Barn v Secretary to the Department of Justice

[2015] NSWWCCPD 6

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:	Barn v Secretary, Department of Justice [2015] NSWWCCPD 6
APPELLANT:	Vicki Barn
RESPONDENT:	Secretary, Department of Justice
INSURER:	QBE Insurance (Australia) Ltd
FILE NUMBER:	A1-3595/13
ARBITRATOR:	Mr J Harris
DATE OF ARBITRATOR’S DECISION:	2 October 2014
DATE OF APPEAL DECISION:	29 January 2015
SUBJECT MATTER OF DECISION:	Psychological injury; ss 149 and 151A of the Workers Compensation Act 1987; settlement of common law claim for damages against employer for breach of contract; whether worker recovered damages in respect of her psychological injury; objective approach to interpretation of contracts and consent orders; relevance of surrounding circumstances to interpretation of contracts and consent orders; Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52; 219 CLR 165 applied
PRESIDENTIAL MEMBER:	Acting President Bill Roche
HEARING:	On the papers
REPRESENTATION:	Appellant:	Herbert Weller
Respondent:	Bartier Perry
ORDERS MADE ON APPEAL:	1.       The Arbitrator’s determination of 2 October 2014 is confirmed. 2.       No order as to costs.

INTRODUCTION

1. This appeal concerns whether the Arbitrator erred in finding that the worker had no entitlement to lump sum compensation under the Workers Compensation Act 1987 (the 1987 Act) in respect of an agreed psychological injury because she had recovered damages in respect of the same injury from her employer in previous common law proceedings.

2. The respondent employer has been wrongly sued as Corrective Services NSW. For the reasons explained in Kelly v Secretary, Department of Family and CommunityServices [2014] NSWCA 102 at [11] the correct legal identity of the respondent is Secretary, Department of Justice and the relevant pleadings have been amended accordingly.

3. This amendment makes no difference to the outcome of the appeal because it was agreed at the arbitration that the damages recovered by the worker in her common law proceedings, which were against the State of New South Wales, were recovered against her employer, however it is described (T73.18—9 September 2014).

BACKGROUND

1. The appellant worker, Vicki Barn, started work with the respondent employer as a receptionist in 1985. In 1990, she was appointed to be the governor’s assistant at Parklea Prison.

2. In 1992, Ms Barn injured her back, left shoulder and left knee when she fell down stairs in the course of her employment with the respondent. On 14 July 2003, Ms Barn injured her left wrist and, again, her left knee when she slipped on a wet floor at work. She gave evidence that she recovered from these injuries and, after brief periods off work for each of them, she continued her normal duties.

3. On or about 22 September 2006, Ms Barn was placed on leave until she could be medically assessed by Health Quest. On 11 December 2006, a doctor from Health Quest assessed Ms Barn to be fit for her full range of duties but with a restriction on the use of stairs.

4. On 14 December 2006, the acting governor wrote to the respondent’s injury manager making certain assertions about Ms Barn’s ability to perform her role. After the injury manager wrote to Health Quest on 15 December 2006, two doctors from Health Quest issued a fitness-to-work summary, purportedly (back) dated to 11 December 2006, determining that Ms Barn was unfit for the inherent requirements of her position.

5. On 17 January 2007, the respondent advised Ms Barn that Health Quest had determined that she was unable to perform the inherent duties of her position. On 6 February 2007 Ms Barn was medically retired. Upon receiving this news, she became ill and saw her general practitioner.

6. On 28 March 2007, Dr Martin Webster, consultant physician in psychiatry, wrote to Ms Barn’s general practitioner thanking him for referring her for treatment for a Major Depressive Disorder, which he agreed was related to her former workplace.

7. On 5 July 2010, Ms Barn filed a Statement of Claim in the District Court of New South Wales claiming damages against the respondent, sued as the State of New South Wales under s 5 of the Crown Proceedings Act 1988, for breach of contract in summarily terminating her employment on or about 22 September 2006 without reasonable and proper cause. Ms Barn alleged that she suffered injury, losses and damages as particularised in the Statement of Particulars filed under Rule 15.12 of the Uniform Civil Procedure Rules.

8. The Statement of Particulars, also filed on 5 July 2010, alleged, under “particulars of injuries received”:

   “Exacerbation of psychological/psychiatric injury diagnosed as full panic disorder with agoraphobia and major depressive episode.”

9. The disabilities alleged, which all related to Ms Barn’s psychological condition, included severe anxiety, depression, depressed mood, marked social withdrawal, anxiety and panic response. The particulars claimed out-of-pocket expenses, including future medical care, past loss of income, future loss of income and loss of earning capacity, and domestic assistance and attendant care.

10. The claim for loss of earning capacity and future economic loss in the Statement of Particulars included an assertion that Ms Barn’s future earning capacity “has been impaired” and that she remained unfit and unable to find appropriate work. Ms Barn also alleged that, “as a result of her injuries and impairments”, she required assistance in carrying out her usual household chores and she claimed for the need for care and assistance. Last, she claimed damages for breach of contract.

11. On 6 June 2011, Ms Barn filed an Amended Statement of Claim in which she alleged, in addition to the claim against the State of New South Wales, that Health Quest breached its duty to exercise proper professional care by not assessing her before it issued the second fitness-to-work summary. As Health Quest had ceased to exist from 1 July 2009, the State of New South Wales was sued as its legal successor and the action against Health Quest was subsumed in the action against the State of New South Wales. Significantly, however, the damages claimed in the action against Health Quest were the same as those claimed against the State of New South Wales.

12. In a document headed “Plaintiff’s Schedule of Heads of Damages” (the schedule of damages), prepared for the purposes of a mediation on 28 March 2012, particulars were provided of Ms Barn’s past lost income. In addition, it was asserted that Ms Barn had “been unable to return to work” and, under “lost earning capacity”, that her “future earning capacity has been impaired”.

13. The parties signed a consent order/judgment (the consent order) on 12 July 2012, settlement having been reached at a conciliation conference on that day. That document provides:

    “By consent and without admission of liability:

    1.Judgment for the plaintiff in the sum of $350,000 inclusive of costs of these proceedings.

    2.The defendant shall be at liberty to deduct and pay from the said sum any monies payable or repayable by the plaintiff to any person or body whether in respect of workers compensation or social services or Medicare benefits or nursing home benefits or hurt on duty gratuities or otherwise concerning which any demand or notice may be served on or given to the defendant and also any monies paid or payable pursuant to the Health and Other Services (Compensation) Act 1995 or the Health and Other Services (Compensation) Care Charges Act 1995.

    3.No notice or demand has been given to the defendant with respect to any monies paid, payable or repayable by the plaintiff with respect to workers compensation and the defendant understands there are no such monies payable or repayable by the plaintiff.

    4. The plaintiff undertakes and agrees to pay out of the said sum any moneys payable or repayable by the plaintiff to any person or body whether in respect of Workers’ Compensation or Social Security or pursuant to the Health and Other Services (Compensation) Act 1995 or otherwise which may not have been deducted by the defendant pursuant to paragraph 2 hereof and also to pay to the parties entitled all outstanding medical, hospital, ambulance and other out of pocket expenses.

    5. No interest shall be payable on the judgment herein if said be   paid within 14 days after:

    (a)     receipt of filed Consent Judgment/Orders; or

    (b)within 28 days after the receipt of an authority to receive satisfactory to the defendant; or

    (c)     whichever is the later.

    6.The plaintiff acknowledges that in accordance with Section 22 of the Health and Other Services (Compensation) Act 1995, the plaintiff has been informed of a possible liability to pay amounts under the said Act or under the Health and Other Services (Compensation) Care Charges Act 1995.

    7.These terms are not to be disclosed otherwise than as may be required by law to do so.” (strike-outs as per original)

14. The consent order was signed by a solicitor employed in the office of I V Knight, for the defendant, and by Mr Herbert Weller, Ms Barn’s solicitor. It is accepted that the State of New South Wales has satisfied the judgment in the consent order.

15. On 26 July 2012, Mr Weller made a claim against the respondent on behalf of Ms Barn for lump sum compensation under ss 66 and 67 of the 1987 Act. The claim for compensation under s 66 was for $37,500 in respect of a 24 per cent whole person impairment.

16. This claim was based on an assessment by Dr Klug, psychiatrist qualified for Ms Barn, in his reports of 27 October 2009 and 18 July 2012 in which he diagnosed Ms Barn to be suffering from “a major depressive episode” and from “a full panic disorder with agoraphobia” (emphasis included in original). Dr Klug said, and it has not been disputed, that there was a “clear temporal and clinical relationship between [Ms Barn’s] enforced and summary medical retirement and her psychiatric conditions”.

17. On 15 February 2013, the respondent’s insurer, QBE Insurance (Australia) Ltd (QBE), issued a s 74 notice in which it denied the claim on grounds that are no longer relevant.

18. On 28 February 2013, Ms Barn filed an Application to Resolve a Dispute (the Application) in the Commission seeking lump sum compensation for whole person impairment as per Mr Weller’s letter of 26 July 2012. The date of injury was pleaded as “September 2006 – February 2007” and the following appears under “Injury description”:

    “chronic major depressive disorder and panic disorder with agoraphobia.”

19. Under “Describe how the injury occurred” the reader is directed to Ms Barn’s statutory declaration attached to the Application. The Commission has previously criticised this form of “pleading” as unsatisfactory (Shore v Tumbarumba Shire Council [2013] NSWWCCPD 1 at [34]) and I repeat that criticism. The Application should include a short, succinct, statement of the event/s said to have caused the injury. Merely referring to an attached document is unacceptable.

20. The Reply filed by the respondent disputed liability on the ground that Ms Barn’s psychological injury resulted from the injury to her knees and was therefore a secondary psychological injury for which no lump sum compensation for permanent impairment is payable (s 65A(1) and (2) of the 1987 Act). In the alternative, it was contended that no compensation was payable because Ms Barn’s psychological injury was wholly or predominantly caused by reasonable action by the respondent with respect to the dismissal of Ms Barn (s 11A(1) of the 1987 Act).

21. On 15 August 2014, QBE issued a second s 74 notice in which it disputed liability on the additional ground that Ms Barn had recovered damages in the sum of $350,000 in respect of the same injury for which she now claimed workers’ compensation and that she had no entitlement to further compensation under the 1987 Act in respect of the injury concerned (s 151A(1)(a) of the 1987 Act).

22. Relevantly, s 151A(1) provides:

    “151A Effect of recovery of damages on compensation

    (1) If a person recovers damages in respect of an injury from the employer liable to pay compensation under this Act then (except to the extent that subsection (2), (3) or (4) covers the case):

    (a) the person ceases to be entitled to any further compensation under this Act in respect of the injury concerned (including compensation claimed but not yet paid), and

    (b) the amount of any weekly payments of compensation already paid in respect of the injury concerned is to be deducted from the damages (awarded or otherwise paid as a lump sum) and is to be paid to the person who paid the compensation, and

    (c) the person ceases to be entitled to participate in any injury management program provided for under this Act or the 1998 Act.”

23. The terms “damages” is defined in s 149(1) of the 1987 Act to include:

    “(a)   any form of monetary compensation, and

    (b)without limiting paragraph (a), any amount paid under a compromise or settlement of a claim for damages (whether or not legal proceedings have been instituted), …”

24. After a number of adjournments, the proceedings in the Commission proceeded to arbitration on 9 September 2014. The issues argued before the Arbitrator were whether Ms Barn had suffered a primary or secondary psychological injury under s 65A of the 1987 Act and, if she suffered a primary psychological injury, whether the respondent had established that she had recovered damages within the meaning of s 151A(1). The respondent abandoned its argument under s 11A.

25. At the conclusion of oral argument at the arbitration, the Arbitrator listed the matter for teleconference on 23 September 2014 to clarify certain outstanding issues concerning the payment of the damages claim.

26. On 10 September 2014, in response to a direction by the Arbitrator made at the arbitration on 9 September 2014, the solicitor for the respondent advised the Commission by email:

    “that Corrective Services NSW did pay damages to [Ms Barn]. For the purposes of billing payment of the damages out of the Treasury Managed Fund, 95% was apportioned to Corrective Services as the employer and 5% to Ministry of Health (as successor to HealthQuest). Of course this did not reflect in the consent orders/judgment since there was never any determination of liability (damages [were] paid on [a] without admission of liability basis).”

27. The email of 10 September 2014 also attached a document from Medicare Australia headed “Notice of judgment or settlement” (notice of judgment).

28. At the teleconference on 23 September 2014, when both parties were legally represented and Ms Barn was present, the Arbitrator noted the contents of the email and that Mr Weller had no objection to the admission into evidence of the notice of judgment. After a brief discussion about matters not in dispute on appeal, the Arbitrator asked if there was anything else Ms Barn wished to raise, to which she replied “no”. The last entry on the transcript of the teleconference records “Decision Reserved”.

29. On 25 September 2014, Mr Weller filed an Application to Admit Late Documents to which he attached a statement from Ms Barn dated 25 September 2014 dealing with the events at the conciliation conference in the common law action.

30. On 2 October 2014, the Arbitrator delivered a written decision in which he found that:

    (a)     the medical evidence established that Ms Barn’s psychological condition arose from the respondent’s actions in improperly terminating her employment ([64]) and, accordingly, Ms Barn suffered a primary psychological injury within the meaning of s 65A and not a secondary psychological injury ([65]);

    (b)     the pleaded injuries and disabilities in the common law proceedings coincided with the allegation of injury in the Application and were consistent with Dr Klug’s diagnosis of Ms Barn’s condition ([72]);

    (c)     the events causing Ms Barn’s psychological injury in the common law proceedings and the claim for lump sum compensation were identical ([73]), and

    (d) the damages of $350,000 were “in respect of” the psychological injury pleaded in the Amended Statement of Claim and the Statement of Particulars and the respondent had established its defence under s 151A of the 1987 Act ([79]).

31. Ms Barn has appealed the Arbitrator’s determination that she recovered damages that have disentitled her to further compensation under the 1987 Act. The respondent has not challenged the finding that Ms Barn suffered a primary psychological injury and not a secondary psychological injury.

FRESH EVIDENCE

1. Under the heading “New Evidence”, in the Application – Appeal Against Decision of Arbitrator, Mr Weller submitted that the appeal could be determined on the papers but, depending on the opposition, it may “be necessary to adduce evidence from the solicitor for the State of New South Wales, who acted on behalf of the Defendant in the Common Law proceedings and the Solicitor who acted for [Ms Barn]”.

2. Pursuant to a direction the Commission issued on 31 October 2014, which set a timetable, modified to allow extra time because of the Christmas break, for the filing of documents in the appeal, the respondent filed its Notice of Opposition on 2 December 2014. The timetable gave Ms Barn until 23 January 2015 to file any submissions in reply.

3. In addition to the direction of 31 October 2014, the Commission issued a direction on 19 January 2015 seeking submissions, on or before 23 January 2015, on the correct legal identity of the respondent and the relevance of that identity, if any, to the appeal.

4. The respondent’s solicitor filed submissions on 23 January 2015 that the correct legal identity of the respondent may be “Secretary, Department of Justice”, but he had been unable to obtain instructions to make that concession. He added that, however described, Ms Barn’s employer and the entity that paid the common law damages to her are one and the same and that that was an agreed fact upon which the arbitration proceeded.

5. Mr Weller filed no submissions in response to the direction of 19 January 2015 and no submissions in reply to the Notice of Opposition. I have therefore concluded that he does not seek to file any additional or fresh evidence on appeal or make any further submissions.

ON THE PAPERS

1. Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) provides:

   “(6)  If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”

2. Having regard to Practice Directions Nos 1 and 6, the documents that are before me, and the submissions by the parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’ without holding any conference or formal hearing and that this is the appropriate course in the circumstances.

ISSUES IN DISPUTE AND SUBMISSIONS IN SUPPORT

1. The issues in dispute and the submissions in support of the appeal have been presented as one and the same. That was most unsatisfactory and has not complied with Practice Direction No 6. Following the numbered paragraphs in the appeal document filed by Mr Weller, commencing at (3), the issues in dispute on appeal are whether the Arbitrator erred in:

   (3)     not finding that the damages “received” by Ms Barn in the common law proceedings were paid in respect of a breach contract and not damages “in respect of the injury” or any injury;

   (4)     failing to give weight or sufficient weight to the consent orders signed by Ms Barn and the defendant in the common law proceedings, which were intended to corroborate the agreement reached between Ms Barn and the defendants in resolving the common law proceedings;

   (5)     failing to take account of or give weight to the agreement reached between Ms Barn and the defendants in resolving the common law proceedings, such agreement being that the damages would be paid to Ms Barn in respect of the breach of contract and not in respect of the injury or injuries also pleaded in the Statement of Claim;

   (6)     failing to take account of the agreement reached between Ms Barn and the defendants in resolving the common law proceedings, such agreement being that the damages would be paid to Ms Barn in respect of the breach of contract and not in respect of the injury or injuries also pleaded in the Statement of Claim and that such payment would not in any way affect her rights to workers’ compensation in respect of the injury;

   (7)     failing to give weight or sufficient weight to the evidence of Mr Trevor Boyd, barrister for Ms Barn in the common law proceedings, who was present during the negotiations in resolving those proceedings;

   (8)     misconstruing the evidence from Mr Boyd, which was evidence that corroborated the agreement reached between Ms Barn and the defendants in the common law proceedings;

   (9)     failing to take any account of the late statement from Ms Barn (dated 25 September 2014) in which she stated that the terms of the agreement between herself and the defendants in the common law proceedings and that the damages were paid to her and received, not in respect of any injury, but for breach of contract;

   (10)     placing reliance on the pleadings filed in the common law proceedings, in circumstances where those pleadings were not part of the agreement reached by the parties that the compensation or damages would be paid not in respect of any injury but purely breach of contract;

   (11)     placing weight on the notice of judgment;

   (12)     if the Arbitrator was to place any weight on the notice of judgment, he should have inquired of Ms Barn or her solicitor the circumstances in which that document was completed (it being submitted that the document was not completed by Ms Barn and was completed in error), and

   (13)     failing to apply the principles in Barnett v Country Rugby League of NSW Inc [2010] NSWWCCPD 73 (Barnett), which applied Adams v Fletcher International Exports Pty Ltd [2008] NSWCA 238 (Adams) where it was stated that the test is what is the “character of the payment”.

Grounds 3–6 and 10

1. As submitted by counsel for the respondent, Mr Andrew Parker, the complaints in the above grounds are, essentially, that the Arbitrator should have found, as was urged during the arbitration, that the resolution of the common law proceedings involved an agreement to resolve a claim in contract, as distinct from the recovery of damages “in respect of” an injury. For the reasons that follow, Mr Weller’s submissions cannot be accepted.

2. I note, as a preliminary point, that it is generally accepted that consent orders are a contract between the parties, as well as an order of the Court, (Chavez v Moreton Bay Regional Council [2009] QCA 348 at [18]), and that the law of contract applies to consent orders (McElwaine v The State of South Australia (Department of Education and Children’s Services) [2009] SAWCT 35 at [30]).

3. Mr Weller’s submissions have assumed that the meaning of an agreement, such as a consent order, is determined by the parties’ subjective beliefs. That is incorrect.

4. As explained by Mason J in Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24 at [24]; 149 CLR 337 at 352 (Codelfa):

   “Consequently when the issue is which of two or more possible meanings is to be given to a contractual provision we look, not to the actual intentions, aspirations or expectations of the parties before or at the time of the contract, except in so far as they are expressed in the contract, but to the objective framework of facts within which the contract came into existence, and to the parties’ presumed intention in this setting. We do not take into account the actual intentions of the parties and for the very good reason that an investigation of those matters would not only be time consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract.”

5. The High Court has further explained, on more than one occasion, that it is “the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations” (Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52; 219 CLR 165 at [40] (Alphapharm)). This “objective approach” was recently reaffirmed by French CJ, Hayne, Crennan and Kiefel JJ in Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; 306 ALR 25; 88 ALJR 447 at [35].

6. As was further explained in Alphapharm (also at [40]) “[t]he meaning of the terms ... normally, requires consideration not only of the text but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction” (quoted and applied by Leeming JA (Ward JA and Emmett JA agreeing) in Mainteck Services Pty Ltd v Stein Heurtey SA [2014] NSWCA 184 at [84] (Mainteck)). The same approach applies to the interpretation of consent orders. In Bindah v Carter Holt Harvey Wood Products Australia Pty Ltd [2014] NSWCA 264 where Meagher JA (Ward JA agreeing) observed (at [22]) that consent “orders are to be construed taking into account the circumstances in which they were made, at least to the extent that those circumstances were known to the parties”.

7. One further point should be noted, though it is not relevant in the matter before me. Though the parties’ actual intentions, that is, their “subjective beliefs or understandings”, are not taken into account in determining the rights and liabilities that govern their contractual relations, such intentions are relevant for other purposes, such as in a claim for rectification or estoppel (per Mason J in Codelfa at [23] and Lord Hoffman (with whom Lord Hope of Craighead, Lord Rodger of Earlsferry and Baroness Hale of Richmond agreed) in Chartbrook Ltd v Persimmons Homes Ltd [2009] UKHL 38; 1 AC 1101, at [42] (Chartbrook). However, as Lord Hoffman explained, these “are not exceptions to the rule. They operate outside it” (quoted with apparent approval in the joint judgment of Warren CJ, Harper JA and Robson AJA in Retirement Services Australia (RSA) Pty Ltd v 3143 Victoria St Doncaster Pty Ltd [2012] VSCA 134 at [101]).

8. In the present case, the surrounding circumstances include the Amended Statement of Claim, the Statement of Particulars, the schedule of damages, and the consent orders, but exclude what was said or done during the course of negotiating the agreement. Those documents, when considered with the circumstances in which Ms Barn developed her psychological injury, demonstrate conclusively that, for the reasons given by the Arbitrator, Ms Barn recovered damages “in respect of an injury” from the employer liable to pay compensation under the 1987 Act.

9. The Arbitrator’s reasoning was that the injuries and disabilities pleaded and particularised in the common law claim were exactly the same as the injuries pleaded in the proceedings in the Commission. That reasoning is consistent with the evidence and is clearly correct. The injury particularised in the common law proceedings was “[e]xacerbation of psychological/psychiatric injury diagnosed as full panic disorder with agoraphobia and major depressive disorder”. That is the same injury pleaded in the Application filed in the Commission, namely, “chronic major depressive disorder and panic disorder with agoraphobia”. Both descriptions are consistent with the medical evidence filed in support of the claim from Dr Klug.

10. The submission that the Arbitrator should have found that the damages “received” by Ms Barn were paid in respect of the breach of contract and were not damages “in respect of an injury” has failed to acknowledge the relevant context in which the parties settled the common law proceedings. Section 151A is concerned with whether the worker has “recovere[d] damages in respect of an injury” not with the cause of action that led to the recovery of the damages.

11. It is not determinative that the cause of action in the common law proceedings was pleaded as a claim in contract. That is because the Statement of Particulars and the schedule of damages make it clear that the claim was largely, if not wholly, founded on the psychological injury received by Ms Barn as a result of the wrongful termination of her employment. That that has to be so is clear from the particulars of loss of earning capacity in the Statement of Particulars, which asserted that Ms Barn’s “future earning capacity has been impaired” and that she remained “unfit and unable to find appropriate work”, and the particulars in the schedule of damages, which asserted that Ms Barn’s “future earning capacity has been impaired”. Those assertions could only be based on the psychological injury Ms Barn suffered because of her wrongful dismissal.

12. Even if most of the damages recovered were for breach of contract, and not for the psychological injury, which is clearly not the case, that does not prevent the application of s 151A. That is because the fact that the money may have been paid, in part, in respect of other claims (for example, a the breach of contract) does not matter if, in fact, the consent orders, construed in light of the surrounding circumstances known to both parties, establish that the payment was “in respect of” Ms Barn’s psychological injury (Adams at [27] Handley AJA (Allsop P and Giles JA agreeing). (Adams is discussed further at [74]–[80] below.)

13. The submission that the Arbitrator failed to take account of or give weight to the agreement reached between Ms Barn and the defendants in resolving the common law proceedings invites the Commission to ignore the consent orders, and the surrounding circumstances known to both parties that led to the making of those orders, and to focus on “the actual intentions, aspirations or expectations of the parties” (Codelfa at [24]), that is, “what was said or done during the course of negotiating the agreement for the purpose of drawing inferences about what the contract meant” (Chartbrook at [42]). That is not the correct approach to the determination of parties’ rights and liabilities under a contract.

14. The submission that the Arbitrator should not have placed any reliance on the pleadings filed in the common law proceedings is inconsistent with clear High Court authority, recently considered and applied by the NSW Court of Appeal (in Mainteck) and is rejected. The pleadings and the particulars were part of the factual matrix of the proceedings and clearly set the parameters for the claim and the ultimate settlement. If the consent orders do not reflect the parties’ actual agreement, the proper course is to seek relief in a court with appropriate jurisdiction.

Grounds 7–8

1. These grounds relate to the evidence from Mr Boyd to the effect that the common law proceedings were brought against the State of New South Wales “for breach of contract and for personal injury against Health Quest for negligence”. He said that it was his belief that the “judgement [sic] that was entered was for the breach of contract claim against the State of New South Wales” and that “[n]o part of the settlement was for compensation for any personal injuries suffered to [Ms Barn]”. He added that this was clear from the deletion of paragraphs 2, 3, 4 and 6 from the consent orders.

2. The Arbitrator said that, relying on Alphapharm at [35], he did not accept that Mr Boyd could give evidence of what the (settlement) document means. That statement was correct and disclosed no error. However, the Arbitrator added that Mr Boyd could give evidence of the surrounding circumstances and the context known to the parties. Considering the evidence in that light, the Arbitrator said that Mr Boyd’s statement that no part of the settlement was for compensation for any personal injuries suffered by Ms Barn was inconsistent with the declaration by Mr Weller in the notice of judgment where the word “psychiatric” appears in the box headed “Brief description of Injury”. That statement was open on the evidence. (The Arbitrator’s reliance on the notice of judgment, and Mr Weller’s challenge to him doing so, is considered under Grounds [11]–[12] below.)

3. In any event, Mr Boyd’s assertion that the claim against Health Quest was in negligence, and the email of 10 September 2014 from the respondent’s solicitor, which stated that the settlement was apportioned 95 per cent against the respondent and five per cent against Health Quest, clearly establishes that Ms Barn recovered damages in respect of the injury from “some person other than the worker’s employer” (s 151Z(1)) and that she is therefore “not entitled to recover further compensation under [the 1987 Act]” (s 151Z(1)(c)). It follows that if the Arbitrator erred in relying on s 151A, and I do not accept that he did, it seems tolerably clear that, in the alternative, s 151Z would prevent Ms Barn from recovering the compensation claimed in the present proceedings in the Commission in any event.

4. Dealing with the paragraphs that were deleted from the consent orders, the Arbitrator considered Mr Boyd’s statement to be a legal submission on the construction of the orders, rather than evidence. The Arbitrator said that the consent orders spoke for themselves. He did not consider the deletion of paragraph 2, which related to the deduction of workers’ compensation payments from the damages, to be unusual in a common law settlement with an employer, noting that such a settlement is often phrased as being “exclusive of workers[’] compensation payments” ([78]). Neither this statement, nor the Arbitrator’s approach to Mr Boyd’s evidence in general, disclosed any error.

Ground 9

1. This ground relates to a statement from Ms Barn dated 25 September 2014 which was attached to an Application to Admit Late Documents of the same date. Ms Barn said in this statement that, during the conciliation of her common law claim, she made known her concerns that she did not want the settlement to impact on her ability to continue to receive weekly compensation entitlements or her ability to claim a lump sum payout for workers’ compensation. Ms Barn said that Mr Boyd assured her that acceptance of the offer would not void her continuing claims of workers’ compensation or her right to claim a lump sum.

2. She recalled the solicitor for the State of New South Wales stating that accepting the offer of settlement would in no way impact on her workers’ compensation benefits or claims. She said that she accepted the offer to settle with knowledge that her workers’ compensation benefits and her claim for a lump sum settlement for her injury would not be affected. It was her understanding that the money she was receiving was for breach of contract and nothing to do with the injuries she sustained.

3. It will be recalled that the arbitration concluded on 9 September 2014 and was listed for teleconference on 23 September 2014, at the direction of the Arbitrator, to clarify one discrete point about the payment of the damages. Therefore, this statement from Ms Barn was prepared and forwarded to the Commission two days after the conclusion of the case. Mr Weller made no attempt to have the case listed so he could make submissions on why the statement should be admitted. It is unclear if the statement even reached the Arbitrator.

4. The Commission’s Rules require that all information and documents on which a party proposes to rely, and that are in the possession or control of the party, should be lodged and served with the Application to Resolve a Dispute or, if the party is a respondent, with the Reply (Pt 10 r 10.3(1) of the Workers Compensation Commission Rules 2011 (the Rules)).

5. Part 10 r 10(2) provides that, subject to sub-rr (3)–(5), a party may not in proceedings introduce evidence that has not been lodged and served as required by sub-r (1) or had not been provided to any other party as required by the 1998 Act or any Regulation or Guideline made under that Act. Subrule (3) provides that the Commission may, if it is satisfied that it is necessary to do so in the interests of justice, allow a party to introduce evidence that the party would otherwise be prevented from introducing because of the operation of sub-r (2).

6. Parties seeking to rely on sub-r (3) do so by filing an Application to Admit Late Documents. Where a party in default seeks to tender late documents, that party carries the onus of establishing why the Rules should not be enforced (Nelson Bay Pest Service Pty Ltd v Morrison [2007] NSWWCCPD 135). In the present case, however, the Application to Admit Late Documents was filed after the case had concluded on 23 September 2014, with no attempt to have the case re-listed to hear argument as to why the document should be admitted. In these circumstances, the Arbitrator did not err in not considering Ms Barn’s further statement, which was not in evidence before him.

7. Further, Mr Weller has made no application that the statement be admitted on appeal as additional evidence or fresh evidence under s 352(6) of the 1998 Act.

8. In any event, even if it were admitted into evidence, Ms Barn’s further statement makes no difference to the outcome. That is because, on the authorities discussed earlier in this decision (see [46]–[47] above), her subjective belief is irrelevant to the determination of the effect of the consent orders, which is based on an objective interpretation of the contract, determined in light of the surrounding circumstances, and the interpretation and application of s 151A.

Grounds 11–12

1. These grounds relate to the weight the Arbitrator gave to the notice of judgment. The assertion that the Arbitrator should have given no weight to this document is rejected. The notice of judgment was admitted into evidence at the teleconference on 23 September 2014, without objection from Mr Weller (T2.14 – 23 September 2014).

2. Once admitted into evidence, the document was admitted for all purposes (Walker v Walker [1937] HCA 44; 57 CLR 630; Jones v Sutherland Shire Council [1979] 2 NSWLR 206, and Albrighton v Royal Prince Alfred Hospital [1980] 2 NSWLR 542 at 569B) and the Arbitrator was entitled to consider it in his assessment of the claim. Mr Weller made no submission that the Arbitrator should not have given weight to the document.

3. The submission that, if the Arbitrator was to place any weight on the document, he should have inquired of Ms Barn or her solicitor as to the circumstances in which it was completed is rejected. An Arbitrator is required to accord the parties procedural fairness. In general, that requires only that a party be given “a reasonable opportunity to present his case” (Deane J in Sullivan v Department of Transport (1978) 20 ALR 323 at 343). It does not require a tribunal to give a “running commentary upon what it thinks about the evidence that is given” (SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63; 228 CLR 152 at [48]).

4. Mr Weller had every opportunity to deal with the notice of judgment at the teleconference on 23 September 2014, but did not do so. In these circumstances, the Arbitrator was entitled to consider the document and place such weight on it as he felt appropriate. The Arbitrator was entitled to conclude, as he did (at [76]), that Mr Boyd’s evidence was inconsistent with the declaration in the notice of judgment where the word “psychiatric” appears in the box headed “Brief description of injury”. In short, though the Arbitrator did not express himself in this way, the notice of judgment provided further objective support for the conclusion the Arbitrator had independently reached, namely, that Ms Barn had recovered damages in respect of her psychological injury and that s 151A applied.

Ground 13

1. This ground asserts that the Arbitrator failed to apply the principles in Barnett, which followed Adams. Exactly how the Arbitrator failed to apply the principles in Barnett, and how those principles advance Ms Barn’s position, was not explained.

2. Barnett concerned, among other things, the meaning of “damages” and “recover” in s 151A. The issue was whether the transfer of a car from the employer to the worker, and the payment of stamp duty on that transfer by the employer, amounted to the recovery of damages “in respect of the injury concerned”. Applying Smith v Commonwealth Oil Refineries Ltd [1938] HCA 33; 60 CLR 141, it was held that “recover” means the “receipt of moneys”. Therefore, Ms Barnett had not recovered damages.

3. The submission that Adams stated “the test is what is the character of the payment” is incorrect. In Adams, the worker had been employed by the respondent as a meat worker from 1988 until he was dismissed in 2003. He brought proceedings in the Australian Industrial Relations Commission against the employer for unfair dismissal. Those proceedings were settled, by compromise, by a deed of release.

4. The deed recited that the worker had sustained injuries during his employment including, but not limited to, an injury to his left hand and wrist, which was the subject of later proceedings in the Commission for compensation under the 1987 Act. Under the deed the employer agreed to pay, and the worker accepted, $2,500 in respect of general and other damages. The $2,500 was sent to the worker by cheque under cover of a letter dated 17 January 2005, which acknowledged receipt of the signed deed and said “[w]e enclose a cheque made payable to you in the sum of $2500 being in respect of the agreed work injury damages”.

5. The worker’s later proceedings in the Commission seeking compensation for the injury to the left hand and wrist were held to be barred by s 151A(1)(a).

6. On appeal, Handley AJA (Allsop P and Giles JA agreeing) said (at [17]) that the deed itself could not have affected the worker’s rights to compensation because s 234 of the 1998 Act provides that the two Acts apply “despite any contract to the contrary”. The worker’s difficulties flowed “not from the deed as such, but from his acceptance of the payment of $2500” ([17]). Noting that “damages” in s 149 includes “any form of monetary compensation” (s 149(a)) and “any amount paid under a compromise or settlement of a claim for damages” (s 149(b)), Handley AJA said that it could not be denied that the $2,500 was monetary compensation within para (a).

1. Handley AJA added (at [24]) that the remaining question was whether the payment of $2,500 damages, as defined, was “in respect of an injury” so that s 151A(1)(a) applied and the worker ceased to be entitled to “any further compensation under this Act in respect of the injury concerned”. It was in this context that his Honour said that “[t]he character of the payment is governed by the deed and the letter of 17 January 2005 which accompanied the cheque” ([24]).

2. After referring to the recitals in the deed, his Honour added, at [27]:

   “The amount of $2500 was also paid in respect of other claims, but this cannot matter. The deed and the letter, construed on their face, or in light of the surrounding circumstances, establish that the payment was made ‘in respect of’ the injury to the worker’s left hand and wrist. Accordingly he ceased to be entitled to compensation ‘in respect of the injury concerned’, that is the injury to his left hand and wrist.” (emphasis added)

3. Thus, as explained at [54] above, the fact that the payment may have been in respect of other claims (in Ms Barn’s case, a claim for breach of contract) does not matter. Construing the consent orders objectively, in light of the surrounding circumstances, leads to only one conclusion, namely, that Ms Barn recovered damages in respect of an injury from her employer.

CONCLUSION

1. Ms Barn has not established any relevant error by the Arbitrator and the appeal is unsuccessful. Mr Weller’s submissions failed to grapple with the real issue in the case or the relevant authorities concerning the interpretation of contracts and consent orders and the application of s 151A.

DECISION

1. The Arbitrator’s determination of 2 October 2014 is confirmed.

COSTS

1. No order as to costs.

Bill Roche
Acting President

29 January 2015

I, JACQUELINE HAGGER, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, ACTING PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE