Bouchmouni v Bakhos Matta t/as Western Red Services - [2013] NSWWCCPD 4

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:		Bouchmouni v Bakhos Matta t/as Western Red Services [2013] NSWWCCPD 4
APPELLANT:		Elias Bouchmouni
RESPONDENT:		Bakhos Matta t/as Western Red Services
INSURER:		QBE Workers Compensation (NSW) Ltd
FILE NUMBER:		A1-6578/12
ARBITRATOR:	Ms J Scott
DATE OF ARBITRATOR’S DECISION:		19 October 2012
DATE OF APPEAL DECISION:		6 February 2013
SUBJECT MATTER OF DECISION:		Estoppel; effect of consent orders; meaning of “injury”; difference between an “injury” and a condition that has resulted from an “injury”; s 4 Workers Compensation Act 1987
PRESIDENTIAL MEMBER:		Deputy President Bill Roche
HEARING:		On the papers
REPRESENTATION:		Appellant:	Frisina Lawyers
Respondent:	Sparke Helmore Lawyers
ORDERS MADE ON APPEAL:		1. Paragraphs 1 and 2 of the Certificate of Determination of 19 October 2012 are revoked and the following order is made in their place: “1. The applicant’s claim for lump sum compensation is remitted to the Registrar for referral to an Approved Medical Specialist for assessment of the degree of whole person impairment as a result of the condition of his lumbar spine, which condition has resulted from the injury to his right knee on 13 March 2003.” 2. Paragraphs 3 and 4 of the Certificate of Determination are confirmed. 3. The respondent employer is to pay the appellant worker’s costs of the appeal, as agreed or assessed.

INTRODUCTION

In 2008, the Commission made consent orders between the parties that provided, among other things, for an award for the respondent “in respect of the claim for injury to the [a]pplicant’s back”. This appeal concerns the meaning of the word “injury” in those orders and the effect of the orders generally. Specifically, the issue is whether, because of the consent orders, the worker is estopped from claiming lump sum compensation for back symptoms that have resulted from an accepted injury to his right knee.

BACKGROUND

Mr Bouchmouni injured his right knee on 13 March 2003, when he struck it on a protruding pipe while performing his usual duties for Bakhos Matta t/as Western Red Services (the respondent). At his initial medical examinations, and in his claim form dated 6 April 2003, Mr Bouchmouni complained only of pain in his right knee and made no mention of having injured his back. His statements of 30 June 2008 and 26 April 2012 also referred only to his knee injury and made no reference to having injured his back on 13 March 2003.
He was diagnosed as having a right medial meniscal tear and had surgery on 1 May 2003. Shortly after the surgery, while having physiotherapy for his knee, Mr Bouchmouni felt severe back pain, which started while he was lifting weights with his legs and worsened when the physiotherapist later bent his leg.
On 26 May 2003, Mr Bouchmouni complained to his general practitioner, Dr Homsi, about having felt back pain during the physiotherapy. Dr Homsi’s notes confirm that Mr Bouchmouni complained on 26 May 2003 that his back pain started the previous day while having physiotherapy.
On 24 June 2003, Mr Bouchmouni returned to see his orthopaedic surgeon, Dr Hale, and complained of persistent back pain, right buttock pain and pain radiating down to his right knee. On examination, he had marked lumbar tenderness with restricted movement. Dr Hale suspected that Mr Bouchmouni’s pain came from his back rather than his knee and referred him to Dr New, orthopaedic and spinal surgeon.
Liability for the right knee injury was accepted and the insurer commenced voluntary payments of compensation.
On 2 December 2007, Mr Bouchmouni saw Dr Guirgis, orthopaedic surgeon, after having been referred for treatment by Dr Homsi. In a reported dated 11 December 2007, addressed to Mr Bouchmouni’s former solicitors, Carroll & O’Dea, Dr Guirgis took a history that Mr Bouchmouni injured his knee in the incident on 13 March 2003 and that he was not bothered about the twinges of pain in his back, but one month after the accident he started feeling persistent pain and stiffness in his lower back. Since then, he continued to complain of episodic pain and stiffness in the lower back with attacks of radiation down his right leg.
Dr Guirgis assessed Mr Bouchmouni to have eight per cent whole person impairment as a result of his knee injury and seven per cent whole person impairment as a result of his back injury, which gave a combined impairment under the tables of 14 per cent.
On 29 January 2008, Mr Bouchmouni claimed lump sum compensation in the sum of $18,500 in respect of a 14 per cent whole person impairment due to the condition of his back and right knee, and $45,000 compensation for pain and suffering.
So far as the alleged injury to the back was concerned, the respondent’s insurer disputed liability in a s 74 notice on 5 May 2008, on the grounds that Mr Bouchmouni had not sustained an injury to his back arising out of or in the course of his employment (s 4 of the Workers Compensation Act 1987 (the 1987 Act)) and that his employment was not a substantial contributing factor to the injury within the meaning of s 9A of the 1987 Act. It added that Mr Bouchmouni did not suffer any whole person impairment in respect of his back “in respect of an injury arising out of or in the course of [his] employment” with the respondent, again referring to s 4 of the 1987 Act.
The s 74 notice also referred to several other issues “relevant to the decision”. They included that the insurer had previously denied liability for medical expenses (under s 60 of the 1987 Act) associated with Mr Bouchmouni’s back condition because he had not sustained an injury to his back arising out of or in the course of his employment, as alleged on 13 March 2003, or, in the alternative, that his employment was not a substantial contributing factor to any back injury.
The notice then referred to the medical histories, all of which referred to Mr Bouchmouni having developed back pain while having physiotherapy for his knee (or because of his altered gait) rather than having injured his back in the incident on 13 March 2003. It also referred to a history taken by Dr Johnson, consultant surgeon, dated 17 September 2003, that the back pain developed as a consequence of an altered gait because of the right knee injury.
On 8 July 2008, Mr Bouchmouni commenced proceedings in the Commission in which he claimed lump sum compensation as particularised in the letter of 29 January 2008 (the first proceedings). The Application to Resolve a Dispute (the first Application) alleged that Mr Bouchmouni had injured his right knee, right thigh and back in the following circumstances:
“The Applicant was cleaning glass of a building from the outside on a scaffold and was conveying from one balcony to another when the Applicant hit a protruding pipe on his right knee and suffered injury to his right knee, right thigh and back.”
That claim was settled on 2 October 2008 and the Commission made the following orders by consent (the consent orders):
“1. Amend the Application to Resolve a Dispute to add in Part 4 the words ‘on or about’ before 13 March 2003.
2.    Award for the Respondent in respect of the claim for injury to the Applicant’s back.
3.    That the proceedings in relation to the Applicant’s claim for lump sum compensation for injury to his right lower extremity be discontinued.
4.    That the Requirement to file a Notice of Discontinuance pursuant to Rule 15.7 in relation to the Applicant’s claim for lump sum compensation for injury to his right lower extremity is dispensed with.
5.    That the Respondent pay the Applicant’s costs as agreed or assessed.
The following is not a determination of the Commission, however, I note that the parties have agreed the following:
1. Parties to enter a complying agreement with the Respondent to pay the Applicant $10,000.00 pursuant to section 66 in respect of an 8% Whole Person Impairment of the right lower extremity attributable to the injury on or about 13 March 2003.”
The respondent’s insurer denied liability for the right knee injury by letter dated 16 December 2011 on the grounds that Mr Bouchmouni “no longer suffered an injury within the meaning” of s 4 of the 1987 Act and no longer suffered any incapacity. Essentially, though it was incompetently expressed, the insurer’s argument was that the effect of the injury on 13 March 2003 had resolved. As required by s 54 of the 1987 Act, weekly compensation continued until 10 February 2012.
Based on an assessment by Dr Habib dated 1 March 2012, by letter dated 22 March 2012, Mr Bouchmouni claimed lump sum compensation of $10,000 made up as follows: $20,000 in respect of a 15 per cent whole person impairment due to injury to his right lower extremity (right knee) “with secondary consequential condition to [the] lumbar spine” less the $10,000 paid under the 2008 settlement.
The insurer disputed liability for this claim on the grounds that Mr Bouchmouni’s medical evidence did not support any deterioration of the right knee since the consent orders and Mr Bouchmouni was estopped from “pursuing compensation in respect of the lumbar spine, given the [consent] award entered in 2008”.
Mr Bouchmouni filed an Application to Resolve a Dispute (the second Application) in the Commission on 25 June 2012, claiming lump sum compensation under s 66 of $10,000 (as per the letter of 22 March 2012), $20,000 for pain and suffering, and weekly compensation from 11 February 2012 to date and continuing. The injury was described as “injury to his right knee and secondary condition to his back thereafter”. Under, “Describe how the injury occurred”, the following appeared:
“The applicant was moving from one balcony to another over scaffolding when his right knee hit a protruding pipe and he suffered injury to his right knee. Thereafter, the applicant suffered a secondary condition to his low back.”
At the arbitration on 18 October 2012, the respondent’s counsel, Mr Baker, submitted:
(a)     all the contemporaneous medical histories recorded that Mr Bouchmouni’s back issues were as a result of his physiotherapy;
(b)     Mr Bouchmouni’s statements made no reference to having injured his back on 13 March 2003;
(c)     the amendment of the first Application to add “on or about” meant to include “options occurring about that time” (T15.9);
(d)     the only inference was that Mr Bouchmouni was going to run his (first) case based on his statement, and the medical evidence, to the effect that he “developed low back pain probably as a result of the physiotherapy” (T15.21);
(e)     there was relevantly only one work injury, namely, the injury on 13 March 2003;
(f)      a consent judgment can create res judicata estoppels (Rail Services Australia v Dimovski [2004] NSWCA 267; 1 DDCR 648 (Dimovski);
(g)     in the consent orders, the parties agreed that “there was no relevant injury to [Mr Bouchmouni’s] back as a result of the episode of the 13^th of March, [and] equally they agreed that the loss that the Applicant suffered was in fact an eight per cent whole person impairment in relation to his right lower extremity” (T16.20);
(h)     the assessments of impairment as a result of the knee injury ranged from one per cent to eight per cent and there was “a compromise agreement reached” (T17.23) whereby the respondent agreed to pay the higher assessment;
(i)      just as the respondent was estopped from disputing the eight per cent whole person impairment due to the knee injury, Mr Bouchmouni was “estopped from now asserting that he in fact does have an injury … to his back as a result of the injury occasioned to him on the 13^th of March 2003” (T17.39), and, in reply,
(j)      the respondent had disputed that Mr Bouchmouni had injured his back on 13 March 2003 and “rejected [the] notion” (T32.53) in Dr Johnson’s report that the back pain developed as a consequence of an altered gait from the right knee injury.
In an extempore decision, the Arbitrator said (at T41.49) that the medical evidence and Mr Bouchmouni’s statements made it “abundantly clear that the back injury occurred post-operative to the knee injury as a result of physiotherapy” after the knee operation, altered gait, and the use of crutches, and “it was this in my decision that the Consent Orders referred to” (T42.1). She added ( at T42.7) that the facts were clear in the 2008 application and she found that Mr Bouchmouni was estopped from “making a claim for lump sum impairment to the lumbar spine as a result of the injury on the 13^th of the third 2008”. The Arbitrator then dealt with the claim for weekly compensation.
The Commission issued a Certificate of Determination on 19 October 2012 in the following terms:
“1. The applicant is estopped from bringing a lump sum claim under s 66 Workers Compensation Act 1987 for the lumbar spine resulting from the injury on 13 March 2003.
2.    The applicant is estopped from bringing a claim for weekly benefits as a result of injury to the lumbar spine resulting from the injury on 13 March 2003.
3.    The respondent pay the applicant weekly compensation at the rate of:
(a) $339.63 from 11/02/2012 to 30/06/2012 under s 40 of the Workers Compensation Act 1987.
(b)$346.07 from 01/072012 to date and continuing under s 40 of the Workers Compensation Act 1987.
4.    The respondent pay the applicant’s costs as agreed or assessed. I certify this case to have a level of complexity for both the applicant and the respondent and uplift costs by 25%.”

Mr Bouchmouni has appealed the Arbitrator’s estoppel findings, but has not challenged the award for weekly compensation.

ON THE PAPERS

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

SUBMISSIONS

Appellant’s submissions

It has been submitted on behalf of Mr Bouchmouni that he is not precluded from raising a consequential condition to the lumbar spine, noting that there were no admissions or agreed facts signed when the first proceedings were settled. The medical evidence from Dr Guirgis and the pleadings in the first proceedings, combined with the wording of the consent orders, does not permit a conclusion that Mr Bouchmouni’s earlier proceedings concluded a claim for a consequential condition to the lumbar spine.
The consent orders only relate to the injury to the back and nothing more. In the second Application, Mr Bouchmouni is not alleging that he received an injury to the back within the meaning of s 4 of the 1987 Act. The Arbitrator’s finding that an estoppel exists extends beyond the agreement between the parties regarding injury to the back. The Arbitrator could give no more meaning to the word “injury” than is defined in s 4 of the 1987 Act.

Respondent’s submissions

Mr Murray, a solicitor, prepared the respondent’s submissions. He submitted that, in the first proceedings, the respondent did not accept that Mr Bouchmouni had received an injury to his lumbar spine “either as a direct result of the episode on the 13/3/2003 (history to Dr Guirgis) or subsequently as a result of that injury by dint of the physiotherapy post the surgery (history relied upon by [Mr Bouchmouni] in his statement unqualified by any other evidence from [Mr Bouchmouni] and a number of doctors including [Mr Bouchmouni’s] treating GP, Dr Homsi) or as a result of the altered gait post injury (history recorded by Dr Johnson)”.
The first proceedings were settled by consent orders on “a compromise basis” and, with “a view of encapsulating the various assertions referred to in the previous paragraph of these submissions, the parties added the words ‘on or about’ to [Mr Bouchmouni’s] Application for Determination [sic] in the section dealing with the date of injury”.
Mr Murray added that the terms of the consent orders represented a “trading off of positions established in the medical evidence” and that there was “no suggestion other than [that] the parties intended to conclude the litigation between them on those compromised terms”. Mr Bouchmouni had the benefit of an eight per cent whole person impairment compensation entitlement as provided by Dr Guirgis’s assessment, whereas the balance of the assessments provided a mere one per cent assessment. As part of the compromise, Mr Bouchmouni consented to an award against himself on the issue of whether he sustained an injury to his lumbar spine as a result of the only pleaded injurious event he suffered.
Had the matter been contested, the evidence was overwhelmingly that Mr Bouchmouni’s alleged injury to his lumbar spine “resulted from the pleaded injury as a result of the physiotherapy undertaken post the surgery to the knee”. Dr Guirgis’s history, taken four-and-a-half years later, was not supported by any contemporaneous evidence.
While the term “injury” has a defined meaning in the 1987 Act, it can have two meanings; the event and the pathology arising from it (Lyons v Master Builders Association of NSW Pty Ltd (2003) 25 NSWCCR 422). Clearly, the consent orders sought to conclude the issue of whether Mr Bouchmouni had a back injury as a result of the pleaded injurious event.
Mr Murray relied on passages in The Doctrine of Res Judicata by Spencer Bower, Turner and Handley, 3^rd ed, 1996 (Spencer Bower), at [39], to the effect that consent judgments and orders are binding and that the court may look at the available evidence to ascertain the matters in dispute. It is clear from an examination “of the available evidence” that “the matters in dispute” in the first proceedings included the assertion of consequential loss to Mr Bouchmouni’s lumbar spine as a result of post-operative physiotherapy/altered gait as a result of the injury to his right knee.

GENERAL PRINCIPLES

There is no doubt that consent orders can give rise to res judicata estoppels. They do so, however, only as to the matters that are “necessarily decided” (Habib v Radio 2UE Sydney Pty Ltd [2009] NSWCA 231 McColl JA (Giles and Campbell JJA agreeing) at [186] (Habib)). Her Honour added, quoting Street CJ and Roper CJ in Eq at 75 in Isaacs v Ocean Accident & Guarantee Corporation Ltd & Winslette (1958) SR (NSW) 69; (1957) 75 WN (NSW) 48 (Isaacs), that to ascertain what was necessarily decided “the court will closely examine all such evidence, if any, as is available and admissible, and, by the aid of such materials, will ascertain whether any and what adjudication of matters in dispute was expressed, or necessarily involved, in the actual decision assented to”. Street CJ and Roper CJ in Eq added (at 75), quoting with approval an earlier edition of Spencer Bower, that “it is absolutely essential to refer to the pleadings or affidavits of the parties”.
In Spencer Bower (3^rd ed), the authors made the following observations at [39]:
“Though consent judgments and orders are decisions and their operative parts binding, it may not be clear what questions were concluded. The court will examine the available evidence to ascertain the matters in dispute. Any issue which the parties recognised was the subject of the litigation and was fundamental to the judgment or order will be conclusively determined. Where, however, there are no such materials neither party is estopped from disputing anything but the actual judgment or order. The proper approach to determining the scope of a consent judgment was stated by Lord Herschell LC [in Re South American and Mexican Co [1895] 1 Ch 37 at 50]:
‘...a judgment by consent is intended to put a stop to litigation between the parties, just as much as is a judgment which results from the decision of the court after the matter has been fought out to the end. And I think it would be very mischievous if one were not to give a fair and reasonable interpretation to such judgments and were to allow questions that were really involved in the action to be fought over again in a subsequent action’.”

The approach of examining the available evidence is consistent with the decision of Campbell J (as his Honour then was) in Kirkpatrick v Kotis [2004] NSWCA 1265; 62 NSWLR 567 (Kotis), where his Honour applied the principles discussed in Rogers v Wentworth (NSW Court of Appeal, 18 April 1988, unreported; BC8802033) where Hope JA (Samuels JA agreeing) said at 18 that “[a] consent order must … be construed in the light of any admissible evidence of surrounding circumstances, but without direct evidence of the parties’ intention”. Mahoney JA added (at 6–7) that the evidence of the surrounding circumstances includes “evidence as to the nature of the dispute which was compromised by” the orders (see Halsbury Laws of England, 4^th ed, Vol 26, par 527; General Accident Fire & Life Assurance Corporation Ltd v IRC [1963] 1 WLR 421 at 430–1; 1207).
Campbell J concluded by stating that the type of surrounding circumstances that can be used are those which can be used to construe a contract “in accordance with the principles laid down by Mason J in Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 352” (Codelfa) (Kotis at [45]).
As consent orders represent an agreement between the parties, they must be interpreted using the same principles of construction used in interpreting contracts. Those principles are “in evolution” (Nokia Corporation v Liu [2009] FCAFC 138 at [29]). In interpreting consent orders in that case, the Full Court of the Federal Court applied the “uncontentious observations of Campbell JA in the New South Wales Court of Appeal (with whom Allsop P and Basten JA agreed) in Masterton Homes Pty Ltd v Palm Assets Pty Ltd [2009] NSWCA 234 at [109] that” it “is well established that in construction of consent orders evidence of surrounding circumstances is admissible”.
The “uncontentious observations” of Campbell JA must now be read in light of the High Court decision in Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45; 282 ALR 604 (Jireh)). In refusing a special leave application in Jirah, the High Court (Gummow, Heydon and Bell JJ) observed that the “true rule” as to the admission of evidence of surrounding circumstances is that stated by Mason J in Codelfa at 352.
In Codelfa, Mason J referred to Macdonald v Longbottom (1859) 1 EI & EI 977; 120 ER 1177, 983–984 (Macdonald), where it was observed that evidence is admissible to show the subject-matter of the contract. Mason J discussed Macdonald (and a later decision which followed it: Bank of New Zealand v Simpson [1900] AC 182) with apparent approval and observed, at 350:
“It is apparent that the principle on which the Judicial Committee acted in Simpson is that where the words in a contract are susceptible of more than one meaning extrinsic evidence is admissible to show the facts which the negotiating parties had in their mind.”
Mason J also quoted (with approval) (at 351) the following passage from DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 at 429 (DTR Nominees), where his Honour, Stephen and Jacobs JJ said:
“A court may admit evidence of surrounding circumstances in the form of ‘mutually known facts’ ‘to identify the meaning of a descriptive term’ and it may admit evidence of the ‘genesis’ and objectively the ‘aim’ of a transaction to show that the attribution of a strict legal meaning would ‘make the transaction futile’ . . .”
Mason J added, at 352:
“The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although, as we have seen, if the facts are notorious knowledge of them will be presumed.
It is here that a difficulty arises with respect to the evidence of prior negotiations. Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable. The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by, and merged in, the contract itself. The object of the parol evidence rule is to exclude them, the prior oral agreement of the parties being inadmissible in aid of construction, though admissible in an action for rectification.”
The meaning of a contract is determined objectively. In a unanimous decision in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 (Toll), the High Court held, at [40]:
“This Court, in Pacific Carriers Ltd v BNP Paribas, has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.” (footnotes omitted)
Without referring to Jireh, the NSW Court of Appeal has recently applied Kotis in construing consent orders (Wardle v Agricultural & Rural Finance Pty Ltd [2012] NSWCA 107 at [103]). Subsequently, in a contracts case, Bathurst CJ (Macfarlan and Meagher JJA agreeing) observed at [52] in Cordon Investments Pty Ltd v Lesdor Properties Pty Ltd [2012] NSWCA 184 (Cordon Investments):
“A contract is to be construed by reference to what a reasonable person would understand by the language in which the parties have expressed their agreement having regard to the context in which the words appear and the purpose and object of the transaction: Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 at [22]; Toll (FGCT) Pty Limited v Alphafarm Pty Limited [2004] HCA 52; (2004) 219 CLR 165 at [40]; International Air Transport Association v Ansett Australia Holdings Ltd [2008] HCA 3; (2008) 234 CLR 151 at [53]. At least in the case of ambiguity, resort can be had to the surrounding circumstances known to the parties in interpreting the particular provision: Codelfa Construction Pty Limited v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337 at 352; Western Export Services Inc v Jireh International Pty Limited [2011] HCA 45; (2011) 282 ALR 604.”
On the question of the meaning of “ambiguous”, McLure P (Newnes JA and Le Miere J agreeing) said in Hancock Prospecting Pty Ltd v Wright Prospecting Pty Ltd [2012] WASCA 216 at [77]:
“The word ‘ambiguous’, when juxtaposed by Mason J with the expression ‘or susceptible of more than one meaning’, means any situation in which the scope or applicability of a contract is doubtful: Bowtell v Goldsbrough, Mort & Co Ltd [1905] HCA 60; (1905) 3 CLR 444, 456–457. Ambiguity is not confined to lexical, grammatical or syntactical ambiguity.”

In Athens v Randwick City Council [2005] NSWCA 317; 64 NSWLR 58, Santow JA (Tobias JA agreeing) observed (at [138]) that “[g]iven that ambiguity is inherent in all language, it would be too much to expect that orders can be expected to be self-explanatory, though that be a worthy ideal”.
In a case where the consent orders were (probably) ambiguous in any event (though not expressly stated to be so by the Court), McLure P (Newnes and Buss JJA agreeing) had regard to the pleadings, particulars of damage, and written offers of settlement when trying to objectively determine the parties’ mutual intention (Chu v Underwriting Agencies Pty Ltd v Wise [2012] WASCA 123 at [68]–[75]).
I draw the following conclusions from the above authorities:
(a)     consent orders create res judicata estoppels, but only to the extent of what was “necessarily decided” (Habib at [186]);
(b) to determine what was “necessarily decided”, the Commission will closely examine the pleadings and particulars, the s 74 notice, and the legislation, because that material forms part of the mutually known facts and assists in objectively determining the “genesis” and “aim” of the orders (Isaacs at 75; Spencer Bower at [39]; DTR Nominees at 429);
(c)     consent orders should be construed by reference to what a reasonable person would understand by the language the parties have used in the orders, having regard to the context in which the words appear and the purpose and object of the transaction (Cordon Investments at [52]);
(d)     where the words in the consent orders are ambiguous, or susceptible of more than one meaning, extrinsic evidence is admissible to show the facts which the negotiating parties had in their minds (Codelfa at 350), but such evidence is not admissible to contradict the language of the orders when it has a plain meaning and is not ambiguous or susceptible of more than one meaning (Codelfa at 352);
(e)     prior negotiations that tend to establish objective background facts which were known to both parties and the subject matter of the consent orders will be admissible (Codelfa at 352);
(f)      evidence of prior negotiations that are reflective of the parties’ actual (subjective) intentions is not receivable (Codelfa at 352), and
(g)     the interpretation of consent orders is not governed by the parties’ subjective beliefs or understandings about their rights and liabilities. It is an objective test of what a reasonable person would understand by the language in which the parties have expressed their agreement (Toll at [40]; Cordon Investments at [52]).

DISCUSSION AND FINDINGS

Applying the above authorities, I believe that, having regard to the mutually known facts, the pleadings and the legislative context in which the Commission operates, the consent orders have a “plain meaning” and are not “ambiguous or susceptible of more than one meaning”.
The consent orders provided for an “[a]ward for the [r]espondent in respect of the claim for injury to the [a]pplicant’s back”. As the term “injury” is defined in s 4 of the 1987 Act to mean “personal injury arising out of or in the course of employment” and includes a disease injury, I do not believe a reasonable person, viewing the matter objectively, would understand the parties to have used that word to have any other meaning.
That being so, the submissions made on behalf of Mr Bouchmouni on appeal are correct and the Arbitrator could give no more meaning to the word “injury” than is defined in s 4 of the 1987 Act. The Arbitrator’s reference to the “back injury” having occurred “post-operative to the knee injury” demonstrates a misunderstanding of the meaning of the word “injury” and the difference between an “injury” and a condition that has resulted from an injury. In making that finding, the Arbitrator erred.
The respondent’s submissions on appeal are based on the incorrect premise that the back symptoms Mr Bouchmouni experienced during the treatment of his knee injury, and as a result of his altered gait, were an “injury” that resulted from the pleaded injurious event on or about 13 March 2003.
The Commission has considered and explained the difference between an “injury” and a condition that has resulted from an injury in several recent decisions (Moon v Conmah Pty Ltd [2009] NSWWCCPD 134 at [43], [45] and [50] (Moon); Superior Formwork Pty Ltd v Livaja [2009] NSWWCCPD 158 at [122]; Cadbury Schweppes Pty Ltd v Davis [2011] NSWWCCPD 4 at [28]–[32] and [39]–[42] (Davis); North Coast Area Health Service v Felstead [2011] NSWWCCPD 51 at [84]; Australian Traineeship System v Turner [2012] NSWWCCPD 4 at [28] and [29] (Turner); Kumar v Royal Comfort Bedding Pty Ltd [2012] NSWWCCPD 8 at [35]–[49] and [61]).
In considering the difference between an “injury” and a condition that has resulted from an “injury”, the Commission has consistently applied the principles in Kooragang Cement Pty Ltd v Bates (1994) 35 NSWLR 452; 10 NSWCCR 796 (Kooragang). To understand those principles, it is helpful to consider (yet again) the facts and chronology in Kooragang, which have previously been discussed in Davis, Turner and Moon.
The worker in Kooragang was a truck driver. He injured his back on 30 July 1981 while climbing up and down from his truck. He stopped work in June 1983. In September 1985, his general practitioner, Dr Furey, reported that the worker was:
“very distressed because of the delay in reaching a solution to his back difficulty. He felt that, if he did anything, people might be watching him. He was very upset. He was complaining of a knot in the stomach. He was depressed and he was placed on a tranquilliser.” (at 453–4)
In May 1986, Dr Furey described the worker as “very severely depressed”. His personality was being affected by the “chronicity of his condition”. In July 1987, Dr Furey advised the worker to go on a diet, as his weight had increased because of his inactivity. In April 1988, the worker told Dr Furey that he had a lot of suicidal thoughts. Dr Furey felt that the length of time in the compensation system was the “root cause of all this”. In March 1989, the worker’s back continued to give him excessive pain, radiating down his leg.
In March 1991, the worker was again found to be “excessively depressed, anxious, still having problems at home and problems with his back”. He had a sudden, unexplained exacerbation of pain in November 1991. A CT scan on 6 November 1991 revealed degenerative disc disease, with a prolapse at L4/5 and significant degeneration at L5/S1. There had been a gross deterioration since the scan taken in April 1982.
On 16 March 1992, the worker received a letter from the insurer advising that compensation payments would cease from 29 March 1992. The worker saw Dr Furey on 19 May 1992, severely depressed. He said he did not have enough money to pay the doctor and that he would have to sell his house. He was worried and anxious about his future. On 8 June 1992, the worker died of a heart attack.
Dr Furey stated that, while the worker had antecedent myocardial disease, it was exacerbated by the “depressive and anxiety situation in which he found himself, as a result of the lengthy and protracted workers’ compensation situation”. He felt that the worker’s death had been accelerated by the “stress generated by the cessation of compensation payments and the peculiarities of the workers’ compensation system”. The heart attack had happened much earlier than the worker should have had it and was “totally related to his back injury and the failure to reach a satisfactory conclusion within a ten year period”.
The worker’s widow claimed compensation benefits, which the insurer denied. She relied on evidence from Dr Furey and Dr Schiller, physician, who concluded that the emotional stress and depression the worker experienced in the weeks leading up to his death, which resulted from the cessation of compensation payments and consequent financial crisis in which he found himself, contributed to his death from a heart attack. Dr Schiller added that the worker’s sedentary lifestyle due to his back injury and unemployment also contributed to the heart attack. The employer called no evidence.
The test of causation in a claim for death benefits under the 1987 Act is the same as in a claim for weekly compensation: if the death “results from an injury”, compensation is payable (s 25 of the 1987 Act). The same test applies to claims for lump sum compensation: a worker who has received an injury that “results in a degree of permanent impairment” (now of more than 10 per cent) is entitled to compensation for that impairment (s 66 of the 1987 Act; Sidiropoulos v Able Placements Pty Ltd [1998] NSWCC 7; 16 NSWCCR 123; Dimovski).
The trial judge found that the deceased “suffered injury in the course of his employment on 30 July 1981; namely, injury to his lower back” (emphasis added) and that “[a]s a result thereof the deceased suffered myocardial infarction from the effects of which, on 8 June 1992, he died” (at 457E). The judge did not find that the worker suffered a psychological injury or that the heart attack was an “injury”.
The employer appealed. It argued that the prolonged incapacity, immobility, sedentary lifestyle, increased obesity, stress and anxiety, depression, and acute stress when compensation payments ceased were all “mere predisposing factors” that were not “causative in the relevant sense that it was not shown that the death ‘resulted from’ any of them, either individually or in conjunction” (at 460F).
Kirby P (as his Honour then was) said (at 461G) (Sheller and Powell JJA agreeing) that “[f]rom the earliest days of compensation legislation, it has been recognised that causation is not always direct and immediate”. After referring to earlier English authorities, his Honour added (at 462E):
“Since that time, it has been well recognised in this jurisdiction that an injury can set in train a series of events. If the chain is unbroken and provides the relevant causative explanation of the incapacity or death from which the claim comes, it will be open to the Compensation Court to award compensation under the Act.”
His Honour said at 463–464:
“The result of the cases is that each case where causation is in issue in a workers’ compensation claim, must be determined on its own facts. Whether death or incapacity results from a relevant work injury is a question of fact. The importation of notions of proximate cause by the use of the phrase ‘results from’, is not now accepted. By the same token, the mere proof that certain events occurred which predisposed a worker to subsequent injury or death, will not, of itself, be sufficient to establish that such incapacity or death ‘results from’ a work injury. What is required is a commonsense evaluation of the causal chain. As the early cases demonstrate, the mere passage of time between a work incident and subsequent incapacity or death, is not determinative of the entitlement to compensation. In each case, the question whether the incapacity or death ‘results from’ the impugned work injury (or in the event of a disease, the relevant aggravation of the disease), is a question of fact to be determined on the basis of the evidence, including, where applicable, expert opinions. Applying the second principle which Hart and Honoré identify, a point will sometimes be reached where the link in the chain of causation becomes so attenuated that, for legal purposes, it will be held that the causative connection has been snapped. This may be explained in terms of the happening of a novus actus. Or it may be explained in terms of want of sufficient connection. But in each case, the judge deciding the matter, will do well to return, as McHugh JA advised, to the statutory formula and to ask the question whether the disputed incapacity or death ‘resulted from’ the work injury which is impugned.”
His Honour concluded that the Court was left with “an unbroken chain of undisputed evidence”. In combination, the facts went “beyond mere predisposing circumstances”. They combined to make it “proper to reach the conclusion that the death of the worker ‘resulted from’ his original injury and all of the consequences which it set in train”. His Honour did not find that the heart attack was a s 4 injury, but confirmed the trial judge’s finding that the heart attack on 8 June 1992 resulted from the accepted back injury in 1981.

It may be seen that if an “injury” sets in train a series of events then, if the chain is unbroken and provides the relevant causative explanation for the incapacity or impairment, compensation is payable (though, in the case of a claim for compensation for permanent impairment, the payment is dependent upon an assessment by an Approved Medical Specialist (AMS)). That does not mean that the condition that provides the relevant causative explanation for the incapacity or impairment is an “injury”.
The fact that the worker in Kooragang died from a heart attack did not mean that the heart attack was an “injury”. It meant that, on the facts of that case, there was an unbroken chain of causation between the back injury and the death. In other words, the heart attack (and death) resulted from the back injury.
In Mr Bouchmouni’s case, the “injury” was both the incident on 13 March 2003 in which he struck his right knee on a pipe and the pathology it caused to his right knee. In the first proceedings, he also alleged that he injured his right thigh and back in that incident. The insurer disputed that he had suffered a s 4 injury to his back.
The injury to Mr Bouchmouni’s right knee caused him to seek treatment in the form of surgery and physiotherapy. The evidence suggests that it was in the course of receiving that treatment, and/or as a result of an altered gait because of his knee symptoms, Mr Bouchmouni developed back symptoms. If that is accepted, and no reason has been advanced why it should not be, it is clear beyond doubt that his back condition has resulted from the treatment he received for his accepted knee injury and his altered gait. That does not, however, make the back condition an “injury”.
It is accepted law that if an “injury” is aggravated by medical treatment, or if the treatment adopted to remedy the injury causes a secondary condition, the total condition is attributable to the original incident or event (Lindeman Ltd v Colvin [1946] HCA 35; 74 CLR 313 at 321; D & W Livestock Transport v Smith (No 2) [1994] NTSC 31; 4 NTLR at 172).
The question of whether a worker suffers a further injury when he or she receives treatment for an accepted injury was considered in Hand v Alcan Gove Pty Ltd [2008] NTSC 25; 23 NTLR 42. In that case, the Mr Hand injured his knee at work in 1991. He had numerous operations over several years and ultimately had a total knee replacement in 2004. Because of his extensive treatment, his impairment increased over time. He claimed additional compensation on the ground that each operation he had on his knee was, in itself, a “new injury”.
In rejecting that argument, Mildren J said (at [20]) that it was difficult to envisage a situation where an operation could be an injury that arose out of or in the course of the employment. His Honour added, “[s]uch a concept postulates that it was part of a worker’s employment duties or otherwise sufficiently connected with the employment to undergo an operation”. Obviously, it was no part of the worker’s duties to undergo surgery.
The same principles apply in the present case. It was no part of Mr Bouchmouni’s duties to have surgery on his knee or to walk with an altered gait. Those things arose because he suffered an injury to his knee in the course of his employment. If a further medical condition has resulted from the treatment of the knee injury (or from an altered gait because of knee symptoms), as has happened in this case, that condition (the back condition) has resulted from the injury but is not itself an “injury”.
Mr Murray’s submission that the evidence was overwhelmingly that Mr Bouchmouni’s alleged injury to his lumbar spine “resulted from the pleaded injury as a result of the physiotherapy undertaken post the surgery to the knee” misunderstands the basic principles involved and has failed to distinguish between an “injury” arising out of or in the course of employment under s 4, on the one hand, and a medical condition that has resulted from an injury, in the sense discussed in Kooragang, on the other. The two situations are quite separate and distinct (Sydney South West Area Health Service v Dyer [2012] NSWWCCPD 46 from [23]).
The submission as to what would have happened if the first proceedings had been contested is irrelevant and, in any event, speculative. Had those proceedings been contested, the pleadings may well have been amended to make it clear that Mr Bouchmouni’s back condition was not a s 4 injury but was a condition that had resulted from his accepted knee injury. Even if the pleadings had not been amended, the Arbitrator would have been required to determine the case on the evidence, not the pleadings (Dawson J in Banque Commerciale SA (in liq) v Akhil Holdings Ltd [1990] HCA 11; 169 CLR 279 at 296–7). The issues in dispute are ultimately determined by the way the parties present their respective cases (Shore v Tumbarumba Shire Council [2013] NSWWCCPD 1 at [36], citing Gould v Mount Oxide Mines Ltd [1916] HCA 81; 22 CLR 490 at 517).
While the word “injury” has more than one meaning, in that it refers to the injurious event and the pathology caused by that event, that is irrelevant in Mr Bouchmouni’s case. The distinction in the present case is not between an injurious event and the pathology caused by that event, but between an “injury” and a consequential condition that has resulted from an injury. The consent orders dealt with the alleged “injury” to the back and nothing more.
Considering the issues in dispute in the first proceedings confirms the above conclusion. The first proceedings alleged that Mr Bouchmouni had injured his back on 13 March 2003. The s 74 notice stated, expressly referring to s 4 of the 1987 Act, that the insurer disputed liability on the grounds that Mr Bouchmouni had not sustained an “injury” to his back arising out of or in the course of his employment and that his employment was not a substantial contributing factor to the injury.
As the insurer denied that Mr Bouchmouni had injured his back, and did so by express reference to s 4 of the 1987 Act, it follows that it is untenable to argue that the consent orders referred to anything other than an injury as defined in that section. It is therefore irrelevant that the s 74 notice also referred to Dr Johnson’s history of Mr Bouchmouni having had an altered gait. That was not part of his claim in the first proceedings and was not a “matter” the insurer identified as being in dispute. Moreover, as the consent orders did not refer to any consequential condition, the addition of the words “on or about” to the first Application makes no difference to the outcome.
The first Application alleged that Mr Bouchmouni had injured his back in the incident on 13 March 2003, but made no mention of any consequential condition. The respondent disputed that Mr Bouchmouni had suffered a s 4 injury to his back. Consistent with those pleadings, and with the weight of the evidence, the parties agreed that there be an award in favour of the respondent “in respect of the claim for injury to the [a]pplicant’s back”.
Mr Murray’s submission that the terms of the consent orders represented a “trading off of positions established by the medical evidence” was based on the fact that the medical evidence of the degree of whole person impairment experienced by Mr Bouchmouni (due to his knee injury) ranged from one per cent to eight per cent and the settlement provided for payment based on the higher assessment. I do not accept this submission.
There is no evidence that the settlement was a “trading off” in the manner described by Mr Murray, namely, that Mr Bouchmouni would give up any potential claim for lump sum compensation for his back condition (whether it was an “injury” or was a condition that had resulted from the knee injury) and it was not open to make that submission.
More importantly, even if there were evidence supportive of Mr Murray’s submission that the settlement was a “trading off” of the kind he suggested, and if it were appropriate to look at that evidence, it would only be evidence of the respondent’s subjective belief and therefore irrelevant.
In construing a written contract (and consent orders), a court must give effect to the parties’ common intention. That intention is ascertained objectively by what a reasonable person would have understood the words used to mean (Toll at [40]) and evidence of prior negotiations that are reflective of the parties’ actual (subjective) intentions is not receivable (Codelfa at 352). The writing itself “stands out as the quintessentially objective means of discovering what the intentions of the contracting parties were” (Retirement Services Australia (RSA) Pty Ltd v 3143 Victoria Street Doncaster Pty Ltd [2012] VSCA 134 at [106]).
The terms of the consent orders are clear and unambiguous. The word “injury” in those orders can only mean “injury” as defined in the legislation and there is no scope for any other interpretation. A condition that has resulted from an injury is not itself an injury and the expression “consequential injury” (used in Mr Murray’s submissions) is not a term used in the legislation (or the consent orders), though it has been regularly and incorrectly used by the profession and, sometimes, by Arbitrators.
The submission that the consent orders sought to conclude the issue of whether Mr Bouchmouni had a “back injury as a result of the pleaded injurious event” was correct, but of no assistance to the respondent. The “injurious event” was (as amended) the work event on or about 13 March 2003. The consent orders are therefore effective to prevent Mr Bouchmouni from arguing that he injured his back in the course of or arising out of his employment on or about 13 March 2003. The claim in the second Application is that Mr Bouchmouni’s back condition has resulted as a consequence of his knee injury. As explained above, that is a different claim and not one that was dealt with in the consent orders.
If I am wrong in my understanding of the matters in dispute, the available evidence (including all the surrounding circumstances) does not support the respondent’s subjective interpretation of the consent orders in any event. The medical evidence (apart from Dr Guirgis), and Mr Bouchmouni’s statements, were consistent with a finding that he had not suffered an injury to his back on or about 13 March 2003. That was the order made in the consent orders.
Conversely, however, the same evidence provides strong support for the conclusion that there is an unbroken causal link between Mr Bouchmouni’s back condition and his accepted knee injury. Therefore, contrary to Mr Murray’s submissions, the surrounding circumstances do not support a conclusion that the consent orders were intended to exclude a claim for lump sum compensation for the back condition. Had that been the intention of the consent orders, it would have been a simple matter for the orders to say (based on some admission or agreed fact) that Mr Bouchmouni had no entitlement to lump sum compensation because of his back condition or symptoms that resulted from his accepted knee injury.

OTHER MATTERS

The Commission has recently delivered several decisions where it has expressed surprise at the now common practice of briefing counsel at the arbitration but not on the appeal. Both parties adopted that practice in this matter. As I have observed in previous cases, that practice is counterproductive and does not advance the interests of the parties (NSW Department of Education and Communities v Murray [2012] NSWWCCPD 76; Nolan v Department of Education & Training [2012] NSWWCCPD 74; Krstevska v Fast & Fluid Management Australia Pty Ltd [2012] NSWWCCPD 69). Those observations are applicable in this matter.

CONCLUSION

The Arbitrator erred in stating that Mr Bouchmouni’s “back injury” occurred “post-operative to the knee injury”. The evidence establishes that Mr Bouchmouni did not suffer a “back injury” on or about 13 March 2003 and the consent orders were consistent with that evidence. The consent orders did not refer, either directly or indirectly, to anything other than a back “injury” and they have not created an estoppel that prevents Mr Bouchmouni from claiming lump sum compensation for any whole person impairment that has resulted from the condition of his lumbar spine that has developed as a result of his accepted knee injury.

DECISION

Paragraphs 1 and 2 of the Certificate of Determination of 19 October 2012 are revoked and the following order made in their place:
“1. The applicant’s claim for lump sum compensation is remitted to the Registrar for referral to an Approved Medical Specialist for assessment of the degree of whole person impairment as a result of the condition of his lumbar spine, which condition has resulted from the injury to his right knee on 13 March 2003.”
Paragraphs 3 and 4 of the Certificate of Determination are confirmed.

COSTS

The respondent employer is to pay the appellant worker’s costs of the appeal, as agreed or assessed.

Bill Roche

Deputy President
6 February 2013

I, KATHRYN CAMP, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE