Lakunda Plantation Pty Ltd v Maluvil [1981] PGNC 42; N308(L) (30 July 1981)

N308(L)

PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

APPEAL 254 OF 1980

BETWEEN:

LAKUNDA PLANTATION PTY. LIMITED
APPELLANT (RESPONDENT)

AND:

IAN MALUVIL
RESPONDENT (APPLICANT)

Waigani: Miles J
17 June 1981; 30 July 1981

MILES J: This is an appeal brought by an employer against an award made in favour of a worker under the provisions of the Workers Compensation Act 1958. The award was made by a magistrate sitting in the District Court at Rabaul as arbitrator on 29th August 1980. The appeal is brought pursuant to s.23 of the Act. It was heard in Port Moresby at the request of the appellant and by consent as it was considered to be of some urgency.

The grounds relied upon are set out in the Notice of Appeal dated 18th September 1980 and are as follows:

1. That the Stipendiary Magistrate erred in law in failing to decide that the application was not maintainable and was time barred.
   
2. The application should have been dismissed as the injury occurred on or about the 3rd November, 1965 and the application for Arbitration was not made until 14th March, 1980.
   

I note that there was a cross appeal by the worker but this was withdrawn on oral application by counsel at the hearing of the appeal.

For the purposes of the appeal the findings of fact made by the magistrate were not challenged. The worker was injured on 3rd November 1965 whilst employed by the respondent. He gave written notice of accident to and made a verbal claim for compensation on the employer within the time limited by s.14(1) of the Act. On 11th February 1966 his right leg was amputated below the knee. This was as a result of the accident. Further verbal claims for compensation were made on the employer by the worker in 1966 after the amputation and he was dismissed. Although the worker sought assistance from government officers and lawyers, there was no further communication between the parties until the commencement of proceedings on 14th March 1980.

The first point taken for the employer is that the worker was not entitled to commence and maintain proceedings before the District Court because his right to claim compensation is barred by the Statute of Frauds and of Limitations Act 1951. In particular the employer relies on s.23 of that Act which provides for certain periods of limitation for bringing actions for debt.

It was submitted that the proceedings to recover workers compensation under the Workers Compensation Act 1958 is an action "for penalties damages or sums given to the party grieved by any law now or hereafter in force in this colony" and that accordingly the time limited for commencing the action by s.23 was within two years of the cause of action arising. No judicial authority was put forward in support of this submission. Judicial authority such as there is appears to be to the contrary. The authorities about to be referred to deal with legislation that is virtually identical with the Papua New Guinea Act insofar as it relates to serving of notice of accident, making of claim for compensation and commencing proceedings to recover compensation.

In Powell v. The Main Colliery Company, Limited^[1] the House of Lords unanimously decided that the claim for compensation referred to in the equivalent of our s.14(1) was notice of claim for compensation given by the worker to the employer, and not the initiation of proceedings before the arbitral tribunal by which the compensation to be awarded, if any, is to be assessed. It was therefore held that the commencement of the arbitration proceedings outside the six months limited for making the notice of claim upon the employer was not barred by any considerations of time. Lord Brampton went on to say at pp. 379 - 380:

"There is no warrant for even a suggestion that a limit is expressly put by the statute upon the time within which arbitration proceedings must be commenced, unless it be found in s.2 sub-s.1 of the Act, the material words of which I have already quoted. I must assume that the farmer of that sub-section intended in it to express, in that ‘ordinary language’ which he has in the following sub-s.2 enjoined an injured workman to use in preparing his notice of injury, that which, reading this sub-section alone for his guide, every ordinary intelligent person would understand from the language he has employed. And I cannot raise in my own mind a doubt that any such person could from that language come only to one conclusion, namely, that a workman, in giving the notice of injury and making his claim for compensation upon his employers within six months, has fulfilled every obligation imposed upon him by that sub-section. If it was intended that it should be interpreted as the respondents contend, I can only say that more misleading language could not have been employed."

His Lordship also pointed out that no arbitration proceedings can be taken until a question has arisen under the equivalent of our s.8(5) as to the liability to pay compensation. Thus, although the liability to pay compensation by the employer arises under s.8(1) upon the occurrence of injury, there is no correlative justiciable right on the part of the worker until a question as to liability has arisen under s.8(5). Moreover the worker will not be permitted to refer that question to arbitration unless he has taken the preliminary steps of giving notice of accident and making a claim for compensation upon the employer within the time stipulated by s.14(1). It is the taking of the steps under s.14(1) which enables a question to arise under s.8(5). But apart from those requirements the Workers Compensation Act 1958 does not put any time limit on the commencement of arbitration proceedings. The only judicial authorities seem to indicate that as long as the worker gives his notice of accident and makes his claim on the employer within time, than any delay thereafter and before the commencement of the arbitration proceedings is immaterial. It was so decided by the High Court of Australia in Murray v. Baxter^[2] and the English Court of Appeal in Lingley v. Thomas Firth and Sons, Limited^[3]. In the latter case the court left open the question as to whether any other statute of limitations might apply to bar subsequent proceedings by the worker to bring the claim to arbitration. But in 1930 the House of Lords in a unanimous decision in M’Cafferty v. MacAndrews and Company, Limited^[4] upheld Lingley’s case (supra) and added the following:

"Counsel for the respondents argued that it would permit the workman to make a claim, then do nothing more, and perhaps put off the action for several years, thus keeping his claim alive all that time. The answer is easy. If a workman makes a claim and does nothing, the employer may apply for arbitration so as to put an end to the claim one way or other."

Whether or not these decisions, which involve the application of English statutes, are part of the common law of England for the purpose of Schedule 2.2. of the Constitution, I think with respect that they ought to be followed because they are correct in principle. However none of the decisions expressly decided the precise point at issue: they seem to assume that the Workers Compensation Act itself is to be regarded as the source of any limitation period for the commencement of proceedings in the arbitral tribunal. Mr White relies on the provisions of s.23 of the Statute of Frauds and of Limitations Act 1951 and none of the authorities referred to deals with that submission.

Part III of the 1951 Act is entitled "Statute of Limitations" and the provisions of that Part, I think it is fair to say, are expressed in outmoded and archaic language. The Act itself formally repeals and re-enacts those provisions of the Courts and Laws Adopting Act (amended) 1899 of the former Territory of Papua and those provisions of the Laws Repeal and Adopting Act 1921-1939 of the former Territory of New Guinea which adopted as part of the law of this country the Statute of Frauds and of Limitations of 1867 of Queensland (hence the reference to "this colony" in s.23). The difficulty lies in applying a colonial Statute of Limitations over one hundred years old to a right arising under another statute of a type that could hardly have been conceived of at the time the Statute of Limitations first came into existence. Being as liberal as one might in the application of the language employed, I cannot see any way in which the Statute of Limitations in force in this country can be said to apply to a right under the Workers Compensation Act to refer a matter to arbitration. Both s.17 and s.23 of the 1951 Act refer to limitation of "actions". S.17 covers actions for trespass, actions on the case and several other types of action, none of which can be said to be even remotely like the right to go to arbitration under the Workers Compensation Act 1958. S.23 which was expressly relied upon by Mr White applies to actions for debt and "actions for penalties damages or sums given to the party grieved by any law now or hereinafter in force in this colony". It seems to me that this latter provision relates to actions in respect of which a liquidated sum is presently due and owing, for instance a sum due under statute or a sum awarded by a tribunal. It does not cover a right to take proceedings to an arbitrator under the Workers Compensation Act 1958.

In the United Kingdom the Limitation Act 1939 specifically applies to arbitrations as it applies to actions: s.27(1), and the period runs from the date when the claimant first acquired either a right of action or a right to require that an arbitration take place upon the dispute concerned: West Riding County Council v. Huddersfield Corporation[dl]⁵[5] But that is a specific statutory provision which is lacking in Papua New Guinea.

The alternative submission was put by Mr White that the employer was entitled to raise an equitable defense of laches or acquiescence. This ancient doctrine of equity was part of the rules of common law and equity as they existed in England in 1975 at the time of Independence and it was put that it is part of the underlying law of this country, there being nothing to the contrary in the custom or circumstances of the country to require its rejection.

It should be observed at the outset that it is at least questionable whether the arbitrator from whom the present appeal lies could have been required to consider an equitable defence to a claim for workers compensation but it may be accepted that in this appeal the National Court may exercise its equitable jurisdiction to grant relief if it is proper to do so.

Most of the cases on laches are old ones. The classic exposition appears to be that of the Privy Council in Lindsay Petroleum Company v. Hurd^[6] which is cited by Meagher and others, "Equity Doctrines and Remedies", Sydney 1975, p.655 as authority for the following description of the defence of laches:

"... a defence which requires that a defendant can successfully resist an equitable (although not a legal) claim made against him if he can demonstrate that the plaintiff, by delaying the institution or prosecution of his case, has either:

(a) acquiesced in the defendant’s conduct; or

(b) caused the defendant to alter his position in reasonable reliance on the plaintiff’s acceptance of the status quo, or otherwise permitted a situation to arise which it would be unjust to disturb."

The authors quote the same case as authority for the following (at pp. 657 - 658):

"Equitable relief will be refused on the ground of laches in any circumstances where the plaintiff’s delay would make it unjust to grant the relief which he seeks."

Whether laches can be raised in defence of a claim at law as contrasted with a claim in equity is another matter. In South Australia in In re White, Bakewell v. White^[7] it was decided that a legal right can only be lost by release, abandonment or waiver, and the laches doctrine does not apply, following Harrison v. Kirk^[8]. In Archbold v. Scully^[9] Lord Wensleydale said:

"... the fact, of simply neglecting to enforce a claim for the period during which the law permits him to delay, without losing his right, I conceive cannot be any equitable bar."

The right to bring proceedings to recover compensation under the Workers Compensation Act 1958 is clearly a legal right conferred by statute and not an equitable right. In line with the authorities just referred to, the employer is not entitled to rely on an equitable defence of laches in order to resist a claim for workers compensation. The only possibility is that the employer might raise a defence of waiver or release. There is nothing in the magistrate’s findings in this case that the worker did anything which could be said to amount to a waiver or release of his legal rights under the Act. More fundamentally the Act itself in effect prohibits the worker contracting out of his rights under the Act without the approval of the Clerk of the Court, or in the case of a native worker the consent of the District Court: Third Schedule, cl. 7.

In opening the case for the employer appellant, Mr White spoke of the dire consequences for the insurance industry in Papua New Guinea if the worker in this case were to succeed in his claim after delaying some fourteen years before referring the matter for arbitration, during which time the employer’s insurer had fixed its tariff rates without allowing for the contingency of having to pay the claim. I suspect that there may be some pragmatic answers to this complaint but as a matter of law and between the worker and the employer the making of a claim upon the employer within time is sufficient. It is the employer who should pass the notice of that claim on to the insurer. The insurer can then decide whether it wishes to include that claim in its annual estimates or whether it should step into the shoes of the employer and apply to have the outstanding claim determined by arbitration under Regulation 15. If the employer and insurer between them are unable to do that, then the fault can hardly be attributed to the worker alone.

Order: Appeal dismissed. Cross appeal dismissed. Appellant to pay respondent’s costs.

Solicitor for Appellant (Respondent): Gadens
Counsel: M. White
Solicitor for Respondent (Applicant): Warner Shand Wilson & Associates
Counsel: S. Tedor

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^[1] (1900) A.C. 366
^[2] 18 C.L.R. 622
^[3] (1921) 1 K.B. 655
^[4] (1930) A.C. 599 at 614
^[5] (1957) 1 Q.B. 540
^[6] (1874) L.R. 5 P.C. 221
^[7] (1917) S.A.L.R. 193
^[8] (1904) A.C. 1
^[9] [1861] EngR 510; (1861) 9 H.L.C. 360 at 383[1861] EngR 510; , 11 E.R. 769