Neeranjan v. Caribbean Ispat Ltd (Trinidad and Tobago) [2008] UKPC 41 (30 July 2008)
Privy Council Appeals No 4 & 64 of 2007
Ashram Neeranjan Appellant
v.
Caribbean Ispat Limited Respondent
and
Phillip Hazel Appellant
v.
Reed Monza Trinidad Limited Respondent
FROM
THE COURT OF APPEAL OF
TRINIDAD AND TOBAGO
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JUDGMENT OF THE LORDS OF THE JUDICIAL
COMMITTEE OF THE PRIVY COUNCIL
Delivered the 30th July 2008
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Present at the hearing:-
Lord Bingham of Cornhill
Lord Rodger of Earlsferry
Baroness Hale of Richmond
Lord Carswell
Sir Robin Auld
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[Delivered by Lord Rodger of Earlsferry]
- The Board has before it two appeals raising the same point of construction of section 4(3) of the Workmen's Compensation Act ("the Act"):
"Where compensation payable under this Act for injury by accident arising out of and in the course of employment is received as such by a workman who is an adult, no action shall be brought against the employer for compensation independently of this Act by such workman in respect of such accident after the expiration of one year from the date on which the cause of action accrued."
In Allsop v Petroleum Co of Trinidad and Tobago Ltd (2005) 66 WIR 374 the Board held that the one-year time-bar in section 4(3) applies only where full compensation, in terms of section 5(1) and (2) of the Act, has been paid. The question in the present appeals is whether the time-bar applies only where that full compensation has been paid within the year from the date on which the cause of action accrued or whether it applies even if the full compensation is not paid until after the expiry of that year so that, in effect, the time-bar operates retroactively. The question is of importance since, although section 4(3) has been amended and no longer gives rise to the same problem, the unamended version continues to apply in a significant number of cases, including the two under appeal.
- The Court of Appeal (Hamel-Smith, John and Weekes JJA) recognised that the present question had not arisen for decision in Allsop. Nevertheless, giving the opinion of the court, Hamel-Smith JA considered that support for the view that the time-bar applies even where full compensation is not paid until after the expiry of the year was to be found in the judgment of the Board. In that case the accident occurred on 20 October 1995 and so the one-year period would have elapsed on 20 October 1996. The plaintiff raised tort proceedings on 3 April 1998. The Board said, (2005) 66 WIR 374, 380, para 16:
"as of that date, Petroleum had not discharged its obligation to pay the appellant the appropriate lump sum under the statute. In those circumstances he had not received the 'compensation payable to him under this Act' and so the one-year time bar in section 4(3) did not apply to him" (emphasis added).
The Court of Appeal considered that the reference to the non-payment of full compensation as of the date when the proceedings were started indicated that payment of full compensation at that date, well after the expiry of one year, could have triggered the time-bar.
- The Board is satisfied that the passage in question is not to be interpreted in that way. As the Board explained, at p 375, para 2, the plaintiff's employers, Petroleum, had made weekly payments of compensation to him under the Act between 19 December 1995 and 23 March 1998. So payments of compensation under the Act had indeed been made within the first year. The contention for Petroleum was that the payment of any compensation, even a single weekly payment, within the year would trigger the time-bar. As the Board explained, at p 377, para 8, "On that interpretation, the one-year time bar applies if, in the year after the accident, the workman has received any sum, however small, by way of compensation" (emphasis added). The decision of the Board was that payments of weekly compensation were irrelevant: the only event that triggered the time-bar was the payment of full compensation for the workman's permanent partial disablement. In support of that position the Board observed, at p 378, para 10, that:
"it is easy to see that Parliament might have favoured a system where, if the employer had already paid the workman the full sum to which he was entitled under the Act, then, on the expiry of a year from the date of the accident, the employer should be free from any further liability" (emphasis added).
The indications are, accordingly, that the Board was proceeding on the basis that the time-bar was triggered only where payment of full compensation was paid within one year. In para 16 the Board was simply making the point that, as a matter of fact, not only had full compensation not been paid within a year, it had not even been paid by 3 April 1998, some eighteen months later, when the proceedings were started.
- Nevertheless, the point in issue was not explored in argument in Allsop and the Board must consider it in the light of counsel's submissions in these appeals. The relevant facts of the two cases, which were heard together by the Court of Appeal, can be summarised briefly.
- The appellant in the first case, Mr Ashram Neeranjan, worked for the respondent, Caribbean Ispat Limited. He alleges that, on 6 September 1997, he suffered a back injury at work. The injury was treated and he recovered. He further alleges that, on 5 November 1998, he again suffered a back injury in the form of a herniated lumbar disc, which, unfortunately, has not responded well to treatment.
- The parties entered into negotiations and eventually on 8 March 2001 Mr Neeranjan received the agreed sum of $64,297.61 by way of full compensation. On 25 March 2002 he raised the present action at common law, claiming damages on the ground that his injury on 5 November 1998 was due to the negligence of Caribbean Ispat. The company took out a summons seeking an order that the statement of claim be struck out on the ground that the action was time-barred by virtue of section 4(3) of the Act. Master Sobion ordered that the statement of claim should be struck out and the action dismissed. Mr Neeranjan appealed, but the Court of Appeal dismissed his appeal.
- The other appellant, Mr Phillip Hazel, was employed as a machine operator by the respondent, Reed Monza Trinidad Limited. On 21 November 1991, in the course of his employment, he was standing on a metal structure on which large plastic water tanks were moulded. An explosion or burst of flame occurred, as a result of which Mr Hazel fell from the structure and sustained first and second degree burns to his face, neck and arms. On 22 October 1992 he made an application under the Act and on 23 March 1994 he received $17,103.76 by way of full compensation. The claim was discontinued before the Commissioner on 11 May 1994. Later that year, on 17 August 1994, Mr Hazel raised his present action, claiming damages on the ground that he had suffered injury as a result of the company's negligence. The company pleaded that the action was time-barred by virtue of section 4(3) of the Act. In a judgment dated 9 December 2002 Bereaux J upheld that defence and dismissed the action. The Court of Appeal dismissed Mr Hazel's appeal.
- In Allsop v Petroleum Co of Trinidad and Tobago Ltd (2005) 66 WIR 374, 377-378, paras 9 and 10, the Board set out the background to section 4(3) of the Act. Under its predecessor, section 4(3) of the Workmen's Compensation Ordinance 1926, the workman had to choose between compensation under the Ordinance and a claim in tort. As experience of the equivalent provision in United Kingdom law showed, that provision not only gave rise to much litigation, but was potentially productive of injustice. So, in 1960, the legislature of Trinidad and Tobago passed the Act, sweeping away the old section 4(3) and replacing it with the section 4(3) which is the subject of these appeals.
- The change was fundamental. Under the previous law a workman had to choose between a claim under the Act and a claim at common law or under some other statutory provision. The new provision took away the need for the workman to choose. He was now to be free to claim both workmen's compensation under the Act and damages for negligence or breach of statutory duty. Their Lordships therefore reject the basic premise of the argument of Mr Pymont QC for Caribbean Ispat Limited, that section 4(3) is all about the workman choosing whether to receive full compensation or raise proceedings in tort. On the contrary, the default position is that, whether or not he has claimed compensation under the Act, the workman is free to raise proceedings for damages at any time up to four years from the date of the accident, in accordance with section 3(1) of the Limitation of Certain Actions Act 1997. He does not need to choose.
- The freedom thus given to the workman is subject to the exception in section 4(3). Since it is an exception, in case of doubt, the provision should be construed narrowly, in favour of the workman: Allsop v Petroleum Co of Trinidad and Tobago Ltd (2005) 66 WIR 374, 378, para 11.
- Mr Pymont submitted, however, that the words of section 4(3) are clear. His argument was to the following effect. The first two clauses ("Where compensation ... an adult") set out the situation which gives rise to the one-year time-bar. In terms of these clauses, the only premise is that full compensation under the Act should have been received by a workman who is an adult. The clauses contain no stipulation that the compensation should have been received within any specific period - in particular, they do not provide that it should have been received within the year from the date when the cause of action accrued. It is accordingly enough that full compensation is received by the workman – whenever it is received. Once full compensation is received, no action can be brought against the employer for compensation independently of the Act after the expiration of a year from the date of the accident. It is left to the workman to choose whether to receive any full compensation and so to trigger the operation of the time-bar in the employer's favour.
- On a very literal approach, and if its effects are ignored, that construction of the words is possible. But, in the Board's view, it must be rejected since it would produce results in practice that were manifestly unsatisfactory.
- Admittedly, on the respondents' construction, section 4(3) could operate as a perfectly normal time-bar in some circumstances. Where the workman had, in fact, received full compensation within a year, the time-bar would take effect on the expiry of one year from the date when the cause of action accrued. Both sides would know where they stood. So far so good. Where full compensation had not been paid within the year, however, the time-bar would hover – uniquely, in the Board's experience – over the parties until the ordinary four-year limitation eventually came into operation. The time-bar would not apply so long as the workman did not receive full compensation, but the moment he did, it would come into effect and retroactively cut off his right to raise proceedings.
- Take the case of Mr Neeranjan. His cause of action is alleged to have accrued on 5 November 1998. The year would elapse on 5 November 1999. He received full compensation on 8 March 2001. So, on the respondents' construction of section 4(3), even though more than a year had elapsed since the cause of action had accrued, Mr Neeranjan could have raised tort proceedings at any time between 5 November 1999 and 8 March 2001. But the moment he accepted full compensation on 8 March 2001, the retroactive one-year time-bar in section 4(3) came into operation and he was prevented from raising the present action on 25 March 2002. Indeed, although Mr Pymont did not need to press the point in the circumstances of these appeals, the logic of the respondents' position would seem to be that, by receiving full compensation on 8 March 2001, Mr Neeranjan triggered a retroactive time-bar which would affect any proceedings raised after 5 November 1999. Any other approach would involve rewriting section 4(3) completely, so as to make it say that the time-bar comes into operation to prevent proceedings being raised after the date when full compensation is received. However that may be, the respondents' approach would introduce a novel element of uncertainty into a field where certainty is to be prized.
- Mr Pymont suggested that support for the idea that section 4(3) was concerned to give the workman control, by allowing him to choose whether or not to receive full compensation, was to be found in the reference to the full compensation being "received as such by a workman who is an adult". The workman had to be an adult in order to be bound by the consequences of choosing to receive the compensation: a minor could not be expected to exercise that choice with a full awareness of the implications. The Board is not persuaded by the argument. Time-bar legislation often contains special provisions relating to young claimants. That is indeed the position in the case of infants under sections 2(3)(a) and 11(1) of the Limitation of Certain Actions Act 1997. So the qualification in section 4(3) of the Workmen's Compensation Act is consistent with the provision being intended to make due allowance for a young workman not being in a position to take steps to raise proceedings within a year, rather than for a young workman not being in a position to choose to receive full compensation and so trigger the one-year time-bar.
- The respondents' construction would also have the effect of discouraging a workman from taking any necessary steps to "receive" the full compensation provided by his employer. Mr Pymont suggested that the workman might well deliberately postpone receiving the compensation in order to prevent the time-bar from coming into operation and so preserve his right to raise tort proceedings. Their Lordships are far from sure that such a suggestion is compatible with the operation of provisions such as sections 8, 39 and 40 of the Act, but it is unnecessary to explore that matter. Quite simply, the idea of a time-bar which a claimant could defeat by deliberately taking, or refusing to take, a step, other than raising proceedings, is so extraordinary as to be untenable unless no other interpretation of the provision is open.
- Moreover, the policy of the legislature must surely be that the employer should pay the full compensation as soon as practicable and that the workman should receive it as soon as practicable. Where that happens within a year of the cause of action arising and the workman has not raised proceedings, the employer should then be free from the possibility of any proceedings in tort. This scheme would encourage a workman, who was minded to take proceedings, to do so promptly. By contrast, it is hard to imagine why the legislature, while enacting a one-year time-bar, would create a situation where the workman could choose to postpone taking proceedings for up to four years, even though the employer had taken all the necessary steps to pay him full compensation within a year.
- For all these reasons the Board is satisfied that the time-bar in section 4(3) of the Act applies only where the workman has received full compensation under the Act within one year from the date on which the cause of action arose.
- The Board recognises that, on this interpretation, there will be many cases in which the employer will, in practice, be unable to take advantage of the time-bar in section 4(3). As counsel for the respondents pointed out, under section 11(1), the workman has up to six months from the accident in which to claim compensation. Moreover, the ultimate medical prognosis will quite often not become clear within the first year after the accident and so it will be impossible to determine the appropriate sum by way of full compensation within that period. In such cases – of which Allsop is an example - the abbreviated time-bar is not available, simply because the circumstances which justify its operation have not occurred and so it is proper to allow the injured workman the usual period of four years within which to raise proceedings at common law or under statute, if so advised.
- For these reasons the appeals must be allowed with costs and the cases remitted to the High Court.
