Bye v Danzante

IN THE MAGISTRATES’ COURT OF VICTORIA
AT MELBOURNE
WORKCOVER DIVISION

Case No. L10620634

TIMOTHY JAMES BYE	Plaintiff
v
DANZANTE PTY LTD (A.C.N. 066 928 890)	Defendant

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MAGISTRATE:	M A HOARE
WHERE HELD:	Melbourne (Online Magistrates’ Court)
DATE OF HEARING:	4-5 April 2022
DATE OF DECISION:	5 May 2022
CASE MAY BE CITED AS:	Bye v Danzante
MEDIUM NEUTRAL CITATION:	[2022] VMC 12

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WORKERS COMPENSATION – Weekly payments and medical and like expenses - Rejection of claim – Decision to reject claim disputed – Dispute between parties referred to conciliation – Dispute settled – Whether terms of settlement precluded worker from claiming further weekly payments - Accord and satisfaction – Lodgement of subsequent claims – Preliminary ruling sought – Workplace Injury Compensation and Rehabilitation Act 2013, ss 13, 280, 273, 296.

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APPEARANCES:	COUNSEL	SOLICITORS
For the Plaintiff	Mr Y C Chen	Lennon Lawyers
For the Defendant	Mr B McKenzie	IDP Lawyers

HER HONOUR:

Introduction and overview

Between April 2016 and 26 June 2017, Mr Timothy Bye was employed as an accounts receivable officer with Danzante. In September 2017, he lodged a claim for compensation for psychological injury under the Workplace Injury Rehabilitation Compensation Act 2013 (the Act) His claim was rejected by the insurer Agent of Danzante by notice dated 6 October 2017 (the rejection notice).
Mr Bye disputed the rejection notice and requested the dispute be conciliated by the Accident Compensation Conciliation Service (ACCS). On 13 December 2017, a settlement agreement was reached in respect of ten weeks of weekly payments and medical and like expenses to 31 December 2017 (the settlement agreement). A conciliation outcome certificate was issued by ACCS dated 14 December 2017 (the outcome certificate).
The issue for my determination is whether or not the settlement agreement precludes Mr Bye from claiming weekly payments of compensation after 31 December 2017. The parties agreed that the Court should rule on this preliminary issue prior to the substantive proceeding and without a consideration of the merits of Mr Bye’s claim.
Danzante contended that Mr Bye was barred from bringing the proceeding on the basis that the settlement agreement constituted an ‘accord and satisfaction’ which resolved the dispute and, further, relied on the outcome certificate under s 296 of the WIRC Act.
Mr Bye, on the other hand, contended there was no ‘accord’ in the sense of the parties being of the same mind that Mr Bye’s entitlement to compensation for weekly payments of compensation and medical and like expenses was finalised ‘once and for all’ by reason of the settlement agreement.
There was no dispute that Mr Bye was paid the benefits in accordance with the settlement agreement once he had supplied the Agent with certificates of capacity.
Mr Bye’s pleadings rely also on two subsequent claims lodged by him for psychological injury on Danzante. Both those claims were rejected on grounds they raised no new issue nor allegations not previously considered by the parties in entering into the settlement agreement.
Many background matters were either agreed or not disputed. It is convenient to start by setting out those matters before turning to Mr Bye’s oral evidence which was confined to the matters related to the ‘accord’ question.
Matters agreed or not in dispute
Mr Bye has not worked for Danzante nor for any other employer beyond 25 June 2017 which was the date of his dismissal by Danzante.
Mr Bye’s claim dated 9 September 2017 (the first claim) included the following responses:
What is your injury/condition…? Acute post-traumatic stress disorder, psychological.

What happened and how were you injured? I was discriminated against and the company did not do anything to resolve the issue. I'm now psychologically injured. Darren Reed the operations and sales manager was talking to another staff member where I could hear and he is all f****** are disgusting and don't deserve to live.

On 5 October 2017, Mr Bye was medically examined for the Agent by A/Prof Damodaran, an independent medical examiner, who prepared a report (the IME report).
The rejection notice advised that the Agent relied on ‘the available information’ including the IME report and a circumstance investigation report (which included a nine-page signed statement of Mr Bye dated 2 October 2017). Under the heading ‘Reasons for this decision’, the rejection notice stated:
On 9 September 2017 you completed a Worker’s Injury Claim Form in which you indicate that you sustained an acute post-traumatic stress disorder on 23 October 2016 as a result of allegedly being discriminated against and not being supported by your employer … It is noted that your employment was terminated with Danzante Pty Ltd effective 26 June 2017 and that situation remains.
The sole ground for rejection of the first claim, as set out in the rejection notice, was that Mr Bye’s claimed psychological injury was non-compensable as it arose wholly or predominantly as a result of management actions take on reasonable grounds and in a reasonable manner.
After the dispute was referred to conciliation, the ACCS scheduled a conference for 14 December 2017.
Prior to the scheduled conference, Mr Bye was contacted by telephone by Ms Joan Spina of WorkCover Assist who discussed the matter with him. Following that discussion, Ms Spina then commenced negotiations with the Agent without a formal conference being convened. The negotiations culminated in the settlement agreement.
The outcome certificate of 14 December 2017 was issued in the following terms:
This dispute relates to a decision dated 6 October 2017 to reject a claim for stress.
I have discussed the issues with the parties. Pursuant to s.290 of the Act, I confirm that I have received sufficient information to enable me to exercise my functions without the need for a conciliation conference or further information.
The following recommendation has been requested by the Authorised Agent and the employer.
Timothy Bye has obtained independent advice and also requests this recommendation.
Accordingly, I recommend pursuant to s.294(1)(a) of the Act that the Authorised Agent pay 10 weeks of weekly payments and the reasonable costs of medical and like expenses to 31 December 2017 in accordance in [sic] the Act.
The parties accepted this recommendation and agree that this dispute is resolved on these terms.
Payment of compensation in accordance with a recommendation is not an admission of liability (s.300(1) of the Act).
Pursuant to s.296(2)(d) of the Act, this Outcome Certificate certifies that each party to this dispute is bound by this result and these terms of resolution.
This outcome certificate is evidence of: -
·The resolution of this dispute between the parties; and
·The terms on which this dispute has been resolved.
Conciliation has been completed.
Once Mr Bye provided certificates of capacity to the Agent, the arrears of weekly payments representing the settlement agreement were paid to him.
On 16 July 2019, Mr Bye lodged another claim on Danzante (the second claim) which included the following responses:
What is your injury/condition…? Post-traumatic stress disorder, mental health.

What happened and how were you injured? A manager would call me a lady and say gays don't deserve to live. He also tried to hit me with a forklift. I have nightmare and suffer extreme stress.

The rejection of the second claim (by notice dated 29 July 2019) was referred to conciliation. After a conciliation conference on 28 October 2019, an outcome certificate of the same date was issued (the second outcome certificate) which stated (in part):
I am unable to bring the parties to agreement.
I am satisfied that there is genuine dispute with respect to the liability to make or continue to make weekly payments and … compensation for [medical and like expenses].
Accordingly, under s.298(2) of the Act, I am satisfied that there is a genuine dispute with respect to the liability to make or continue to make weekly payments and … compensation for [ medical and like expenses].
I certify that the claimant has taken all reasonable steps to settle the dispute.
Application may be made to a court to determine the matter.
On 22 June 2020, Mr Bye lodged a further claim on Danzante (the third claim) which included the following responses:
What is your injury/condition…? PTSD, Generalised Anxiety, Agoraphobia, Depression, Excessive Bruxism, MTD, Excessive wear, Cracked Tooth Syndrome.

What happened and how were you injured? I was bullied, harassed and discriminated in the workplace. I was called a lady on a daily basis by a senior manager, he also said that gays are disgusting and don't deserve to live and he shouldn’t have to work with them. He also tried to hit me with a forklift.

The rejected third claim (by notice dated 20 July 2020) was referred to conciliation by Mr Bye. An outcome certificate dated 23 July 2020 was issued in essentially the same form as the second outcome certificate (the third outcome certificate).
I now turn to Mr Bye’s oral evidence.
Plaintiff’s evidence
Mr Bye did not seek legal advice nor have legal representation at any stage prior to 2018.
Mr Bye had requested an internal review by the Agent of the rejection notice (prior to conciliation) and there were various communications about this by email and telephone.
In cross-examination, Mr Bye was taken to the Agent’s contemporaneous ‘NOVUS’ records of email exchanges and telephone calls between himself and the Agent.
On 1 November 2017, Mr Bye emailed the Agent (the 1 November 2018) as follows:
Hello Tate,
Extremely disappointed in [the Agent] and the continued ignorance in my case. The internal reviewer has no bothered [sic] to look for the clinical notes that were sent to you over two weeks ago. She's not looking at any of the reason I asked for the internal review. I'll be asking a lawyer to look this as I believe you are doing extremely illegal thing [sic] with not doing what your company is supposed to do. I will also be asking the media to look into what has happened and if they wished that this to the public. You have not done anything you are supposed to be doing to protect the worker that was harmed. NOT HAPPY. Thank you.
On 2 November 2017 and 3 November 2017, Mr Bye sent further emails to the Agent regarding the making of a complaint to WorkSafe. He wrote that he was ‘disgusted’ the internal reviewer still did not have the clinical notes.
In cross-examination, Mr Bye agreed that, although he made reference to seeking legal advice in the 1 November 2017 email, he did not do so then or at any stage in 2017.
As for whether he had telephoned the Agent on 13 November 2017 asking to escalate his dissatisfaction with the internal review process, he agreed that was possible and did not dispute the Agent’s records.
As for why he did not have a specific recollection, that was because he was in a dark mental place at the time.
On 16 November 2017, there was another phone call between Mr Bye and the Agent in which he complained about the independent medical examiner not having all the information in preparing the IME report. In addition to that complaint, the NOVUS note stated as follows:
The worker appears to have a miss understanding [sic] of conciliation, and is alleging that the matter would be reported in the media, and will expose the employer and [the Agent].
The worker suggested that we are inappropriately insuring the employer, and that we have a right to cease their policy as his friends at WorkSafe have informed him.
In cross-examination, Mr Bye agreed he was unhappy with the IME report but otherwise denied the accuracy of this NOVUS note. He did not recall making the comment about the Agent inappropriately insuring the employer and denied he said anything about having friends at WorkSafe.
On 17 November 2017, in response to the ACCS’s email advising him of the scheduling of a conference, Mr Bye had emailed the ACCS as follows (the 17 November email):
Hello Tracy, I am pulling out of the conciliation as EML are unethical and no longer can handle the bullying I have faced with them and my mental state cannot take their bullying anymore. Thank you.
It was after that email that Ms Spina had contacted him.
In examination in chief, Mr Bye said he told Ms Spina that he was mentally not in the space for the conference. She responded that she thought that they could achieve a deal and that she could talk to the insurer without the need for a formal conciliation conference. Mr Bye’s response to Ms Spina was that he wanted to move the conciliation.
There were phone calls back and forth from Ms Spina and eventually the settlement agreement was reached.
In examination-in-chief, Mr Bye agreed he was to receive 10 weeks of weekly payments and medical and like expenses, however, as for his understanding of the effect of the settlement agreement, there was no talk of restrictions on timelines of what he was accepting.
In cross-examination, Mr Bye was questioned about his 17 November 2017 email and there being no reference to him seeking to postpone the conference. He denied the reason there was no reference to postponing the conference was because he had not wanted to postpone, rather he wanted to pull out consistent with his prior complaints about the agent. Mr Bye said that his mental health was his mental health. He found out later that he could pull out and get a new date.
As for the scope of the claim, in cross-examination, Mr Bye agreed that it was an open-ended claim for weekly payments of compensation and medical and like expenses from the date of the claim onwards.
As for the settlement, in cross-examination, he agreed his understanding was that he would receive ten weeks of weekly payments and medical and like expenses to 31 December 2017.
In cross-examination, as for the ‘independent advice’ referred to in the outcome certificate, that was only Ms Spina. As for whether there were discussions with her before the settlement was reached, Mr Bye said there were no conversations as to whether it was good, bad or otherwise.
As for whether he told Ms Spina to accept the offer of ten weeks, in cross-examination, Mr Bye said that it had got to the point of no return with his mental health and he wanted to get off the phone. He did not expect the settlement was a ‘full-stop’. All he had wanted was a different date for the ACCS conference.
In cross-examination, as regards the phone calls back and forth, Mr Bye had kept saying he didn’t want offers, he wanted a new date for the ACCS conference. Ms Spina was not listening to him and kept on pushing ‘deal, deal, deal’.
In cross-examination, Mr Bye said that three successive offers were conveyed to him by Ms Spina. These were for four weeks of compensation, then six weeks and then ultimately ten weeks.
In cross-examination, Mr Bye agreed that following the conciliation, he was in communication with the Agent about providing the certificates of capacity and chasing up payment.
On 18 December 2017, the Agent emailed Mr Bye regarding ‘… finalising the payment for 10 weeks compensation in accordance with the conciliation’ and requesting certificates of capacity.
The last phone call was on 18 January 2018 and the NOVUS note recorded:
Called and spoke to Timothy Bye with relation to his outcome. Worker confirmed that he has received the funds and is satisfied that this completes the matter.
In cross-examination about this note, Mr Bye said he was satisfied he had been paid, but he would not have been satisfied about this being a full-stop that ended everything.
In cross-examination, Mr Bye disagreed with the proposition that the communications with the Agent contained no suggestion that he was in some way unable to participate in conciliation. He said that by then he thought it was too late.
As for whether he could have participated in a conciliation conference, in cross-examination, he said that, mentally, he could not drive to the city because a car accident had been how he tried to hurt himself previously. That was on his GP’s advice.
In cross-examination, Mr Bye was questioned about the contemporaneous histories recorded by his GP around the time of the conciliation in an extract of clinical notes from Ivanhoe Clinic.
As for an attendance on 13 November 2017 and the lack of any reference to any issues to do with limiting his driving, Mr Bye said the explanation for that was that his GP was a very kind and loving person. She had known him for 15 years and been treating him for 10 years. If Mr Bye asked for things not to be recorded in the clinical notes, she would not write them down.
As for an attendance on 29 November 2017, the GP had recorded that he wanted to be finished with anything to do with work. Mr Bye said the explanation for that was that that he wanted to stop thinking about Mr Reed (the operations manager) and he wanted it all to stop, the discrimination.
In cross examination, Mr Bye denied that what really happened was that he had a change of heart and now wanted to go back and start all over again and ignore the settlement agreement.
In re-examination, Mr Bye was asked whether he recalled what his attitude had been regarding a return to work at the time the settlement agreement. He had no thought of that. All he knew was that if he got worse the doctor said he was allowed to put in a second claim if he did get worse.
Other evidence
It is appropriate to assess the evidence which comprised ‘the available information’ relied upon in the rejection notice being the IME report and Mr Bye’s 2 October 2017 statement (which was the only document from the circumstance report tendered into evidence).
A/Prof S. Damodaran, consultant psychiatrist, provided the IME report of 6 October 2017. A detailed history was obtained of Mr Bye’s employment with Danzante involving difficulties with the workplace culture including discriminatory and exclusionary behaviour. There were derogatory remarks including homophobic slurs made by the operations manager which Mr Bye overheard. There was inaction by the employer who also did not keep him informed after he had complained. There were further workplace difficulties including a lack of protection of him, poor treatment and a failure to take his concerns seriously. There was reference to his position being restructured whilst he was on annual leave and a temporary employee being brought in to do his job. Ultimately, matters culminated in a meeting on 26 June 2017 at which he was dismissed and handed a letter terminating his employment because of being ‘too social’.
Mr Bye’s statement of 2 October 2017 comprised nine pages and was signed by him at the foot of each page. In the course of paragraphs 33 to 80, Mr Bye’s allegations were detailed and expanded upon regarding: the exclusionary and discriminatory conduct of the operations manager in the workplace including overhearing homophobic slurs; efforts to raise his concerns and his employer’s lack of action; the altered or reduced scope of his role after his return from annual leave; the appointment of the temp; and the meeting on 26 June 2019.
A volume of medical evidence was tendered into evidence by agreement although it was not the subject of substantive submissions of either Counsel. I will refer to that medical evidence only to the extent that it falls within the scope of the issue for my preliminary determination.
Dr Alina Yaramenko, treating GP, provided several reports including those dated: 14 March 2018, 21 October 2019, 4 September 2020 and 18 May 2021. In the 14 March 2018 report, there is reference to Mr Bye’s attendances through 2017 relating to symptoms attributed to workplace stressors, the termination of employment, ruminating on derogatory and discriminatory treatment in the workplace. On 9 October 2017, suicidal ideation was reported. On 13 November 2017, Mr Bye reported improvement although with persistent symptoms. On 19 February 2018, an escalation of symptoms was reported followed by some improvement in the course of 2018. In February 2019, there was notable exacerbation and in subsequent attendances in 2019 references to teeth-grinding and related dental issues. She opined that Mr Bye’s psychological condition was directly contributed to by his workplace injury and the lack of definitive action to address the original assault.

Dr Sung Kim, treating dental surgeon, provided a report dated 13 December 2019 regarding various dental issues that he opined were strongly associated with Mr Bye’s stress and bruxism (habitual teeth-grinding).
Dr Timothy Entwisle, consultant psychiatrist, provided a medico-legal report of 15 March 2021 at the request of Danzante’s lawyers. A detailed history of issues in the workplace was obtained including: derogatory and discriminatory treatment by the operations manager; inaction by the employer following Mr Bye’s complaint; an incident with a forklift; the hiring of the temp and restructuring of his role; and the termination of his employment.
Dr David Weissman, consultant psychiatrist, provided a medico-legal report of 29 April 2021 at the request of Mr Bye’s lawyers. An extensive history of the workplace issues was obtained including the treatment by the operations manager and throughout employment up until Mr Bye’s employment was terminated.
Analysis
Legislative Framework

64. Disputes and conciliation are governed by Division 2 of Part 6 of the Act.

65. Section 296(1) provides that the ACCS must issue an outcome certificate where the dispute was referred to ACCS and has resolved.
66. Sub-sections (a) to (e) of s 296(2) set out requirements regarding the form of the outcome certificate including that it must: (c) set out any terms on which the dispute is resolved; (d) certify that each party to the dispute is bound by the result; and (e) state that the outcome certificate is evidence of—
i.the resolution of the dispute between the parties; and
ii.the terms on which the dispute has been resolved.

Section 296(3) of the Act provides that the outcome certificate is admissible as evidence both of: (a) the resolution of the dispute between the parties; and (b) the terms on which the dispute was resolved.
Section 296(4) provides that s 296(1) does not apply if the ACCS has issued a certificate in respect of that dispute under s 273.
Pursuant to s 273(1), proceedings must not be commenced in a Court (other than certain limited types of proceedings specified in s 273(3)) unless:
a) the dispute between the parties has been referred for conciliation under Division 2; and
b) ACCS is satisfied that all reasonable steps have been taken by the claimant to settle the dispute; and
c) ACCS has issued a certificate to that effect that ACCS is so satisfied.
Although practitioners in this jurisdiction commonly refer to certificates issued under s 273 as being ‘genuine dispute’ certificates, the Parliament has enacted s 273 without reference to the term ‘genuine dispute’. Rather, the requirement is that the ACCS needs to be satisfied that all reasonable steps have been taken to settle the dispute: s 273(1)(b).
The term ‘genuine dispute’ appears elsewhere in Division 2 of Part 6 such as, for example, in the context of the ACCS issuing directions about payments of compensation as in ss 297(10) and 298(2).
For the purposes of s 297, the ACCS is to be taken to be satisfied that there is no genuine dispute if the ACCS is satisfied that there is no arguable case in support of the denial of liability: s 297(10).
For the purposes of s 298, the ACCS is to be taken to be satisfied that there is a genuine dispute if the ACCS is satisfied that there is an arguable case in support of the denial of liability: s 298(2).
In closing submissions, Counsel for Danzante referred to the flow chart in s 280 that illustrates the applicable dispute resolution process if a worker disagrees with a decision. That appears at the commencement of Division 2 of Part 6.
Of course, as I observed to Counsel in the course of submissions, flow charts in the Act do not form part of the Act. That is in accordance with s 13 of the Act which provides (as stated in the note to s 13) that flow charts are intended as a guide only to the reader as to the general scheme of the provisions.
In essence, upon a conciliation outcome, there are two processes (as illustrated by the flow chart) that follow from the question, ‘Is the dispute resolved?’
If the answer to that question is yes, the conciliation officer may make a recommendation to the parties and endorse the parties’ agreement: s 294. The conciliation outcome certificate is then issued pursuant to s 296.
If the answer to that question is ‘no’, the conciliation officer notifies the claimant worker that there is a genuine dispute and issues a certificate to that effect.: s 273/s 298.[1]
[1]Section 298 as already observed relates to the power of the ACCS to give directions about payment of compensation (which did not occur in this case).
As already observed, it is upon the issuing of a certificate under s 273 that the claimant may commence proceedings in the Magistrates’ or County Court: s 273. The Court then has the power to confirm, vary or set aside the decision: s 264.
That there are two distinct and alternative processes in terms of outcomes of conciliation is plain enough from the legislative provisions in Division 2. For example, s 296(4) provides that an outcome certificate is not to be issued under that provision if a certificate is issued under s 273 of the Act.
Whilst that much seems clear, this is nevertheless an area of some ambiguity. I refer to the following passage in the current edition of the Lex Nexus Accident Compensation Vic + Cases in the commentary on s 296 of the Act:
Section 296 is the successor to s 57 of the Accident Compensation Act 1985 (Vic). In the event of a dispute at conciliation being resolved the Conciliation Officer must issue a certificate in accordance with the requirements of s 57(2). Pursuant to s.57(3) the certificate itself is admissible in any court proceeding as evidence of the resolution of the dispute between the parties and the terms on which it has been resolved. What is unclear however is the extent to which an agreement reached at conciliation acts as any sort of bar at law in relation to the same, or any or other dispute, between the parties. The Act is silent on the point nor is there any particular sanction provided for breaching such an agreement.

Having considered the legislative framework, I now turn to the relevant case law.
Authorities
The applicability of accord and satisfaction principle in workers compensation has been the subject of numerous workers compensation cases in this Court, the County Court and the Supreme Court.
For example, I refer to Warren v Jennifer A Yates where the principle was discussed by Dyett J.[2] The principle was discussed and applied by Magistrate Saines in Bunney v CGU[3] and Magistrate Wright in Bucic v Arnej Pty Ltd.[4] For completeness, I observe that the facts of those cases differ significantly to this case which also concerned issue estoppel and res judicata. In those matters, the prior settlement agreement giving rise to an accord and satisfaction defence occurred between the parties in the context of previous litigation.
[2] [2006] VCC 1780 as referred to in Lex Nexus Accident Compensation Vic + Cases in the commentary, [s44.9].
[3](Unreported, MCV, 5 April 2013).
[4][2014] VMC 17.
There was no question that the evidence must establish the parties were consensus ad idem as to the settlement agreement or the defence of accord and satisfaction relied upon by Danzante must fail.

In relation to the proper construction of the settlement agreement, both Counsel relied on the recent Court of Appeal authority of McKenzie v Healthscope Operations Pty Ltd, particularly the following passage:
The principles governing the construction of the settlement agreement are not in dispute. The agreement is to be construed objectively, by reference to its text, context and purpose. The context in the present case includes the March 2016 termination notice. The termination notice is an objective circumstance, external to the settlement agreement, which was known to the parties, and thus a matter to which recourse may be had.[5]
[5][2020] VSCA 309, [37].
Whilst McKenzie was concerned with the predecessor provisions in the Accident Compensation Act 1985 (the AC Act), the provisions mirror the provisions of the current Act.
Applying the authority of McKenzie, Counsel were in agreement, correctly in my view, that objective construction of the settlement agreement includes reference to the notice of rejection of 6 October 2017 (which I have referred to as the rejection notice) and the available information referred to in the notice. The Court of Appeal also considered the context by reference to the contemporaneous communications by email between the parties.
Clearly, there are parallels between McKenzie and the present case.
As in the facts of this case, the worker, Mr McKenzie, had reached a settlement agreement at conciliation, with the assistance of WorkCover Assist, and without a formal conference. The agreement was for the worker to be paid a period of arrears of weekly payments up to a particular date.
In a subsequent Magistrates’ Court proceeding claiming weekly payments beyond that date, the Court upheld the employer’s contention that the proceeding was barred based on an accord and satisfaction defence. An appeal by the worker to the Supreme Court, on a question of law, was dismissed. Ultimately, an appeal by the worker to the Court of Appeal was successful.
As I observed to Counsel in the course of submissions in this case, a major difference between the facts of this case and those of McKenzie related to the nature of the dispute at conciliation. Another difference was the form of words appearing in the outcome certificate relating to the parametres of the period of arrears.
In McKenzie, the dispute at conciliation related to a termination of weekly payments of compensation prior to 130 weeks rather than a rejection decision as in this case. Mr McKenzie’s claim was accepted initially and he received weekly payments for over two years before the notice of termination was issued.
The form of the conciliation outcome certificate issued by the ACCS in McKenzie following the settlement agreement is set out in full in the Court of Appeal’s decision.[6] It is in similar (although not identical) terms to the outcome certificate in this case. For example, both use the following phrase: ‘The parties accepted this recommendation and agree that this dispute is resolved on these terms’.
[6]Ibid, [9].
In this case, the outcome certificate contains a paragraph that does not appear in the McKenzie outcome certificate (and which was the subject of cross-examination of Mr Bye and also submissions). That paragraph read as follows: ‘Timothy Bye has obtained independent advice and also requests this recommendation’.
I will return to Mr Bye’s evidence about this later in these reasons.
As for the terms of the recommendation agreed to by the parties, another difference on the facts of McKenzie, as I have noted, related to a phrase attached to the period of arrears which was that the Agent would make weekly payments up to a specific date ‘but not thereafter’.
In McKenzie, the employing of the words ‘but not thereafter’ was a substantial focus of competing submissions as to the construction of the agreement and of the Court of Appeal’s consideration. Of course, there, the construction for which the worker contended was that the phrase referred to an agreement to pay weekly payments of compensation for up to the end of second entitlement period under the Act, ‘but not thereafter’, in the sense of there being no agreement between the parties about the payment of weekly payments beyond the 130-week entitlement.
On the other hand, the employer contended the phrase involved a release by the worker of any entitlement to weekly payments after the end of the specified and/or that the agreement did not provide for reinstatement of entitlement to weekly payments. That was in reliance on the Court of Appeal’s decision in Victorian WorkCover Authority v Balogh.[7]
[7][2004] VSCA 200, [14] – [17].
The Court of Appeal in McKenzie accepted that the entitlement to weekly payments was so terminated when the worker’s payments were ceased. However, it did not accept that further applications or claims could not be made in certain circumstances in accordance with the Act.[8]
[8][2020] VSCA 309, [42].
Ultimately, on the facts of that case, the Court of Appeal preferred the worker’s construction and held as follows:
In our view, the context in which the present settlement agreement was entered into supports the [worker’s] construction of the agreement. It seems plain to us that the dispute that was resolved ... was a dispute concerning the [worker’s] entitlement to weekly payments up until the end of the second entitlement period (130 weeks). ... We think it an unlikely construction that, in the absence of clear words of release, the parties' intentions, objectively ascertained, were to compromise any entitlement the applicant may have had to weekly payments beyond the end of the second entitlement period.[9]
[9]Ibid, [51].
In this proceeding, submissions were concerned with the ad idem question and construction of the settlement agreement (as reflected in the outcome certificate) in circumstances where:
a.          There was no initial acceptance of the claim or of an entitlement (as per the analysis in Balogh).[10]
b.          There was an absence of any words or phrase such as ‘and not thereafter’.
c.           There was a compromise of the potential benefits to ten weeks’ arrears whereas by the time of the settlement agreement six months had elapsed since the worker ceased employment.
[10][2004] VSCA 200, [14] – [17].
I now turn to submissions before assessing the evidence and making my findings.
Plaintiff’s Submissions
It was submitted that, ‘in the absence of clear words of release’ as the Court of Appeal put it in McKenzie, the settlement agreement was restricted to the period ending 31 December 2017.
Mr Bye’s pleadings referred to the negotiations at conciliation having ‘culminated in a conciliated agreement being reached ... in relation to the plaintiff’s claim for compensation under the Act for the period 26 June 2017 to 31 December 2017...’.[11]
[11]Amended Complaint, paragraph [32].
Then, under ‘Particulars’, the pleadings refer to the settlement being ‘set out in a Conciliation (‘Genuine Dispute’) Outcome Certificate ... dated 14 December 2017. …’
At this point, I observe that whilst the outcome certificate of 14 December 2017 is referred to in the pleadings as a ‘genuine dispute certificate’, it is not in fact a genuine dispute certificate in the usual sense understood by s 273 of the Act. Rather, it is a certificate issued in the form of the dispute having ‘resolved’ under s 296(1).
As for the objective circumstances external to the settlement agreement and to which recourse may be had (as per the principles referred to McKenzie), Counsel for Mr Bye submitted that the 17 November 2017 email was a critical communication.
The conclusions to be drawn, it was submitted, from that communication combined with the plaintiff’s oral evidence were that:
a.Mr Bye wished to pull out of the conciliation as he considered the Agent had acted unethically;
b.His mental state was poor.
The evidence was overwhelming that the settlement agreement was arrived at in spite of those matters and there was, therefore, no accord.
Further, or alternatively, whilst it may be ultimately accepted that Mr Bye had agreed to the settlement agreement, taking into account the whole of the objective circumstances, it could not be inferred that he had accepted a settlement agreement to finalise all of his rights.
Mr Bye’s evidence about his own mental state, which his Counsel submitted was precarious and fluctuating, was corroborated by the contemporaneous clinical notes of his GP and, for example, the reference to ‘protective measures’. Mr Bye’s evidence was that he needed to restrict access and use of his car because of his suicidal ideation which was why he wanted to put off the conciliation.
It was submitted that, at the time of conciliation, there was potentially an outstanding period of six months of arrears compensation since Mr Bye’s last day at work. The final agreement to pay 10 weeks was a compromise and intended to function as a compromise. The compromise was from the date he was dismissed from employment to the lodgement of the WorkCover claim but not thereafter.
Defendant’s Submissions
The starting point for determination of the ‘accord’ question was to assess the evidence regarding: first, the basis and scope of the claim as well as the notice of rejection; and, second, the objective circumstances of the settlement agreement.
The claim made by Mr Bye was of broad scope in terms of claimed injury (acute post-traumatic stress disorder, psychological) and the causative events and circumstances relied upon (references to discriminatory conduct including derogatory slurs by the operations manager, the employer’s inaction and failure to resolve the issue).
Mr Bye conceded it was an open-ended claim and his assertion now that that he did not understand or intend there to be a ‘full-stop’ to benefits should be rejected as self-serving and inconsistent with the whole of the evidence.
Additionally in relation to context, applying the McKenzie principles, the objective circumstances included ‘the available information’ relied upon in the rejection notice and comprised the expanded allegations found in Mr Bye’s nine-page 2 October 2017 statement and the similarly expansive history referred to in the IME report.
Those matters included: the operations manager’s exclusionary and discriminatory conduct, his derogatory comments; the employer’s conduct and communication following Mr Bye’s complaint; the alteration of his role with the appointment of the temp and ultimately his dismissal at the meeting on 26 June 2019.
Pursuant to s 296(2) and by reason of the first outcome certificate, Mr Bye was bound by the result of the settlement the terms and the certificate was admissible evidence as to the resolution of the dispute.
It was submitted that, although a matter of speculation, the agreed period of 10 weeks may have derived from the reference in the IME report to there being an anticipated period of incapacity for employment for eight to 10 weeks.
Findings
Having considered submissions, I now turn to the evidence and my findings.
On the issue of construction of the settlement agreement, I find that the first claim which was the subject of the rejection notice as of broad scope. That was apparent from the claim form itself in response to ‘what happened and how were you injured’. Also, the rejection notice referred to acute PTSD ‘as result of both discrimination and a lack of support by his employer’.
As for the 2 October statement, as Mr Bye’s Counsel pointed out in submissions, he was not cross-examined on the document although the statement was signed and tendered into evidence by consent. It was urged that limited weight be attributed to the statement it as did not touch on the conciliation process nor the circumstances of the settlement agreement.
I accept that submission. Although I did not understand Mr Bye’ Counsel to be saying that the statement could not have any bearing on or relevance as an objective circumstance regarding the scope of the claim and the subsequent rejection decision.
To my mind, very little turns on the 2 October statement other than to corroborate what was relied upon in the claim form as he states at paragraph [32]: his claim was ‘for post-traumatic stress disorder, as a result of being discriminated against by Darren Reed, the operations and sales manager and subsequent behaviour by my employer’.
Even leaving aside the 2 October statement, Mr Bye’s own evidence, under cross-examination, was that the claim was an open-ended claim for weekly payments of compensation (and medical and like expenses) from the date of the first claim onwards.

In short, I am persuaded that the weight of evidence supports a finding that all of Mr Bye’s issues in the workplace were ‘on the table’ and had been articulated expansively by him.
I find therefore that Mr Bye’s claim made in those terms was the subject of the ‘dispute’ at conciliation referred to in the outcome certificate. That is plain enough from the first paragraph of the outcome certificate which states: ‘This dispute relates to a decision dated 6 October 2017 to reject a claim for stress’.
It is fair to say that the real divergence on the accord question, both on Mr Bye’s own evidence and as was apparent from submissions, was what the parties intended in terms of the accepted recommendation.
The central thrust of submissions by Mr Bye’s Counsel was that there was an absence of consensus ad idem on the terms of the settlement agreement.
On the ad idem issue, Mr Bye’s credibility as a witness was a central consideration. His credit came under considerable attack in cross-examination.

At this point I observe that I did not find Mr Bye to be a truthful witness on this issue. Having the benefit of observing Mr Bye while he was giving evidence to the Court, I formed the view that his responses lacked directness and, at times, were, exaggerated or embellished on the issues in dispute. My impression was that Mr Bye’s answers were self-serving at best and at times were intended to mislead the Court in order to advance his interests.

There were several important inconsistencies or contradictory aspects to his evidence under cross-examination. On the one hand, he told the Court he did not dispute the accuracy of the Agent’s NOVUS records, for example, in relation to his wish to escalate his complaint. He then disputed the accuracy of the same notes, saying anyone can write a note, and denied he had said in a phone call that he had friends at WorkSafe who had informed him his employer’s insurance could be cased.

I found Mr Bye’s evidence about his interactions with Ms Spina through the negotiations to be not only unlikely but implausible. For example, Mr Bye said there were no discussions regarding whether the settlement agreement was ‘good, bad or otherwise’. To my mind, that is inconsistent with his evidence that there was a series of three increasing offers from which I conclude that his discussions with Ms Spina must necessarily have been that the first two offers were not enough to consider taking.

Mr Bye gave evidence that he had repeatedly asserted a wish to move or postpone the conference from the time Ms Spina first called him after the 17 November 2017 email. That appears to be contradicted by his evidence at another point that he found out ‘later’ that he could pull out and get a new date.

Similarly, I find his evidence unlikely regarding the phone calls with Ms Spina which was that in he had kept repeating to Ms Spina that he ‘didn’t want offers’ and that all he wanted was ‘a new date for the ACCS conference’. It seems to me highly improbable that Ms Spina in her role as a WorkCover Assist officer was ‘not listening to him’ and even more so that negotiations including a series of increasing offers would have continued on his behalf in the face of such instructions.

As for the final NOVUS note of 18 January 2018 recording ‘Worker confirmed that he has received the funds and is satisfied that this completes the matter’, Mr Bye told the Court under cross examination that only meant he was satisfied about having been paid. He denied it meant he was satisfied the settlement agreement was ‘a full stop’.

Yet his evidence regarding the settlement agreement does not, it seems to me, match up to the submissions made by his Counsel. In examination in chief, Mr Bye agreed the settlement agreement was for him to receive 10 weeks of weekly payments and medical and like expenses. He repeated that evidence, under cross-examination, telling the Court his understanding about the settlement agreement was that he would receive ten weeks of weekly payments and medical and like expenses to 31 December 2017.

Assessing the whole of the evidence, it must be said that Mr Bye’s evidence was fairly vague as to his reasons for accepting the settlement agreement. However, his evidence in a contemporaneous history to his GP on 29 November 2017 referred to the ‘work issues hanging over his head and wants to be finished with anything to do with work to enable moving on process’.

It is also true that he also told his GP on 29 November 2017 that he ‘can’t let it go’ as discrimination was not okay and he ‘needs to make a stand’. That is consistent with him proceeding with conciliation even though he had considered pulling out at the time of the 17 November 2017 email.

Weighing the whole of the evidence and assessing the content and style of his prior communications and the Agent from 1 November 2017 onwards, it seems to my mind far more likely that had Mr Bye, as his Counsel submitted, held a contemporaneous belief that the settlement was ‘not a full stop’ to his claim for benefits, he would have said so at some point in the course his post-conciliation communications with the Agent. Examples of the prior communications were: 1 November 2017 he referred to being ‘NOT HAPPY’, and of the Agent failing to ‘protect the worker that was harmed’; then On 3 November 2017, he wrote of his disgust about the review process and on 16 November of complaining about the Agent insuring inappropriately the employer.

When he was asked by his Counsel, in re-examination, about whether he recalled what his attitude had been regarding a return to work at the time of the settlement agreement, he said he had no thought of that. Also in re-examination he referred to his doctor having told him that ‘he was allowed to put in a second claim if he did get worse’. Yet, that account was not corroborated by the GP in any of the clinical records of her attendances upon him nor in any of her reports. Also, perplexingly, he made no mention of that in his evidence-in-chief nor when cross-examined about the settlement agreement or his reasons for entering into it.

In assessing the weight of the whole of the evidence, including the entirety of the NOVUS record of communications between Mr Bye, I conclude that Mr Bye’s evidence that he did not regard the settlement agreement as being a full stop was not credible.

Next, on the consensus ad idem question, Mr Bye’s Counsel contended that the evidence supported a finding against there being accord on 13 December 2019 due to his poor mental state. That was based on the GP notes on 13 and 29 November 2017 and the content of the 17 November 2018 email in which he refers to wanting to ‘pull out’ of conciliation. Mr Bye did, in examination in chief, refer to being in a ‘dark mental place’ to explain his poor recollection of a phone call on 13 November 2017 with the Agent. In cross-examination, he told the Court that the reason he told Ms Spina to accept the offer of ten weeks was because ‘it had got to the point of no return’ with his mental health and he wanted to get off the phone.

It must be said that I did not find the evidence, especially Mr Bye’s evidence, persuasive or credible in support of his Counsels’ submissions regarding his mental health being such that he did not fully understand or comprehend the nature of the settlement agreement. I have already observed that I did not find him to be a witness of credit and that aspects of his evidence seemed to me to be self-serving.

Mr Bye’s Counsel submitted that it was a significant measure of the extent of his poor mental health that the GP’s notes on 13 November 2017 referred to ‘some protective behaviours’ (such as exercise and seeing the psychologist) and to interactions about work being ‘triggering ++’. Things were noted as being the same as previously on the next occasion on 29 November 2017 although it was also on that occasion that he told Dr Yaramenko he wanted to be finished with anything to do with work.

As for the contemporaneous evidence as to the state of Mr Bye’s mental health at the time of the settlement agreement, I find it to be a matter of some significance that, according to the GP notes, Mr Bye did not attend Dr Yaramenko for treatment again on any occasion after 29 November 2017, that is during the whole of the months of December 2017 and January 2018. This would seem to be inconsistent with submissions made regarding Mr Bye being in precarious mental health during this period.

Mr Bye told the Court that he could not have driven into the city to attend the scheduled conciliation conference on 14 December 2018 because his GP had told him not drive his car. This was apparently because a car accident had been an aspect of past suicidal ideation. Again, I find it implausible that a matter such as that would not be recorded, yet she does record that the presence of a support person would be of benefit.

Another matter that Mr Bye appeared to rely upon regarding his understanding of the terms of the settlement agreement was that his ‘only advice’ was from Ms Spina. That was what he told the Court when cross-examined on the reference in the outcome certificate to him having ‘independent advice’. Yet the evidence also was that Mr Bye not only had an awareness of his right to obtain legal advice, he flagged his preparedness to take that step should he consider it appropriate. That was apparent from the NOVUS records: in the 1 November 2017 email and again on 10 January 2018 when complaining about a delay in payments.

Having made findings on the evidence, I conclude as follows:

a. The ‘dispute’ was the rejection of Mr Bye’s claim for workplace stress encompassing the allegations and matters relied on in his first claim and the rejection notice: as result of both discrimination and a lack of support by his employer up until and including the date of his employment being terminated.

b. There was consensus ad idem between the parties that the ‘dispute’ was resolved by the acceptance of the requested recommendation of the conciliation officer being the ten weeks of weekly payments and medical and like expenses to 31 December 2017.

c. There was consensus ad idem between the parties that the ‘dispute’ had the effect of discharging or finalising any entitlement to claim benefits beyond 31 December 2017.

d. On that basis, by reason of the operation of Division 2 of Part 6 of the Act specifically ss 273 and 296, Mr Bye is precluded from bringing his proceeding in this Court in relation to the rejection notice.

Whilst it is acknowledged that this determination results in an unpalatable outcome for Mr Bye, it seems to me there are considerable difficulties in the Court arriving at any other conclusion in this case.

Firstly, whilst the Court of Appeal preferred the worker’s interpretation in McKenzie regarding the settlement agreement at conciliation not being a bar to litigation, as both Counsel conceded here for the reasons already identified, this case is distinguishable from the facts of that case.
In particular, the ‘dispute’ that remained in Mr McKenzie’s situation was his entitlement to payments beyond the second entitlement period. By contrast, in this case, it is unclear to me what ‘dispute’ remained when the settlement agreement was a compromise reached in relation to a rejected claim. I also agree with the submission of Danzante’s Counsel that in McKenzie, a threshold entitlement had been established, but that had never occurred here.
Secondly, the fact that the sole ground relied upon in the rejection notice was that the claimed injury was non-compensable based on the management action defence under s 40(1) would seem to reinforce the accord and satisfaction defence.
Thirdly, on the question what ‘dispute’ remained, Mr Bye’s Counsel was asked, in the course of submissions, to address the question of what he contended was the ‘dispute’ between the parties that had been resolved at conciliation. He submitted that it was the entitlement of Mr Bye ‘between the two dates’ comprising the ten weeks. The dispute that remained was for the period beyond 31 December 2017.
I reject that submission. To my mind, such a narrow and artificially contorted interpretation of the ‘dispute’ as urged by Mr Bye’s Counsel cannot be correct and is contrary to the authority of the Court of Appeal in McKenzie requiring objective construction by reference to text, context and purpose of the agreement. I have already referred extensively to the evidence regarding the broad scope of the first claim and the rejection notice, the emails and Mr Bye’s evidence. The outcome certificate related to the disputed rejection certificate.
Fourthly, Mr Bye has not had the necessary certification by the ACCS to commence proceedings in accordance with s 273(1)(c) of the Act, Rather, a certificate has been issued that is admissible evidence of the resolution of the dispute between the parties having been resolved in accordance with s 296(3).
It is plain, as I have previously stated, that s 296(4) requires that the outcome of conciliation be reflected either by a certificate of resolution under s 296(1) or by a certificate of steps being taken to settle the dispute which were unsuccessful under s 273(1(1)(c). It cannot be consistent with Parliament’s intention that proceedings can be commenced with s 296 certificate in the same way as a s 273 certificate.
Fifthly, for completeness, that impediment is not fixed by Mr Bye’s pleadings describing the outcome certificate of 14 December 2017 as being a ‘genuine dispute’ certificate. It is not a certificate issued in accordance with s 273(1)(c).
Sixthly, again for completeness, the outcome certificate records that s 300(1) of the Act provides that: ‘Payment of compensation is not an admission of liability’. Again, I make the comparison, when considering the whole of Division 2 of Part 6 that where provisions do make reference to ‘genuine dispute’ or ‘no genuine dispute,’ the Act refers to there being, or not being, an arguable case of the denial of liability: s 297(10), 298(2). That of course has not occurred here.
Seventhly, the outcome certificate certifies that each party is bound by and it is admissible evidence of the terms on which the dispute has been resolved: s 296(3).
As for the application of s 296 and in particular the admissibility of the outcome certificate, Mr Bye’s Counsel pointed out that there was no discussion by the Court of Appeal in McKenzie regarding the operation of the predecessor provision in the AC Act. It was contended that was because the provision was essentially tautological and did not advance the issue of whether the parties were ad idem. That may be so but I have already stated why I consider McKenzie is different to this case.
Accordingly, I would dismiss the proceeding for these reasons.
Subsequent claims
I now consider briefly the second and third claims.
Both those claims, as the agreed facts set out at the outset of the reasons make clear, were also the subject of conciliation and resulted in outcome certificates issued under s 273 of the Act (in contrast to the outcome certificate of 14 December 2017).
In his pleadings, Mr Bye has contended as follows:
Although the second claim relates to the same facts and incidents as the first claim, by reason of the settlement, it is a logical corollary that the second claim only seeks compensation in the form of reinstated weekly payments and medical and like expenses under the Act from 1 January 2018.[12]
[12]Amended Complaint, paragraph [35].
In relation to the subsequent claims, both Counsel relied on the Court of Appeal’s decision in Ozbilgi v Bradnams Windows and Doors Pty Ltd[13] and, in particular, the following passage:
The appellant’s next submission is that it was not open to the learned trial judge to reject the appellant’s allegation of a fresh injury without considering the medical evidence. The appellant submits that the matter should be remitted to the County Court for a retrial on the issue of whether he has a fresh injury. I reject this submission. The appellant claims that his ‘condition has seriously deteriorated’ following the settlement of the first County Court proceeding. A deterioration of a pre-existing injury is compensable under the Act only if employment was a ‘significant contributing factor’ to the deterioration. The appellant claims that his employment was a significant contributing factor to the deterioration of his condition because the deterioration ‘arose primarily as a result of the original work related injury’. That claim cannot be accepted as a matter of law. As the learned trial judge held, employment cannot be a significant contributing factor to a deterioration of an injury solely because the original injury arose in the course of the employment. The appellant’s argument, if accepted, would mean that every deterioration of an employment-related injury constitutes a fresh compensable injury under the Act. This meaning could not have been intended by Parliament and is contrary to the plain wording of the Act. It follows that even if the appellant’s condition has deteriorated in the manner that he alleges, the deterioration cannot constitute a fresh compensable injury under the Act. Accordingly, there was no need for the learned trial judge to consider medical evidence.[14]
[13][2011] VSCA 210.
[14]Ibid, [38].
Ozbilgi was ultimately a case of issue estoppel as the Court of Appeal observed in McKenzie. However, whilst the Court in McKenzie decided there were few parallels between the facts of the two cases, it did not question the correctness of the analysis in the passage set out above.[15]
[15]Ibid, [48] – [50].
In particular, Counsel for Mr Bye submitted that, in reliance on that passage, if the Court was against the plaintiff on the accord and satisfaction defence in relation to the first claim, the subsequent claims were not impacted and were a matter for further argument and evidence. That was because the evidence would support there having been a deterioration of Mr Bye’s work-related injury after 31 December 2017.
Counsel for Danzante submitted that the question of deterioration did not arise in reliance on the same passage in Ozbilgi, and, there was therefore no need to consider the medical evidence.
I agree with the submissions of Counsel for Danzante that any such deterioration could not constitute a fresh compensable injury under the Act. I am of that view so for these reasons:
a. The evidence was undisputed that Mr Bye did not work for Danzante beyond 27 June 2017.
b. The events and circumstances relied upon in the first claim are one and the same events and circumstances relied upon by Mr Bye in his second and third claims. That is apparent from Mr Bye’s responses to the questions ‘what happened and how were you injured’ set out in the agreed facts.

c. The opinion of Dr Yaramenko was that Mr Bye’s psychological injury was related to the original ‘work events’. That remained her view (according to her latest report of 21 October 2019) when for example she refers to an apparent escalation of symptoms in February 2018 being connected to the workplace issues with Danzante. Whilst she opines there has been an aggravation, her opinion is that the aggravation or exacerbation is as a result of the workplace injury with Danzante.
d. Mr Bye’s case differed from a Robinson[16] type scenario frequently seen in in this Court. That is where, for example, a worker has brought litigation for a dispute regarding a frank incident claim, then seeks to expand the scope of issues before the Court by lodging a subsequent claim for injury in the course of employment which is then also the subject of dispute.
[16]Robinson v SPI Electricity Pty Ltd [2012] VMC 30.

Moreover, as I have observed, the sole ground of the rejection notice was that the claimed injury was of a type that did not create an entitlement to compensation under the Act. Mr Bye’s medical condition and incapacity were apparently not in dispute anyway. On the basis the question of ‘deterioration’ is therefore irrelevant as a justification for subsequent claims.

I would therefore order the proceeding be dismissed with respect to the second and third claims.

MAGISTRATE HOARE

5 MAY 2022

[2022] VMC 12

5 May 2022