Beck v Endeavour Coal Pty Limited; Beck v South 32 t/as Endeavour Coal Pty Limited

[2019] NSWDC 951

District Court

New South Wales

Medium Neutral Citation:

Beck v Endeavour Coal Pty Limited; Beck v South 32 t/as Endeavour Coal Pty Limited [2019] NSWDC 951

Hearing dates:

13 June 2019

Date of orders:

14 June 2019

Decision date:

14 June 2019

Jurisdiction:

Civil

Before:

P Taylor SC DCJ

Decision:

Proceedings 2018/348234:

(1)   Dismiss the defendant's notice of motion filed 6 February 2019.

(2)   Order that 50% of the defendant's costs of that motion be the defendant's costs of the proceedings.

(3)   List the matter for mention on Thursday, 4 July 2019 at 10am before the Judicial Registrar.

Proceedings RJ00015/17:

(1) Direct Mr Beck to file an amended statement of claim within 14 days deleting the s 66 and s 67 claims.

(2)   Dismiss the plaintiff's notice of motion filed 21 March 2019.

(3)   Direct that there be no order as to the costs of the plaintiff's motion.

Catchwords:

WORKERS COMPENSATION – permanent loss compensation – common law damages – election – leave to revoke election

Legislation Cited:

Workers Compensation Act 1987, s 66, s 67, s 151A

Cases Cited:

New South Wales v Taylor [2001] HCA 15

Category:

Procedural rulings

Parties:

Proceedings 2018/348234
Nicholas Beck (plaintiff)
Endeavour Coal Pty Limited (defendant)

Proceedings RJ00015/17
Nicholas Beck (plaintiff)
South 32 t/as Endeavour Coal Pty Limited (defendant)

Representation:

Counsel:
Mr G Parker SC with Mr R Stanton (plaintiff)
Mr F Doak (defendant)

Solicitors:
Gerard Malouf & Partners (plaintiff)
HWL Ebsworth Lawyers (defendant)

File Number(s):

2018/348234; RJ00015/17

Publication restriction:

None

Judgment

A. Introduction

1. After an industrial accident in 2016, Nicholas Beck commenced workers compensation proceedings in 2017, and commenced proceedings for personal injury damages at common law in 2018. Endeavour Coal Pty Limited, Mr Beck’s employer, was the defendant in both proceedings.

2. Endeavour Coal applied to have the 2018 proceedings “dismissed for breach of s 151A of the Workers Compensation Act”. Mr Beck applied to amend the statement of claim in the 2017 proceedings. Both motions are concerned with the same area of dispute: whether by reason of s 151A, and the 2017 proceedings, Mr Beck is not entitled to maintain the 2018 proceedings.

B. Issues

3. The issues in these applications can be briefly stated:

1. Did Mr Beck elect to claim permanent loss compensation in the 2017 proceedings.

2. If Mr Beck did so elect, is the Court entitled to grant leave to Mr Beck to revoke that election.

4. Both these issues arise out of the terms of s 151A of the Workers Compensation Act 1987 (“WCA”).

C. Legislation: s 151A WCA

5. Section 151A as it relevantly applied to the present dispute was in the following form:

“151AElection—damages or “Table of Disabilities” compensation

(1)  In this section and in section 151V:

…

permanent loss compensation means compensation under Division 4 of Part 3 (Compensation for non-economic loss).

(2)  A person to whom compensation is payable under this Act in respect of an injury is not entitled to both:

(a)  permanent loss compensation in respect of the injury, and

(b)  damages in respect of the injury from the employer liable to pay that compensation,

but is required to elect whether to claim that permanent loss compensation or those damages.

(3)  The person makes that election (or is taken to have made that election):

(a)  … or

(b)  by commencing proceedings in the Compensation Court to recover that permanent loss compensation or by accepting payment of that permanent loss compensation (in which case the person ceases to be entitled to recover damages in respect of the injury).

(3A)  The amendment of a claim that is the subject of proceedings before the Compensation Court to include a claim for permanent loss compensation is (for the purposes of subsection (3) (b)) taken to constitute the commencement of proceedings in the Compensation Court to recover that permanent loss compensation.

(4)  An election is irrevocable, except that an election to claim permanent loss compensation may be revoked with the leave of the court given in accordance with this section.

(5)  If:

(a)  a person elects to claim permanent loss compensation in respect of an injury, and

(b)  after the election is made, the injury causes a further material deterioration in the person’s medical condition that, had it existed at the time of the election, would have entitled the person to additional permanent loss compensation, and

(c)  at the time of the election, there was no reasonable cause to believe that the further deterioration would occur,

the person may, with the leave of the court and on such terms (if any) as the court thinks fit, revoke the election and commence proceedings in the court for the recovery of damages in respect of the injury.

…”

6. The parties agreed that the reference to the Compensation Court should, by reason of other legislative amendments, be read as a reference to this Court.

D. Election by Mr Beck

7. Endeavour Coal submits that the 2017 proceedings by Mr Beck constituted an election under WCA s 151A(3) because in those proceedings Mr Beck made claims for lump sum compensation for permanent impairment under WCA ss 66 and 67. That submission necessitates an examination of the content of the statement of claim and of the circumstances surrounding it.

8. Mr Beck allegedly suffered an injury to the neck on 15 January 2016 in the course of his employment with Endeavour Coal. On 9 May 2016 he was given advice by a letter from his then solicitor about his workers compensation rights. The letter referred to weekly compensation and medical expenses and continued:

“In addition…you will be entitled to lump sum benefits for any permanent impairment or loss of use to various parts of the body arising out of the injury. If the injury is serious enough you will also receive a lump sum for pain and suffering…

A claim for lump sum benefits as outlined in the preceding paragraph cannot be made until your condition has stabilised…

From a legal point of view a claim for lump sum benefits can be made at any time once the condition has stabilised…(…if maintaining your employment is essential then you will need to consider whether the claim should be lodged at this time.

In some cases it is possible to negotiate what is called a redemption of your workers compensation rights. In summary this means that in return for a negotiated tax free lump sum you give up the right to claim any further weekly compensation, medical expenses and lump sum benefits…This matter will be discussed in greater detail with you if it becomes an appropriate option.

The alternative to a claim for lump sum benefits and ongoing weekly compensation and medical expenses is to sue your employer or another party…The difference between workers compensation claim as described earlier in this letter and suing is that if you successfully sue your [employer] then you will receive a potentially larger tax free lump sum in return for finalising your rights. Such claims must be made within three years.” [1]

1. Affidavit of Karl Stephen Foster sworn 2/5/19, Annexure A.

9. On 25 October 2016 Mr Beck was assessed by Roger Pillemer, orthopaedic surgeon. Dr Pillemer reported that some five days after the January 2016 work incident Mr Beck “awoke at 4.50am with severe pain in his left scapular region, his neck and down his left arm and into his left hand involving the thumb, index and middle fingers. Symptoms were severe”. Eventually Mr Beck had surgery, “with an excellent result” according to Dr Pillemer. The doctor also reported:

“Mr Beck has had a very good result following his surgery and at the present time has no particular discomfort in his neck or his arm. He does however still feel his left arm is weak but this is simply because of lack if use…

Investigations showed a very significant disc protrusion at the C6/7 level…and [Mr Beck] came to surgical removal of this offending disc on 1 July 2016. Mr Beck has had an excellent result following his surgical treatment and at the present time has not been left with any residual symptoms or signs of residual nerve root involvement (ie no radiculopathy)…

It is now some 4 months following surgery and at this stage his prognosis would seem to be very good…

STABILITY

It is only 4 months since his operation and therefore his condition cannot be regarded as having stabilised at this stage.

IMPAIRMENT

If Mr Beck’s symptoms remain unchanged, in my opinion he could be said to have a 20% permanent impairment of his neck. At the present time he does not have any loss of efficient use of his left arm at or above his elbow.”

10. On 9 November 2016 Mr Beck’s then solicitor notified him that he had:

“forwarded a formal claim to your employer…for lump sum as follows:

∙ Section 66 - $10,584.00 for 20% permanent impairment of the neck

∙ Section 67 - $20,000 for pain and suffering.

In accordance with the Workers Compensation Act, we are required to allow 2 months for a response to your claim.

At the expiration of that time, if your claim has not been resolved by settlement, I will lodge a statement of claim in the District Court…”

11. On the same day Mr Beck’s solicitor wrote to the defendant enclosing Dr Pillemer’s report and wrote:

“I have been instructed to make a formal demand under section 66. I accordingly make the following demand.

Amount claimed:

∙ Section 66 - $10,584.00 for 20% permanent impairment of the neck

The above claim under Section 66 crosses the relevant threshold such that our client claims lump sum compensation under Section 67 for pain and suffering.

∙ Section 67 - $20,000.00 being for 30% of the maximum.

∙ Weekly compensation – from 15 January 2016 to date and continuing

…”

12. On 16 November 2016 the solicitor for Endeavour Coal wrote relevantly as follows:

“We…note that you have been instructed to make a claim pursuant to section 11(1)(2), section 66 and 67 of the Workers Compensation Act.

With respect to your claim for section 67, we note that medical evidence does not entitle your client to claim section 67 and on such it would be appreciated if you could amend your claim accordingly”.

13. On 1 December 2016 Malcolm Pell, neurosurgeon, at St Vincent’s Clinic reported on a visit by Mr Beck on 23 August 2016, stating that:

“there was little neck pain, he was off all medication and the strength in the arm was improving. No weakness was noted on examination that day. It was recommended he return to work on light duties…

10.Prognosis

At the last consultation on 23 August 2016 I recommended return to light duties. I believe these could be graduated up to restricted duties with a permanent lifting restriction of 10 kg. He would be able to return to work in his pre-injury duty as a mining technician.”

14. On 25 January 2017 Endeavour Coal’s insurer wrote to Mr Beck’s solicitor stating:

“We refer to your letter of 9 November 2016 regarding the above named and in particular the claim pursuant to Section 66 for the neck.

We note your client is currently in receipt of active treatment for the neck. In this respect, we do not consider that Mr Beck's neck condition has stabilised. Could you please advise whether you will be discontinuing your client's claim pursuant to Section 66.

…”

15. On 31 January 2017 Mr Beck’s solicitor responded, relevantly:

“We have commenced a claim for weekly payments and section 60 expenses so that liability can be determined. We are happy to let the section 66 lay in abeyance until question of liability is determined. Dr Pillemer's opinion is that the condition is not stable and so currently section 66 won't be proceeding.

…”

16. On the same date the statement of claim for workers compensation was filed in the District Court. The claim included particulars of claim for “S 66 lump sum $10,584.00 in respect of 20% permanent impairment of the neck” and “section 67, $20,000”.

17. About four weeks later, on 1 March 2017, the solicitor for Endeavour Coal responded to the statement of claim relevantly as follows:

“Statement of Claim Issues

We note your correspondence to our client dated 31 January 2017 where you confirmed that the Plaintiffs condition was not stabilised to allow a claim for lump sum compensation to proceed.

On that basis, we request that you immediately amend your Statement of Claim to withdraw the claim for lump sum compensation pursuant to both sections 66 and 67 of the Workers Compensation Act 1987.

Please otherwise confirm whether you are instructed or anticipate seeking instructions to amend the Statement of Claim aside from those indicated above, and if so, the nature of any proposed amendments within 14 days from date of this letter. If we do not hear from you in this regard within 14 days, should any future application be made to the Court to amend the pleadings or to seek any further relief we will seek appropriate costs orders with respect to any costs thrown away as a result of the amendments sought.” (Emphasis in original).

18. In a defence filed 7 March 2017, the solicitor for Endeavour Coal disputed the s 66 claim asserting that the condition had not stabilised or that there was no impairment in fact. Some months thereafter, the solicitor for Endeavour Coal again requested the amendment to delete the claim pursuant to s 66 if it was not to be pressed. [2]

    2. Exhibit 1.

19. On 13 November 2018 Mr Beck filed a statement of claim seeking common law damages. In response on 29 November 2018 Endeavour Coal filed a defence raising the election by the claim for lump sum entitlement in the 2017 proceedings.

20. In this application, Mr Beck also referred to evidence from his former solicitor who deposed that:

“I instructed my secretary to lodge a statement of claim for weekly compensation and medical expenses in accordance with my instruction, but through a mistake a claim under Section 66 was also included, although at that stage that claim could not have been validly made as the medical evidence supplied by Dr Pillemer was that the condition was not stable and had not reached maximum medical stability as required by the legislation. I also had no instructions from the Plaintiff to file a claim for Section 66 in the court.”

21. Endeavour Coal relies upon s 151A(3) submitting that the content of the 2017 statement of claim, in particular the reference to ss 66 and 67 claims, establishes that Mr Beck has commenced “proceedings to recover…permanent loss compensation”. Therefore, it submitted, Mr Beck has elected to claim permanent loss compensation and ceases to be entitled to recover damages in respect of the injury.

22. Mr Beck submits that the 2017 proceedings were not commenced to recover permanent loss compensation. He submits that the inclusion of the ss 66 and 67 claims was a mistake by the solicitor, that the injury had not stabilised and thus permanent loss compensation was unavailable, that both parties knew this, that this is why Mr Beck’s solicitor agreed to “let the s 66 lay in abeyance until questions of liability” are determined, and that is why Endeavour Coal’s solicitor demanded that the form of the 2017 statement of claim be amended.

23. Mr Beck’s solicitor was not cross-examined, yet his affidavit is not without difficulty. He asserts that he had no instructions to file a claim for s 66 lump sum compensation, yet he repeatedly stated in correspondence on 9 November 2016 the he acted in accordance with Mr Beck’s instructions in making a claim for s 66 and s 67 lump sum compensation in November 2016. There is no evidence that those instructions were thereafter withdrawn. No explanation for the absence of instructions was provided. In these circumstances, I am not prepared to accept the solicitor’s evidence of a lack of instructions.

24. However, I do not think the existence or otherwise of instructions is of great significance. The 2017 statement of claim was filed, and Endeavour Coal was entitled to rely upon the ostensible authority of the plaintiff’s solicitor in its filing, whether or not Mr Beck had so instructed his solicitor.

25. As to the solicitor’s evidence of mistake, there is no contrary evidence and no cross-examination. Although Mr Beck’s solicitor intended formally to demand lump sum compensation in November 2016, further correspondence thereafter highlighted the problems of such a claim because Mr Beck’s condition had not stabilised. His solicitors accepted the representations of Endeavour Coal’s insurer on this point, agreeing to “let the s 66 [claim] lay [sic] in abeyance”, so that the “s 66 won’t be proceeding”.

26. These circumstances give some explanation for why the inclusion of the ss 66 and 67 claims could be a mistake, as the solicitor asserts. Given that there was no challenge to his testimony in this regard, and no relevant contrary evidence, I accept the solicitor’s evidence of a mistake.

27. Further, in a context where the other claims are identified by the solicitor as the weekly payments and s 60 expenses, and there was an earlier challenge by the insurer to the s 67 claim, the likely inference is that the reference to s 66 is a reference to permanent impairment lump sum compensation, whether under ss 66 or 67.

28. Where a party has included a certain claim in a pleading but has at the same time, in writing, stated to his opponent that he does not proceed with that claim, a question arises as to whether the party has commenced proceedings in respect of that claim.

29. I do not think the content of the statement of claim is determinative. Here Mr Beck’s solicitor has mistakenly included the claim, has repeatedly been informed by Endeavour Coal that the claim is defective and has informed Endeavour Coal at the time that the claim will not proceed, and Endeavour Coal has accepted that position by demanding thereafter that the statement of claim be amended to remove the reference to the ss 66 and 67 lump sum claims. In these circumstances, preferring substance over form, I conclude that Mr Beck did not commence proceedings to recover permanent loss compensation. It follows that the deeming provision in s 151A(3) is not enlivened.

30. In other words, the mere filing of a statement of claim in the circumstances is not a commencement of proceedings to recover permanent loss compensation and thus is not taken to be an election, notwithstanding s 151A(3).

31. Mr Beck has not yet amended or obtained leave to amend the statement of claim. Endeavour Coal has demanded on at least one occasion that Mr Beck do so. Mr Beck has not rejected these demands though he has been dilatory in acting on them. I do not think these circumstances establish an election by Mr Beck.

32. Accordingly, Mr Beck remained free to claim common law damages. Yet he has sought leave to amend the 2017 proceedings in the manner requested repeatedly by Endeavour Coal in 2017 to delete the reference to ss 66 and 67 lump sum compensation in the document. If there is no election, as I have found, then there is no reason to refuse leave. Further, in the circumstances, it seems appropriate to direct that in the absence of the amended claim being filed in the 2017 proceedings within 14 days, Endeavour Coal would be entitled to make an application to strike out the 2018 proceedings. The continued irregularity, not corrected in defiance of a court order would, in my view, constitute an election under s 151A(2).

E. Leave to revoke election

33. In the event that I am mistaken as to whether there had been an election by Mr Beck under s 151A(3), the issue arises as to whether the Court should grant leave to revoke the election taken to have been made.

34. The parties accepted that fulfilment of the requirements in s 151A(5) were, in the circumstances, both necessary and sufficient for the Court to grant leave to revoke an election. That provision requires Mr Beck to establish two matters:

1. that there has been a further deterioration in Mr Beck’s medical condition since the election, that is, since 31 January 2017, that would entitle him to additional permanent loss compensation; and

2. that as at 31 January 2017 there was no reasonable cause to believe that the further deterioration would occur.

35. There was no real challenge to Mr Beck’s assertion that his condition has further deteriorated entitling him to additional permanent loss compensation. Dr Pillemer having found in 2016 a 20% permanent impairment in his neck, found in 2018 an additional 8% permanent loss of efficient use of his left arm at or above the elbow.

36. The real debate between the parties in respect of s 151A(5) was whether there was no reasonable cause to believe that this further deterioration in Mr Beck’s left arm would occur. Or to use the words of the High Court in New South Wales v Taylor [2001] HCA 15 at [4]:

“whether it would be unreasonable for a person to believe that the evidence before the court, concerning the applicant's condition at the time of election, demonstrated that the further deterioration would occur.”

37. As the evidence set out above indicated, as at January 2017 the two expert medical reports indicated no ongoing issue with Mr Beck’s arm. Dr Pillemer in October 2016 did not find any permanent impairment of the arm stating, “At the present time he does not have any loss of efficient use of his left arm at or above the elbow”. The doctor’s report indicated Mr Beck’s concern that his left arm was weak, but attributed that to lack of use. He found no radiculopathy. Subsequently, Dr Pell in December 2016 reported “strength in the arm was improving” and that he “would be able to return to his pre injury duty as a mining technician”.

38. Endeavour Coal submitted that Mr Beck’s condition had not stabilised. That is so, but it does not establish a reasonable cause to believe that his left arm condition will deteriorate. Speculation about that possibility may be available whilst the condition has not stabilised, but that speculation is insufficient to establish “a reasonable cause to believe” under s 151A(5)(c). It still remained unreasonable to believe that the evidence demonstrated that further deterioration would occur. Some reasonable basis to establish a belief was needed. The circumstance that Mr Beck’s strength in his arm was improving could only reasonably support a belief that stabilising over time would result in an improvement rather than a deterioration of the arm.

39. Accordingly, the requirements of s 151A(5) are satisfied. Section 151A(4) permits that the Court may grant leave to Mr Beck to revoke the election. Endeavour Coal did not suggest any other reason why leave should not be granted but rather accepted, as I indicated earlier, that proof of the requirements of s 151A(5) in this case was sufficient to warrant a grant of leave. It follows that if an election was found to have occurred, I would grant leave to revoke the election.

40. The proposed orders of the Court are:

1. Direct Mr Beck in proceedings RJ00015/17 to file an amended statement of claim within 14 days deleting the s 66 and s 67 claims.

2. Otherwise dismiss the defendant’s notice of motion filed 6 February 2019 in proceedings 2018/348234 and the plaintiff’s notice of motion filed 21 March 2019 in proceedings RJ00015/17.

F. Costs

41. I have heard the parties on costs and any further orders and directions.

42. The first issue is the costs of the application to amend the 2017 proceedings. The plaintiff has not merely been granted leave, but has been directed to make the amendment. That amendment is only necessary because the plaintiff did not adopt the invitation to amend made more than two years ago by the defendant. However, the defendant seeks only an order that the costs of the motion in the 2017 proceedings be that there be no order as to costs and the plaintiff did not forcefully contest that order. In these circumstances, the order for the costs of the plaintiff’s motion for amendment should be that there be no order as to costs.

43. As to the 2018 proceedings, each party initially sought an order for costs. Mr Beck ultimately accepted, as I understood his submissions, that an order that each party bear their own costs might be appropriate, notwithstanding that the plaintiff has had some success on the application, because he needed to bring an application to amend his workers compensation statement of claim, to revoke an election, or both, which would have entailed costs for the parties. The application seemed in no respect to be caused by the defendant’s conduct, but rather by the plaintiff’s oversight and dilatoriness in correcting a mistake.

44. In those circumstances, I am persuaded that the plaintiff should not get his costs. But in the event that the proceedings fail, the defendant should be entitled to some of the costs that have arisen from these motions.

45. Accordingly, the order for costs should be that 50% of the defendant’s costs of the motion in the 2018 proceedings be the defendant’s costs of the proceedings.

G. Orders

46. In proceedings 2018/348234, the orders of the Court are:

1. Dismiss the defendant's notice of motion filed 6 February 2019.

2. Order that 50% of the defendant's costs of that motion be the defendant's costs of the proceedings.

3. List the matter for mention on Thursday, 4 July 2019 at 10am before the Judicial Registrar.

47. In proceedings RJ00015/17, the orders of the Court are:

1. Direct Mr Beck to file an amended statement of claim within 14 days deleting the s 66 and s 67 claims.

2. Dismiss the plaintiff's notice of motion filed 21 March 2019.

3. Direct that there be no order as to the costs of the plaintiff's motion.

**********

Endnotes

Decision last updated: 16 February 2021