Carter v GIO Workers Compenation (NSW) Ltd
[2006] NSWWCCPD 180
•9 August 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Carter v GIO Workers Compensation (NSW) Limited [2006] NSWWCCPD 180
APPELLANT: Jennifer Yvonne Carter
RESPONDENT: GIO Workers Compensation (NSW) Limited
INSURER:GIO Workers Compensation ( NSW) Limited
FILE NUMBER: WCC7865-05
DATE OF ARBITRATOR’S DECISION: 31 March 2006
DATE OF APPEAL DECISION: 9 August 2006
SUBJECT MATTER OF DECISION: Issue estoppel; prior District Court proceedings; identity of parties.
PRESIDENTIAL MEMBER: Acting Deputy President Deborah Moore
HEARING:On the papers
REPRESENTATION: Appellant: Fitzpatrick Solicitors
Respondent: Moray & Agnew
ORDERS MADE ON APPEAL: 1. The decision of the Arbitrator dated 31 March 2006 is revoked and the following order made:
i. The matter is remitted to a different Arbitrator under section 352(7) of the Workplace Injury Management and Workers Compensation Act 1998 for the Arbitrator to determine the Appellant Worker’s entitlements in accordance with the reasons in this decision.
ii The Respondent Employer is to pay the costs of the appeal and of the proceedings before the Arbitrator.
BACKGROUND TO THE APPEAL
On 24 April 2006, Jennifer Yvonne Carter (‘the Appellant Worker’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Commission against the decision dated 31 March 2006.
The Respondent to the appeal is GIO Workers Compensation (NSW) Limited (‘the Respondent Employer’) substituted as the Respondent by order made at an arbitration hearing on 23 February 2006 in place of a deregistered employer, described by the Arbitrator as ‘Community Services and Health Industry Training Company Limited trading as Care Skills’.
On 19 May 1999, the Appellant Worker was engaged by the Respondent Employer to work as an assistant in nursing at the Nyora Gardens Nursing Home (‘Nyora’). She claimed that on that date, she was assaulted by a patient as a consequence of which she suffered a number of injuries.
On 24 April 2002 the Appellant Worker filed a Statement of Claim in the District Court being proceedings number 2628/02 against Stelcom Pty Limited trading as Nyora Gardens Nursing Home seeking damages as a result of the injuries she suffered on 19 May 1999 allegedly as a consequence of Nyora’s negligence.
On 12 December 2002 Nyora filed a cross-claim against ‘the Government Insurance Office of New South Wales’ named as Cross Defendant, stating that: “At all material times the Cross Defendant was the worker’s compensation insurer of the Plaintiff’s employer trading as Careskills Community Services and Health Industry Training Company”. Nyora alleged the Cross Defendant had breached its duty of care to the Appellant Worker.
Those proceedings were heard and determined by Dodd DCJ on 25 August 2004. The decision of the Court was “… a verdict and judgment for the defendant against the plaintiff with costs and to dismiss the defendant’s cross claim”.
On 26 May 2005 the Appellant Worker filed her ‘Application to Resolve a Dispute’ in the Commission seeking weekly benefits compensation, medical, hospital or related expenses, and permanent impairment/pain and suffering compensation as a consequence of the incident on 19 May 1999 at Nyora. The Respondent in that application was named as ‘Treasury Managed Fund’.
On 18 June 2005 a ‘Reply’ was filed by ‘Australian Traineeships System in respect of Community Services and Health Industry Training Company Limited (deregistered)’ naming the insurer as ‘NSW Treasury Managed Fund (IMC)’ with its address as ‘c/- GIO Workers Compensation NSW Limited … Orange. NSW’. Under the heading ‘related claims’, the ‘Reply’ referred to the District Court proceedings No. 2628/02 between Ms Carter, “… Stelcom Pty Limited t/as Nyora Gardens Home (first defendant and cross claimant) and the Government Insurance Office of NSW (cross defendant)” noting the “verdict entered in favour of the Defendant and cross claim dismissed.”
The ‘Reply’ disputed all of the Appellant Worker’s claims for benefits.
The matter was listed for a Teleconference on 4 August 2005. A transcript of that Teleconference records discussions between the parties as to what material should be forwarded to an ‘Approved Medical Specialist’. At that stage, the employer was still named as ‘Community Services and Health Industry Training Company Limited (deregistered)’.
The matter was listed for arbitration hearing on 23 February 2006. No formal transcript of those proceedings is available, but the Appellant Worker has included in her Appeal Application a ‘transcribed recording’ prepared by the solicitors for the Respondent Employer at the direction of the Arbitrator.
On 1 March 2006 a ‘Certificate of Determination’ with an accompanying ‘Statement of Reasons’ was issued. The decision of the Arbitrator was as follows:
“1. I declare that the Respondent Community Services and Health Industry Training Company Limited ACN 067118905 entered into a contract with GIO Workers Compensation (NSW) Limited in respect of a liability under this Act and the 1998 Act.
2. I therefore substitute ‘GIO Workers Compensation NSW Limited’ for the Respondent wherever it appears in the pleadings.
3. I grant leave to the Respondent to amend part 3 of its Reply to add ‘9. Issue Estoppel.’
4. I stand this matter over to 14 March next at 2:00pm to deal with the question of issue estoppel.
5. The Respondent is to pay the Applicant’s costs as agreed or assessed of today in any event.
6. I direct the Respondent to give particulars of the issues said to be estopped to the Applicant within seven days. That is to say, by the close of business on 2 March 2006.
7.I extend the time for the lodgement by the Respondent of a video to the close of business on 7 March 2006.
8. I direct the Respondent to make copies of a video available to the Applicant and the Commission.
9. I direct the Respondent to make a transcript available of today’s proceedings and to lodge it with the Commission and I record that I handed the soundcard to the solicitor for the Respondent.”
The proceedings resumed on 14 March 2006. On 31 March 2006 a further ‘Certificate of Determination’ with an accompanying ‘Statement of Reasons’ was issued. The determination of the Arbitrator was as follows:
“1. There will be an award in favour of the Respondent.
2. No order as to costs.”
It is from this decision that the Appellant Worker now appeals.
The Respondent Employer in its ‘Notice of Opposition to the Appeal’ filed on 24 May 2006 submits that the Arbitrator’s finding that the Applicant is estopped from claiming benefits of compensation should be confirmed.
LEAVE TO APPEAL
The amount at issue on appeal satisfies the criteria set out in section 352(2) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’). No award of compensation has been made such that section 352(2)(b) does not apply. (See Mawson v Fletchers International Exports Pty Limited [2002] NSWWCCPD 5).
The appeal was filed within the time limits prescribed by section 352(4) of the 1998 Act.
Leave to appeal is granted.
ON THE PAPERS REVIEW
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.”
The Appellant Worker submits that the Arbitrator’s decision “… determines the Appellant’s whole Compensation Case without a hearing on the merits. Procedural fairness requires that the Appellant be given a full opportunity to present her appeal …” which the Appellant Worker submits requires an oral hearing in order that she may address any questions raised by a Presidential Member.
The Respondent Employer submits that “… in light of the fact that the oral arguments put forward by both parties are contained within the transcript of the proceedings, the appeal is one suitable to be determined on the papers”.
I have before me all the Commission files, the transcripts and the detailed written submissions from both parties on appeal. I do not consider that the issues, limited as they are, require further argument by way of oral hearing. Having regard to Practice Directions No 1 and 6, I am satisfied that I have sufficient information to proceed ‘on the papers’ and that this is the appropriate course in the circumstances.
THE GROUNDS OF APPEAL
The Appellant Worker lists four main grounds of appeal which may be summarised as follows:
“1. The Arbitrator erred in his interpretation of the law relating to issue estoppel.
2. The Arbitrator decided a matter not before him being the question as to the Appellant Worker’s entitlement to benefits pursuant to section 66 of the Workers Compensation Act 1987 (‘the 1987 Act’) which, the Appellant worker claims, was the subject of a conclusive determination by an ‘Approved Medical Specialist’ on 25 November 2005.
3. The named Respondent is not identical with the Cross Claimant in the District Court proceedings No. 2628 of 2002.
4. The Arbitrator’s decision is “… tainted with apprehended bias in that the … Arbitrator pre-judged the question of Issue Estoppel and ought properly to have disqualified himself on 14 March 2006 in response to the Appellant’s Application.””
THE SUBMISSIONS EVIDENCE AND FINDINGS
The principal issue in dispute between the parties, as the Arbitrator described it, was “… the legal effect of the judgment of Dodd DCJ upon the right of the Applicant to bring these proceedings.”
This was the main focus of the Arbitrator’s ‘Statement of Reasons’ and it requires detailed and careful consideration of the principles of estoppel. For this reason, I propose to deal firstly with the other grounds of appeal raised by the Appellant Worker.
The ‘Bias’ Issue
The Appellant Worker submits that:
“The decision is tainted with apprehended bias in that the Lerned [sic] Arbitrator pre judged the question of Issue Estoppel and ought properly to have disqualified himself on 14 March 2006 in response to the Appellant’s Application. The views expressed by the Learned Arbitrator in the last paragraph of page 9 of the Transcript of proceedings before him on 23 February 2006 went well beyond a tentative opinion and amounted to pre-judging the question of Issue Estoppel. The views of the Arbitrator were expressed without the benefit of any submissions.”
The transcript referred to is that prepared by the Respondent Employer pursuant to the Arbitrator’s direction following the hearing on 23 February 2006.
At page 9, the Arbitrator asked the Appellant Worker’s solicitor “are you familiar with the case of Egri” [Egri & Anor v DRG Australia Limited (1988) NSW SC 600] (‘Egri’). The solicitor replied “No”. The Arbitrator then said: “It seems to be right on point.” There followed a brief outline of the facts of that case, and the Arbitrator then said “… I think the ratio of that case is fairly compelling on me …”
Prior to that, the Arbitrator had enquired of the Appellant Worker’s solicitor whether or not he was ready to argue his case that day if the Respondent Employer’s amendment to its ‘Reply’ raising ‘Issue Estoppel’ was permitted. The Appellant Worker’s solicitor initially indicated that he was ready but had no particular authority. It was at that point that the Arbitrator made reference to the Court of Appeal decision of Egri.
The Arbitrator ultimately advised the Appellant Worker’s solicitor that “I need some authority”.
Did those comments amount to a ‘pre-judging’ of the issue as the Appellant Worker claims? The question of bias in proceedings before the Commission was considered by Deputy President Fleming in South Western Sydney Area Health Service v Edmonds [2005] NSWWCCPD 18 (‘Edmonds’’). In that case, it was noted that the Arbitrator had indicated “from the outset [that] I’ve got a certain view”. As Deputy Fleming then said “Given that proceedings in the Commission are conducted on the basis of the parties filing all of their evidence and submissions early … it is not unusual, nor inappropriate, for an Arbitrator to have formed a preliminary view of the dispute prior to hearing from the parties at a telephone conference.” It was held that the Arbitrator had not failed to act fairly and independently.
Whilst that case is pending an appeal to the Court of Appeal, I concur with Deputy President Fleming’s comments on the role of Commission Arbitrators.
In this case, the Arbitrator had indicated that he would be assisted by some authority on the points raised. He also advised the Appellant Worker that he would grant an adjournment with costs “… if it [the Respondent Employer’s amendment] puts you in a position of prejudice because of the late notice …” That offer was ultimately accepted by the Appellant Worker thus the proceedings were adjourned to 14 March 2006.
On that occasion, the transcript records the Appellant Worker’s solicitor (pages 2 – 3) asking the Arbitrator “… to clarify that you have not pre-judged the question … [and] that you are bringing an open and fair mind to what is to be determined today …” The Arbitrator then advised the Appellant Worker’s solicitor:
“You are aware … of the nature of the Commission and the fact that Arbitrators are seized of all the evidentiary material before a word is spoken … and that when Arbitrators look at that material sometimes they will form a preliminary view. The fact that I have this material, or in this case … knowledge of legal cases that I think might be germane, does not mean that … I have brought a … biased mind to any of the proceedings I sit on, this no more or less than any other …”
Notwithstanding those comments, the Appellant Worker’s solicitor then stated: “In the circumstances … in order to protect my client’s future position, I need to make that application that you disqualify yourself on the grounds that you pre-judged a vital question, being the application of equity to the matter now before you.”
In relation to that application, further submissions were sought from both the Appellant Worker and Respondent Employer’s representatives. The Arbitrator then proceeded to give a judgment on this point with lengthy reasons set out at pages 3 and 4 of the transcript, and declined to disqualify himself.
The Arbitrator’s comments were clearly in line with the decision in Edmond’s case. Nothing in the transcript or the Arbitrator’s Reasons discloses any either overt or apprehended bias. The Arbitrator’s remarks reflect rather an indication of assistance he was providing the parties, insofar as reliance on authority was concerned, in the conduct of the proceedings before him. Those proceedings, heard on 14 March 2006, were simply to determine the preliminary question of issue estoppel.
I am not persuaded that, in light of the Commission’s objectives, and Edmond’s case, the Appellant Worker’s submission that the Arbitrator has failed to act fairly and independently in his conduct of the proceedings has been made out. This ground of appeal must therefore fail.
The ‘Section 66 Entitlement’ Issue
The Appellant Worker submits that:
“The Arbitrator decided a question not before him being the question of the Appellant’s entitlement to Lump Sum Compensation under section 66 of [the 1987 Act]. The Appellant’s section 66 entitlement was the subject of an AMS Determination of Associate Professor Ian Cameron dated 25 November 2005. Pursuant to section 326 of [the 1998 Act] that determination is conclusive as to the Appellant’s section 66 entitlements unless reversed on appeal under section 327 of the 1998 Act. The Respondent has lodged an Application to Appeal under section 327. The Appellant has received no notice from the Commission as to whether the Respondent was granted leave to appeal.”
This submission is somewhat misconceived. As the Respondent Employer rightly points out:
“The Arbitrator’s finding that the Applicant has no entitlement to lump sum benefits pursuant to section 66 flow from his finding that the Applicant was estopped from claiming benefits of compensation in light of the prior Court award. The Arbitrator did not seek to determine the Applicant’s claim for lump sum benefits pursuant to section 66. Rather, the Arbitrator found that the Applicant was not entitled to claim lump sum benefits pursuant to section 66”.
In other words, the consequence of the Arbitrator’s decision on the question of estoppel was such as to disentitle the Appellant Worker to pursue a claim for section 66 benefits. It was not a claim actually decided by the Arbitrator.
The Arbitrator concluded that (paragraph 52):
“It follows therefore that there is no entitlement to lump sum payments for permanent impairment or permanent loss of use in view of that finding. Clearly, resolution of the plaintiff’s condition estops her from claiming any permanent condition at all.”
Whether the Arbitrator’s determination on this point is correct or not, depends on the determination of the estoppel issue.
The role of an ‘Approved Medical Specialist’, as set out in section 122 of the 1998 Act is confined to a medical opinion as to the worker’s condition or fitness for employment and, subject to some exceptions is “… conclusive evidence as to the matters certified …” (section 122(6)).
It is for this reason that the Arbitrator declined to accede to the Respondent Employer’s application at the arbitration hearing on 4 August 2005 “… to have the transcript and judgment referred to the [AMS]”. (See page 3 transcript).
The Respondent Employer filed an appeal against the decision of the AMS on 20 January 2006. The Commission file on this matter records that the Commission has determined that the appeal against the Arbitrator’s determination of 31 March 2006 should be decided prior to consideration of the AMS appeal.
In those circumstances, the status of the Appellant Worker’s claim for section 66 benefits is yet to be determined pending the outcome of this appeal such that the Appellant Worker’s assertion that the Arbitrator “decided” the claim for section 66 entitlements is misconceived.
The ‘Identity of the Parties’ Issue
The Appellant Worker submits that “The Respondent is not identical with the Cross Claimant in District Court proceedings at Sydney No. 2628 of 2002”.
The Defendant and Cross Claimant were identified in the District Court proceedings as ‘Stelcom Pty Limited t/as Nyora Gardens Nursing Home’. The Cross Defendant was named as ‘Government Insurance Office of NSW’. The Respondent to the ‘Application to Resolve a Dispute’ filed by the Appellant Worker was initially named as ‘Community Services and Health Industry and Training Company Limited (deregistered)’ but ultimately ‘GIO Workers Compensation NSW Limited’ was substituted by the Arbitrator at the hearing on 23 February 2006.
The nature of the dispute between the parties on the issue of the ‘identity’ of the parties is dealt with at length in the transcripts both of 23 February 2006 and 14 March 2006 such that it is clear that the Appellant Worker’s appeal on this point is wrongly described. The dispute involves the identity of the Cross Defendant (not Cross Claimant) and the Respondent Employer.
In its submissions, the Appellant Worker asserts that:
“The Appellant does not concede that the Respondent and the Cross Defendant are the same party. [The Arbitrator] determined that the said Respondent and the said Cross Defendant are the same party without having any evidence before him on the question and over the objection of the Appellant.”
In the District Court proceedings, Judge Dodd noted (page 2):
“The Defendant cross-claims against the Government Insurance Office of NSW (the Cross Defendant) as the ‘workers compensation insurer’ of the Plaintiff’s employer, Community Services and Health Industry Training Co trading as Careskills (Care Skills), alleging a non-delegable duty on the part of the employer to take reasonable care for the safety of its employees, which duty was breached. The Cross Defendant denies that it is so liable. However, it has been agreed between the Defendant as Cross Claimant and the Cross Defendant that the Cross Defendant is to be treated as standing in place of the employer, or in other words, as if it is the employer, and no issue is taken that the Defendant has not sought leave to sue the Cross Defendant as insurer liable to indemnify the employer.”
At the hearing before the Arbitrator on 23 February 2006, the Appellant Worker sought leave to amend the name of the Respondent to ‘Treasury Managed Fund’. The Respondent Employer claimed that the correct entity, at the time of the hearing of the District Court case in 2004, was ‘GIO Workers Compensation (NSW) Limited’ and that they were the same entity. Both parties agreed that the employer company, however described, was deregistered.
The Appellant Worker’s solicitor disputed that ‘Treasury Managed Fund’ and ‘GIO Workers Compensation (NSW) Limited’ were indeed the same entity. The Arbitrator stated at page 2 of the transcript of the proceedings on 23 February 2006 “It’s correct isn’t [it] that the same entity that was responsible for insuring the Respondent at the time of the injury should be the entity joined now?” The Appellant Worker’s solicitor replied “I think that’s right Arbitrator being that the extension of the workers compensation policy would be provided to the same insurer”. The Arbitrator then said:
“… Why shouldn’t I substitute the same entity that was substituted in common law proceedings? … Is it not correct that the entity to be substituted in the case of a death of an employer under section 162 is the insurer who was on risk at the time of the injury?”
The Appellant Worker’s solicitor replied: “Yes Arbitrator, I agree with that.” The Appellant Worker’s solicitor then indicated that he would not pursue the matter but would reserve his decision “… if in fact there has been a mistake in the common law case.” There ensued discussion about the relationship between Treasury Managed Fund and the Government Insurance Office, and the Respondent Employer’s solicitor and Counsel both contributed with information to the Arbitrator. Ultimately, the Arbitrator said “… I think I’ve got enough, bearing in mind the nature of this jurisdiction to be satisfied with myself that they are deregistered and that I will substitute an entity… Unless I am given some very powerful authority to the contrary, I am going to be prepared to accept … that it’s the same entity …”
Ultimately, the Arbitrator said: “… I therefore substitute GIO Workers Compensation NSW Limited for the Respondent wherever it appears in the pleadings. That will cover that.”
The parties then proceeded to discuss the issue of the late notice of the Respondent Employer’s ‘estoppel’ point and to any proposed adjournment. The Appellant Worker’s solicitor then stated: “Well I oppose the proposed amendment Arbitrator, on two fundamental grounds, the first one is I said there is no identity of parties and that is the fundamental requirement of the issue of estoppel.”
Discussion on the following pages of transcript then becomes a little confused as to precisely what issue was being taken by the Appellant Worker as to the ‘identity of the parties’ and seems to reflect more the Appellant Worker’s assertion that the District Court proceedings were essentially between the Appellant Worker and Nyora, with the Employer, however described, joined by Nyora and not by the Plaintiff. That is not really in dispute.
The thrust of the Respondent Employer’s assertion was that the ‘Government Insurance Office of New South Wales’, incorrectly described as a legal entity in the District Court proceedings, was the same entity as the correctly identified ‘GIO Workers Compensation NSW Limited’ and thus was a named party to the District Court proceedings.
In the absence of any ‘proof’ by the Appellant Worker to the contrary, the evidence before the Arbitrator was in my view sufficient to entitle him to both substitute ‘GIO Workers Compensation NSW Limited’ as the Respondent to the Application and to conclude that it, and ‘Government Insurance Office of NSW’ were, for practical purposes, the same entity. In the ‘Statement of Reasons’ annexed to the ‘Certificate of Determination’ dated 31 March 2006, the Arbitrator stated (paragraph 14):
“… Having been informed by the representatives of the Respondent that the correct identity at the time of the District Court proceedings was as appears in the intituling hereof, I ruled that the present Respondent should be so described. I do not think that any legal issue turns upon the precise description of the GIO at the time. I am informed that the entity sued in the Cross Claim was not in fact a legal entity, but no point was taken at the District Court trial. It is clear that the same insurer is liable under the same policy as pertained in the District Court proceedings”.
The impact of his decision on the question of issue estoppel is a different issue, to which I will shortly refer, but I can see no error by the Arbitrator on this particular aspect of his determination.
The ‘Issue’ Estoppel
The Appellant Worker submits that:
“The Respondent particularised by letter the Issues allegedly estopped as follows:
(i) The Applicant is estopped from alleging that she sustained injury by ‘being dragged to the ground by the resident and kicked in the knee by the resident.’ In this regard, we refer you to pages 24 – 26 of the judgment of His Honour Judge Dodd dated 25 August 2004.
(ii) The Applicant is estopped from alleging incapacity beyond ‘a few weeks’ from 19 May 1999. In this regard, we refer you to page 34 of the abovementioned judgment.
(iii) The Respondent further asserts that it necessarily follows that the Applicant can have no entitlement pursuant to sections 60, 66 and 67 as claimed”.
In proceedings before the Arbitrator on 23 February 2006, he directed the Respondent Employer to “… give particulars of the issues said to be estopped to the Applicant within 7 days…”
The Arbitrator stated at paragraph 23 of the ‘Statement of Reasons’ “[the Respondent Employer] relied upon the particulars provided following my orders of 23 February …”. Thus they were essentially confined to two distinct issues, firstly ‘injury’, and secondly ‘incapacity’.
At paragraphs 24 – 43 of the ‘Statement of Reasons’, the Arbitrator summarised both parties’ submissions on the principle of issue estoppel as it applied to this case. Dealing firstly with the Respondent Employer’s submissions, at paragraph 24, he stated:
“[The Respondent Employer] asserted that the parties were the same, and that issue estoppel was available for a third party by way of cross claim to plead against a Plaintiff, even though the Plaintiff had not joined that third party to the action. He cited a Canadian authority … for that proposition. I am not much assisted by that authority, although I accept that proposition as a matter of law. Indeed, [the Appellant Worker’s solicitor] did not argue the point before me on 23 February, beyond criticising [the] use of the Canadian authority. The classic dictum of Dixon J in Blair v Curran [1939] 62 CLR 464 (‘Blair’) requires simply that the judicial determination directly involving an issue of fact or of law must finally dispose of that issue, so that it cannot be raised later by the same parties or their privies …”
At paragraph 25, he stated:
“It thus becomes necessary to analyse His Honour’s judgment from that perspective. As will be seen, I am satisfied that the status of the party is irrelevant, as long as that party is joined to the action from which the judicial determination arises. This the present Respondent clearly was in the action heard by Dodd DCJ”.
At paragraph 26, the Arbitrator quoted from Barwick CJ in Ramsay v Pigram [1968] 118 CLR 271 [‘Ramsay’] as follows:
“… An estoppel is available to prevent the assertion in those proceedings of a matter of fact or law in a sense contrary to that in which the precise matter has already been necessarily and directly decided by a competent Tribunal in resolving rights or obligations between the same parties in the same respective interests or capacities, or between a privy of each, or between one of them and a privy of the other in each instance in the same interest or capacity. The issue thus determined, as distinct from the cause of action in relation to which it arose, must have been identical in each case. Of its nature such an estoppel must be available to and operative in respect of each party; or, as it is said, estoppel must be mutual”.
At paragraphs 28 to 35, the Arbitrator said as follows:
“28. In his judgment, Dodd DCJ made a number of factual and legal determinations.
29. As to liability, His Honour held at page 23, that there was no negligence on the part of the Defendant, Nyora. As His Honour then said, This is sufficient to dispose of all aspects of the case.
30. At page 25 His Honour said, On the Plaintiff’s account given in evidence the most significant assault upon her from every point of view was her being dragged to the floor …
31. His Honour then concluded at page 26, … I am unable to conclude on the balance of probabilities the Plaintiff’s account of being dragged to the floor by [the male patient] is made out.
32. With regard to His Honour’s enquiry as to what injury the plaintiff may have suffered, he found, after analysing the medical case brought by each side and contrasting it with the video material tendered, at page 34, … that the Plaintiff does not suffer the physical restrictions of which she complains and that for that and the other reasons discussed above, I do not accept her account of her psychological symptoms.
33. Also on page 34, His Honour found that … The Plaintiff’s condition as a result of the incident with [the male patient] resolved within a few weeks.
34. His Honour therefore found no entitlement that the severity of non- economic loss amounted to at least 15% of a most extreme case, nor that there was any entitlement to weekly payments of compensation beyond the end of July 1999 (at page 35).
35. In relation to the cross claim, His Honour found the Respondent liable for 25%.”
The Arbitrator then proceeded to recite passages from Dodd DCJ’s decision which the Respondent Employer claimed gave rise to an issue estoppel. The Arbitrator then concluded at paragraph 36:
“It becomes necessary to decide whether these findings of fact and law, or any of them, have those characteristics which sustain the plea that the issues thus raised before the Commission have already necessarily and directly been decided by a competent tribunal to estop the Applicant from raising them again.”
At paragraphs 38 – 43, the Arbitrator summarised the Appellant Worker’s submissions. At paragraph 38, he stated: “[The Appellant Worker’s solicitor] in his well researched and thorough argument, submitted that there was no issue estoppel raised in Dodd DCJ’s findings beyond his finding that the Plaintiff had not established that the Defendant had been negligent.”
In paragraph 39, the Arbitrator noted the Appellant Worker’s reliance upon the following dictum of Dixon J in Blair, that “… The estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion …”
The Arbitrator then went on noting the Appellant Worker’s submissions that “… The only ‘necessary’ issue that was the legal foundation for the dismissal of the Applicant’s claim in the District Court was that she had failed to prove negligence against the Defendant, which was not the present Respondent.” He further noted the submission that “… If a party were not involved in the litigation of an issue because it was not an issue between it and another party to the proceedings, then it cannot raise an issue estoppel between them.”
The Arbitrator then made reference to a number of authorities upon which the Appellant Worker relied.
The Arbitrator’s reasons and conclusions then commence at paragraph 44. There he stated:
“The resolution of this case depends upon whether it can be said that the subsequent findings of Dodd DCJ following his finding that no negligence had been proved, were capable of amounting to issue estoppel. In other words, what did the word ‘necessary’ mean in both the extracted citation from Blair … and Ramsay …”
At paragraph 46, the Arbitrator stated:
“To apply the test in Ramsay, what part of His Honour’s judgment constitute the matters of fact or law that are precisely raised again before the Commission which have been necessarily and directly decided? His Honour’s finding that the Applicant’s condition would have resolved in a few weeks … is a finding on an issue of fact which is precisely that which the Commission would have to decide.”
At paragraph 47, the Arbitrator stated:
“The finding that the Applicant had not been dragged on the floor was also a precise issue relevant to any finding of injury that has directly been made by Dodd DCJ also, and which is a precise issue for determination before the Commission.”
At paragraph 48, the Arbitrator stated: “Similarly, His Honour’s assessment of the Applicant’s credit is another factual issue which would undoubtedly arise before the Commission.”
The Arbitrator then stated at paragraph 49:
“Whether these matters were necessarily established as the legal foundation of Dodd DCJ’s determination, or whether his primary finding that there was only one ‘necessary’ issue to his determination, can be answered by a passage later in Dixon J’s judgment in Blair:
Nothing but what is legally indispensable to the conclusion is thus finally closed or precluded. In matters of fact the issue – estoppel is confined to those ultimate facts which form the ingredients in the cause of action … But in neither case is the estoppel confined to the final legal conclusion expressed in the judgment, decree or order … the judicial determination concludes, not merely as to the point actually decided, but as to a matter to which it was necessary to decide and which was actually decided as the ground work of the decision itself, although then not directly the point at issue. Matters cardinal to the latter claim or contention cannot be raised if to raise them is necessarily to assert that the former decision was erroneous.”
The Arbitrator then stated at paragraph 50:
“Applying that interpretation I am not satisfied that the word ‘necessary’ relates to the actual determination made, but rather to matters which it was necessary to decide, though not germane to the question of negligence, the point then at issue. Matters of fact such as injury and incapacity are cardinal to the Applicant’s claim in the Commission, and in raising them in the face of His Honour’s decision, the Applicant must necessarily be asserting that His Honour was in error.”
The Arbitrator then concluded:
“In any event, whether or not His Honour’s findings as to incapacity and injury were strictly necessary to the conclusiveness of his judgment, they were nonetheless necessary as part of the judicial process to demonstrate his findings on all relevant issues before him in the event that his judgment were to be reviewed. The issues necessary to be determined by a claim for damages at common law arising out of exactly the same facts alleged in the Applicant’s claim for compensation before the Commission have been so determined against the Applicant. To permit her to re-agitate them in the light of the determination of the District Court would be to circumvent the purpose of the principle of issue estoppel.”
As a consequence, the Arbitrator determined that the Appellant Worker was estopped from pursuing a claim either for weekly benefits or lump sum entitlements.
Despite the Arbitrator’s somewhat cursory treatment of the Appellant Worker’s reference to Spencer Bower, Turner and Handley’s book ‘The Doctrine of Res Judicata’, 3rd Edition,
(‘Handley’) it is as instructive in the area of estoppel in general as it is on the principle of res judicata in particular.
At paragraph 200 of Handley, the author’s note: “Whether a point determined by or necessarily involved in a judicial decision is in substance the same as a point raised in subsequent proceedings, is a question of law.” In noting that: “The determinations must be fundamental, not collateral,” the authors went on:
“Even when the court has expressly determined the same issue in the earlier proceeding an issue estoppel will not necessarily result. Only determinations which are necessary to the decision, and fundamental to it, will found an issue estoppel. Other determinations, however positive, cannot.”
The authors went on to recite extracts from the various judgments in Blair quoting from Dixon J as follows:
“In the phraseology of Lord Shaw, ‘a fact fundamental to the decision arrived at’ in the former proceedings and ‘the legal quality of the fact’ must be taken as finally and conclusively established … But matters of law or fact which are subsidiary or collateral are not covered by the estoppel. Findings, however deliberate and formal, which concern only evidentiary facts and not ultimate facts forming the very title to rights give rise to no preclusion. Decisions upon matters of law which amount to no more than steps in the process of reasoning, tending to establish or support the proposition upon which the rights depend do not estop the parties if the same matters of law arise in subsequent litigation.”
The authors then concluded with a quote from the judgment of Fullagar J as follows:
“Issue estoppel only applies to issues. There is no estoppel as to evidentiary facts found in the course of determining the affirmative or negative of an issue”.
In the present case, Dodd DCJ dealt with the issue of whether or not Nyora breached its duty of care to the Appellant Worker at the outset. He concluded, at page 23 of his judgment, that:
“I have come to the conclusion therefore that there was no negligence on the part of the Defendant causing the Plaintiff’s injuries.
This is sufficient to dispose of all aspects of the case. However, in view of the time devoted to other issues, I should say something about them.”
He then went on to consider a number of issues such as “Contributory Negligence”, stating:
“If I am wrong in my primary conclusions as to the liability of the Defendant to the Plaintiff in negligence, the Defendant says there should be a finding of contributory negligence against the Plaintiff… I would find no contributory negligence if required to decide this issue.”
Under the heading “The Fall to the Floor – Did it Occur?” His Honour concluded “… I am unable to conclude on the balance of probabilities that the Plaintiff’s account of being dragged to the floor by [the resident] is made out”
Under the heading “What Injury Did the Plaintiff Suffer?” His Honour discussed the medical reports and some video evidence of the Appellant Worker at some length and ultimately concluded “… The Plaintiff does not suffer the physical restrictions of which she complains and for that and the other reasons discussed above I do not accept her account of her psychological symptoms”.
Under the heading “Damages” His Honour stated: “I now turn to a hypothetical consideration of the damages that could be awarded to the Plaintiff if, contrary to my finding on liability, she were to succeed.”
Later on under this heading, His Honour concluded: “I am of the view that the Plaintiff’s condition as a result of the incident with [the resident] resolved within a few weeks.”
Are these findings ‘fundamental’ or ‘necessary’ to His Honour’s decision or merely collateral?
His Honour’s decision effectively concluded at page 23 when he stated “This is sufficient to dispose of all aspects of the case.” In my view, his subsequent comments could not be interpreted as either necessary or fundamental to his decision on liability which, as he said, ‘disposed’ of all aspects of the case.
The purpose of his comments on the subsequent issues to which he referred can more properly be described as by way of assistance to an appellate court in determining whether or not a miscarriage of justice might have occurred. Indeed, the Arbitrator appears to have acknowledged this at paragraph 51 of the ‘Statement of Reasons’ where he stated that His Honour’s findings were “… nonetheless necessary as part of the judicial process to demonstrate his findings on all relevant issues before him in the event that his judgment were to be reviewed”.
However, as the Appellant Worker points out in her submissions, “This simply ignores the test in Blair and substitutes an entirely different test.” The Appellant Worker at this point then recites the dictum of Dixon J to which I have referred in paragraph 76 above.
It must also be said that issues between the Plaintiff and the Defendant are not necessarily the same issues that arise between defendants inter se.
I have come to this view in light of a number of authorities to which I will now refer.
The question of issue estoppel was recently dealt with by the Court of Appeal in Kuppers v NSW Fire Brigades [2005] NSWSC 193 (‘Kuppers’). It involved a determination of the question whether the judgment of Campbell CJ as he then was in the Compensation Court operated as an issue estoppel in Supreme Court proceedings so as to estop the defendant from raising issues contrary to that decision.
Johnson J in discussing the elements of issue estoppel, referred to the decision of the High Court in Kuligowski v Metro Bus [2004] HCA 34 (‘Kuligowski’) and noted that:
“The High Court of Australia … indicated that, for the doctrine of issue estoppel to apply in a second set of proceedings, the requirements were that in the earlier proceedings:
(a) The same question has been decided;
(b) The judicial decision which is said to create the estoppel was final; and
(c) The parties to the judicial decision or their privies were the same persons as the parties to the proceedings in which the estoppel is raised or their privies.”
In the present case, I consider that requirements (b) and (c) have been met: the real issue is whether ‘the same question’ has been decided.
Johnson J went on to note at paragraph 26:
“In Blair v Curran … Dixon J said that what is precluded by issue estoppel is what is legally indispensable to the conclusion. In Murphy v Abi-Saab, above, Gleeson CJ (Kirby P and Rolfe AJA agreeing), said at 288 E – F: ‘The difficulty is to distinguish between decisions of fact or law fundamental or cardinal to the judgment and other decisions. One thing, however, is clear. Only a decision about a matter which it was necessary to decide can create an issue estoppel. It is, therefore, essential to approach reasons for judgment which are said to create an estoppel with an accurate understanding of what the author of the reasons was required to decide (my emphasis)”.
Dodd DCJ was clearly not ‘required to decide’ issues of injury, incapacity or indeed damages by virtue of his finding that the Appellant Worker failed on liability. As His Honour pointed out, his consideration of ‘damages’ was purely ‘hypothetical’ so that it cannot be said that his statement “… The view I have come to that the Plaintiff does not suffer the physical restrictions of which he complains …” was at all fundamental or necessary to his decision.
Johnson J in Kuppers concluded with a further reference to Kuligowski as follows:
“… But the difficulties which the evidence which is accepted or rejected in reaching a decision in one set of proceedings may create in a second set, are immaterial in assessing whether the doctrine of issue estoppel applies. Not all estoppels are odious … but all must be certain. It is for that reason that the law … has strict requirements for the application of issue estoppel.”
The Arbitrator in his determination made reference to the facts in Egri’s case. The relevance of that decision to these proceedings is encapsulated in the summary findings on page 1 of the decision that:
“A final decision, once given by a competent tribunal, creates an issue estoppel in that it forever binds the parties and all those who claim through them in respect of any issue of fact or law which was legally indispensable to that decision. However, no estoppel arises concerning evidentiary facts, no matter how fundamental they may have been in a chain of proof or reasoning concerning the decision of an ultimate issue.”
The ‘ultimate’ issue which Dodd DCJ decided was whether there was any liability on the part of the Defendant to pay damages to the Plaintiff for the injuries suffered. The nature and extent of those injuries were not ‘indispensable’ to that decision.
The Appellant Worker has also referred to a number of other authorities in her submissions on appeal which warrant comment. The Appellant Worker quotes extensively from a Victorian decision of Glen Eira City Council v Kingston City Council [2001] VSCA 150 but, with respect, it does little more than reiterate the principles of issue estoppel to which I have referred earlier.
The Appellant Worker however, by reference to that decision, notes that the Arbitrator’s statement that “… The Applicant must necessarily be asserting that His Honour was in error” was inappropriate since the question is not whether or not His Honour was in error but rather whether an issue is estopped. Those are clearly entirely different questions. It is the Appellant Worker’s submission that in the decision of Dodd DCJ:
“… The facts which were not involved in his decision that the Plaintiff failed on liability are not estopped. Consequently, it is not a matter of the Plaintiff asserting that His Honour was in error. The issues being not estopped they are determined afresh by the Commission based on the evidence before the Commission. The question of whether or not Dodd DCJ fell into error just does not arise before the Commission. The Arbitrator has fallen into error in confusing the concepts of judicial error with issue estoppel.”
The Appellant Worker made reference to the decision of Taylor v Ansett Transport Industries Limited [1987] 72 ALR 188 and quoted as follows:
“It seems clear to me that issue estoppel can only be raised by or applied against parties who were in ‘controversy’ at the time when the issue was first determined, either in their favour or adversely to them. If a party was not involved in litigation of that issue, either because it was not an issue between him and another party in the proceedings, or because he was not a party at all to the proceedings at the time of the resolution, then he is not affected by, nor can he raise, an estoppel. Likewise, his presence initially or subsequently cannot affect the rights of other parties to raise or rely upon issue estoppel as between themselves. If the contrary was the case, the public interest in not having the same matters relitigated, could with ease be bypassed.”
In relation to this, the Appellant Worker submits that:
“Had the Plaintiff (Appellant) succeeded before Dodd DCJ the Respondent would have obtained a financial benefit in that the Plaintiff would have had to repay to the Respondent pursuant to section 151Z of the 1987 Act her workers compensation benefits out of any of damages awarded and her workers compensation entitlements for the future would have ceased, again to the great financial advantage of the Respondent. Again it was for the Respondent to prove by evidence that its interests were opposed to the interests of the Plaintiff in the District Court proceedings. The Respondent led no evidence on this issue …”
There is some merit in this submission. In answer to this the Respondent Employer submits that:
“The Respondent was joined and therefore became a party to the District Court proceedings. The Respondent was entitled to adduce evidence, cross examine the Plaintiff and any other witnesses. The Respondent would have been obligated to pay monies pursuant to any verdict that was entered against it by the Court. The Respondent submits that the fact that the Plaintiff did not join the Respondent to the District Court proceedings is irrelevant.”
This is true to some extent. However, it should be noted that the proceedings against the Respondent Employer in the District Court were effectively dismissed as a necessary corollary to the verdict and judgment in favour of the Defendant against the Plaintiff. Under the heading ‘The Cross Claim’, Dodd DCJ said this:
“In view of my conclusions on other issues, I will be brief as to this … if liability were to be found against the Defendant I would apportion liability 75% to the Defendant and 25% to the Employer. This seems to be a guideline for such situations following TNT Australia v Christie (left without such guidance, I would apportion only nominal liability to the employer).”
His Honour then went on to discuss the various parties’ submissions on the cross claim and makes reference to the provisions of section 151Z of the 1987 Act.
Again however, His Honour’s comments were made on the basis “… if liability were to be found …” In other words, if he had determined the primary issue in a different way. His comments merely reflect what he ‘would’ have done, not in fact ‘did’ do. It is the ‘issue’ which was determined that forms the foundation of any alleged estoppel. In this case, the ‘issue’ was the liability of Nyora.
The Appellant Worker has also quoted extensively from the decision of Armitage J as he then was in Chouseas v Qantas Airways Limited [1999] NSWCC 30, [‘Chouseas’] which was a case concerning the issue of privity of interest. Some comments are however pertinent. The Appellant Worker quotes as follows:
“I cannot see that, using the words of the Federal Court, it was ‘involved in the litigation’ of the issue in respect of which it seeks to establish an issue estoppel between the present Applicant, the Plaintiff and the other driver. Consequently, the present employer was, to use again the words of the Federal Court, not ‘affected’ (at least to its own benefit, as was the ultimately successful defendant) by the decision on that issue in the other Court, nor therefore can it raise that decision by way of issue estoppel in the present proceedings.”
The Respondent Employer submits Chouseas:
“… has no application to the dispute before the Commission since Chouseas concerned the notion of privity of interest between the parties which were different from the parties appearing before Armitage J in the Compensation Court. In the matter at hand, the same parties were involved in the District Court proceedings and the proceedings currently before the Commission.”
The thrust of the Appellant Worker’s submissions on Chouseas seems to be the question of the ‘identity of interest’ between the parties and the question as to whether the Respondent Employer could be said to be ‘involved in the litigation’ of the issue in respect of which it seeks to establish an issue estoppel. However, it must be pointed out that the only issues said to create an estoppel upon which the Respondent Employer relies are the ‘injury’ by way of being dragged to the ground, and the extent of ‘incapacity’. It does not seek to establish an issue estoppel in respect of the primary finding on liability.
The Respondent Employer in its submissions maintains that Dodd DCJ “… made clear findings in respect of both injury and incapacity.” It relies on the decision in Egri supra specifically Clarke JA that: “It is sufficient if the finding, of fact or law or mixed fact and law, is made in respect of an identical question notwithstanding that that question may fall to be decided in the course of a determination of issues which are not identical.”
The Respondent Employer submits that: “His Honour (Clark JA) then cited the judgment of Williams J in Jackson v Goldsmith [1950] CLR 446 (at page 460):
“… A party is precluded from contending the contrary of any precise point which, having been once distinctly put in issue, has been solemnly found against him. Though the objects of the first and second actions are different, the finding on a matter which came directly (not collaterally or incidentally) in the first action is conclusive in a second action between the same parties and their privies …”
Although not having the benefit of a transcript of the proceedings before Dodd DCJ, it is clear from his comments, particularly in relation to the video, that questions as to the Appellant Worker’s ‘injury’ and ‘incapacity’ were ‘distinctly put in issue’, but in my view they cannot be said to have been “solemnly found against” the Appellant Worker. Similarly, for the reasons stated previously, these were not issues with respect to “the finding on a matter which came directly (not collaterally or incidentally) in the first action …”
His Honour’s finding as to liability against Nyora was a matter which indeed came directly in the first action and that finding is certainly conclusive. His Honour’s comments however on the issues of ‘injury’ and ‘incapacity’ were neither fundamental or necessary to his decision such that no estoppel can arise.
CONCLUSION
The Arbitrator’s determination on the question of issue estoppel was wrong in law such that the Appellant Worker is not estopped from pursing her claim for compensation in the Commission against the Respondent Employer.
DECISION
The decision of the Arbitrator dated 31 March 2006 is revoked and the following decision made in its place:
(i) The matter is remitted to a different Arbitrator under section 352(7) of the Workplace Injury Management and Workers Compensation Act 1998 for the Arbitrator to determine the Appellant Worker’s entitlements in accordance with the reasons in this decision.
COSTS
The Respondent Employer is to pay the costs of the appeal and of the proceedings before the Arbitrator.
Deborah Moore
Acting Deputy President
9 August 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF DEBORAH MOORE, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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