Bucic v Arnej

[2014] VMC 17

IN THE MAGISTRATES COURT OF VICTORIA E11271147

AT MELBOURNE

MARIN BUCIC	Plaintiff
v
ARNEJ PTY LTD	Defendant

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MAGISTRATE:	Magistrate B.R. Wright
WHERE HELD:	Melbourne
DATE OF HEARING:	19, 20 August 2014
DATE OF DECISION:	5 September 2014
CASE MAY BE CITED AS:	Bucic v. Arnej

REASONS FOR DECISION

Workers Compensation – Rejection of Claim – Prior Settlement and Consent Dismissal of Previous Claim as to Liability – Issue Estoppel/Res Judicata – Accord and Satisfaction – Preliminary Ruling Sought – Accident Compensation Act

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr P Baume	Simon Legal
For the Defendant	Mr B McKenzie	Lander & Rogers

HIS HONOUR:

1Mr Bucic has issued these proceedings (“the present proceedings”), seeking weekly payments from 17 October 2013 and reasonable medical and like expenses. The claim is in respect of injuries suffered while working for Arnej Pty Ltd on 30 October 2007 when he fell from scaffolding (“the incident”). The claim is brought pursuant to the provisions of the Accident Compensation Act 1985 (“the Act”).

2In its amended Defence, Arnej denies that he was a worker at the time of the injury, but rather he was a self-employed brick cleaner.  More importantly, it says that he is prevented from bringing the present proceedings because of issue estoppel/res judicata arising out of the consent dismissal and related terms of settlement in proceedings issued in this court and finalised on

28 January 2009.

3.It also pleads accord and satisfaction based on the agreement to pay and actual payment pursuant to the terms of settlement on that same date.

4.It was agreed between the parties that the issue estoppel/res judicata and accord and satisfaction issues be first argued on a threshold or preliminary ruling basis without considering the merits of the case.

5.Mr Bucic lodged a claim form on 9 November 2007 (“the first claim”) seeking weekly payments and reasonable medical and like expenses from 30 October 2007 as a result of the incident. The first claim was rejected.

6Subsequently, Complaint X01610977 (“the earlier proceedings”) was issued in the Melbourne Magistrates' Court seeking reasonable medical and like expenses and weekly payments "from 30 October 2007." 

7.Arnej filed a Defence in the earlier proceedings, denying entitlement to compensation under the Act on a number of bases. Some were later withdrawn. However, at all times it specifically denied the allegation that it employed Mr Bucic.

8.Paragraph 5 of the Statement of Claim in the earlier proceedings pleaded

"On or about 30 October 2007, the plaintiff in the course of his employment with the first named defendant (Arnej) sustained injuries to the head, trunk, right arm and back, together with a psychological/psychiatric injury." 

9.Allowing for later alterations, para. 5 of the amended Defence pleaded

"Save they admit the plaintiff lodged a claim for an injury described as 'head, trunk, right arm, back,' they otherwise deny the allegations contained in paragraph 5 as they are not supported by the available evidence."

10.Entitlement, incapacity in general and work related incapacity were further denied in that amended Defence. 

11. The earlier proceedings came on for hearing in the Magistrates' Court before me on 28 January 2009.  Experienced Counsel represented both parties.  Consent Orders were made for Arnej to pay the Mr Bucic’s costs on Scale F, with the proceedings otherwise dismissed.  Both Counsel also signed terms of settlement as follows:-  

"In consideration of the parties' consent to the consent orders made this day, and with the defendant denying liability, the defendant will pay in full settlement of these proceedings (1) weekly payments at the rate for no current work capacity for the period 30 October 2007 to 30 May 2008 (but not thereafter) subject to (a) tax, (b) provision of valid WorkCover certificates of incapacity and (c) Centrelink indemnity and (2) reasonable medical and like expenses for the same period (but not thereafter) subject to production of valid accounts and receipts and HCS. This settlement is without prejudice to either party's rights under s.98C and s.134AB of the Act."

12.It is noted by Counsel for Arnej that the important parts of the terms of settlement are (1) it is expressed to be in full settlement of the proceeding, (2) the defendant agreed to pay weekly payments and reasonable medical and like expenses for an expressed period of seven months with the rider "but not thereafter", (3) the settlement was expressed to be without prejudice to either party's rights under s.98C or 134AB of the Act and (4) it was made with an express denial of liability.

13.There was no dispute that Mr Bucic supplied the necessary documentation and was paid the benefits as set out in the terms of settlement.

14.On 6 April 2009, Mr Bucic made a claim for 98C impairment benefits arising out of the same incident. Despite its denial of employment in the earlier proceedings, the VWA on behalf of Arnej admitted liability to pay such compensation. Obviously, the issue of non-employment was not raised then. In the amended Defence in the present proceedings, Arnej alleges the s.98C claim was "erroneously accepted."

15. In respect of the s98C claim, Mr Bucic accepted a final offer of $13,310 which was based on a 7% combined whole person impairment assessment by a medical panel for the admitted physical injuries to "lower back, right wrist, chest and lungs." The medical panel also found a 5% whole person impairment resulting from an accepted psychiatric injury. There was no further benefit paid in that regard because of the provisions in the Act.

16. As for common law proceedings, it was agreed that Mr Bucic's serious injury application was rejected.  On 28 October 2012 a subsequent Originating Motion was dismissed by consent, with an agreement that Mr Bucic pay the VWA's costs fixed at $2500.  It was agreed that no other benefit was paid.  Counsel for Arnej stated he was not making any argument on the dismissal of the Originating Motion.

17.Mr Bucic served another claim form on about 26 October 2012 in respect of the incident (“the second claim”), the rejection of which led to the issue of the present proceedings

18. The pleading as to the various injuries sustained by Mr Bucic in the incident as stated in the various claim forms and court proceedings has been perplexing to say the least.  I will detail the various description of injuries. 

19.The first claim specified “fractured rib, fractured lung, fractured right arm, back injury, head injury”. 

20.The Statement of Claim in the earlier proceedings pleaded “head, trunk, right arm, back, psychiatric/psychological”. 

21.The 98C claim form specified “back, right arm, chest, lungs, brain, eyesight, hearing, psychological”. 

22. The second claim specified “neck, psychiatric, both hands and arms, stomach, constipation, sleeplessness from pain and stress”. 

23.The Statement of Claim in the present proceedings pleads “neck and cervical spine, head injury, lacerations and cuts to head and body, psychiatric injury including depression shock and anxiety, lumbar spine, wrists and arms, loss of (blank), scarring, neurological injury, fractured ribs, punctured lung, broken right arm, chest injury, sexual dysfunction”.

24. The only injury which is common to the three claim forms and the two Statements of Claim is the right arm, though this is in the context of “both arms” in the second claim for the present proceedings. 

25.As will be seen later, Counsel for Mr Bucic makes much of his client’s recent back surgery and proposed neck surgery as demonstrating a “change of circumstances”.  However, the neck has not been claimed prior to the second claim for the present proceedings and the back has not been specified in that claim.

26. The second claim does state "the neck injury not diagnosed until recently."  On one view, any claim in respect of the back should not even be made in the present proceedings at all, as it has not been claimed in the second claim (see, Robinson v. SPI, per Magistrate Garnett, delivered 3 October 2012). However, it was specified in the first claim and liability was admitted for the back for s.98C purposes, though there was allegedly an “erroneous admission” of liability according to the amended Defence in the present proceedings.

27.As stated, Arnej relies on the defences of issue estoppel/res judicata together with accord and satisfaction based on the court orders and/or the terms of settlement in the earlier proceedings.  It did not differentiate between issue estoppel and res judicata.

28.Of course, I am dealing with a preliminary application effectively to dismiss these proceedings without going into the merits of Mr Bucic's present claim.

29.Counsel for Arnej submits that the question of initial injury was "front and centre," though the question of physical injuries as such were not disputed when para. 5 is read with para. 8 in the amended Defence in the earlier proceedings. He submits that the real issue then was whether Mr Bucic was a “worker” within the meaning of the Act as at 30 November 2007. As the earlier proceedings were dismissed without any hearing, that issue was not determined by the court in the earlier proceedings.

30. As for accord and satisfaction, he argues that the terms of settlement constitute the “accord” and the later agreed payment to Mr Bucic constitutes the “satisfaction”, preventing the continuation of these proceedings. 

31.Counsel for Mr Bucic relies on the later s.98C impairment benefit and payment as constituting an admission that Mr Bucic was, and by implication is, entitled to continue to claim benefits under the Act.

32.He submits the present claim for incapacity is different in that it commences from 17 October 2013, well after the completion of the earlier proceedings.  He says that it is open for Mr Bucic to claim for a later period of incapacity.  Further, he says that as the neck was not included in the earlier proceedings, there can be no issue estoppel or res judicata in relation to the neck anyway.  He submits that there is a clear “change of circumstances” here in that Mr Bucic has recently undergone low back surgery and now requires neck surgery.

33.Counsel for Arnej correctly concedes that the question of surgery may constitute an alleged change of circumstances for the sake of argument, without conceding that there is such a change, and that such change is related to the injury of 30 October 2007. 

34.Counsel for Mr Bucic submits that there are different injury claims between the first claim and the particulars of injuries in the earlier proceedings compared to the second claim and the particulars of injuries in the present proceedings.

35.Having regard to the large variation as to particulars of injuries in those three claim forms and two Statements of Claim, I have difficulty in accepting on their face that such pleadings were carefully considered at the time.  However, that is not to the point in deciding this application. 

36.Counsel for Mr Bucic does submit though that the psychiatric injury is more detailed and precise in the present proceedings rather than general pleading of a psychiatric/psychological injury in the earlier proceedings.

37.However, I would have thought that the wider pleading in the earlier proceedings includes the narrower pleading in the present proceedings. Thus, I really am unable to see the point of that argument. 

38As for accord and satisfaction, he also refers to the fact that there are different claims, injuries and periods of incapacity claimed.  When I pointed out that both the earlier and the present proceedings were concerned with a single incident on a single date which was the point of the accord and satisfaction argument, he made no further specific submission in that regard.

39.Both Counsel referred to a number of decisions in this court, the County Court and the Supreme Court as to issue estoppel/res judicata. These decisions include decisions made by me in Cihan v South Pacific Dunlop Tyres (del. 25 January 2005), Breen v VWA (del. 11 July 2012) and Saunders v VWA (del. 7 February 2014) as well as Magistrate Garnett in Spreckley v Biazan (del. 26 October 2006).

40.County Court decisions referred to by Counsel include Fuat v.Onesteel ([2010] VCC 584, per Judge Bowman) and Warren v. Yates ([2006] VCC 1780, per Judge Dyett). The Supreme Court decisions referred to were Derks v. R & J Fibreglass ([2009] VSC 601), AMP v. Chalkley ([1998] VSC 290 and Ozbilgi v. Bradnams ([2011] VSCA 210), a decision of the Court of Appeal.

41.There were other decisions cited as to the accord and satisfaction argument, which I will refer to in due course. 

42.I do not see any purpose in engaging in a detailed analysis of the above decisions.  Both counsel relied substantially on Justice Beach's decision in Derks, which I believe is the most relevant decision in looking at the facts of this case as to the issue estoppel/res judicata argument.

43.Of course, in such proceedings issue estoppel can arise from a consent order (see, Chamberlain v. DCT (1988) 164 CLR 502).

44.The strength of the submission that the issue estoppel/res judicata depends on the applicability of the “X and Y” principle as outlined in ACCC v. Safeway No.3 (2001) 119 FCR 1 at para. [1152], as cited by Justice Beach in Derks.  

45.It does no harm to repeat that “X and Y” proposition as referred to by Justice Goldberg in ACCC v. Safeway No.3 as follows:-

"A dismissal of an action which could succeed on establishing either X or Y is a decision negativing both, but if an action is founded on X plus Y, its dismissal does not necessarily involve a decision as to either, since the action may have failed because X had not been established, though Y had been, or vice versa, or because neither had been established."

46.Counsel for Arnej submitted, and I agree, that Justice Beach's dicta in Derks at para. 22 is important. He stated,

"In determining questions of this present kind, it will often be important to consider what material can be looked at for the purposes of ascertaining the matters that were in dispute.  The pleadings in the earlier proceedings are obviously of critical importance." 

47.I have already quoted para. 5 of the Statement of Claim in the earlier proceedings. Importantly it refers to a specific date, the allegation of employment and the allegation of injuries sustained in the incident.

48.Allowing for later concessions by Arnej, para. 5 of its amended Defence as referred to above admitted “. . the plaintiff lodged a claim for an injury described as ‘head and trunk, right arm, back’, they otherwise deny the allegations . . . as they are not supported by the available evidence”.  Thus, the issue of employment, the fact of injury and even the date of injury were denied.

49.Further, para. 5 of that amended Defence denied employment.  Paragraph 6 denied incapacity for employment as a result of the injuries from on or about 30 October 2007. 

50.For the purpose of the present argument, I will ignore the issue of incapacity as not going to entitlement.  Despite this, the somewhat blanket denials in paras. 4 and 6 raise entitlement issues going to employment and the fact of injury, together with even the date of the alleged incident.

51.These could be characterised as “X, Y or even Z” issues which the consent dismissal does not address individually.  The dismissal in the earlier proceedings does not necessarily involve a decision as to either X or Y or even Z, since the action may have failed if any one or two or three of those constituent issues had not been established or in fact because none had been established.  Thus, I believe that Mr Bucic is precluded from continuing these proceedings on grounds of issue estoppel/res judicata.

52.As for the discussion as to “change of circumstances”, I am not sure that  aspect is relevant to this case.  The cited cases in relation to change of circumstances, including Cihan, Spreckley and Chalkley, dealt with earlier proceedings as to the degree of incapacity, and more particularly at the end of the prima facie weekly payment period of 104/130 weeks.  The present case concerns earlier proceedings arising out of a decision and notice in which liability for the injury was denied from the beginning, for whatever reason.

53.In any event, although there is an allegation of change of circumstances, I have no evidence on this aspect on the need for surgery for both back and neck for whatever reason, which may or may not be related to the initial alleged injury.  However, that is a separate issue, which is not necessary for me to consider in view of my finding as to issue estoppel/res judicata not being applicable in this case. 

54.Similarly, there is no need for me to consider whether employment can be a significant contributing factor to the “worsening” (presumably the deterioration) of injury and  whether this makes it a fresh injury (see, Ozbilgi, supra, at [38]).

55.Finally, I now turn to the accord and satisfaction argument.  As stated, Counsel for Bucic advanced very little argument on the point, save for submitting that the present proceedings involve different claims, periods of incapacity and injuries.  It was agreed that the moneys agreed to be paid (seven months of weekly payments and reasonable medical and like expenses) pursuant to the terms of settlement in the earlier proceedings, were in fact paid.

56.The accord and satisfaction principle has been raised before in some workers compensation cases.  For example, in Warren (supra, at [6]) Judge Dyett upheld accord and satisfaction was applicable until the date of the order dismissing the previous proceedings.  On the material before him, he was otherwise unable to find consensus ad idem between the parties as to the alleged accord.

57.In Fuat (supra, at p.26), Judge Bowman agreed with accord and satisfaction applying up to the date of the previous consent orders, but not thereafter. As he had previously found that it was not permissible to contract out of the Act, he did not apply the principle of accord and satisfaction thereafter.

58.However, that case concerned earlier proceedings that arose out of a 104 week notice and alleged later deterioration.  It did not involve proceedings arising out of the initial rejection of a claim as in the present case.

59..More recently, Magistrate Saines applied the accord and satisfaction argument in Bunney v CGU (del. 5 April 2013).  That was a case in which the worker had an accepted claim and received weekly payments after a single traumatic injury.  He returned to work with the defendant and sought later reinstatement of weekly payments.  That claim was denied, amongst other reasons, on the alleged basis that he had recovered from the injury.

60.Proceedings on that claim were compromised with the payment of six months weekly payments and continuing reasonable medical and like expenses, and the proceedings were dismissed by consent. 

61.In further and later proceedings seeking weekly payments for the same injury, His Honour found that there was an accord in that the acknowledged settlement did amount to a full and final settlement.  Further, the agreement was completed by the payment of the agreed weekly payments.  He ruled that this had the effect of extinguishing the original cause of action, and thus the plaintiff was not entitled to pursue any further claim for weekly payments.

62.His Honour relied upon the principles set out in the Court of Appeal decision of Osborne v. McDermott (1998) 3 VR 1 which cited the classic statement as to accord and satisfaction in the High Court in McDermott v. Black (1940) 63 CLR 161, at 183,185 per Dixon J.

63.In Ozbilgi (supra), Warren CJ discussed accord and satisfaction in the context of a workers compensation claim in which Judge Wischusen in the County Court had found an issue estoppel based on previous proceedings, but had not formally addressed the accord and satisfaction issue.

64.At paras. 44 to 47 Her Honour said it was unnecessary for her to express any concluded views on the applicability of accord and satisfaction as an alternative basis for the dismissal of later proceedings, as the worker's appeal on the issue estoppel failed.  However, she did comment on the facts, and in particular, the consent orders and terms of settlement, stating "it appears there was an accord and satisfaction of the appellant's claim."

65.Later she said "so it would seem that the settlement agreement precludes the plaintiff from subsequently challenging the validity of the termination notice."

66.In the present case both parties agreed as to the consent orders and the terms of settlement entered into on the same date, 28 January 2009. There was no dispute that this was the agreement entered into by the parties and that settlement moneys had been paid to Mr Bucic in accordance with the agreement. The terms of settlement were without prejudice to either party's rights in relation to the claims pursuant to s.98C and 134AB of the Act.

67.The terms of settlement also expressly denied liability. Mr Bucic had later exercised his “without prejudice” rights and received payment under s.98C, though he had to pay the other party's costs in the s.134AB proceedings. It is not to the point that s.98C benefits were paid without Arnej relying on the previous defence as to the lack of the necessary employment relationship.

68.Whether or not it paid the s.98C benefits on an “erroneous” basis as set out in the present amended Defence does not affect the accord and satisfaction principle. The terms of settlement and consent orders were specifically without prejudice to such a later claim.

69.In the particular circumstances of this case for the reasons I have outlined, I find in favour of Arnej as to the defence of accord and satisfaction.  The consent orders and agreed terms of settlement are clear in their expression and intent.  They have not been disputed in any way.  It is agreed that consequently the earlier proceedings were dismissed and that Mr Bucic has been paid the compensation contemplated in the terms of settlement.

70.All this results in the extinguishment of the original cause of action for weekly payments and reasonable medical and like expenses from 30 November 2007 and continuing.  Thus, he is prevented from pursuing his claim for weekly payments and reasonable medical and like expenses from 17 October 2013 and continuing. 

71Therefore, these proceedings are dismissed.

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