Administrative law updater: Statutory construction – statutory meaning vs ordinary meaning

By John Carroll, Neil Cuthbert and Lauren Hargrave
23 Jul 2020
To understand the significance of a term used in legislation, you may need to consider whether the word has a specific statutory meaning as opposed to its ordinary or natural meaning.

What is the problem decision-makers face?

In order correctly to interpret legislation the words of the text have to be understood in context. It is often said that the words of a provision are to be given their ordinary or "natural" meaning. But what happens when words are instead given a specific meaning by the statute, and how can you tell when this has occurred?

How did Associated Steamships and Dollisson approach this issue?

Two recent cases considered the meaning of the word "compensation" in different statutes. Seafarers Safety, Rehabilitation and Compensation Authority v Associated Steamships Pty Ltd [2019] FCAFC 232 considered the Commonwealth safety, rehabilitation and compensation scheme for seafarers. Australian Rail Track Corporation Limited v Dollisson [2020] NSWCA 58 considered the Victorian workers' compensation scheme. Both cases independently determined that the word "compensation" should be given a specific statutory meaning in the context of the relevant piece of legislation. The ordinary or natural meaning of that word was displaced in each case.

The facts and decision in Associated Steamships and Dollisson

In Associated Steamships the Full Federal Court considered whether "commercial settlement" payments made by the respondent to a deceased former employee's estate (and his wife) constituted compensation for the purposes of section 128 of the Seafarers Rehabilitation and Compensation Act 1992 (Cth) (Seafarers Act). The commercial settlement payments were two payments which had been made by the employer in respect of the separate claims under the Seafarers Act: one of $20,000 to his estate and one of $300,000 to the deceased wife of the former employee. The question of statutory construction arose because under section 128, the employer could seek contribution from other ship operators, but only if the employer had "paid compensation".

The Full Court determined that the meaning of the word "compensation" in section 128(b) is a reference to compensation payable "under the Act". The Full Court reasoned:

  • if the employer's argument was correct (allowing claims for contribution where compensation of any kind had been paid), this would allow an employer to make a claim for contribution against another employer even where the second employer would have no liability under the Seafarers Act if a claim was brought directly against it by the employee;
  • common sense suggests that an employer against whom a claim for contribution is made under section 128 ought to be able to defend itself by denying that a claim could have been made against it under the Seafarers Act; and
  • consequently, "compensation" in section 128 must mean "compensation under the Act" because only liability for compensation under the Act should mean an employer shares liability with another employer.

Accordingly, the Full Court allowed the appeal and remitted the matter to the primary judge.  

In Dollisson the NSW Court of Appeal considered whether compensation obtained by Mr Dollisson (under the NSW workers' compensation scheme) should be construed as compensation within the meaning of Victorian workers' compensation scheme. If it amounted to compensation under the Victorian workers' compensation scheme, then Mr Dollisson would have been barred from seeking additional damages in NSW by section 134AB(1) of the Accident Compensation Act 1985 (Vic) (ACA). A majority of the NSW Court of Appeal determined that limitations imposed by the ACA did not apply to Mr Dollisson, interpreting "compensation" in section 134AB(1) of the ACA to mean compensation under the ACA and not the ordinary meaning of compensation (per Acting Chief Justice Bell, Justice Macfarlan agreeing, Justice Emmett dissenting).

Acting Chief Justice Bell reasoned that it would be unusual if the Victorian legislature intended to proscribe the recovery of common law damages of any kind by an injured worker on the basis that he or she was entitled to compensation of any kind under the law of another state or territory. More likely was that that the Victorian legislature introduced the amendments in circumstances where it "knew and could control what compensation was available to an injured worker under the comprehensive no fault statutory compensation scheme that was established in Victoria". Furthermore, it would make no sense for the Victorian ACA to direct the application of New South Wales law to govern the question of liability but then require an applicant to first step through "statutory gateways" which are part of Victorian law.

The majority concluded that Mr Dollisson had not received "compensation" within the meaning of the ACA. Mr Dollisson was entitled to seek damages in NSW.

After Associated Steamships and Dollisson here's what you need to do remember

Both Associated Steamships and Dollisson are reminders that, on occasion, words in legislation should be construed as having a specific, statutory meaning distinct from their ordinary meaning. Consequently, it is important for decision makers not to assume the meaning of the words they are interpreting but instead have regard to the relevant statutory scheme. Associated Steamships and Dollisson illustrate this distinction with respect to the word "compensation", and whether it should mean compensation in a general sense or compensation under the relevant statute itself. In both cases, the ordinary or natural meaning of that term was displaced in favour of a narrower, statutory meaning.


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