Bluescope Logistics Co Pty Limited (formerly BHP Transport & Logistics Pty Limited) v Finlow

Case •

[2006] NSWWCCPD 338

•

7 December 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR

STATUS: Reconsideration decision: Bluescope Logistics Co Pty Limited (formerly BHP Transport & Logistics Pty Limited) v Finlow [2006] NSWWCCPD 338R immediately follows this decision.

REPORTED DECISION: Bluescope Logistics Co Pty Limited (formerly BHP Transport & Logistics Pty Limited) v Finlow (2007) 6 DDCR 1
CITATION: Bluescope Logistics Co Pty Limited (formerly BHP Transport & Logistics Pty Limited) v Finlow [2006] NSWWCCPD 338
APPELLANT: Bluescope Logistics Co Pty Limited (formerly BHP Transport & Logistics Pty Limited)
RESPONDENT: Wesley Finlow
INSURER: Blucescope Steel (AIS) Pty Limited
FILE NUMBER: WCC3012-06
DATE OF ARBITRATOR’S DECISION: 1 June 2006
DATE OF APPEAL DECISION: 7 December 2006
SUBJECT MATTER OF DECISION: Sections 151A and 151C of the Workers Compensation Act 1987; election; waiver
PRESIDENTIAL MEMBER: Acting Deputy President Michael Snell
HEARING: On the papers
REPRESENTATION: Appellant: Sparke Helmore
Respondent: Turner Freeman
ORDERS MADE ON APPEAL: The decision of the Arbitrator dated 1 June 2006 is revoked and the following decision is made in its place:
1.    Award for the Appellant Employer.
2.    No order as to costs.
No order as to costs of the appeal.

BACKGROUND TO THE APPEAL

  1. On 29 June 2006 Bluescope Logistics Pty Limited (formerly BHP Transport & Logistics Pty Limited) (‘the Appellant’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’).

  1. The Respondent to the Appeal is Wesley Finlow (‘the Respondent’)

  1. The factual background to the appeal is, by and large, uncontroversial. The Respondent was born on 27 September 1973, and worked for the Appellant as a stevedore from about 1999.

  1. The Respondent was injured in the course of this employment on 16 June 2001, whilst lifting dunnage. He injured his lower back, and had associated radiation of pain into the buttocks and legs. An MRI scan carried out on 30 June 2001 indicated the presence of a disc protrusion at L5/S1. He came to surgical decompression at the hands of Dr Pell, neurosurgeon on 30 January 2004. The Respondent also asserts he injured his neck in the same incident.

  1. The Respondent filed a Statement of Claim in the District Court of New South Wales in the Wollongong Registry on 26 November 2001, in matter number 826 of 2001, claiming damages from the Appellant in respect of the incident of 16 June 2001 (‘the common law proceedings’). This was the day prior to the commencement of provisions of the Workers Compensation Legislation Further Amendment Act 2001 (‘the 2001 amendments’), which significantly curtailed the rights of an injured worker to take common law proceedings against his employer.

  1. The common law proceedings were commenced within six months of the date of notice of the 16 June 2001 injury, and accordingly were commenced in breach of section 151C of the Workers Compensation Act 1987 (‘the 1987 Act’). It is common ground the common law proceedings were discontinued by the Respondent. There is no suggestion the Respondent actually recovered damages in respect of the injury of 16 June 2001.

  1. On 18 March 2004 the Respondent registered an Application to Resolve a Dispute (‘ARD’) in the Commission, in matter number 4606-2004 (‘the 2004 proceedings’), seeking a determination of whether the degree of permanent impairment resulting from the injury of 16 June 2001 was at least 15%. Such level of permanent impairment would have been necessary to permit the recovery of damages under the provisions of Part 5 Division 3 of the 1987 Act, where proceedings for the recovery of such damages had not been instituted prior to commencement of the 2001 amendments, on 27 November 2001: section 151H and Schedule 6 Part 18C clause 9 of the 1987 Act, Forstaff Blacktown Pty Limited v Brimac Pty Limited & Anor [2005] NSWCA 423. The previous institution of the common law proceedings which were in breach of section 151C of the 1987 Act, and were consequently discontinued, was insufficient to avoid the retrospective operation of the 2001 amendments: Asplundah Tree Experts Pty Limited v Robertson [2005] NSWCA 471 (‘Asplundah’).

  1. Thus, if the Respondent were to be entitled to pursue a work injury damages claim under the modified common law damages provisions in Part 5 Division 3 of the 1987 Act, it was incumbent upon him to demonstrate 15% whole person impairment (to satisfy section 151H). Any damages to which he was entitled in such proceedings would be calculated under the modified form of Part 5 Division 3, as amended by the 2001 amendments. In the absence of agreement by the Appellant that the degree of permanent impairment exceeded 15%, the Respondent was under an obligation to have his degree of permanent impairment assessed by an approved medical specialist under part 7 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’), before he could serve a pre-filing statement or commence court proceedings against the Appellant: section 313 of the 1998 Act.

  1. The ARD filed by the Respondent in the 2004 proceedings referred to a permanent impairment assessment by Dr Peter Conrad dated 7 November 2003. That report referred to complaint of pain in the lumbar spine, which “radiates into his thoracic region and into his neck” (page 1.6). There were two supplementary reports of Dr Conrad, both dated 7 November 2003. One of these assessed permanent impairments and losses of the back and legs at or above the knee, and also assessed 15% permanent impairment of the neck. The other assessed a whole person impairment of 17%, made up in part by an impairment of the neck, described as falling within DRE Category II of the 5th edition AMA Guides.

  1. The 2004 proceedings were referred to an approved medical specialist, Dr Higgs, who examined the Respondent on 29 September 2004. His medical assessment certificate (‘MAC’) recorded the matter referred for assessment as the Respondent’s claim for permanent impairment of the back and both legs at or above the knees. It said the matter was not referred on the basis of whole person impairment. The history recorded, and examination conducted, by Dr Higgs related to the Respondent’s back and lower limbs. There is no indication the Respondent’s neck was examined. The reports of Dr Conrad dated 7 November 2003 are referred to as being included among the “medical reports on file”. Dr Higgs assessed 20% permanent impairment of function of the back, 15% permanent loss of use of the left leg at or above the knee, and 5% permanent loss of use of the right leg at or above the knee. He regarded these losses and impairments as being wholly the result of the injury of 16 June 2001. He said the Respondent’s impairment of lumbar spine function in whole person impairment terms could be assessed at 13% (page 9.1).

  1. It is apparent, from the MAC, that Dr Higgs did not include in his assessment of whole person impairment any component for the neck. In commenting upon “other medical opinions and findings submitted by the parties”, Dr Higgs said “I am not entirely in agreement with Dr Conrad’s conclusions where it is the case that Dr Conrad has also taken into account an impairment of cervical spine function” (at page 9.7).

  1. The Respondent sought leave to appeal the certificate of Dr Higgs to a Medical Appeal Panel, on the basis Dr Higgs’ assessment contained demonstrable error, and was made on the basis of incorrect criteria, in that Dr Higgs had failed to take account of the Respondent’s neck condition, in making his assessment. In a decision dated 5 July 2005 the Panel noted Dr Higgs’ statement regarding Dr Conrad’s consideration of the neck (referred to at [11] above), regarded that as a specific expression of Dr Higgs’ opinion in respect of the neck condition, and declined to re-examine the Respondent on the basis a re-examination would not result in a change in the assessment. They referred to a period of fourteen months having elapsed after the injury, before there was a report of neck pain, on the material before them. The Appeal Panel confirmed the decision in Dr Higgs’ MAC.

  1. A Certificate of Determination dated 12 September 2005, in the 2004 proceedings, noted the finding of 13% whole person impairment by the approved medical specialist, and ordered that by consent those proceedings be discontinued, with no order as to costs.

  1. An ARD was registered in the current proceedings on 1 March 2006, claiming $6,000.00 in respect of 15% permanent impairment of the neck, pursuant to section 66 of the 1987 Act, allegedly resulting from the injury of 16 June 2001.

  1. The Appellant, in its Reply, asserted the Respondent was estopped, by the earlier MAC of Dr Higgs and the Appeal Panel findings, from bringing the current proceedings. The Appellant also denied liability on the basis the Respondent had not injured his neck in the incident relied upon, section 9A was not satisfied, and any impairment of the neck should be reduced to take account of non-work related conditions.

  1. The current proceedings were listed for arbitration hearing on 1 June 2006. Both parties were represented by counsel. The Respondent was called to give evidence, and was cross-examined. Both parties addressed. The Appellant relied upon a further defence, that the Respondent, by commencing the common law proceedings on 26 November 2001, had made an election pursuant to section 151A of the 1987 Act (in its form as at 26 November 2001), and therefore was not entitled to permanent loss compensation (T7.10). Both parties acknowledged this issue was not previously raised by the Appellant in its pleadings (T18).

THE DECISION UNDER REVIEW

  1. The ‘Certificate of Determination’, dated 1 June 2006 records the Arbitrator’s orders as follows:

“1.The Applicant suffered an injury to his neck that arose out of or in the course of his employment on 16 June 2001.

2.The former s151A of the Act does not act as a bar to recovery as the Respondent has waived its rights under that section.

3.The Medical Assessment Certificate and subsequent determination of the Medical Appeal Panel does not act as a bar to assessment of the Applicant’s neck as the certificate does not provide any assessment of permanent impairment to the Applicant’s neck.

4.This matter to be referred to an Approved Medical Specialist for medical assessment with the Registrar to select.

5.That the Respondent pay the Applicant’s costs of the Conciliation/Arbitration of 1 June 2006 as agreed or assessed and for that purpose I certify the proceedings as complex. Such other costs shall be reserved pending determination of all matters.”

  1. The Arbitrator’s decision was ex tempore, and was sound recorded. His reasons appear at T30.45 to T34.40 of the transcript. He found the MAC, and the Medical Appeal Panel, did not assess whether there was any permanent impairment of the neck, and accordingly that issue was not the subject of a binding MAC. He said “no estoppel arises” from the MAC and Medical Appeal Panel on that topic. He found the form of section 151A of the 1987 Act which governed the question of whether there had been an election was that in force as at 26 November 2001. He found the commencement of the common law proceedings in breach of section 151C did not render the common law proceedings a nullity, referring to Deng v GMS Fulfilment Services Limited (2003) 25 NSWCCR 446 (‘Deng’), and Gordon v Berowra Holdings Pty Ltd (2005) 62 NSWLR 427 (‘Berowra Holdings’). He (by implication) found the Respondent had made an election, for the purposes of section 151A of the 1987 Act, by commencing the common law proceedings. He relied upon Berowra Holdings as authority an employer could waive compliance with section 151C. He found the Appellant’s conduct in entering “into negotiations”, and consenting “to orders being made” in earlier proceedings, had waived its rights under sections 151A and 151C of the 1987 Act. He found on the evidence overall he was satisfied the Respondent had injured his neck on 16 June 2001. He accordingly ordered the matter be referred to an approved medical specialist to assess the permanent impairment of the Respondent’s neck.

ISSUES IN DISPUTE

  1. The issues raised by the Appellant in this appeal are:

    (i)Whether the Arbitrator erred in failing to make a positive finding that the Respondent had made an election pursuant to section 151A of the 1987 Act, by commencing the common law proceedings.

    (ii)Whether the Arbitrator erred in regarding Berowra Holdings as authority for the proposition an employer could waive an election under section 151A (in its pre-27 November 2001 form).

    (iii)Whether there was any evidence of facts which, in the circumstances of this case, could amount to waiver by the Appellant of the Respondent’s election pursuant to section 151A.

    (iv)Whether the MAC and Medical Appeal Panel in the 2004 proceedings were binding on the parties, on the question of whether the Respondent had suffered injury to his neck in the incident of 16 June 2001.

    (v)Whether the Arbitrator’s finding of injury to the neck on 16 June 2001 was reasonably open on the evidence.

  2. The Respondent, in opposing the appeal, raises the following:

(i)Whether the effect of the decision of the Court of Appeal in Asplundah is that the 2001 amendments are taken to have always applied, so that section 151A was amended retrospectively, and the election provisions, as they appeared in section 151A immediately prior to 27 November 2001, have no application.

(ii)Whether the Appellant had elected to waive any election the Respondent had made, by failing to plead section 151A in its Reply, in either the 2004 proceedings, or the current proceedings, and failing to raise the issue prior to the arbitration hearing on 1 June 2006. It is claimed the Respondent relied, to its detriment, upon the Appellant’s failure to raise the issue previously, by failing to proceed to have lump sum awards entered for the back, and legs at or above the knee, consistent with the assessments made in the MAC in the 2004 proceedings. Alternatively, it is submitted the decision of the Arbitrator may be properly viewed as a refusal by the Arbitrator to permit the Appellant leave to amend its Reply to raise the issue at the arbitration hearing.

(iii)The Respondent maintains his argument the MAC and Medical Appeal Panel did not consider the question of whether there was a permanent impairment of the Respondent’s neck, and thus there is no binding certificate in this regard. It is claimed however that the MAC is binding as regards the losses and impairments assessed of the Respondent’s back and legs at or above the knee.

(iv)It is contended the finding of neck injury occurring on 16 June 2001 was open on the medical evidence overall, particularly having regard to the Respondent’s evidence symptoms in his neck commenced about two weeks after the incident.

ON THE PAPERS REVIEW

  1. Section 354(6) of 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.”

  1. Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by both 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.

LEAVE

  1. Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act.

  1. The Arbitrator has not actually made an award of compensation, but has referred the quantum of the Respondent’s permanent impairment of the neck to be assessed by an approved medical specialist. The amount claimed is $6,000.00, representing 15% permanent impairment of the neck. When no actual award of monetary compensation is contained in the decision, it is sufficient to satisfy the threshold test in section 352(2) if the decision is one which clearly has the potential to put in issue the amount of compensation claimed: Fletchers International Exports Pty Ltd v Regan [2004] NSWWCCPD 7 (at [28]). The current decision can be characterized in this way.

  1. The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.

  1. In the circumstances it is appropriate I grant leave to appeal.

DISCUSSION AND FINDINGS

Election

  1. The first point raised by the Appellant is that the Arbitrator should have made a positive finding that commencement of the common law proceedings amounted to an election pursuant to section 151A of the 1987 Act. In my view the Arbitrator should be understood to have made such a finding. The Arbitrator’s decision and reasons were ex tempore. After noting the issue of section 151A had not been raised prior to the arbitration hearing, the Arbitrator then described section 151A as a matter he must take into account in arriving at his decision, and said the form of the section which was relevant was that applying as at 26 November 2001 (at T32.40). He expressed the view (based upon Deng) that commencement of proceedings in breach of section 151C did not render the proceedings a nullity, and an election could be made notwithstanding the breach of section 151C (at T32.55). He then proceeded to consider whether ‘waiver’ has occurred, and concluded “I consider that to be a waiver of the application that would otherwise be made under 151A and 151C” (at T33.40). Whilst it would have been desirable that he express more clearly his finding that an election pursuant to section 151A had occurred, this was a necessary part of the reasoning process referred to above.

  1. The Respondent, however, raises the question of whether an election pursuant to section 151A had occurred, having regard to the decision of the Court of Appeal in Asplundah. Section 151A, in its form as at 26 November 2001, relevantly provided:

“(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) by commencing proceedings in a court to recover those damages or by accepting payment of those damages (in which case the person ceases to be entitled to permanent loss in respect of the injury); 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).”

  1. On the clear words of the section, commencement of the common law proceedings constituted an election, as described in section 151A(3)(a). At the moment when those proceedings were commenced on 26 November 2001, the Respondent ceased to be entitled to permanent loss compensation in respect of the injury, as a consequence of the election he had made.

  1. The Respondent, in its submissions, properly concedes there are a number of decisions, in both the Compensation Court of NSW, and at Presidential level in the Commission, holding that common law proceedings commenced in breach of section 151C can operate as an election pursuant to section 151A (see for example Deng, Huynh v Andison International Pty Ltd [2005] NSWWCCPD 86, Sydney Water Corporation v Singh [2005] NSWWCCPD 92). In a different context, it has been held in both the NSW Court of Appeal, and in the High Court, that common law proceedings commenced in breach of section 151C are not a nullity: Gordon v Berowra Holdings Pty Ltd (2005) 62 NSWLR 427; Berowra Holdings Pty Ltd v Gordon (2006) 80 ALJR 1214.

  1. The Respondent pursues an argument the decision of the NSW Court of Appeal in Asplundah, dealing with the transitional provisions in Part 18C Schedule 6 clause 9(1) of the 1987 Act, means the earlier cases dealing with election, where the common law proceedings were commenced in breach of section 151C, are wrongly decided. Asplundah was a case where the worker instituted common law proceedings prior to 27 November 2001, and within six months of the date of notice of his injury (in breach of section 151C). He subsequently discontinued those proceedings, due to the breach of section 151C, after 27 November 2001. He then commenced fresh common law proceedings, claiming damages for the same injury, without complying with the various procedural pre-requisites to commencement of court proceedings for work injury damages, which applied pursuant to the 2001 amendments. The worker argued, in that case, that the second set of common law proceedings fell within the exception in clause 9(1) of Schedule 6 of Part 18C, and accordingly were governed by the pre-27 November 2001 regime, notwithstanding the second set of proceedings were commenced after 27 November 2001.

  1. Clause 9(1) provides:

“(1) An amendment made by Schedule 1 to the Workers Compensation Legislation Further Amendment Act 2001 applies in respect of the recovery of damages after the commencement of the amendment (and so applies even if the injury concerned was received before the commencement of the amendment) but does not apply in respect of the recovery of damages if proceedings for their recovery were commenced in a court before the commencement of the amendment.”

  1. The judgment of the Court of Appeal in Asplundah was delivered by Handley JA. His Honour held it was appropriate, in dealing with any ambiguity in the clause, to read the definite article into the wording of the clause, before the word “proceedings”. Thus it was necessary that the proceedings in which the damages were being recovered have been commenced prior to 27 November 2001, if the exception in the clause were to apply. It was insufficient that some other proceedings had been instituted before 27 November 2001.

  1. The Respondent relies upon Asplundah to make the following submission:   

“Applying the decision of Asplundah Tree Experts (Australia) Pty Ltd v Robertson it follows that in this case the amendments apply and are taken to have always applied. The consequence is that, retrospectively, Section 151A is repealed and did not apply when the proceedings were commenced in November 2001. In those circumstances no election occurred.”

  1. In my view the decision in Asplundah does not lead to this conclusion. It dealt with a different issue. Clause 9(1) specifically deals with the recovery of damages, giving those provisions retrospective operation, save for the stated exception where the proceedings for such recovery were commenced prior to 27 November 2001. Asplundah dealt with the construction of that clause, in the context of an action for the recovery of damages. There is nothing in the transitional provisions which would have the effect of retrospectively repealing section 151A, so as to invalidate an election which occurred prior to 27 November 2001. As at 26 November 2001, when the Respondent commenced the common law proceedings, he made an election, the effect of which was that he was no longer entitled to permanent loss compensation. Section 151A(4) provided such election was “irrevocable”, save with the leave of the court in certain specific circumstances (see State of NSW v Connor [2003] NSWCA 200). There was nothing in the transitional provisions which reinstated the Respondent’s entitlement to permanent loss compensation, which had ceased when he commenced the common law proceedings.

  1. Accordingly, in my view the Respondent, when he commenced the common law proceedings on 26 November 2001, elected within the meaning of section 151A, as it applied at that date. The consequence of this was that he ceased to be entitled to permanent loss compensation, due to section 151A. This is consistent with the finding I understand the Arbitrator to have made. However the Arbitrator then went on to find the Appellant had waived its right to rely upon such election.

Waiver

  1. The Appellant contends the Arbitrator erred in regarding Berowra Holdings as authority that an employer could waive an election pursuant to section 151A, and also that he erred in finding the circumstances of the current case were sufficient to lead to the conclusion a waiver had occurred.

  1. The Respondent submits the history of the dealings between the parties is such as to support the finding the Appellant had waived its right to rely upon the Respondent’s election. It also submits the Arbitrator’s finding should properly be understood as a refusal by the Arbitrator to permit the Appellant to rely upon the waiver argument, it not having been raised prior to the arbitration hearing. The Respondent does not specifically address the argument, regarding whether an election pursuant to section 151A is susceptible to waiver by an employer.

  1. The point made by the Appellant is a valid one, that Berowra Holdings is concerned (in part) with whether an employer could waive its rights under section 151C. The question of whether an election pursuant to section 151A could be waived was not an issue in that case. The parties, in their submissions, have cited no authority regarding whether such an election is potentially subject to waiver.

  1. In Berowra Holdings Mason P, in considering waiver and section 151C, said:

“44. A conclusion of jurisdictional nullity would remove any basis for finding that a defendant has waived the right to take the objection. It follows that, if the defendant is correct in its submission, it would not matter that it had knowingly refrained from raising the point (by motion for dismissal or defence) while using the interlocutory processes of the court, including those directed at settlement itself. Presumably even a final judgment by consent or judicial decision would have to be set aside when the point was eventually taken. It is impossible to infer that this would have been Parliament’s intent when a defendant is able to protect itself and to ensure the purpose of the Rule is given effect by taking the point in a timely manner in a normal manner.
45. In fact, there is authority recognising that waiver is possible (Dandashli, Hill at 337, Vockins at 195[8]), Deng v GMS Fulfilment Services Ltd (2003) 25 NSWCCR 446. Cf also Kammins Ballrooms Co Ltd v Zenith Investments (Torquay) Ltd [1971] AC 850, Commonwealth of Australia v Verwayen (1990) 170 CLR 394 at 406-7, 423, 471-3, 482, 497 and Whiteford v Commonwealth of Australia (1995) 38 NSWLR 100.

46. Statutory rights are not necessarily jurisdictional, and unless jurisdictional, are themselves capable of waiver unless the statute was enacted for some public interest wider than that of the private parties (see generally Admiralty Commissioners v Valverda (Owners) [1938] AC 173 at 185, Brown v The Queen (1986) 160 CLR 171 at 178, 208). In one sense, provisions such as 151C serve the public interest of encouraging dispute resolution without litigation. But they operate in the context of the adversary system in which parties not subject to disability are free to make their own forensic decisions. Subsection (2) of s151C confirms that the section is of this nature.”

  1. The majority judgment of the High Court in Berowra Holdings, whilst upholding the decision in the Court of Appeal, did not regard the concept of ‘waiver’ as a particularly helpful one in the circumstances:

“It is one thing to speak of the waiver of a legal, equitable or statutory right or privilege. However, once it is appreciated that the court has jurisdiction and that its procedural rules have been engaged, concepts such as "waiver" (and acquiescence and estoppel) are confusing and imprecise. This was pointed out by Dawson J in Verwayen[29] and Lord Browne-Wilkinson in Roebuck v Mungovin.” (at [39])

  1. In Connor a worker obtained leave pursuant to section 151D of the 1987 Act to proceed out of time, in common law proceedings against his employer. He filed a Statement of Claim pursuant to such leave. The decision granting leave was reversed on appeal. He then commenced proceedings in the Compensation Court seeking permanent loss compensation, which were ultimately met by the argument he had lost his entitlement to permanent loss compensation, as he had elected pursuant to section 151A. The judgment of the Court of Appeal was delivered by Sheller JA, who said:

“11. Section 151A requires a person to whom compensation is payable under the Act in respect of an injury to elect whether to claim that permanent loss compensation or damages in respect of the injury from the employer liable to pay that compensation. The injured person is not entitled to claim both. Subsection (3) provides that the person makes that election, inter alia, by commencing proceedings in a court to recover those damages or by accepting payment of permanent loss compensation. The election is irrevocable except that an election to claim permanent loss compensation may be revoked with the leave of the court pursuant to subs (4) or if, after the election is made, the injury causes a further material deterioration to the person’s medical condition, again with the leave of the court pursuant to subs (5). In no circumstance does the Act allow revocation of an election to claim damages in respect of the injury from the employer.”

  1. In considering the question of whether section 151C renders proceedings commenced in its breach a nullity, the majority judgment of the High Court in Berowra Holdings contains the following passage:

“For many centuries the courts have developed a well-known interpretative approach to construing certain statutory bars. In The Commonwealth v Mewett, Gummow and Kirby JJ said of a limitations statute[10]:

"[A] statutory bar, at least in the case of a statute of limitations in the traditional form, does not go to the jurisdiction of the court to entertain the claim but to the remedy available and hence to the defences which may be pleaded. The cause of action has not been extinguished. Absent an appropriate plea, the matter of the statutory bar does not arise for the consideration of the court [11]. This is so at least where the limitation period is not annexed by statute to a right which it creates so as to be of the essence of that right [12]."

What was there being referred to was a law which barred the remedy for the plaintiff's cause of action without extinguishing the right. There are numerous examples of such statutory bars. The two with the longest pedigree are s 3 of the Statute of Limitations 1623 (Eng)[13] applicable to personal actions ("all Actions ... shall be commenced ... within the Time ...") and s 4 of the Statute of Frauds 1677 (Eng)[14] ("no Action shall be brought ... unless ..."). Other examples were given in the decisions mentioned by Mason CJ in The Commonwealth v Verwayen [15].

In Dawkins v Lord Penrhyn [16], Earl Cairns LC drew a distinction between those cases and the limitations statute applicable to real actions which resulted in the extinguishment of the title of the plaintiff to the property in question after the stipulated period of time. This distinction reflects the settled approach of courts to interpreting statutes of that kind in the adversarial system of litigation which obtains in common law jurisdictions. The New South Wales legislature must be taken to have been aware of this when enacting s 151C.” (at [20] and [21])

  1. Section 151A, in its form prior to 27 November 2001, specifically extinguished a worker’s right to receive permanent loss compensation, if he made an election by commencing proceedings to recover damages. Sub-section (4) described such election as “irrevocable”, save with the leave of the court, in specified circumstances which do not have application to the current case. Having regard to the mandatory language of section 151A, and the irrevocable nature of the election, I have formed the view the election was not such that it could be waived by the Appellant.

  1. If I am wrong in this, I have also formed the view the Appellant had not acted in such a fashion as to support a conclusion of waiver, even if it were available as a matter of law. The relevant passage of the Arbitrator’s Reasons is at T33.35 to T33.40. He based his finding of waiver on the fact that, after the common law proceedings had been commenced, the Appellant had entered into negotiations, and consented to orders being made, in earlier proceedings before the Commission. This must have been a reference to the 2004 proceedings, described at [7] above. Those proceedings did not seek permanent loss compensation, but rather a determination of whether the Respondent’s permanent impairment was sufficiently high to satisfy the 15% threshold in section 151H, such that he could seek recovery of work injury damages, under the post-27 November 2001 regime. Seeking this determination was not inconsistent with the election made on 26 November 2001. As the Appellant points out in its submissions on this appeal, the only orders to which it consented in those proceedings were for their discontinuance. Accordingly, the actions of the Appellant in not raising the section 151A election in those proceedings, and then consenting to the discontinuance, cannot justify a finding of waiver.

  1. The Respondent also seeks to raise two further matters in support of the finding of waiver. Firstly, it claims once the approved medical specialist had assessed the Respondent’s losses and impairments of the back and legs at or above the knee, in the MAC resulting from the examination of 29 September 2004, the Respondent was “entitled” to an award of $27,000 pursuant to section 66. It is said that, “rather than have incomplete awards entered the Respondent elected to discontinue proceedings so that a further claim could be brought that included the neck”. It is said the “Respondent was not compelled to take that course”, and by “not raising the Section 151A issue at that stage the Appellant has allowed the Respondent to act to his detriment”.

  1. The Respondent did not, after issue of the MAC, have an entitlement to entry of awards for the impairments and losses assessed. Whilst the MAC is binding on questions of quantum, it does not decide threshold questions of injury, causation, section 9A and the like. These remain matters for determination by the Commission. The 2004 proceedings did not seek permanent loss compensation. Even if they had, an entitlement to it would not have been decisively determined by the MAC: Joppa Pty Limited t/as Tricia’s Clip-n-Snip v Edenden [2004] NSWWCCPD 50; Issott v North Sydney Leagues Club Limited t/as Seagulls Club [2005] NSWWCCPD 38; Davies v Bisaxa Pty Limited t/as Sir Joseph Banks Nursing Home [2006] NSWWCCPD 103; Connor v Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2006] NSWWCCPD 124; Ooi v NEC Business Solutions Limited [2006] NSWWCCPD 131. The question of the application of section 151A, if and when raised, similarly would have been a matter for the Commission, if the proceedings sought permanent loss compensation, not a matter to be determined by the MAC. It is not legally accurate to assert the Respondent had an entitlement to lump sum compensation, from when the MAC issued. The 2004 proceedings did not claim permanent loss compensation, and if they had, an entitlement to it would have required more than the issue of the MAC. Rather, the discontinuance of the 2004 proceedings involved an acknowledgement the MAC, as confirmed by the Medical Appeal Panel, was for an impairment lower than 15%, where 15% was required if the Respondent were to be entitled to work injury damages.

  1. The second point raised by the Respondent is that the section 151A issue had not been raised by the Appellant in its Reply in the current proceedings, and was first raised on the arbitration hearing on 1 June 2006. This is consistent with the transcript (see [16] above). It is submitted this may constitute waiver, or alternatively that the decision should be seen as a refusal by the Arbitrator to permit the Appellant to amend its pleadings to raise the issue, at that point.

  1. In dealing with the question of waiver, in the context of section 151C, Mason P in the Court of Appeal in Berowra Holdings said:

“51. A defendant’s mere failure to raise the point at the earliest opportunity will not amount to waiver or generate an estoppel (see generally Verwayen). The normal principles governing amendment apply to this as to other defences that are not pleaded at the earliest opportunity (see generally Queensland v J L Holdings Pty Ltd (1997) 189 CLR 146).

52. A defence raising non-compliance with the section should be permitted unless the facts show that it is doomed to failure because of an unarguable riposte invoking waiver and/or estoppel. If the plaintiff’s position is only arguable then waiver and/or estoppel should be pleaded in a Reply and these and other issues should normally go to trial in the ordinary course.”

  1. Consistent with this approach, clearly the Appellant should have pleaded its reliance upon section 151A in its Reply. However this failure to plead it does not give rise to waiver.

  1. The other point made by the Respondent, that the decision should properly be viewed as a refusal by the Arbitrator to permit the Appellant to amend its Reply to rely upon section 151A at that stage of the proceedings, is inconsistent with the transcript. It was acknowledged by the Appellant’s counsel that the defence based upon section 151A was “not in the pleadings” (T18.40). The Arbitrator, in an interchange with the Respondent’s counsel, quoted part of section 151A (in its pre-27 November 2001 form), and the following was then said:

ARBITRATOR:“I think it’s relatively settled law now as to how an election is made, but if it takes you by surprise Mr Cooley, I’m certainly happy for you to take some instructions and consider that. And while it’s not in the pleadings, it’s the law by which I’m bound.”
MR COOLEY: Oh, no, I appreciate that. I would be objecting if I didn’t think that. I think we’re – I think you’re bound to apply the laws of New South Wales and I think it’s just – I mean – perhaps if I can formulate that argument, if I can make my submissions – I do have a submission to make in respect of it.” (T19.10 to 19.20)

  1. The Appellant did not make a formal application to amend its Reply. The Respondent did not oppose the argument based upon section 151A being pursued in the circumstances.

  1. For these reasons, I have formed the view commencement of the common law proceedings constituted an election pursuant to section 151A of the 1987 Act, in its form as at 26 November 2001, with the consequence the Respondent was not then entitled to permanent loss compensation. I have formed the view the Arbitrator was in error in holding that election to be a matter susceptible to waiver by the Appellant. If I am wrong on that, I have formed the view the facts did not establish the Appellant had waived the consequences of that election. This is sufficient to dispose of the appeal. Should it become relevant, I should briefly deal with the other matters raised in the appeal.

The MAC in the 2004 Proceedings

  1. The Arbitrator found the MAC in the 2004 proceedings did not act as a bar to assessment of the Respondent’s neck. I agree with this finding. The MAC emanated from proceedings seeking a determination of whether the Respondent suffered from 15% impairment. Such assessments are conducted pursuant to the Workcover Guidelines, on a whole person basis, and involve application of the 5th edition AMA Guides. Those proceedings did not include any claim for permanent loss compensation for the neck (or indeed any other part). It is perfectly conceivable an injury could produce some permanent impairment of the neck, which did not necessarily result in the neck contributing to the level of whole person impairment, applying the appropriate AMA Guides (for example, neck impairment falling within DRE Category I). Assessment of the Respondent’s neck impairment was not part of the relief sought in the 2004 proceedings, nor was it part of the question referred to the approved medical specialist.

The Finding of Neck Injury – Weight of the Evidence

  1. The Appellant also attacks the Arbitrator’s finding that injury to the neck occurred, in the incident of 16 June 2001, on the basis it was against the weight of the evidence. The role of a Presidential member on review was described by Fleming DP in Babylon Property and Cleaning Services Pty Limited v Hormoz [2005] NSWWCCPD 21:

“14. The consideration of the evidence and the weight to be attached to the evidence is entirely a matter for the Arbitrator. In the absence of demonstrable error by the Arbitrator in arriving at the decision it should not be disturbed. Presidential review (pursuant to section 352 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’)) is not a rehearing where a matter is heard de novo based on all of the evidence available at a later time (Coal & Allied Operations Pty Limited v Australian Industrial Relations Commission (2000) 203 CLR 194; Builders Licensing Board v Sperway Constructions (Syd.) Pty Ltd (1976) 135 CLR 616).
15. The errors alleged by the Employer are largely matters of discretionary judgement by the Arbitrator, on the basis of his view of the evidence before him. As with any exercise of discretion by an administrative decision maker, this discretion must be exercised lawfully and fairly, taking into account the scope of the discretion and the objects of purpose for which it is conferred. It is only where the Arbitrator can be said to have failed to exercise his discretion fairly and according to law that his decision should be overturned. This occurs where the Arbitrator has: acted upon a wrong legal principle; allowed irrelevant considerations to influence the decision; made a material mistake as to the facts or failed to take into account relevant and material considerations (House v The King (1936) 55 CLR 499 at 504-505; Norbis v Norbis (1986) 161 CLR 513 at 520, National Roads and Motorists’ Association Ltd [2003] FCAFC 206 at [21] to [21]).

  1. The Arbitrator’s reasons on this point are short, although they are not attacked on that basis. They appear at T33.55 to T34.10. He refers to various pieces of medical evidence, where the Respondent complained of neck pain, and where there is medical support for the proposition the Respondent injured his neck in the incident. In addition, the Respondent had given evidence of neck symptoms commencing from two weeks after the incident (T13.5). The Respondent was cross-examined about failure to mention the neck symptoms to various medical practitioners, although he did not resile from his evidence of the neck symptoms commencing about two weeks after the incident (T17.40). Overall, I am not persuaded the Arbitrator committed any appealable error, in his consideration of the evidence on this point, or in the finding of fact he ultimately made. 

DECISION

  1. The decision of the Arbitrator dated 1 June 2006 is revoked, and in its place I make the following decision:

1.Award for the Appellant Employer

2.    No order as to costs.

COSTS

  1. I make no order as to costs of the appeal.

Michael Snell

Acting Deputy President  

7 December 2006

I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF MICHAEL SNELL ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE

WORKERS COMPENSATION COMMISSION

DETERMINATION OF APPLICATION FOR RECONSIDERATION OF A DECISION OF THE COMMISSION CONSTITUTED BY A PRESIDENTIAL MEMBER

CITATION:Bluescope Logistics Co Pty Limited (formerly BHP Transport & Logistics Pty Limited) v Finlow [2006] NSWWCCPD 338R

APPELLANT:  Bluescope Logistics Co Pty Limited (formerly BHP Transport & Logistics Pty Limited

RESPONDENT:  Wesley Finlow

APPLICANT FOR RECONSIDERATION:      Wesley Finlow (original Respondent)

INSURER:Bluescope Steel (AIS) Pty Limited

FILE NUMBER:  WCC3012-06

DATE OF ARBITRATOR’S DECISION:          1 June 2006

DATE OF APPEAL DECISION:  7 December 2006

DATE OF RECONSIDERATION DECISION: 21 March 2007

SUBJECT MATTER OF DECISION: Reconsideration power pursuant to section 350(3) of the Workplace Injury Management and Workers Compensation Act 1998; election pursuant to section 151A of the Workers Compensation Act 1987 where breach of section 151C; Regulation 229A of the Workers Compensation Regulation 2003.

PRESIDENTIAL MEMBER:  Acting Deputy President Michael Snell

HEARING:On the papers

REPRESENTATION:  Appellant: Sparke Helmore

Respondent: Turner Freeman

ORDERS MADE ON APPEAL:  The decision dated 7 December 2006 is reconsidered and varied and the following orders made in substitution:

The decision of the Arbitrator, dated 1 June 2006, is varied in that the words “as the Respondent has waived its rights under that section” are deleted from paragraph 2 of the decision.

The balance of the decision is confirmed.

The Appellant is to pay the costs of the appeal, including those relating to both the original decision, and the application for reconsideration.

RECONSIDERATION OF ORDER

  1. On 7 December 2006 I issued the following determination in the appeal:

“The decision of the Arbitrator, dated 1 June 2006, is revoked and the following decision is made in its place:

1.Award for the Appellant Employer.

2.No order for costs

No order as to costs of the appeal.”

The Background and Arguments

  1. The factual and procedural background to the matter is set out in the earlier decision, particularly at paragraphs [1] to [18], and I do not need to recite it here. There was a significant issue between the parties, as regards whether common law proceedings commenced by the Respondent, in breach of section 151C of the Workers Compensation Act 1987 (‘the 1987 Act’), constituted an election pursuant to section 151A in its form as at 26 November 2001 (the date of such commencement), such as to prevent the Respondent recovering lump sum compensation pursuant to sections 66 and 67 of the 1987 Act. There were consequential arguments regarding whether, if such an election had occurred, the Appellant had waived its rights flowing from the election.

  1. A starting point in the argument was whether commencement of the common law proceedings, notwithstanding the breach of section 151C, constituted an election pursuant to section 151A. I found that the Arbitrator, on a proper reading of his Reasons, had answered this question in the affirmative ([27] of the earlier determination). There was a line of authority, in both the Compensation Court of NSW and the Workers Compensation Commission, consistent with this view. Some examples of such decisions are referred to at [30] of the earlier determination. After reviewing the Arbitrator’s decision on the point, and referring to the legislation and certain authorities, at [27] to [36], I expressed the conclusion, at [36], that commencement of the common law proceedings amounted to an election. I found the consequence of this was that the Respondent had ceased to be entitled to permanent loss compensation, due to the operation of section 151A.

  1. I then dealt, at [37] to [53], with the parties’ arguments regarding whether, if an election had occurred (as I found to be the case), that election was susceptible to being waived by the Appellant, and if so, whether it had been waived. I ultimately concluded, at [53], that the election was not susceptible to waiver, and even if it were, the evidence did not establish a waiver. This led to the conclusion that the proceedings, which sought only lump sum compensation, could not succeed, as there had been an election pursuant to section 151A.

  1. At [54] to [56] I dealt briefly with other arguments raised on the appeal, although the conclusions I had already reached, on the topics of ‘election’ and ‘waiver’, were sufficient to dispose of the appeal. These short points were decided in a manner favourable to the Respondent.

  1. The earlier decision was dated 7 December 2006. On 11 December 2006 the NSW Court of Appeal delivered judgment in Humphreys v Mulco Tool & Engineering Pty Ltd [2006] NSWCA 355 (‘Humphreys’). Humphreys raised the same issue as the current matter, being whether commencement by a worker of proceedings to recover damages from his employer, in contravention of section 151C, prior to commencement of the amendments in the Workers Compensation Legislation Further Amendment Act 2001, precluded a worker from claiming lump sum compensation due to the ‘election’ provisions in section 151A.

  1. The dissenting judgment of McColl JA in Humphreys (see particularly [89] to [91]) is generally consistent with the conclusion I reached on the point. Her Honour found a binding election had occurred when a worker instituted common law proceedings against his employer, notwithstanding such proceedings were commenced in breach of section 151C. This prevented him subsequently claiming lump sum compensation for the injury the subject of the common law proceedings, due to the operation of section 151A.

  1. However the majority judgment of Basten JA (with whom Ipp JA agreed) came to a contrary view. Basten JA said:

“Accepting that the proceedings commenced by the Appellant were not a nullity, as held by Berowra Holdings, there is a separate question as to whether, by commencing proceedings in contravention of s 151C(1), the Appellant in fact made a statutory election for the purposes of s 151A(3)(a). A literal reading of that provision taken in isolation would suggest that he did. He commenced proceedings in the District Court, which proceedings were dismissed, but which were legally effective to engage the jurisdiction of the Court.” (at [124])

  1. His Honour went on, after considering the interrelationship between sections 151A and 151C, to prefer what he described as a purposive construction of the legislation:

“134. A construction which places a premium on the employee obtaining flawless legal advice (in an area where change is the norm) by putting in the hands of the employer a power immediately to strike out a claim for damages as invalid, but to rely upon the same claim as a valid election, precluding a claim for compensation, is unattractive. It goes further than promoting a policy against double claims (let alone double recovery) and effectively precludes litigation of any claim. Such a construction does not further any discernable statutory purpose: it tends to undermine the statutory entitlements to compensation for non-economic loss. There being no power to undo an ill-advised or mistaken commencement of proceedings, if there is a construction which avoids a blatant subjection of substantive rights to procedural precision, it should be preferred.

135. A purposive construction, giving effect to these considerations, requires that ss 151A and 151C be read together so that, taken as part of a statutory scheme, the prohibition in s 151C is given effect in s 151A as a limitation on the period within which an effective election can be made. Thus, the election made in the present case was not legally effective, because the Appellant was not at the relevant time a person entitled to make such an election, and is now entitled to pursue his claim for compensation, in accordance with the current law.”

  1. On 13 December 2006 the Respondent’s solicitors  wrote to the Registrar of the Commission, also forwarding a copy of the correspondence to the Appellant’s solicitors, seeking that the matter be referred back to me for reconsideration of my decision of 7 December 2006, in light of the decision in Humphreys.

  1. On 15 December 2006 I caused a Direction to be issued by the Registrar, directing the parties to file and serve submissions dealing with whether my decision of 7 December 2006 should be reconsidered, in light of the decision of the NSW Court of Appeal in Humphreys. 

  1. On 8 January 2007 the Respondent’s solicitors lodged written submissions. Effectively, these argued my decision of 7 December 2006 should be reconsidered, as it was inconsistent with the subsequent majority decision in Humphreys. It was additionally asserted the Respondent had “filed a Holding Summons in the Court of Appeal pending the outcome of this Application for Reconsideration”. There were also some other submissions at [10] and [11] of that document, which do not really flow from the decision in Humphreys, and which I shall deal with later in these reasons. The submissions of the Respondent did not seek to deal with the issue of whether the Commission’s reconsideration power, found in section 350(3) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’), was available in the circumstances.

  1. The Appellant filed written submissions on 12 February 2007. These argued there was a procedure for appeal from a Presidential member to the Court of Appeal, in section 353 of the 1998 Act, and the “coming into being of additional appellate authority after a Presidential decision has been handed down should not be regarded as sufficient justification for a decision being re-opened or reconsidered and infringes on the principle of finality of proceedings being achieved”. Other than to query the submissions at [10] of the Respondent’s submissions, the Appellant’s submissions did not concern themselves with the substantive argument regarding whether Humphreys justified a decision different to that reached by me on 7 December 2006. It was submitted that, if there were to be a reconsideration, there should be “further submissions as to the merits and application of Humphreys Case”. The Appellant did not take issue with the assertion of the Respondent, that the Respondent had filed a holding appeal in the Court of Appeal.

  1. On 20 February 2007 I issued a further Direction in the following terms:

“The Appellant Employer is invited to make such further written submissions as it may wish, on or before 7 March 2007, generally, on the substantive issues raised by the Respondent Worker’s request for reconsideration, and what orders should be made, if the reconsideration power is available and is exercised in the circumstances.”

  1. On 26 February 2007 the solicitors for the Respondent wrote to the Registrar of the Commission, seeking that both parties be entitled to make further submissions, on the Workers Compensation Amendment (Transitional) Regulation 2007 (‘the Regulation’). On 28 February 2007 I caused another Direction to be issued:

“1.The Appellant Employer, when making written submissions pursuant to the previous direction dated 20 February 2007, is invited to include therein submissions on the Workers Compensation Amendment (Transitional) Regulation 2007.

2.The Respondent Worker is invited to make such further written submissions as it may wish, on or before 7 March 2007, on the Workers Compensation Amendment (Transitional) Regulation 2007.”

  1. The Respondent’s solicitors lodged further written submissions dated 2 March 2007. These submitted the reconsideration power should be exercised in the circumstances, so as to apply the law of New South Wales. Reference was made to Electricity Commission of NSW v Yates (1991) 30 NSWLR 351. It was submitted the Regulation is retrospective in its operation, and the operation of clause 229A(3) of the Regulation results in the conclusion the Respondent’s common law proceedings, commenced in breach of section 151C and consequently discontinued, never operated as a valid election for the purposes of section 151A.

  1. The Appellant lodged further written submissions dated 7 March 2007, in which it indicated it had “no further submissions to make on the substantive issues raised by the Respondent worker’s request for reconsideration” and “no submissions to make in relation to the Workers Compensation Amendment (Transitional) Regulation 2007”. There was a submission that, if the matter were reconsidered, each party should bear its own costs of the original appeal and the reconsideration.

Reconsideration On the Papers

  1. The original decision in this matter was made ‘on the papers’ (see paragraphs [21] and [22]). The original decision and all other documentation on which that decision was based remains before me. Neither party has submitted I should adopt any different course on this reconsideration. I accordingly will deal with the reconsideration, as I dealt with the original decision, ‘on the papers’.

The Reconsideration Power

  1. Section 350(3) provides as follows:

“The Commission may reconsider any matter that has been dealt with by the Commission and rescind, alter or amend any decision previously made or given by the Commission.”

  1. Reconsideration is sought in the current matter on two bases. Firstly, the handing down of a judgment in the Court of Appeal, by which I would be bound, shortly after my earlier decision. The majority judgment in Humphreys reached a conclusion, on whether common law proceedings, commenced in breach of section 151C, constituted a valid election, different to the view I had reached and applied in my earlier decision. Secondly, the Regulation, made subsequent to my earlier decision, is submitted to have the consequence, independent of Humphreys, that commencement by the Respondent of his common law proceedings “does not operate (and is taken never to have operated) as an election to claim damages for the purposes of (section 151A)”.

  1. The only authority to which I have been referred by either party, in submissions on whether the reconsideration power is properly available in the circumstances, is Electricity Commission of NSW v Yates (1991) 30 NSWLR 351 (raised in the Respondent’s Further Submissions). That authority does not deal with the reconsideration power, or any power analogous to it. It deals with the appropriateness of the Court of Appeal applying legislation on appeal, when such legislation was in force when proceedings were conducted at first instance, but not raised or relied upon by either party. Notwithstanding the rule that a party is normally bound by the conduct of his case (see University of Wollongong v Metwally & Ors (No 2) [1985] 59 ALJR 481), the Court of Appeal intervened to correct error, where:

“The law applied by the judge was not the law of this State. The trial judge did not fall into error in the course of attempting to apply the law which governed the case. The judge completely misconceived the relevant law by overlooking the statute which governed the award of damages in this case.” (per Handley JA at 357E)

I do not find this authority of any great assistance, in considering the availability of the reconsideration power in current circumstances. 

  1. The submissions made by the Appellant on the topic, assert the appeal was decided in my earlier decision, and it is inappropriate I revisit the matter. It is submitted a Presidential decision should “be varied only by an appellate court as authorized by the Act” (at [3] of the Appellant’s submissions). The Appellant’s submissions on the point bear a similarity to the submissions put, unsuccessfully, by the appellant employer in Hardaker v Wright & Bruce Pty Limited (1962) 62 SR (NSW) 244 (‘Hardaker’) at 248. Whilst the Appellant’s submissions do not use the term, their thrust is consistent with an assertion by the Appellant of res judicata. The inter-relationship between the reconsideration power, and the doctrine of res judicata, was discussed by Neilson J in Bruce v Grocon (1995) 11 NSWCCR 247:

    “Of course, the doctrine of res judicata, meaning cause of action estoppel, and also the doctrine of issue estoppel can have no application in a claim for reconsideration pursuant to section 17(4). It is to overcome such principles that the power of reconsideration exists. That is what Rainbow J was referring to in Humphreys v Shell Co of Australia Ltd. However, in my view, absent an application under section 17(4) of the Compensation Court Act1984, any determination made by this Court does create an issue estoppel: see Somodaj v Australian Iron & Steel Ltd (1963) 109 CLR 285. Therefore, there is no reason in principle why a determination of this Court could not in appropriate circumstances create a cause of action estoppel, absent an application under section 17(4).” (at 264D)

  1. Logically this must be correct. The reconsideration power would be of no utility, if it were impossible to revisit a decision which, in the absence of reconsideration, created a res judicata. If the submissions of the Appellant on the point were correct, the reconsideration power would have no work to do.

  2. Hilliger v Hilliger (1952) 52 SR (NSW) 105 (‘Hilliger’) concerned a power under the Landlord and Tenant (Amendment) Act 1948 – 1951 to vary, discharge or rescind any order previously made in proceedings taken by a lessor for possession. In considering the use of the power Street CJ said:

    “I see no reason for limiting the generality of the words used in the section, and whether the question be one of fact or one of law, if the circumstances warrant it, I think that there is power in the Court to entertain an application for variation or recision so long as the original order is current, and to make such order in the way of variation or recision as to it may seem proper. It is important, naturally, to keep well in mind the distinction between the existence of the power and the occasion of its exercise, and courts should not lose sight of the general rule that public interest requires that litigation should not proceed interminably. A party who seeks or opposes an order must produce all the available evidence at the original hearing, and courts must be on their guard to refuse to allow the same matter to be litigated again and again. But at the same time it is clear that the Legislature intended to leave with the prescribed courts the power of reviewing any decision in order to see that justice is done between the parties.” (at 108) (my emphasis).

  3. Hardaker concerned the reconsideration power contained in section 36(2) of the Workers Compensation Act 1926 (‘the 1926 Act’), the equivalent provision to that now found in section 350(3) of the 1998 Act. Owen and Walsh JJ referred to the reconsideration power being “expressed in extremely wide terms” (at 248). Their Honours quoted and applied the above passage from Hilliger, saying:

    “Thinking, as we do, that these observations are applicable in relation to s. 36(2), we find no ground for holding, as a matter of law, that the Commission was not entitled to reconsider the original award of 22nd April, 1953. Such reconsideration is not necessarily limited to an examination of changed circumstances, or of fresh evidence concerning the original circumstances. It may, in a proper case, extend to considering whether an error has been made, whether of fact or of law, and to making such new or altered award as the circumstances, when thus reconsidered, appear to require.” (at 249) (my emphasis).

  4. In Schipp v Herfords Pty Limited [1975] 1 NSWLR 412 (‘Schipp’) Samuels JA, discussing the power conferred by section 36(2) of the 1926 Act, said:

    “It is clear that the authority conferred by this provision is a discretionary one, and permits the Commission to review, and correct, errors of both fact and law: Hardaker v Wright & Bruce Pty Ltd .” (at 424E) (my emphasis).

  5. In Schipp the judge at first instance was found to have erred in law, in failing to permit a worker to withdraw his Application part way through judgment, when it had become apparent the worker would be unsuccessful. An award was entered in the employer’s favour. The worker did not seek to appeal the decision, but about two years later, brought an application for reconsideration, based upon the earlier error of law. The judge on the reconsideration, while accepting his earlier failure to permit withdrawal amounted to an error of law, declined to reconsider the earlier decision. He declined to exercise his discretion under section 36(2), having regard to the worker’s failure to appeal the original decision, or to otherwise seek to review it, over the intervening two years. This exercise of discretion was not disturbed by the Court of Appeal. In considering the availability of the reconsideration power to correct errors of law, Samuels JA said at 426D:

    “To my mind, there was much more involved here than delay alone. First, the worker had not brought the appeal to this Court for which s. 37(4) provides. It seems to me that the terms of s. 37 as a whole clearly intend that the primary mode of challenge to errors of law is to be by appeal to the Supreme Court. I say ‘primary’ because such errors may be dealt with also under s. 36(2). But I do not think that these review provisions are to be regarded as fully alternative to the right of appeal. They may be capable of doing the same work, but the extent to which they should be permitted to perform the same function ought properly to be controlled; and the means of control is to be found in the discretion. Hence, where relief is available both by way of appeal and in an application under s. 36(2), failure to appeal is relevant to the exercise of the discretion.”

  6. In Maksoudian v J Robins & Sons Pty Limited (1993) 9 NSWCCR 642 Bishop J was considering a reconsideration application based upon fresh evidence. His Honour said:

    “The legal basis for a reconsideration for an award of the Court as laid down in section 36 of the previous legislation and section 17 of the present is well settled. There is no doubt that the discretion of this Court to reconsider is wide and far reaching. The task of the Court is to balance the policy requirement of finality of litigation with the obligation to rectify any clear cut injustice. The cases do not comprehensively indicate how the Court is to approach this task, but it does seem that two broad requirements are laid down. The first of these is that the material leading to an application for reconsideration must be what can broadly be described as ‘fresh evidence’, namely material that with reasonable diligence could not have been put before the Court at the time of the original proceedings and the application for reconsideration has to move with appropriate speed and diligence to bring that matter to the Court's attention. The second point is that the fresh evidence must be of such a nature that if it had been before the Court when the original proceedings were heard it would more likely than not have affected the outcome of the proceedings: Hardaker v. Wright & Bruce Pty Ltd (1962) 62 SR (NSW) 244 and Hilliger v. Hilliger (1952) 52 SR (NSW) 105.”

  7. Fleming DP in Comensoli v Department of Juvenile Justice [2006] NSWWCCPD 138, applied the decision of the NSW Court of Appeal in CSR Limited v Bouwhuis (1991) 7 NSWCCR 223 (‘Bouwhuis’) (a case under the Dust Diseases Tribunal Act 1989), to read the reconsideration power in a more restrictive way than had been suggested by the other authorities discussed above. The Deputy President said:

    “The power is wide and discretionary, however an application for reconsideration of a Commission decision should only be granted where there are exceptional circumstances so that the reconsideration is necessary to address a “manifest injustice” in the particular case.” (at [64])

  8. For reasons given by Roche ADP (as he then was) in Samuel v Sebel Furniture Limited [2006] NSWWCCPD 141, and myself in Nan v Country Road Freight Services Pty Limited [2006] NSWWCCPD 160, I am of the view the decision of the Court of Appeal in Bouwhuis, whilst clearly applicable to reconsiderations under the Dust Diseases Tribunal Act 1989, should not be taken to have general application to matters arising under the reconsideration power of the Commission pursuant to section 350(3) of the 1998 Act.

  9. Applying the above principles to the current matter, in my view the following considerations favour exercise of the reconsideration power in the circumstances:

    (i)The matters relied upon, both the Court of Appeal authority of Humphreys, and the Regulation, would, had they been available at the time of the earlier decision, have affected the outcome.

    (ii)As these matters post-date the earlier decision, they could not have been utilised at the time of the earlier decision. The situation is quite different to one where authority or legal principle was not referred to by a legal adviser due to mistake or oversight (see Selfe v A Cook & Sons Pty Limited [1965] WCR 88; Hurst v Goodyear Tyre & Rubber Co (Australia) Limited [1953] WCR 29)

    (iii)The Respondent (who seeks the reconsideration) has acted with diligence and promptness, in bringing the matters to the Commission’s attention, and seeking the reconsideration.

    (iv)The Respondent has, as a matter of prudence, sought to preserve his appeal rights, having filed a Holding Summons in the Court of Appeal, pending the outcome of the reconsideration application.

    (v)The reconsideration power is an extremely wide one, and is available to correct errors of both fact and law. It is available to do justice between the parties according to the substantial merits of the case: Samuels at [58].

  10. The consideration which militates against exercise of the discretion in the circumstances, is the public interest that litigation should not proceed indefinitely: Hilliger and Samuel.  

  11. The circumstances of the matter are quite unusual. An appellate authority has been delivered, a matter of days after the original decision, inconsistent with the reasoning in the original decision. Shortly thereafter, the Regulation was made inserting clause 229A into the Workers Compensation Regulation 2003. The affect of the inserted clause is to retrospectively provide that the factual circumstances in the current matter, do not operate, and are taken never to have operated, as an election, for the purposes of section 151A.

  12. In my view, it is appropriate that I exercise my discretion under section 350(3) of the 1998 Act, to reconsider my decision of 7 December 2006.

Application of the Matters Relied Upon to the Original Decision

  1. The circumstances surrounding the commencement, and subsequent discontinuance, by the Respondent of common law proceedings against the Appellant, are set out at [5] and [6] of my decision of 7 December 2006. It is clear, from the passages of the majority judgment of Basten JA in Humphreys, quoted at [9] above, that such circumstances cannot, consistent with that decision, be regarded as constituting an election for the purposes of section 151A of the 1987 Act.

  2. Clause 229A, inserted into the Workers Compensation Regulation 2003 by the Regulation, is in the following terms:

    “229A Application of 2001 amendments relating to work injury damages to discontinued transitional proceedings

    (1) In this Subdivision:

    discontinued transitional proceedings means proceedings to recover damages in respect of a transitional injury that were commenced in the 6 month period immediately before the commencement of Schedule 1.1 to the Workers Compensation Legislation Further Amendment Act 2001 and are discontinued or struck out in connection with the application to the proceedings of section 151C of the 1987 Act.

    transitional injury means an injury notice of which was given to the employer in the 6 month period immediately before the commencement of Schedule 1.1 to the Workers Compensation Legislation Further Amendment Act 2001.

    (2) Despite clause 9 (1) of Part 18C of Schedule 6 to the 1987 Act, an amendment made by Schedule 1 to the Workers Compensation Legislation Further Amendment Act 2001 extends to the recovery of damages in respect of a transitional injury in relation to which discontinued transitional proceedings were commenced (even though the proceedings were commenced before the commencement of that Schedule).

    (3) The commencement of discontinued transitional proceedings is to be ignored for the purposes of section 151A of the 1987 Act (as in force when the proceedings were commenced), with the result that the commencement of the proceedings does not operate (and is taken never to have operated) as an election to claim damages for the purposes of that section.

    (4) Section 151D of the 1987 Act does not apply to the commencement of proceedings in respect of a transitional injury that may be commenced because of the operation of this clause (and that could not otherwise have been commenced).”

  3. The Appellant has restricted its submissions to procedural and discretionary matters, going to the question of whether the reconsideration power is available to be exercised in the circumstances. It has not, in its further written submissions dated 7 March 2007, sought to make submissions on the substantive issues raised in the Respondent’s reconsideration application, including the affect of clause 229A.

  4. The common law proceedings commenced (and discontinued) in the current matter fall, as is submitted on the Respondent’s behalf, within the definition of ‘discontinued transitional proceedings’ in clause 229A. The retrospective intention of the clause is clear. As a consequence of sub-paragraph (3) of that clause, commencement of those proceedings is taken never to have operated as an election, for the purposes of section 151A.

  5. It flows from the above that, as a consequence of both Humphreys and clause 229A, there was never an election for the purposes of section 151A, which would preclude the Respondent from pursuing his entitlement to lump sum compensation pursuant to sections 66 and 67 of the 1987 Act.

Further Submissions of the Respondent

  1. At [10] of the Respondent’s written submissions dated 8 January 2007, there are submissions purporting to relate to paragraph [45] of my original decision, which go to whether there was error in the medical assessment certificate (‘MAC’) of Professor Higgs, the approved medical specialist (‘AMS’). Paragraph [45] of my original decision did not touch in any way on the MAC, but rather was part of my reasons on the issue of ‘waiver’. The submissions probably relate to paragraph [54] of my original decision, which did touch on the MAC. The Respondent’s written submissions concern themselves with whether there was some error by the AMS. The inclusion of submissions on this topic is misconceived, in that I do not have jurisdiction to correct any error in the MAC. They are further misconceived, in that such matters could not in any way properly form a basis for reconsideration pursuant to section 350(3) of the 1998 Act.

  2. Paragraph [11] of the Respondent’s written submissions dated 8 January 2007, refers to my original decision at paragraphs [54] and [55]. It is not apparent whether the submissions seek that I reconsider that part of my decision. It is said the Commission should reconsider its decision and “find that the Applicant’s neck injury arose from the incident of 16 June 2001”. The conclusions expressed at [54] and [55] (albeit briefly given the views I had reached on ‘election’ and ‘waiver’), were to the effect of confirming decisions of the arbitrator, which were in favour of the Respondent.

DECISION

  1. Questions of waiver do not arise, as Humphreys and clause 229A lead to the result that there was never a valid election for the purposes of section 151A. Accordingly it is appropriate that I reconsider my decision of 7 December 2006 to vary that decision to the following:

    “The decision of the Arbitrator, dated 1 June 2006, is varied in that the words “as the Respondent has waived its rights under that section” are deleted from paragraph 2 of the decision.

The balance of the decision is confirmed.”

COSTS

  1. The Appellant has submitted that, should the decision be reconsidered, each party should pay its own costs of the original appeal proceedings, and the application for reconsideration.

  1. In my view it is appropriate that costs follow the event. The ultimate outcome has been that the Respondent has succeeded. The Appellant is to pay the costs of the appeal, including those relating to both the original decision, and the application for reconsideration.

Michael Snell

Acting Deputy President  

21 March 2007

I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF MICHAEL SNELL, ACTING DEPUTY PRESDIENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE

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Cases Cited

20

Statutory Material Cited

0

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Gordon v Berowra Holdings Pty Ltd [No 2] [2005] NSWCA 123