151D was held, notwithstanding like all legislation it must be supposed it was passed for reasons of perceived public interest, that because it could be seen to be for the benefit of a defendant, that is, not to be vexed, it was for the defendant to plead the point, that is, it could be waived, the benefit could be waived. 

Now, his Honour contrasted that in Verwayen with provisions which are of a different kind, that is, for the public interest generally and not so located as providing benefit for one or other of the players in relation to which the statute is addressed.  Here we can say plaintiff and defendant.

In our submission, a moratorium on the commencement of proceedings, not a bar on their being commenced at all, but only a moratorium that delays rather than bars, is scarcely one that can be seen as self‑evidently in the interests of defendants, and obviously, from the circumstances to which I referred in opening the appeal, it ought to be held that the evident purpose is simply to ensure that people who would otherwise be engaged voluntarily on the part of the plaintiff and by deciding not to let things go by default on the part of a defendant who would otherwise be engaged in litigation must not litigate until that time has passed.

GUMMOW J:   The paragraph in Chief Justice Mason in Verwayen (1990) 170 CLR 405, the last paragraph encapsulates a lot of what we have been talking about really:

not by imposing a jurisdictional restriction, but by conferring on defendants a right to plead . . . the provisions are procedural rather than substantive in nature, which suggests that they are capable of waiver.

MR WALKER:   Yes.

GUMMOW J:   You say these do impose jurisdictional restriction, do you – we are back to where we were before.  I thought you said they did not because they were not directed to the court in some way?

MR WALKER:   No, I do not espouse a jurisdictional analysis.  The question of jurisdiction only comes up when one asks does a court have a discretion and thus a power not to prevent a plaintiff from gaining the benefit of proceedings it was not entitled to commence.  It is only in that narrow sense that questions of jurisdiction arise and, in our submission, the answer to that question is, no, a court does not have power to exercise a discretion which Parliament did not give.  It gave a discretion in 151D; it gave none in 151C, so that if the point is taken it must be upheld.

Now, your Honours, that means that we are right on the verge of the question of waiver and estoppel to which Justice Mason turns on page 76 in paragraph 50 and following, and it would appear by comparing his paragraph 49 with his paragraph 52 on page 77 that his Honour was taking the view, at least in those paragraphs – I stress in those paragraphs – that it would be only by way of a “riposte invoking waiver and/or estoppel” – to quote from 52 – that a defence raising non‑compliance with 151C ought not to succeed.

Now, waiver and estoppel is before your Honours only in this contingent sense.  Your Honours will recall at the end of paragraph 6 on page 66 that no issue about the plaintiff’s state of mind on what is evoked by commencing four days before the 15 per cent permanent impairment threshold was going to cut in, no issue about that appears to have been raised in the District Court.  So there is nothing here to be able to display the plaintiff as mistaken or calculating, the plaintiff as risk taking or not, certainly nothing to display the plaintiff in the same way as the unfortunate plaintiff in Verwayen came to be held by the majority in this Court, namely, as somebody vexed by the pending litigation.

Perhaps in retrospect it is understandable why nothing of that kind was raised, even though estoppel and waiver are the obvious matters to have been raised in answer to 151C being raised late, because it obviously, on its face, the temporal sequence bespeaks a deliberate chance being taken.

Now, that means that waiver and estoppel are only necessary to be considered in this actual case between these actual parties if your Honours were to hold that the Court of Appeal erred by refusing, as it were, leave to take the point – and I will come to how that emerges – as we say they clearly did, and that the point was a good point unless waiver and estoppel was available.  We have here, partly at least, the support of the reasons against it because in paragraph 52 that seems to be what Justice Mason is saying:  only waiver and estoppel could have answered this point.

That suggests a point which does not involve any discretion bestowed between the lines of the statute in 151C, or anywhere else, as to the consequences of somebody commencing when they were not entitled to commence and it does not seem to depend upon when the point is taken – within the six months, after the six months, within the three years or after the three years.  At paragraph 53 your Honours again see in the last sentence that which makes waiver and estoppel simply a theoretical or contingent possibility between these parties in the way I have just described.

At paragraph 54, the last sentence is, I think, the third and emphatic way in which the Court of Appeal makes that clear.  Then it comes to paragraph 55 which puts very plainly, we submit, that the Court of Appeal regarded itself as giving to the plaintiff the benefit of court procedures created by and depending completely upon Court Rules themselves engaged because proceedings had been commenced.  One sees that in the first sentence of paragraph 55 where the phrases include:

the Offer that was bound to remain open for acceptance under the Rules.  That step was part and parcel of proceedings that were unaffected by any taint of nullity or voidness.

That was his Honour’s reasons on that point.  Then the question became one that appears to have been discretionary, namely:

whether the Court should permit the defendant to resile from its Offer –

The word “resile” perhaps is unfortunate in flavour.  There is a right to seek leave to withdraw.  There is nothing derogatory about rethinking an offer and seeking leave to withdraw it.  Of course, the Rules limited the liberty of a party at common law who needs no reason, good, bad or indifferent, to withdraw an offer but simply has a liberty to do so.

KIRBY J:   Why would it not be open to another decision-maker to say, if you accept that the prohibition in 151C is not such as to make the conduct a nullity, that having made the offer and it still being time within which to accept the offer and the offer having been accepted within time, albeit with notice of the fact that you are seeking to raise 151C, that having regard to the way you have conducted it for such a time, even though it was not a long period of time, that if you want to raise these points and take away people’s rights, you have to be vigilant too.

MR WALKER:   Your Honour, the difficulty with that is that it starts to get into areas of estoppel and waiver.

KIRBY J:   Not only that.

MR WALKER:   No, I appreciate that, your Honour.

KIRBY J:   I understand your arguments against estoppel and waiver because there does not seem to be any prejudice in the plaintiff, except the prejudice of your raising this point.

MR WALKER:   For all we know, the plaintiff, through his advisers, was well aware of the chance being taken and, as it were, had his fingers crossed.  We do not know.  If that were the case ‑ ‑ ‑

KIRBY J:   That might be so and it might not.  That is speculation, as Justice Mason pointed out in the Court of Appeal, as to what lay behind the commencement of the proceeding.  We just do not know.

MR WALKER:   We do not know.

KIRBY J:   But you had for months gone on and proceeded.

MR WALKER:   Yes.

KIRBY J:   Why would it not be open to a decision-maker to say, “The plaintiff was not entitled to do this but the plaintiff then did it – did commence – and you did not raise it.  You gave an offer.  The offer was, on the face of things, suitable.  It fulfils the purpose of the settlement motivation of the statute.  Then, at the last minute, literally, at the moment before the moment of truth, you seek to withdraw it and we don’t think you should be allowed to do that.”

MR WALKER:   To say of the proceedings before the court, they were commenced contrary to a statutory statement that the plaintiff was not entitled to commence it, and that unless the court upholds the point, then it has given to a person not entitled to commence everything that would be available to a person entitled to commence, thereby negating the statutory statement.

KIRBY J:   But having regard to the fact that you had not raised the issue and, indeed, contrary to the non‑entitlement, had proceeded to make an offer which was for the settlement of the proceedings which looked a reasonable offer which the plaintiff accepted within the time you had specified.

MR WALKER:   Your Honour, there is no suggestion here that the plaintiff was led to believe by our conduct ‑ ‑ ‑

KIRBY J:   I realise that, and that is an argument against ‑ ‑ ‑

MR WALKER:   ‑ ‑ ‑ that he had in fact been entitled to commence the proceedings.  That is unavailable to the respondent in this argument, and all such thinking, whether it be in relation to a discretion to permit amendment of a pleading or to grant summary dismissal ‑ ‑ ‑

KIRBY J:   Can I try to sharpen it?  The purpose of 151C is in order to ensure that before people dash off to court and build up costs they explore settlement.  The purpose of the offer provisions is to support settlement.

MR WALKER:   Particularly the costs sanction on it, yes.

KIRBY J:   Yes, and the requirement of leave to withdraw it if it is still within time is to promote settlement.  So it is all to get settlement and if you have not, as it were, used one way to enforce that but had made the offer and it is still open and it is accepted and that would produce a settlement, why would it not be open to the court to say, “Well, even though there is no prejudice and even though waiver and estoppel may not provide the bar, you still need my leave, and my leave will not be granted because the overall object of the statute is to promote settlement and you were content to settle on that basis”?

MR WALKER:   Until we decided we were no longer content and wished to withdraw.  It is as simple as that.

KIRBY J:   It really is a question of how much weight one gives to “shall not be entitled”.  Even if it is not a nullity, if it does not render a nullity of the proceedings that are commenced without that entitlement, it can still be said that it is there not just for inter partes purpose but to promote an opportunity for discussion of settlement between parties and the court should uphold that policy, but you did not put on any evidence saying, “Well, if only we had had a bit more time” ‑ ‑ ‑

MR WALKER:   That is because this is not discretionary.  The language of “is not entitled to commence” is not the language of a discretion.  Section 151C(2) is not the language of what I will call open‑ended categories of people not subject to that statement in subsection (1).  It is prescriptive and limited as to people not caught by that statement.

KIRBY J:   Yes, but you are seeking a benefit from the court.  You are seeking the court permitting you to raise a matter out of time.

MR WALKER:   We would phrase it differently, though the substance is probably the same, your Honour; namely, we are seeking that the court deny its assistance – it is not a matter of the court not acting and therefore allowing things to go by the board – denying its assistance to a party to obtain the benefit of proceedings which it was not entitled to commence.  In order that the statement “You are not entitled to commence proceedings” continues to have substantive content as to the rights of that person, one must ensure that the court does not treat indifferently the outcome for a person entitled to commence and a person not entitled to commence, because at that point onlookers are entitled to say, “Though Parliament has said you are not entitled to commence, the judges have said ‘But if you do it will make no difference’.”  Worse, in our submission, if the answer is, “But that will be subject to a judicial discretion”, because where a judicial discretion is intended to be given, one sees it in 151D, and one would expect, in any event, in a provision of this kind that if a judicial discretion to ameliorate the operation of the law were intended, it would be given.  Now, I would be repeating myself to go further down that vein.  That is the way in which we put the point.

HAYNE J:   That is a chain of argument that seeks to have a sharp cleavage between the commencement of proceedings, proceedings which are intended to enforce substantive rights, cleavage between that and the rights which it is sought to vindicate or enforce.  Apparently off stage left altogether is a compromise struck compromising those rights.  Why are we putting all of these three things into three separate boxes in which the commencement of proceedings somehow impinges upon the making of an agreement to compromise the rights which are to be vindicated by the proceedings?

MR WALKER:   Your Honour, we are not putting it all in one box as simply as that, hence the trouble we have gone to in our written reply to attend to the question of the making of a contract as a matter of common law quite outside the operation of the Rules.  May I concede that when proceedings have been commenced contrary to a disentitlement to commence, the parties to it may still make a valid compromise agreement; of course they can.

GLEESON CJ:   Do you accept Justice Mason’s account of the purpose of section 151C given in the second sentence of paragraph 61? 

MR WALKER:   No, it is not a complete statement.  It is not simply to enable a defendant to consider its settlement options before litigation.  Purpose will be stated differently depending upon the level of generality.  One starts here with the purpose of the provision is to prevent the commencement of certain kinds of litigation for a certain period, then the policy intended to be served by that purpose, if one likes, the higher level of generality of purpose, is, we have submitted, evidently to promote non‑litigated solutions.

GLEESON CJ:   Yes.  I am not suggesting this is conclusive one way or the other but part of the thinking behind this kind of legislation was, was it not, that what I might call smaller or smallish claims for damages for personal injuries become very difficult to settle when the legal costs are disproportionate to the amount of potential damages?

MR WALKER:   Yes, though one has to throw into that the nature of a speculative retainer and the economic judgments made by insured defendants, that is, the insurers of the defendants.  I do not, with respect, seek to deny what your Honour has said but it would be difficult – impossible, on the face of things, to say that was, as it were, a dominant motivation.  Almost certainly of its nature it was part of the considerations that went into the production of the drafting instructions, but the drafting instructions were probably no more than, “Make sure there is a six‑month delay”, hence the explanatory memorandum.  I do not think it can be taken further than that.

GLEESON CJ:   If what Justice Mason said there were a fair account of the purpose of section 151C, it would fit in with his conclusions that this was something the defendant could waive.

MR WALKER:   Yes.  It is entirely in accordance with his Honour choosing the opposite alternative from that for which we contend in Sir Anthony’s alternatives, entirely consistent.  But that is why, in our submission, it is important to note that the idea of this being to enable a defendant to consider settlement options for litigation, 151C cannot, on its face, be seen as simply enabling a defendant to do that.  After all, if the delay comes after notice of a claim, it is not as if the plaintiff has not taken steps to prosecute a claim.  It is just that they are not allowed to go to the litigious step until a certain time has passed.  It is really, in our submission, not a benefit for the parties; it is a benefit for the broader community in which the parties are potentially disputants using social facilities.

GLEESON CJ:   By hypothesis, we are dealing here in this context, are we, with claims of which the defendant is aware?

MR WALKER:   By hypothesis, been notified.  Furthermore, that there has been a further dealing or dealings between the parties enabling one to know whether subsection (2) applies, as there was in this case.  His Honour must be proceeding on that basis in 61:  you are not going to be able to consider settlement options unless you know that there is a claim against you.  We say of that sentence that it is a manifestly incomplete, if it is at all accurate, description of the purpose.  It is not the whole purpose, query whether that is a purpose at all, except in the sense that consideration of settlement options is necessary by any of two parties proposing voluntarily to come to an agreement. 

The real purpose of the statute is to provide a means – it may be thought a crude means – to increase the number of such settlements.  It does not wear on its face any intention to benefit particular people, one side or the other, in each and every pair of prospective litigants, unlike our limitations provision which wears on its face the notion that it will be too unfair for one party to have to answer a claim which, by hypothesis, may have first been known of – may, not always will – may have only been known of when action has been brought.  So, in our submission, 61 is not accurate, certainly not complete, and though it is consistent with his Honour’s preference for the second alternative, that preference itself is flawed for the reasons we have already put. 

Your Honours, we will reserve, if the opportunity arises in the course of events, to reply anything further about the contracting point.  I have noted in‑chief the way in which it was or was not raised below.

KIRBY J:   Would you elaborate a little on the illegality point?  That seemed to concern Justice McHugh in the special leave application.

MR WALKER:   Yes.

KIRBY J:   Does that provide an alternative line of argument?

MR WALKER:   Yes, the arguments I have put this morning when I have said that it is our position that far from there being any discretion, the court when asked by the plaintiff should do nothing to assist it, from which it follows that when asked by the defendant it should make sure that the position is now regularised, namely, that which should never have happened – commencement – should belatedly be recognised and benefits that have flowed from what should never have happened should be denied. 

Now, it is just denied in this case.  In another case it might be reversed.  That is an argument which is like the matters considered, for example, in Justice McHugh’s considerations in Nelson v Nelson.  It does not, as your Honours have seen from our written submission, in truth have any distinct foundation to the argument from that which I have already put.  It is that the Court should always withhold assistance to those who have acted in breach of the law.  Now, thus stated, that is too general to be correct and Justice McHugh’s discussion of that matter in Nelson v Nelson obviously goes on to express considerable need for qualifications.

GUMMOW J:   Does ABC v Redmore 166 CLR 454 bear on this?

MR WALKER:   It does.  At page 457 there is, for example, a reference –that is a contractual case.

GUMMOW J:   Yes.  It is one of your triumphs.

MR WALKER:   Yes – a contractual case where, in the majority reasoning, what was rather important was the effect of the ABC’s arguments on what is called a “contract with an innocent outsider” – page 457, point 8 of the report.  Contract cases may well give rise, as in Leonhardt, to so‑called innocent outsiders, somebody who is either outside the water‑drilling licensing regime, not able to obtain the licence for the other party to the contract and not the regulator or, as in ABC, not the Minister and not the ABC and not able to rifle through the file of approvals. 

Certainly, the reasoning adopted in ABC v Redmore, pre‑Blue Sky, of course, but nonetheless, in our submission, consistent with it, illustrates – it may do no more than illustrate – how in a particular case for a contractual invalidation argument conditions precedent on one of the parties acting within the law may not, upon them being not observed, lead to destruction of what would otherwise be the resulting contract.

KIRBY J:   But in that case the statute was in very strong terms:

The Corporation shall not, without the approval of the Minister –

(a)      enter –

That is what led me, and in this Court Justices Brennan and Dawson, to believe that that was a prohibition which the courts had to uphold.

MR WALKER:    It is an illustration really.

KIRBY J:   But that did not carry the day because, presumably, of the distaste of the majority for the consequences of void contracts.

MR WALKER:    And there were other things apart from denying the contract its validity at the behest of the wrongdoer – that is what it is all about – there were other ways of vindicating that public finance probity and prudence provision.

KIRBY J:   It is hard to compare this statute and its arguably high purpose of involving the Minister exceptionally in corporation contracts with ‑ ‑ ‑

MR WALKER:    It was not exceptional.  It was then a very common provision in fact.  Corporatisation has put paid to a lot of that, your Honour, but it was then very common.

KIRBY J:   It is a much stronger statute than this one which is addressed not to the corporation, not to courts, but to litigants.

MR WALKER:    Yes, but our point is this.  In Redmore, as identified by the majority and as argued, there were other ways of ensuring that this breach by the ABC would not go, as it were, unremedied if the court nonetheless said of the “innocent outsider”, hence that expression in the passage to which I have drawn attention, that the statute did not extend so far as to have within its purpose the deprivation from them of the benefit of the contract made.

Now, in this case, if you, the Court of Appeal, give the respondent anything, as they eventually did, then there is no other vindication of the non‑entitlement to commence at all.  There is nothing left because you have said you can have exactly what you could have had had you been entitled to commence.  It is for those reasons that the case is instructive but only because it illustrates that in this task imposed by what might be called traditional and traditionally incomplete legislative technique the courts must ask how far should the prohibition, to use a general and loose expression, extend down the line narratively or to other parties.  We do not have lots of parties in this.  We only have the two.

KIRBY J:   But can your argument be turned against you here and to say that if the purpose of the legislation in this case was that which the Chief Justice lately identified then you have had that purpose.  You did not have it as was intended to stop the plaintiff commencing, but he having commenced you have had that purpose of having the opportunity to commence settlement and you offered a settlement and you should not now be allowed to wriggle out of it.

MR WALKER:    The difficulty with that, your Honour, is that this is not a statute expressed in terms such as “is not entitled to commence for six months unless the defendant properly considered all options and they are ready to box on”.  This is a provision that says indifferently to plaintiffs, defendants and courts that the plaintiff is not entitled to commence a proceeding for an inflexible period, the exception not being a matter of flexible discretion but by reference to being a state of fact, dealings between the parties.  It is for those reasons, in our submission, that the Court of Appeal erred in the critical part of its reasoning.

Now, as I say, there is an alternative, namely, that if we fail to persuade your Honours on the proposition that it was clearly wrong not to allow this point to be raised, because there is no prejudice pointed to, so as to enable the law to be vindicated rather than negated, then the question would arise as to whether it could be susceptible of waiver and estoppel. 

We have put our arguments in writing about that.  I do not wish to repeat them.  Much of the reasoning is based upon the same considerations I have already addressed.  May it please your Honours.

GLEESON CJ:   Yes, Mr Toner.

MR TONER:   I have heard what was being said, your Honour.  Could I approach our position this way.  Our client is in a somewhat different situation to that of Mr Walker.  I do not think that we have the parade of sins that they have perhaps committed in the course of that litigation.  Proceedings were brought against our client and, true enough, there was some dilatoriness on its part in responding to the statement of claim but, nonetheless, the point was taken and steps were taken to move the court at a point where there can not be said to be any particular prejudice to the plaintiff in the proceedings as there perhaps was in Gordon v Berowra.  So we make that point of distinction from the beginning, but perhaps this case is not going to turn upon the difference in the two sets of facts. 

They simply pose this question:  what is the status of proceedings brought by a plaintiff within the six‑month period when neither of the provisions of subsection (2) are engaged?  It is the plaintiff that brings the proceedings, so the commencement of the proceedings is entirely in the hands of the plaintiff, so that to bring it within the six‑month period is unlawful and that the plaintiff then turns around and says, “Well, regardless of what the section says, I am now asking the court to give me all the rights of a plaintiff who might bring the proceedings lawfully”; in other words, somebody who brings the proceedings after the expiration of six months or on the happening of either of the things in subsection (2).  That, effectively, is what this plaintiff is asking to be done in this case. 

True it is that the words of the section are somewhat inconsistent with other provisions within the Act but, nonetheless, it is our submission that there is a plain intention on the Parliament’s part that people ought not commence proceedings until the six months has expired or until the happening of one of the two things nominated in subsection (2) of the section.

KIRBY J:   This Judge Balla appears to have been affected by the fact that you conceded before her that the plaintiff was entitled to a finding that the failure to act by the defendant and its insurer amounted to a waiver and that affected the Court of Appeal too.  It appears in Justice Giles at page 30, paragraph 7.  You do not withdraw that concession?

MR TONER:   No.  I would like to but I cannot and we do not.

KIRBY J:   So that we have a position where it is conceded that at trial before the primary judge you made concession of a waiver.

MR TONER:   Yes.  No, we do not resile from that.  No matter how much we would like to resile from it, we do not.

KIRBY J:   Having accepted waiver, you are then, in a sense, seeking a benefit from the court that it does not have to give.  It has to exercise its decision according to law in a lawful way and your main argument is the provision of the statute is so strong that you have to give it effect.

MR TONER:   Yes.

KIRBY J:   But the contrary arguments which you have heard before us is that it is not so strong; it is for a rather limited purpose; that purpose was sufficiently fulfilled and therefore that it was open to Judge Balla to reach the conclusion she did.

MR TONER:   Yes.  In those terms, I adopt the arguments that were advanced to the Court by Mr Walker and that rather than having to rehash those arguments, I adopt those, but can I also add this?  Once the proceedings are on foot and a defendant in fact moves the court to strike out the pleading invoking the provisions of 151C(1), what can the court do once that application is made? 

As was pointed out by Mr Walker, there is no discretion vested in the court by the section itself.  The section delineates the circumstances in which a plaintiff can bring proceedings:  either the elapse of six months or one of the two things described in subsection (2) occurring.  Beyond that, there is no discretion such as there is vested in the court by 151D.  So that once the application is made, the court, in our submission, is left with the proposition of simply applying the provisions of the statute – in order words, that these proceedings were commenced unlawfully; in other words, in contravention of the provision of 151C(1) – and that the court then ought strike it out.  But as what?  On what basis does the court strike out the statement of claim?  What is the legal effect of the statement of claim once the proceedings are commenced but then struck out by the court?  Is it a nullity?  Is every step and every thing taken to pursue that cause of action described in the statement of claim, is that a nullity?  We say, yes, it is.  Once the court makes that order striking out the statement of claim, everything in relation to those proceedings is a nullity.

KIRBY J:   But before the court makes that order?  Do you submit that it is a nullity before that order of the court?

MR TONER:   Well, that is our primary submission but, having heard the argument in this Court, we move to the next position, namely, to say that once the point is taken, and at any stage in the proceedings while they remain on foot, then the court (a) has no option but to strike the proceedings out and it is void ab initio, a nullity.

HAYNE J:   And all the orders made before that date somehow disappear, do they?

MR TONER:   Except for the costs orders, yes, your Honour.

HAYNE J:   Well, why except for the costs orders, Mr Toner?  I understand the financial reason why, but what is the legal reason why those magically remain if this is this wonderful nullity?

MR TONER:   For the same reason that the court is vested with jurisdiction to deal with the application and has control of its process to punish those who have brought these proceedings.

KIRBY J:   “Punish”, that is a strong word.

MR TONER:   To control those who have brought those proceedings.  There is nothing within the statute itself which would vest in the court any discretion to do otherwise.  Within the scheme of the statute and the purpose of the statute, that is a logical and sensible outcome, we say.  As was have pointed out previously, the purpose of this statute is to enable matters to be settled without resort to curial intervention within that six‑month period, not merely to allow an insurance company to investigate the claim, but to allow the parties to settle without the intervention of the courts.  That is a benefit to the community, it is a benefit to the worker and it is a benefit to the employer.  So that a worker jumping the gun, we say, ought to be on the other end of the sanction that I have proposed.  I suggest it is the appropriate outcome in the case.

KIRBY J:   I did not see a submission that the District Court Rules Part 19A are invalid, at least in this sort of instance, by reason of their contradiction of the statutory provision of 151C.

MR TONER:   No.

KIRBY J:   So you are not putting that argument forward.  You say that it was still necessary for you to approach Judge Balla or, rather, that Judge Balla had the powers under the Rules, notwithstanding 151C of the Act.

MR TONER:   To go further would be just to repeat the arguments that were advanced by Mr Walker.

HAYNE J:   Just one matter of fact arising out of paragraph 19 of your submissions at page 3, Mr Toner.  You say there that:

On 12 July 2002 the Respondent’s proceeding was reinstated on the application of the Respondent -

that is the plaintiff in the action –

by Notice of Motion -

Was that motion on notice to your side?

MR TONER:   Yes, your Honour.  I think it had been struck out for want – nobody turned up at a particular callover.

HAYNE J:   Yes.  I think there seem to be about four way stations along the way and then we get to striking out then reinstatement on notice to your client.

MR TONER:   Yes.

KIRBY J:   If you had noticed then and you did not do anything, why should you be allowed to do it a bit later down the track?

MR TONER:   Relatively shortly afterwards we did just that.

KIRBY J:   It was shortly after but there you got a chance.  That was a time when you could say, “Now, steady on.  They’ve got no right to be in the court”.  They were seeking the benefit then of the court’s exercise of power.  You stood by then, saved it up, and came back later.

MR TONER:   We did not save it up for too long, though, your Honour.

KIRBY J:   You had to come back ‑ ‑ ‑

MR TONER:   That is true.

KIRBY J:    ‑ ‑ ‑ and make your own application.

MR TONER:   There is a reason ‑ ‑ ‑

KIRBY J:   Then you were seeking the exercise of the power.

MR TONER:   Yes.  I think one of the problems, one of the complicating factors was that the company was in liquidation at the time and their notices may or may not have been going but I do not think there is any particular evidence of that at the moment.  Perhaps that would have been a good argument to have put in relation to a question of waiver generally, but was not, nonetheless.  So I adopt the arguments of Mr Walker beyond that, your Honours.

GLEESON CJ:   Thank you, Mr Toner.  Yes, Mr Sexton.

MR WALKER:   Your Honours, I wonder if I might supply those answers to the question on notice before my friend starts so that he may take them into account.

GLEESON CJ:   Yes.

MR WALKER:   Your Honour Justice Gummow asked about Howard v Bodington.  The passage in question which is found in ‑ ‑ ‑

GUMMOW J:   It is from the world of Trollope.

MR WALKER:   It certainly is.

HAYNE J:   Who shall have the living, Mr Walker?

MR WALKER:   Is he complying with the Book of Common Prayer and one suspects which one of the articles was in question?  A smell of crocheted lace and candles permeates the case.

GUMMOW J:   Yes, that is right.

HAYNE J:   There is a case in itself.

MR WALKER:   It was not a trivial matter in question, namely, the ‑ ‑ ‑

GUMMOW J:   It had money at the root of it.

MR WALKER:    ‑ ‑ ‑ the modification of the holder of the living by the bishop and then in the bishop’s stead, because the bishop was the patron of the living, the archbishop, in order that the proceedings at the suit of three disgruntled parishioners could go ahead.  On the other hand, it was only late notification.  There was a limited period provided in the statute for notification of the proceedings to the affected priest.

Now, the passage from which the quotation is taken that your Honours have seen, which is at page 210 of (1877) 2 PD is, of course,

permeated with language no longer admissible, “directory”, “mandatory”, et cetera.  The very word “proceedings” in question is expressed in the sentence so as in context so as to appear to be completely generalisable although enough has already been said to show that the matter under consideration by Lord Penzance was, as it happens, a form of proceeding, that is ecclesiastical litigation.  But the actual sentence is - it is completely generalisable and could well by proceedings, we would respectfully submit that his Lordship was referring to subsequent actions upon not just to inter partes litigation.

GUMMOW J:   Mr Walker, while you are there, back in the spotlight for a minute, I meant to take up with you this.  In Giumelli v Giumelli (1999) 196 CLR 101 at 122, paragraph 38, we refer to a decision in the House of Lords in Roebuck [1994] 2 AC 224 at 235 to 236, and what their Lordships were saying there – and it seemed to have some attraction to it – is that when you are dealing with leave applications in the course of litigation to reinstate, to do this, to do that, where there is a discretion, you are not really adjudicating legal and equitable rights and introduction of terms and concepts like “estoppel”, “waiver”, “acquiescence”, are rather beside the point.

MR WALKER:   Yes.

GUMMOW J:   Perhaps you could look at that before you reply.

MR WALKER:   May it please the Court.

GLEESON CJ:   Yes, Mr Sexton.

MR SEXTON:   Your Honours, the last proposition that my learned friend made, not a moment ago but before he sat down the first time, was a proposition which underlies the whole of the argument that they make in this case, and the words that are used were that there is no other vindication of the statute if the plaintiff achieves what he would have achieved if the proceedings had been commenced in compliance with the statute.  That proposition is wrong because the vindication is that the plaintiff loses the right to run common law proceedings.  If an application is made in the normal case where proceedings have been commenced within the preclusionary period and an application is made to strike them out, the application will in the usual course of things be granted.

What the plaintiff in this case has achieved is the capacity to accept an offer, so the plaintiff in this case is not in the position that he would be in if he had commenced proceedings and prosecuted his common law rights.  He is simply in the position because of the particular circumstances in this case that he is in a position to accept an offer.  The reason he is in that position is because the appellant’s application for leave to withdraw the offer was refused and there is no appeal against that discretionary decision.  The only basis on which the appellants in effect challenge that decision is by saying the proceedings are completely ineffective, so that you do not get to that question.

But if the proceedings are not completely effective, in other words, if the Court of Appeal was correct in holding that steps that are taken between the commencement of the proceedings and an application to strike out are effective, then in this particular case because there is no appeal on the point about the exercise of discretion, you just do not get to that aspect of it, although my learned friend made some submissions on it.  Your Honours, the way we approach the question of the effect of the ‑ ‑ ‑

KIRBY J:   But we do have the instruction of Parliament to which we have to be faithful, and Parliament says “shall not be commenced”.  It seems pretty clear, at least it is arguable, that this was overlooked by the defendant and then at a late stage the penny dropped, the point was raised and the issue is whether the policy and purpose of that prohibition must be given effect by the Court, even though belated, and maybe make orders as to costs to protect a plaintiff from the injustice that the lateness causes, given the policy that is behind the statutory provision.

MR SEXTON:   That is so, your Honour, and the way in which that was done in this case was that the appellant was given the opportunity to make an application for leave to withdraw the offer it had made.  Now, it failed in that application.  It does not appeal against that decision, but that is the way in which effect was given to the statute coupled with what I have already put, namely, that the plaintiff lost or would have lost, subject to waiver or estoppel, his right to take his claim to a hearing.  The effect of the belated recognition by the appellant of the fact the proceedings had not been commenced in compliance with section 151C in the circumstances that were obtaining 18 months after that event was that the appellant had put itself in the position where it needed to avail itself of the Rules of Court, attempted to do so, but was unsuccessful.  Now, the concession that my learned friend ‑ ‑ ‑

KIRBY J:   What do you say is the purpose of 151C(1)?

MR SEXTON:   To promote settlement of disputes between employers and employees.  As you have seen from our written submissions, we put the point that was discussed earlier that there is a real financial benefit in many cases for defendants and their insurers in avoiding legal costs being incurred immediately after an injury if proceedings are commenced immediately which may impact on the ability of the parties to resolve ‑ ‑ ‑

KIRBY J:   There may also be the factor mentioned by the Chief Justice of promoting settlements especially in small cases where parties get locked into the litigation because of the proportion of the costs of the stake.

MR SEXTON:   Yes, your Honour, we have made that point in our written submissions.  The point about the concession that is recorded – which I made and which is recorded at page 69 of the appeal books in paragraph 21 of the judgment goes no further than the point that an application for leave to withdraw an offer would not be negated by the other party accepting the offer.  If that was to be the case, then an application for leave to withdraw would presumably have to be preceded by some application to restrain the other party from accepting the offer.  The point that is being made and the concession that was being made is simply that in exercising the discretion to decide whether or not an offer should be – or leave should be given to withdraw the offer, it does not matter at all whether the offer has been accepted.  Similarly, if an offer has been accepted and there are some vitiating circumstances that later come to light, such as fraud or mistake, then that would not preclude an application being made on normal contractual principles.

GUMMOW J:   This is Harvey v Phillips that we were looking at a while ago.

MR SEXTON:   Yes, your Honour.  The point is that there is nothing special about Part 19A of the Rules which means that once an offer has been accepted, that is the end of any other normal contractual consideration.

Turning to the effect of 151C and the consequences of its breach we make the following points.  The first is that the better description of section 151C is that it is a statutory provision which postpones the remedy.  There are suggestions in the written submissions, both in this case but more in the Boardman Case, that section 151C and the other sections of the Act that surround it create a statutory right and that this provision in 151C is a precondition to that right arising.  It is not.  It is not a provision which extinguishes a right or which creates a new right.  The right is the common law right to bring proceedings in either the District Court or the Supreme Court or, theoretically if the damages were low enough in a local court for damages in tort.

Section 151C operates in exactly the same way in that regard as the normal type of limitation provision which bars the remedy, not the right, after the expiration of a period of time.  What this section does is to postpone the remedy.  It does not affect the right.  It is a provision which uses words which have commonly been seen, as your Honour Justice Gummow pointed out, since 1623, and has been consistently regarded over that nearly 400 year period as provisions which have to be pleaded, the defence has to be taken.

They are not provisions which are regarded as effective without the point being pleaded.  In this case the point was pleaded, or at least an attempt was made to do so.  We have given your Honours a reference to – if I could take your Honours briefly to what Justice Windeyer said in Australian Iron & Steel v Hoogland 108 CLR 471. The relevant passage is at page 488 at about point 3 on the page:

Statutory provisions imposing time limits on actions take various forms and have different purposes.  Some are for preventing stale claims, some for establishing possessory titles, some for the protection of public authorities, some in aid of executors and administrators.  Some are incidents of rights created by statutes.  Some prevent actions being brought after, some before, a lapse of time . . . It seems that, under the common law system of pleading, when a limitation is annexed by a particular statute to a right it creates, the plaintiff should allege in his declaration that the action was brought within time.  On the other hand it is for the defendant to plead the Statute of Limitations as a defence to an action on a common law cause of action, as if he does not it is assumed that he intends to waive it . . . And, even when a time limit is imposed by the statute that creates a new cause of action or right, it may be so expressed that it is regarded as having a purely procedural character, as a condition of the remedy rather than an element in the right; and in such cases it can, it seems, be waived, either expressly or in some cases by estoppel ‑ ‑ ‑

KIRBY J:   Why is it not open to interpret the present events as a default in pleading the statute, but the discovery of that default and an attempt to rectify it before it was too late?

MR SEXTON:   Because there is no point in the matter being raised and rectified if the proceedings have been compromised, and the proceedings ‑ ‑ ‑

KIRBY J:   But the proceedings have been compromised inter partes and the provisions on compromise are provided in the Rules.  This is something that appears with the authority of Parliament in the statute, and for a purpose that commended itself to Parliament, so why does that not, as it were, trump the Rules and the inter partes dealing because it is for public and not just inter partes purposes?

MR SEXTON:   For the reason I gave earlier, your Honour.  To use my learned friend Mr Walker’s word, the statute is vindicated by precluding the plaintiff from running his case, but the point I am seeking to make by reference to this passage is that this is not a case where a statute creates a right and the limitation is annexed by the statute to the right it creates.  These are the words, and this is the type of provision which for 400 years has been regarded as a provision which is – not to use the appellant’s words – void ab initio.  It is something which must be pleaded and the point may or may not be taken by a defendant, so that what that leads to is that the real inquiry – and I think my learned friend, Mr Walker, agrees with this from the submissions he made this morning – the real inquiry, and this probably accords with what your Honour Justice Kirby was just asking is ‑ what happens in the particular case between the point at which the proceedings are commenced and the point at which they are struck out.

Our answer to that submission is that the Rules of Court apply, and in a particular case – and this case of Gordon is an exceptional case – if in a particular case an offer has been made and because of the Rules of Court the offer has not been withdrawn, and it is accepted, then that is an effective resolution of the dispute between the parties which accords with the legislative purpose, the broad purpose of achieving settlement, and that would preclude the point then being taken and striking the proceedings out.  There would be no point in doing that.

The only reason for striking the proceedings out is to prevent the plaintiff going the full length of his common law rights and obtaining a judgment which is the equivalent of the whole of those rights as opposed to a compromise which gives the plaintiff only part of the rights which the statute precludes.

KIRBY J:   There was a discussion in this Court, albeit in the context of administrative decisions of the Immigration Review Tribunal of nullification in Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597. Now, I saw in the special leave argument that it was suggested that the considerations that arise in administrative decisions of tribunals are not the same as in the decisions of courts, even a court such as the District Court. Do you know why that is so? Why is a different consideration involved in administrative decisions?

MR SEXTON:   No, I do not, your Honour.

KIRBY J:   I will just have to ask Justice Gummow a little later what he meant.

MR SEXTON:   I understand that was put to me on the leave application but ‑ ‑ ‑

KIRBY J:   I am just putting you on notice I am going to be looking at that decision.

MR SEXTON:   Thank you, your Honour.  Your Honour, the decision in Verwayen, in our submission, informs the consideration of the meaning of the words in this case because we submit that there is no real distinction between a statute which postpones a remedy for a period of time and a statute which bars a remedy after a period of time in terms of what is, as the Chief Justice said at page 405, which the Court has already drawn attention to, but what I wanted to do was to make some submissions about the words at the top of page 406 where Chief Justice Mason drew the distinction between a statute which confers:

a benefit upon persons as individuals ‑

and a statute which meets ‑

some public need which must be satisfied to the exclusion of the right of access of individuals to the courts.

The appellants submit, for the reasons they have given in their written submissions, that this right as they call it under 151C is a right which is only for the public benefit which has no private component and which underlies what was said in the discussion between the Chief Justice and my learned friend, Mr Walker, about paragraph 61 of the judgment, where President Mason identified the purpose of 151C as being to enable the defendant to consider its settlement options before litigation. 

As I have already said, and we have pointed out in our written submissions, our submission is that the primary effect of the postponement of the remedy is to give defendants the private benefit of being able to resolve disputes before proceedings are commenced and save the costs and other inconveniences that will arise once proceedings are commenced.  It is self-evidently a provision which provides for private benefit to defendants. 

In the context of the distinction which does appear in some of the older cases between sole benefit and part benefit of a public nature we have given your Honours a reference to the judgment of Justice McHugh in Brisbane South Regional Health Authority v Taylor 186 CLR 541, particularly page 553 where his Honour in the context of discussing the rationales for the existence of limitation periods points out that there is a public interest in any limitation period which is of the expiration type or post type that requires disputes to be settled as quickly as possible.

The point of that is that even the Verwayen‑type limitation provision which bars the remedy after a certain period of time has elements of public benefit so that even if it be correct in this case that there are elements of public benefit, which we doubt, nevertheless that does not preclude this type of provision which is a postponing provision being regarded as a typical limitation statute which requires a defendant to take the point.

At one point Mr Walker described the effect of section 151C as stripping away the right, and for the reasons that I have already given, in our submission, that is an accurate description.  It postpones; it does not take away.  This is not a statutory provision which extinguishes a right and then restores it after a period of time.

I turn now, your Honours, to the point that my learned friend made about no judgment being sought at first instance.  It seems to confuse what happened in the Court of Appeal with what occurred at first instance.  What happened in these proceedings was that an application was made for three forms of relief:  to withdraw an offer; to amend a defence and to strike out the proceedings.  If that application was successful, then there could be no basis on which the respondent could make an application for the entry of judgment under Part 19A rule 3(7).  It was only if that application failed that that step could be taken.

In the Court of Appeal there was some discussion about – and we have not been able to obtain the transcript – but there was discussion about how the proceedings would be disposed of if the Court of Appeal came to a contrary view to that of the judge at first instance about the nullity of the proceedings.  The effect of, as it were, reinstating the offer because of the three decisions that the Court of Appeal made was to then leave it open for the entry of judgment under Part 19A and there was no reason not to do so, so that nothing, in my submission, turns or can turn on the fact that there was no separate application at first instance for the entry of judgment pursuant to that rule. 

I turn now to the contractual issue.  It arises in this appeal in this way.  The appellant has raised in its written submissions in the appeal three aspects of the matter which have not been considered in either court below.  The first is the third category, if I could call it that, of statutory illegality, that is, statutory illegality where – sorry, contractual illegality where there is no express prohibition and no, as a matter of statutory construction, implied prohibition on the particular contract, but where there is, nevertheless, because of some taint, a public policy prohibition on enforcement of the contract.  That had not been raised at any point before argument in this Court.

The second aspect that has not been raised until the matter came to this Court was the concept that the appellant’s offer had been withdrawn inferentially because of notification of a desire to make an application for leave to withdraw its offer.  The third new aspect is the proposition that this was a contract that was entered into or not entered into freely.  Each of those matters goes to an issue which has never been litigated.  That issue arises in this way.  If the appellants are correct and the effect of 151C is that the proceedings are a nullity in the sense that the Rules of Court have no operation, nothing that happened after the proceedings were filed without complying with 151C is effective in any way, then there is still a question or an issue between the parties as to whether, independently of the Rules of Court and independently of the proceedings, there is a contract of compromise which settles the dispute between them, that dispute being the right of the respondent to make a claim for common law damages against his employer.

KIRBY J:   This matter does not have to be decided if a decision is made that the primary judge is wrong in holding that it was a nullity.

MR SEXTON:   That is so, your Honour.

KIRBY J:   This is a fallback position of yours?

MR SEXTON:   It is not a fallback position in this appeal.  It has been dealt with by us in our written submissions because it has been raised but our primary position on this is it is an issue that does not arise until it is finally determined that the primary judge was correct and it is then a matter for the respondent as to whether he wishes to commence proceedings in the Local Court in New South Wales seeking to enforce the judgment which is alleged to arise independently of the Rules of Court or of the proceedings.  So that our primary position is it just does not arise in this appeal.

HEYDON J:   It would not be a judgment; it would just be a contract, a contract to pay you some money.

MR SEXTON:   Yes, your Honour.

KIRBY J:   But the Court of Appeal, by its second order, entered judgment in your client’s favour in the sum of $50,000, plus costs.

MR SEXTON:   Yes, your Honour.

KIRBY J:   So you do not need any contract finding to get that order unless the finding of nullity is upheld and it is struck down on that basis.

MR SEXTON:   Yes, your Honour.

KIRBY J:   It is just a little difficult to treat the case as one of a pure inter partes private law contract when the contract that is alleged was made and was known to be made and was procedurally dealt with as being made in the context of a statutory and District Court Rule regime that provided the elements or the environment in which the contract was to be given effect.

MR SEXTON:   I appreciate those difficulties, your Honour, but my point is that none of them arise until the respondent seeks to enforce that contract independently of the proceedings.  The respondent has not sought to do that.  It is not a matter which should be before this Court.

GLEESON CJ:   What do you say about Mr Walker’s point concerning section 151H and the significance that attached to the date of commencement of proceedings which he based on the reference in paragraph 6 of Justice Mason’s judgment?

MR SEXTON:   What we say about that, your Honour, is that that is a consideration which does not really assist in determining what the effect of a breach in a general sense of 151C is because, as Mr Walker pointed out, in the particular circumstances of an individual case it may cut one way or the other.  The point he was making here is that because of the coincidental introduction of other amending legislation the respondent in this case might be worse off than if that legislation had not been introduced, and that is in the context that if proceedings are commenced in breach of 151C and the point is taken then there is nothing to preclude a plaintiff from simply commencing fresh proceedings.  In the normal course, it would only go to costs.

GLEESON CJ:   This question has nothing to do with the outcome of the present case, but where does section 151H leave that famous character, the concert violinist who loses a finger?

MR SEXTON:   Out of court, I think the answer is, your Honour.

HEYDON J:   You have to be extremely badly injured to reach the 15 per cent level.

MR SEXTON:   You do, your Honour.

GLEESON CJ:   And I suppose if somebody negligently ran over Lleyton Hewitt’s foot?

MR SEXTON:   There would be no ‑ ‑ ‑

KIRBY J:   But, as I understood Justice Mason’s reasons, he mentioned 151H as a possible explanation why you jumped the gun and commenced the proceedings.

MR SEXTON:   Yes, your Honour.

KIRBY J:   I inferred from that that was because 151H did not apply, but did it come into force after the commencement of your proceedings?

MR SEXTON:   Yes, your Honour, and a factual level that has never been investigated, whether in fact Mr Gordon would or would not meet the new 15 per cent whole body impairment.  That has just not been considered.  It is completely at large.

KIRBY J:   But if you had commenced the proceedings on the day after the six months required by 151C, would you then have fallen into the regime controlled by 151H?

MR SEXTON:   Yes, your Honour.

KIRBY J:   Do I understand that your submission is the present appellant had the opportunity to consider all this and, notwithstanding the new regime, it proceeded to make an offer which you accepted?

MR SEXTON:   Yes, your Honour.  Mr Walker used the words that perhaps Mr Gordon was standing, or his advisers were standing there for 18 months with their fingers crossed.  Will they take the point?  Will they take the point?  They did not take the point.  They made an offer.  When they sought leave to withdraw it, leave was not granted.

KIRBY J:   But I suppose the argument could be put that you, by pretending that the matter was within time, tricked the appellant into proceeding to make an offer under the Anshun regime rather than under the new regime?

MR SEXTON:   That was never put below, your Honour.  It is a matter of speculation.  What this Court is being asked to do, and part of the reason presumably why special leave has been granted, is that this is a matter of public importance where some principle has to be enunciated which applies to all cases and not just to the particular circumstances in which Mr Gordon either did or did not knowingly jump the gun.  That was just never investigated. 

Whilst we are dealing with the way in which the proceedings were conducted below, it is worth noting that, at first instance and in the Court of Appeal, the appellant very much fixed its standard to the mast that section 151C simply nullifies everything and considerations about why Mr Gordon may or may not have commenced, or why the defendant may or may not have realised that there had been non‑compliance with 151C, simply did not matter because they had a killer point, namely, that there could be no answer to non‑compliance with 151C.

HEYDON J:   Those three new aspects which you say the appellant is raising in this Court, do you take any Suttor v Gundowda point about them, that is, that possibly evidence might have been called to defeat them had they been raised before Acting Judge Woods?

MR SEXTON:   Yes, your Honour, certainly not in relation necessarily to the tainted with illegality point, but certainly in relation to the two points about free acceptance.

HEYDON J:   Two and three?

MR SEXTON:   Yes, your Honour.

GLEESON CJ:   Is that a convenient time, Mr Sexton?

MR SEXTON:   Yes, your Honour.

GLEESON CJ:   We will adjourn now and resume at 2.15.

AT 12.44 PM LUNCHEON ADJOURNMENT

UPON RESUMING AT 2.17 PM:

GLEESON CJ:   Yes, Mr Sexton.

MR SEXTON:   Your Honours, following on from the submissions I was making just before lunch about the private contract point and the proposition that that had not been raised in this appeal, or did not fall for determination in this appeal, we have placed some emphasis in our written submissions on the issue of whether a contract in a general sense would be tainted with illegality or would be either expressly or impliedly invalid because of section 151C.  The distinction between the general concept and the particular contract in this case follows from what Justice Hayne said about having to put all the parts into one box when considering the effect of section 151C.

At the end of the day the precise right which the respondent relies on and which the appellant says the Court should not assist the respondent by permitting him to rely on is the right conferred by Part 19A rule 3(3) which says that an offer must be open for 28 days.  At the end of the day it is that which gives effect to the purpose which the respondent seeks to achieve, namely, that the offer of compromise can be accepted.

So that starting at the end, as it were, if a contract made independently of the Rules of Court would be valid – and, as I understood Mr Walker’s submissions this morning, he accepts that such a contract would be valid – that, in our submission, supports a proposition that a contract made under the Rules in the particular circumstances, one part of which is an offer being open for 28 days, is not something which falls foul of the statutory purpose in enacting 151C.

Finally, your Honours, for completeness, in relation to the submission I made earlier that 151C postpones a remedy and does not extinguish the right, might I hand up copies of section 149 of the Workers Compensation Act 1987 which was the provision to which the President, Justice Mason, was referring indirectly in paragraph 5 of his judgment on page 65 of the appeal books where he said:

This was a comprehensive set of provisions that restored the right to “common law” damages –

The point, your Honours, is that section 149 which was the provision which was loosely referred to as abolishing common law rights operated by barring the remedy, not the right:

A worker is not entitled to recover damages, otherwise than under this Act ‑

So that at no point was there an extinguishment of the right to recover common law damages.  In 1987 there had been a provision which barred the remedy in a particular way and then when the 1989 amendments came into force there were other provisions which affected the right to recover damages, including section 151C, which, as we have already submitted, postponed the remedy but not the right.  They are my submissions, your Honour.

GLEESON CJ:   Thank you, Mr Sexton.  Yes, Mr Bozic.

MR BOZIC:   Your Honours, without going over the ground that has already been covered, can I make perhaps three relatively short points.  The first is in relation to the language of section 151C.  The second is in relation to the purpose of section 151C and, in particular, just to touch on the question of to what extent is there a public benefit as well as a private benefit contained within that section.  The third short point is simply to respond to something my learned friend, Mr Toner, said this morning about the absence of any prejudice to the respondent.

In relation to the language used in section 151C, section 151C and section 151D were inserted into the Act by the 1989 amendments which restored in a modified way the common law rights.  They are two, in effect, limitation provisions.  Section 151C obviously prohibits the proceedings from being commenced before the expiry of a particular period of time and section 151D is the conventional limitation period form which prohibits the proceedings from being commenced more than three years after the date of injury. 

When one looks at the terms of those two provisions, 151C and 151D, the language of limitation used is identical in each section.  Section 151C uses the words “is not entitled to commence” and section 151D uses the identical words “is not entitled to commence”.  Now, in that context, where in 1989 these two limitation provisions were inserted into the Act and identical language was used in each, one can perhaps make two comments.  In response to the appellant’s submission, which is that the language is so plain as to make any other interpretation not follow, in my submission, when one looks at the language that has been used, in the relevant sense, it is equivocal.

What section 151C does is to state the relevant prohibition but what it does not do is to state the consequence of a breach of the provision.  In other words, what it does not expressly state is the very question which is in issue here, so that the language used in section 151C is equivocal in that sense.

The second comment that can be made is that if the legislature had intended section 151C to have the effect contended for here, it is singularly odd that the words they chose were the identical words that have also been used in section 151D, a conventional limitation period which has been interpreted for a great length of time now in a number of very, very different contexts as giving a right to raise a question of waiver.  It is a provision which can be waived.

GUMMOW J:   Does anything flow from the fact that 149, which Mr Sexton just gave us, used the words “A worker is not entitled to recover damages”?

MR BOZIC:   I am sorry, I missed the opening part of your Honour’s ‑ ‑ ‑

GUMMOW J:   Does anything come, in construing 151D, which went in later, I think, from 149 in the form Mr Sexton handed up to us just a few minutes ago?  This phrase “is not entitled” seems to have some pedigree in this Act.

MR BOZIC: Well, it does in the sense that it is obviously a phrase which finds its way into 149, but in interpreting the phrase in the context of the limitation provisions in 151C and 151D, nothing, in my submission, really flows from the use of that expression in section 149. That is all I wanted to say about the language and it was simply to draw attention to the use of that language in the two limitation provisions.

The second aspect that I wanted to touch on was the question of to what extent is there a public or a private benefit, and that is in the context of the passage that your Honour the Chief Justice raised with Mr Walker at paragraph 61 of the judgment of the learned President in the Court of Appeal.

KIRBY J:   This is in Berowra?

MR BOZIC:   That is, I am sorry, paragraph 61 at page 79 of the appeal book.  There is a reference to:

the whole purpose of s151C is to enable a defendant to consider its settlement options before litigation. 

The appellants have raised the wider public benefit of section 151C.  True it is that if one descends to the level of the sweeping generality, there is a public benefit here, and that is the public benefit that is referred to earlier in the learned President’s judgment at paragraph 46 at page 75 of the appeal book.  That is that in a broad sense section 151C serves the public interest of encouraging dispute resolution without litigation.  But, as we have set out in our written submissions, the real beneficiaries of section 151C are the parties, and in particular the defendant, because it enables the defendant to make a proper assessment of the claimant’s entitlement to damages. 

When one looks, therefore, at the broader public benefit that might also underlie section 151C, in my submission, it no more would prevent waiver from being raised in the context of this legislation than does, say, the general public interest in the finality of litigation would prevent waiver being raised in relation to ordinary limitation provisions.

The third point I wanted to touch on briefly was to respond to my learned friend Mr Toner’s opening remarks that unlike the plaintiff in Gordon v Berowra Holdings, the plaintiff in this case, the respondent, Mr Boardman, suffered no particular prejudice.  In fact the prejudice that

has been suffered is that the statement of claim was filed in July 2001.  If the point had been taken in a timely manner, it would have enabled Mr Boardman to have recommenced prior to the 27 November 2001 cut‑off date and would have enabled him to have brought his proceedings under the workers compensation legislation prior to the amendments containing the provisions relating to the 15 per cent whole body impairment.  So in that sense there is a very real prejudice which he can point to, particularly if there is a prospect that he would not now reach the 15 per cent whole body impairment.  That would mean that his common law or modified common law rights are quite significantly different to those that they would have been had the point been taken in due course and he had been able to file a fresh statement of claim.

KIRBY J:   But what is the prejudice that your client has suffered by reason of the delay in raising the point?

MR BOZIC:   The prejudice is that if the ‑ ‑ ‑

KIRBY J:   Assuming prejudice to be relevant to this exercise.

MR BOZIC:   Assuming it to be prejudice – and I was really raising it only in the context of the submission that had been made that there was no prejudice, but the prejudice here is that the statement of claim was filed in July 2001.  The relevant amendments to the workers compensation legislation were in November 2001.   Now, the prejudice is that if the point had been taken in a timely manner, that is, at or shortly after the filing of the statement of claim, a fresh statement of claim could have been filed and the respondent’s claim would have come under the workers compensation legislation as it then stood, whereas at the point in time at which it was taken was post‑27 November 2001.  They are the only matters I wanted to raise.

GLEESON CJ:   Thank you, Mr Bozic.  Yes, Mr Walker.

MR WALKER:    Your Honours, the point has been raised in relation to the wording of 151C and 151D, and of course the traditional wording of many limitations provisions, as to the indication from that the same result should follow in relation to the need to plead and thus the capacity to waive which applies in the case of limitation statutes applying also in the case of this moratorium statute.

In our submission, the answer to that argument, which clearly as a linguistic foundation, is that the notion of the waiver, as Sir Anthony Mason has put it, requires attention above and beyond the public interest that can be attributed to all public statutes, to an understanding of what the particular law bestows on one of the parties in the relation being governed.

It is impossible to see how an ordinary limitation period statute can ever be for a plaintiff’s benefit.  The staleness of the claim is to see a claim from the point of view of a defendant only.  From the point of view of the plaintiff ‑ not the defendant ‑ would brand a stale claim as a claim that is better late than never. 

Now, unlike that position, which leads to the result as in Verwayen and, as has been held for hundreds of years, that limitation statutes need to be pleaded because they are of their nature capable of being waived, that is, they are not a point that exists willy-nilly the defendant’s volition, unlike that, this moratorium provision is designed to stop people who both of whom may be quite willing and ready and eager to litigate.  It is designed to stop both of them from litigating because unless a plaintiff commences, a defendant does not litigate.  We know this is a defendant who is well aware of the existence of a claim because a notice has been given.  It is clear from the very same circumstance which leads the concessions to be made in our favour from those on the other side of the Bar table that this is legislation for a general ‑ ‑ ‑

GUMMOW J:   Just going back a minute, I think a plea of non assumpsit was enough to raise the statute.  I think you had to plead it in equity.

MR WALKER:   I am sorry, your Honour, I cannot say.  I do not know.  Certainly ‑ ‑ ‑

GUMMOW J:   It does not detract from your main point.

MR WALKER:   No, and certainly by the time Judicature Act requirements of a 20th century kind for pleading points that might otherwise take by surprise were enacted or promulgated ‑ ‑ ‑

GUMMOW J:   Yes.  The judicature system followed the equity practice, I think.

MR WALKER:   Quite.  As soon as that had happened and as soon as blank pleas or blank or general denials were either corralled or eliminated, then, as is described in Verwayen, this is a point has to be pleaded, has to be taken. 

Now, our submission is that differently from the limitations provisions which had that characteristic because, we submit, one could never suppose a plaintiff could benefit from it, then, in our submission, there is a qualitative difference of a fundamental kind, namely, that even willing contestants – there has been no denial of liability but they want to know where they stand – even willing contestants are not allowed to have litigation commenced. 

Now, that fits with what, in our submission, plainly fits or matches the first alternative as described by Sir Anthony Mason, namely, a general statute designed to bring about a change in conduct at a social level, not just an individual level, that is, a change across a class of people, sufficiently large to have the desired public benefit and a change which, in our submission, by producing settlement can be seen as one which is just as much for the benefit of plaintiffs as it is for defendants because you cannot say of compromise that they are preternaturally outcomes that favour defendants.

HAYNE J:   Is not the case of the willing contestant met wholly by 151C(2)?

MR WALKER:   No, not entirely, your Honour, because this contemplates proceedings, notwithstanding the classes covered by subsection (2) where liability is not denied but, for example, causation of injury or amount of compensation is in question.  After all, that is what the six months delay is designed to avoid being visited upon a court system.  So, no, subsection (2) does not entirely deal with the position of people who, as your Honour will be well aware, in many cases wish to fight, not about so‑called liability meaning breach of duty, but about the measure of damages.

There are many contests in this area where there is either never or ultimately there is no contest as to breach of duty but there is a contest, lively contest, as to the amount of damages.  It is that second category that is delayed for six months. After all, this is a provision which contemplates the commencement of proceedings after six months, notwithstanding that subsection (2) describes two categories to which that six months delay does not apply.

It certainly contemplates – a quantum dispute is the obvious one – proceedings which must be delayed for six months but may thereafter be commenced.  “Liability” in subsection (2)(a) certainly does not mean the entirety of the damages, the amount of the damages to be awarded for the liability.  I drew attention earlier to paragraph (b).  The expression “partial liability” is a rather difficult one but it certainly suggests that we are not talking about encompassing within it the quantum of damages.  That is the first point.

Your Honour Justice Gummow drew to attention in relation to what might be called a pleading question some judicial statements concerning the difference between the issues when leave to amend is sought, leave to amend a pleading is sought, and the issues that arise in a true waiver, estoppel or acquiescence case.  The point was made as well by Sir Anthony Mason and Justice Toohey in Verwayen as well as in the passage in Giumelli v Giumelli 196 CLR 101 at 122, paragraph 38, to which Justice Gummow made reference. In that reference there is a further reference to the comments by Lord Browne‑Wilkinson in his Lordship’s speech in Roebuck v Mungovin [1994] 2 AC 224 at 236.

In our submission, how they translate to the present case is as follows – and this goes to the way in which the case was disposed of by the Court of Appeal.  A point such as 151C, it may be supposed, needs to be taken; this case that we are appearing in shows that.  If nobody had even woken up to the point we would not be here because there would have been no dispute about it.  So it needs to be taken in that basic sense, and in the pleading sense about which Justice Hayne asked me in‑chief, if there is a defence put on, then it also ought to be taken; that is, raised.  It shows the proceedings are not maintainable.  But, as was recognised by Justice Mason, that is not the only way in which the point can be taken so as to bring the proceedings which should not have been commenced to a peremptory halt without the merits being adjudicated.  One sees at page 76 of the appeal book paragraph 49 where his Honour uses the expression in relation to the provision that:

it arms a defendant faced with contravening proceedings with power to move for summary dismissal and/or plead a defence invoking the provision -.

the “and/or” leaving open the possibility that there is no summary dismissal with the artificially high burden of persuasion there, but there is a trial in which 151C is mounted as a point.  His Honour then goes on to say in paragraph 52, perhaps to mingle those concepts of a trial on pleadings and a summary dismissal motion, when his Honour says that:

A defence raising non-compliance with the section should be permitted unless the facts show that it is doomed to failure because of an unarguable riposte invoking waiver and/or estoppel.

Now, his Honour cannot be meaning that would have been the position at trial, at trial rather, as his Honour means in the next sentence at paragraph 52, there would be tried the facts of a waiver and estoppel.  It would not have to be unarguable.  The word “unarguable” suggests that his Honour was there referring to a summary dismissal motion.

Now, what follows from that is that this matter did not need to be raised in our defence if it was the subject of a motion for summary dismissal and, equally, if it was successfully raised in a defence, there need not ever have been a motion for summary dismissal so long as there was a trial.  But what the parties did in this case was to put everything in.  They sought to amend the defence so that the issue would be there for any trial - after all, the trial needed to be vacated for the hearing of the motion – and they also put on a motion for dismissal.

GUMMOW J:   The real questioning Verwayen - and it is a problem about Verwayen that may explain its unsatisfactory nature in many respects – what triggered Verwayen was, was it not ‑ ‑ ‑

MR WALKER:   An amendment.

GUMMOW J:    ‑ ‑ ‑ an application by the Commonwealth for leave to amend.

MR WALKER:   Yes, and the doctrines of estoppel came up.

GUMMOW J:   Lord Browne-Wilkinson would say, “Well, look, I’m going to have regard to your past conduct of this litigation”.

MR WALKER:   It is a relevant factor, as the Court has said time and time again.

GUMMOW J:   I am not going to ruminate on High Trees estoppel.  I am going to get on with it in a practice court.

MR WALKER:   Quite so.  Now, my point is that it is therefore – in this case what the Court of Appeal was faced with was ultimately a question, should there have been summary dismissal or, alternatively, should there have been permitted to be raised a defence which it could be demonstrated had no answer because there was no suggestion in relation to the amendment application that it ought not to be permitted because there was “an unarguable riposte invoking waiver and/or estoppel”.  Why would you ever get into determining the merits of a matter requiring to be a following pleading to the pleading which was the subject to the application for amendment, unless there was a futility or hopelessness point to be argued and if there was, then the time for that to be raised was before Judge Woods and it was not.

Now, it is for those reasons, in our submission, when one looks at pages 76 and 77 and recalls my learned friend’s opening to his submissions today, namely, that there is no appeal against the Court of Appeal’s reversal of the leave to withdraw the offer, it is to be recalled that the Court of Appeal was seized completely of, and this Court is seized completely of the orders once made by Judge Woods and now reversed by the Court of Appeal which included summary dismissal.  The proceedings were summarily dismissed by Judge Woods.  That was reversed, but there is no explanation on pages 76, 77, 78 and 79 as to why it was reversed, bearing in mind, as is so clearly pointed out, the status of 151C as “a knockout blow” – that is Justice Mason’s expression at paragraph 61 on page 79, line 24 – would emerge one way or the other only if you had sufficient material to appreciate the availability of waiver or estoppel.

Now, it is for those reasons, in our submission, that one then returns to the allied application which was for leave to amend, to put on a defence raising 151C.  The point had been taken by summary dismissal.  Here is a second way of taking it in a proposed pleading and, in our submission, there really is no prejudice point taken on any of pages 76, 77, 78 and 79.  The height of it comes in paragraph 61 where the President describes our point as hardly meritorious and then refers to the purpose of section 151C.

Now, that is to go to the merits of the issue about the effect of 151C rather than to allow the amendment in order that those merits may then be an issue between the parties.  Had he done so, then it would have been for the plaintiff to say finally, “What am I going to say about waiver and estoppel?”  That point has never arisen.  It is for those reasons, in our submission, that in this Court the error of the Court of Appeal’s disposition emerges the more clearly after my friend has put the points he did just before the adjournment.

One of those points was that he resisted the proposition that the statute could not be vindicated other than by our arguments.  He said it would be vindicated, and how?  It would be vindicated by precluding the plaintiff from running a case for common law damages.  How is that so unless by summary dismissal or by forbidding a defence which will succeed in the absence of a waiver or estoppel?

On the other hand, my learned friend does not seem to take the logical step of saying that the proceedings should have been dismissed, which is what, after all, Acting Judge Woods had done.  For those reasons, in our submission, the arguments my friend relies upon in relation to 151C do not answer the proposition that what was done at first instance was the correct disposition as was in reality recognised in the Court of Appeal in the absence of waiver or estoppel.

Your Honours, as explained, the concession by my learned friend recorded on page 69 of the appeal book in paragraph 21 makes, with great respect, the not unreasonable point that Court Rules providing for an application, presumably inter partes, for leave to withdraw an offer should not be interpreted so as to render the whole application nugatory because there can be acceptance during the pendency of that application for leave.  That is how my friend put it.  But it has consequences, including those properly spelled out and not contested by Justice Mason in paragraph 21, namely, that what is there called the nullification of a supposed settlement is not precluded by a prior acceptance after notification of an application for leave to withdraw.  From which it follows, finally, that there is nothing in my learned friend’s what I will call collateral contract point – collateral in the sense that it is collateral to the proceedings and has an existence apart from and unaffected by any defects in the proceedings, whether by way of commencement or any other aspect of them.

Now, it is at this point that what your Honour Justice Heydon raised with my learned friend as a Suttor v Gundowda objection to the argument becomes important.  There is no concept of what I think my learned friend called “free acceptance” involved in any part of the argument that we seek to raise, nor is there any Suttor v Gundowda point for the following reasons.  The argument that we advanced in‑chief in writing in paragraphs 33, 34 and 35 is an argument about the difference between a contract made at common law and the contract claimed by the respondent in this case which depended for its making upon the compulsive effect against what would have been the common law liberty of the appellant here to have withdrawn its offer.

Unravelled, it goes as follows.  A stipulation that an offer will remain open for 28 days at common law, in the absence of consideration rendering it in the nature of an option, is not enforceable.  That promise, if it be a promise, “I promise to leave my offer open for 28 days”, is nudum pactum itself, and the offer may be revoked by being withdrawn or by conduct showing that it is not available for acceptance, notwithstanding the 28 days has not passed.

That was the common law liberty which the Rules entrenched upon and cut back and it is the entrenching or cutting back of that liberty upon which, of course, the respondent relies to make good his so‑called contract quite independent of the proceedings.  As Judge Woods pointed out and as we have sought to argue in writing and in address, it is just not possible to say of this contract that it does not depend, for the acceptance to be effective, upon the proposition by the respondent that you were not allowed to withdraw your offer. 

At first instance, there was not a case of a contract having been made, the existence of which was a discretionary or other reason to resist summary dismissal or withdrawal of the offer.  In the Court of Appeal neither was that argument put.  I have already taken your Honours and we have it in written submission as to the way in which the President understood the issue.  It was a discretionary matter.

In this Court, in the written submission, the distinction is drawn that we have identified in paragraph 1 of our written reply.  In other words, you were too late because we had accepted after you had merely announced an

intention to seek leave.  As we point out in paragraph 2 of our written reply the evidence is in fact to the contrary.  We said we have instructions to withdraw.  True it is, we then went on to talk about that which could be described as the requisite leave to pick up and apply, in a slightly different context, the very word that the President used about leave to amend the defence, that you will see at appeal book 66 to 67, paragraph 17. 

For the reasons we have developed in our written reply I do not need to dwell on at common law the dealings between the parties.  There was full communication, ample communication, nothing left to guesswork, simply do not give rise to the possibility that objectively manifested the respondent could have understood the intention of the appellant was that the offer could be accepted so as to produce at common law a contract.  To the contrary, there was an offer which was the subject of an application for leave to withdraw of the very kind which my learned friend says could still be made, and effectively so, so as to nullify a settlement even if there had been a prior purported acceptance. 

It is for those reasons that there was no Suttor v Gundowda point at all.  It was common ground between the parties that what happened as recorded in paragraph 2 of our written reply had happened and what flows from that legally has been raised in this Court for the first time in a slightly different fashion from the way in which it was ever raised in the two courts below.  There is no Suttor v Gundowda point against us.  If anything there is a Coulton v Holcombe point in our favour against the other side but that is not a matter that we need to dwell upon.  May it please the Court.

GLEESON CJ:   Thank you, Mr Walker.  Yes, Mr Toner.

MR TONER:   Just two brief points.  A fuller chronology of events is set out in the appeal book between pages 14 and 16 which is within the judgment of Judge Balla at first instance.  I do not need to take the Court particularly to it but it fleshes out the rather rudimentary chronology which is attached to our submissions.  That goes to this proposition, that my friend says that his client does suffer prejudice – it is a prejudice of his own making – and that apparently we are obliged to rescue him from it by raising the point.  In other words, they started too early.  They started within the six months.  Had they have discontinued and started at the expiration ‑ ‑ ‑

HEYDON J:   Why should you not tell them that?  He is a weak ignorant worker.  You are an insurance company.  Why should you not tell him?  If you have rights, you are just not going about it the right way.  We will deal with your rights.  Why do you hold back?

MR TONER:   He is a weak and ignorant worker with very professional attorneys acting for him, so that it is not as if ‑ ‑ ‑

HEYDON J:   You are postulating that you had knowledge of the problem but did not communicate it.  That is one thing.  It might be another thing if you, like his lawyers and himself, were not alive to the problem.

MR TONER:   I think that is a more likely proposition.

HEYDON J:   Is that your point or is your point that you had the knowledge and thought it right to hold it back?

MR TONER:   I think everybody overlooked it.  I think that is the reality of it.

HEYDON J:   In that case, there is no point to be made, is there?

MR TONER:   I think it is probably mutual – both sides. My second point is this, that Justice Gummow pondered whether the words in section 149, “A worker is not entitled to recover damages”, has any significance when looking at section 151C where “not entitled to commence” issues. We say yes, because, similarly, if one looks at 151D, again “not entitled” is used and the significance of “not entitled to commence” in 151D(2) is highlighted by the effect of subsection (3), namely, it specifically excludes the operation of the Limitation Act 1969.

So we say that in interpreting the proper meaning and application of 151C there was a specific and deliberate attempt to avoid the conventional interpretation given to limitation words by excluding the operation of the Limitation Act and by using consistently, at least in this part of the legislation, “not entitled to” as the words that restrict the right of the worker in each instance, both 151C and the limitation period that is imposed by 151D, a different limitation period to that which is imposed by the Limitation Act 1969. Had the Parliament simply wanted to have conventional limitation language applied as the courts have understood it over the centuries, why not simply leave the Limitation Act in place as the limiting statute for workers’ rights under the legislation?  They are my submissions.

GLEESON CJ:   Thank you, Mr Toner.

MR WALKER:   Your Honours, I apologise, may I hand up that amended defence in Berowra?

GUMMOW J:   There was a motion we were going to be supplied with too, was there not?

MR WALKER:   I am sorry, your Honour, I was not aware there was a motion.

GUMMOW J:   Some document that was not in the appeal book.  Is this it?

MR WALKER:   That was the form of defence which was the subject of an application recorded, but I am not sure if that application is ever in writing.  This is the one that was irregularly filed without leave or consent.  It is then the subject of an application which I have assumed was made on counsel’s feet.

GLEESON CJ:   Thank you, Mr Walker.  We will reserve our decision in this matter and we will adjourn until 11 o’clock tomorrow morning.

AT 3.00 PM THE MATTERS WERE ADJOURNED