Art Coating Pty Ltd v Gerace - [2000] NSWCA 169

CITATION: ART COATING PTY LIMITED v GERACE [2000] NSWCA 169

FILE NUMBER(S): CA 40702/99

HEARING DATE(S): 3 July 2000

JUDGMENT DATE:
13 July 2000

PARTIES :

Art Coating Pty Limited - Appellant
Maurizio Gerace - Respondent

JUDGMENT OF: Priestley JA at 1; Sheller JA at 2; Foster AJA at 34

LOWER COURT JURISDICTION : Supreme Court - Equity Division

LOWER COURT
FILE NUMBER(S) : ED 1516/99

LOWER COURT
JUDICIAL OFFICER : Master Macready

COUNSEL: CRR Hoeben SC/SG Campbell - Appellant
M Cranitch SC/JE Armfield - Respondent

SOLICITORS: Hunt & Hunt - Appellant
Margiotta Solicitors - Respondent

CATCHWORDS: CONTRACTS - Whether abandonment of contract - Effect of legislative amendment on term of contract. WORKERS COMPENSATION - Entitlement to and liability for compensation - Commutation agreement. - NR

LEGISLATION CITED: Workers Compensation Act 1926
Workers Compensation Act 1987
Workers Compensation Legislation Amendment Act 1998

CASES CITED:
Tran v JR Manufacturing Industries Pty Ltd (1998) 17 NSWCCR 225
Gosper v Christopherson (1986) 160 CLR 423

DECISION: 1. Appeal allowed; 2. Set aside order 4 made by Master Macready on 23 August 1999 and in lieu thereof, substitute: Declare that in the event the Compensation Court determines the application for commutation in the amount of $130,000 the defendant is bound by the Heads of Agreement of 4 September 1997 to pay that amount to the plaintiff less any lawful deductions; 3. Add the following order: ‘4A. Liberty to apply.’; 4. Otherwise confirm the Master’s orders; 5. The appellant to pay the respondent’s costs of the appeal.

THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40702/99
ED 1516/99

PRIESTLEY JA

SHELLER JA
FOSTER AJA

ART COATING PTY LIMITED v GERACE

The respondent was awarded weekly compensation against the appellant in the Compensation Court. The respondent wished to have the payments commuted so that he could receive a lump sum and return to Italy. He filed a notice of motion for an order pursuant to s53(1) of the Workers Compensation Act 1987. When this came before the Compensation Court for hearing on 4 September 1997, the parties signed an agreement to settle all entitlements to compensation for an agreed sum. The agreement contained a reference to the need for approval for commutation by the WorkCover Authority which was required by legislation then in force. This need for approval was later removed by the Workers Compensation Legislation Amendment Act 1998, the relevant part of which came into force on 1 August 1998. Subsequently the appellant tried to challenge the agreement and the respondent successfully brought proceedings in the Equity Division of the Supreme Court for an order that the appellant proceed with the commutation application and a declaration that the agreement was binding.
Held (by Sheller JA, Priestley JA and Foster AJA agreeing):
There was no abandonment of the contract as evidenced by the correspondence between the parties and there was no basis upon which the appellant could unilaterally terminate the agreement. If the need for approval disappeared by force of amendment…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Art Coating Pty Ltd v Gerace

Details

AGLC: Art Coating Pty Ltd v Gerace [2000] NSWCA 169
Case: [2000] NSWCA 169
Decision Date: 13 July 2000

CaseChat Overview and Summary

Art Coating Pty Ltd appealed to the New South Wales Court of Appeal against orders made by Master Macready concerning a dispute arising from a Heads of Agreement. The core of the dispute involved the interpretation and enforceability of a term within the Heads of Agreement, particularly in light of a subsequent legislative amendment, and its connection to a commutation agreement for workers' compensation.

The Court of Appeal was required to determine whether the Heads of Agreement had been abandoned by the parties and, if not, what its effect was in relation to a proposed commutation of a workers' compensation claim. Specifically, the court had to consider whether the legislative amendment impacted the contractual obligations of the parties under the Heads of Agreement and whether the defendant was bound to pay a specific sum in the event of a successful commutation application.

The Court of Appeal reasoned that the Heads of Agreement remained binding and had not been abandoned. It held that the legislative amendment did not alter the defendant's obligation under the Heads of Agreement to pay the agreed commutation amount, less lawful deductions, should the Compensation Court approve the commutation. The court found that the Master’s orders did not adequately reflect this binding obligation.

Consequently, the Court of Appeal allowed the appeal, setting aside the Master's order of 23 August 1999 and substituting a declaration that the defendant was bound by the Heads of Agreement to pay the commutation amount of $130,000, subject to lawful deductions. The court also granted liberty to apply and otherwise confirmed the Master's orders, with the appellant ordered to pay the respondent's costs of the appeal.

Orders

Orders of the court

1. Appeal allowed; 2. Set aside order 4 made by Master Macready on 23 August 1999 and in lieu thereof, substitute: Declare that in the event the Compensation Court determines the application for commutation in the amount of $130,000 the defendant is bound by the Heads of Agreement of 4 September 1997 to pay that amount to the plaintiff less any lawful deductions; 3. Add the following order: ‘4A. Liberty to apply.’; 4. Otherwise confirm the Master’s orders; 5. The appellant to pay the respondent’s costs of the appeal.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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CITATION:	ART COATING PTY LIMITED v GERACE [2000] NSWCA 169
FILE NUMBER(S):	CA 40702/99
HEARING DATE(S):	3 July 2000
JUDGMENT DATE:	13 July 2000
PARTIES :	Art Coating Pty Limited - Appellant Maurizio Gerace - Respondent
JUDGMENT OF:	Priestley JA at 1; Sheller JA at 2; Foster AJA at 34

LOWER COURT JURISDICTION :	Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S) :	ED 1516/99
LOWER COURT JUDICIAL OFFICER :	Master Macready

COUNSEL:	CRR Hoeben SC/SG Campbell - Appellant M Cranitch SC/JE Armfield - Respondent
SOLICITORS:	Hunt & Hunt - Appellant Margiotta Solicitors - Respondent
CATCHWORDS:	CONTRACTS - Whether abandonment of contract - Effect of legislative amendment on term of contract. WORKERS COMPENSATION - Entitlement to and liability for compensation - Commutation agreement. - NR
LEGISLATION CITED:	Workers Compensation Act 1926 Workers Compensation Act 1987 Workers Compensation Legislation Amendment Act 1998
CASES CITED:	Tran v JR Manufacturing Industries Pty Ltd (1998) 17 NSWCCR 225 Gosper v Christopherson (1986) 160 CLR 423
DECISION:	1. Appeal allowed; 2. Set aside order 4 made by Master Macready on 23 August 1999 and in lieu thereof, substitute: Declare that in the event the Compensation Court determines the application for commutation in the amount of $130,000 the defendant is bound by the Heads of Agreement of 4 September 1997 to pay that amount to the plaintiff less any lawful deductions; 3. Add the following order: ‘4A. Liberty to apply.’; 4. Otherwise confirm the Master’s orders; 5. The appellant to pay the respondent’s costs of the appeal.