Crowe v Comcare AUSTRALIA (No.2) - [2002] FMCA 147

FEDERAL MAGISTRATES COURT OF AUSTRALIA

CROWE v COMCARE AUSTRALIA (No.2)

[2002] FMCA 147

ADMINISTRATIVE LAW – Judicial review – election by injured employee to sue or accept workers’ compensation – decision by respondent to refuse to make a compensation determination – whether election made by applicant was legally effective.

Administrative Decisions (Judicial Review) Act 1977 (Cth)
Australian Federal Police Act 1979 (Cth), s.64B
Federal Magistrates Court Rules 2001(Cth)
Safety, Rehabilitation and Compensation Act 1988 (Cth), ss.24, 25, 27, 45

Crowe v Comcare (No1) [2002] FMCA 146
Khoury v Government Insurance Office (1984) 165 CLR 622
Petelin v Cullen (1975) 132 CLR 355
Robertson v Comcare [2002] AATA 96
Sargent v ASL Developments Ltd (1974) 131 CLR 634
Taylor v Johnson (1982-3) 151 CLR 422

Applicant:

DEAN WILLIAM CROWE

Respondent:

COMCARE AUSTRALIA

File No:

CZ14 of 2002

Delivered on:

18 July 2002

Delivered at:

Canberra

Hearing Date:

18 July 2002

Judgment of:

Driver FM

REPRESENTATION

Counsel for the Applicant:

Mr D A Hassall

Solicitors for the Applicant:

Ken Cush & Associates

Counsel for the Respondent:

Mr G M Watson

Solicitors for the Respondent:

Phillips Fox Lawyers

ORDERS

The application is dismissed.
The applicant is to pay the respondent’s costs of and incidental to the application.

THE COURT CERTIFIES THAT

For the purposes of rule 21.15 of the Federal Magistrates Rules 2001 (Cth) it was reasonable for the respondent to employ an advocate for today’s hearing.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
CANBERRA

CZ14 of 2002

DEAN WILLIAM CROWE

Applicant

And

COMCARE AUSTRALIA

Respondent

REASONS FOR JUDGMENT

This ex tempore judgment concerns an application under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (“the AD(JR) Act”) for declarations relating to a purported election made by the applicant pursuant to s.45 of the Safety, Rehabilitation and Compensation Act 1988 (Cth) (“the SRC Act”). In Crowe v Comcare (No 1) [2002] FMCA 146 I decided that the respondent had made a reviewable decision to refuse to make a compensation determination under ss.24, 25 or 27 of the SRC Act, in reliance upon the purported election.
The remaining issue to determine in these proceedings is whether the decision by Comcare to refuse to make a determination of compensation in the light of the applicant's purported election under s. 45 of the SRC Act was a decision vitiated by legal error. It is submitted on behalf of the applicant, by Mr Hassall, that the decision of Comcare suffers from an error of law as to the interpretation put by Comcare on the election form signed by the applicant.
The applicant claims that he made the election by mistake. The substance of the case for the applicant is that once the situation was pointed out by the applicant's solicitors, Comcare should have determined that the election purportedly made by the applicant was no election at all. It is put on behalf of the applicant that the election purportedly made by the applicant was no election in law for several reasons, but primarily for the reason that the applicant was not intending to make an election to pursue common law rights. He was rather intending to facilitate the determination of statutory workers’ compensation.
The relevant background which came out in the evidence presented from Mr Crowe, and less significantly from his solicitor, was that the applicant, having had determined adversely to him an initial application for workers’ compensation, consulted his solicitors and decided not to pursue his common law rights. He decided to continue to pursue statutory workers’ compensation and to that end submitted a second application for compensation to Comcare.
The applicant gave instructions to his solicitors to pursue that application. In those circumstances the solicitors acted inconsistently with those instructions in forwarding to Mr Crowe for signature an election form sent to them by Comcare. It is clear that the form should not be used by an employee pursuing statutory benefits under the SRC Act. The form is only to be used by an employee who elects instead to pursue a common law claim. There was nothing improper or irregular in Comcare forwarding to the solicitors the election form. An election can be made at any time up to the payment of compensation and it was quite appropriate for Comcare to make that election form available for signature, albeit at any early stage.
The solicitors, consistently with their instructions, should not have sent the form to Mr Crowe. They did so and Mr Crowe in his evidence told me that, having received from his solicitors the letter which forms annexure B to the affidavit of Mr Cush, he simply assumed that his solicitors were sending to him a document which they wanted him to sign for the purposes of his application for statutory workers’ compensation. Mr Crowe told me that, having got that from the solicitors' letter, he did not turn his mind to the content of either the letter from Comcare to the solicitors, which enclosed the election form, or the election form itself. He conceded that in that regard he was foolish and that he should have directed his mind to the content of at least the form if not the covering letter from Comcare. In substance, therefore, his evidence establishes that the applicant thought he was pursuing a purpose quite different from that which he was actually pursuing.
The making of an election under s. 45 of the SRC Act is a formal act with serious legal consequences. It is clear from s. 45 that an election is irrevocable once made. It is also clear that once an election is made, statutory workers compensation is not payable under the SRC Act. The person making the election is left to pursue limited common law rights against his or her employer.
To the extent that elections have been considered by the courts since the SRC Act was passed, the courts have determined that an election is a formal act which requires certain procedural formalities to be met before a valid election can be said to be made. An election must be in writing, an election must be signed and an election must be communicated.
In this instance Mr Hassall submits to me that the election signed by the applicant suffers from a number of defects. The election form he signed comprises part of annexure D to Mr Cush's affidavit. The election is said to be defective in that in the ruled rectangle on the form containing his signature Mr Crowe has not struck out the words necessary to indicate whether he is contemplating suing the Commonwealth, a Commonwealth authority, a licensed corporation or another employee.
It is said that the election is also defective in that it bears the wrong date (the wrong year has been put in) and that the election was not communicated by Mr Crowe to the employer that he would theoretically have sued. The election was only communicated to Comcare, although it was subsequently passed on by Comcare to the Australian Federal Police, the applicant's employer.
I do not think that any of those defects in the completion of the election form render the election void. It would be intolerable if such errors were sought to be set up against an employee who was seeking to pursue such an election in the course of making a common law claim. There is no authority that I am aware of as to whether an election must bear a date and in any event the error in the date on this form was shown to be a simple mistake, without any particular intention attached to it.
I see no particular significance in the failure to strike out the words so as to indicate whether it was the Commonwealth, a Commonwealth authority, a licensed corporation or another employee who would be sued. That is ordinarily obvious from the particular facts concerning who the employer is. Where the employer is a government department it is obviously the Commonwealth who would be sued. Where the employer is a licensed corporation it is obvious that a licensed corporation is the agency to be sued.
In the case of the Australian Federal Police, the situation is governed by the terms of the Australian Federal Police Act1979 (Cth) (“the AFP Act”) and my understanding is that the proper defendant in a common law claim would be the Commonwealth. That is so, even where an injury is caused by the wrongful act of another member of the AFP: AFP Act s.64B. Of course Mr Crowe could not be expected to know that and it could not ordinarily be expected of an employee to make such a fine judgement of law as a precondition to making a valid election for the purposes of s. 45.
On the question of communication, it is important to bear in mind that the election form asks the employee to communicate the election form both to Comcare and to the employing authority. It is clear, and I accept, that in order to be valid an election must be communicated.
An election for the purposes of s. 45 serves two purposes. It serves the purpose first of putting Comcare on notice that it is not to proceed further with the determination of statutory workers’ compensation. The other purpose the election serves is to put the employing authority on notice that it may be the subject of a common law claim.
An employer might seek to raise as a defence to a common law claim that in the absence of the communication to them of an election there is a technical defect in the election for the purposes of the institution of common law proceedings. I would not think that much could be made of that, especially where the employer is made aware of the election by some route, be that direct or indirect.
For the purposes of the performance of its functions under the SRC Act in my view it is clearly sufficient for an effective election if the election is communicated to Comcare. We are in this case looking at the validity of a decision of Comcare for the purposes of the performance of its statutory obligations and the relevant communication for that purpose is the communication to Comcare.
I find, therefore, that there is no defect on the form of election rendering it invalid. It is nevertheless submitted to me that either pursuant to the doctrine of non est factum or mistake I should conclude that the election is void and ineffective and reference is again made to the evidence of the applicant that he thought he was signing a radically different document to the one that he in fact signed.
I have some doubt about the applicant's evidence because I think it is difficult to credit his assertion that he did not read either the covering letter from Comcare or the form and that he did not gain any understanding of what the form was asking him to do. He plainly considered the options of common law proceedings as opposed to statutory compensation rights at an earlier time and gave instructions to his solicitors, so he was plainly aware of the distinction.
If he had paid any regard at all to the election form it should have been obvious to him from the words in bold in the rectangle towards the top of the form bearing the word "note" that he should not complete the form because he intended to receive compensation under ss. 24, 25 or 27 of the SRC Act. He inserted his name and address and his Comcare claim number on the form and it is difficult to accept that in doing so his eyes did not fall on the words in bold in that space.
I am, however, prepared to accept that his attention to the form was affected by the letter he received from his solicitors that simply asked him to sign the form. I am prepared to accept that he gave no or insufficient consideration to what he was doing when he completed and signed the form, on the basis that he had given instructions to his solicitors and he trusted his solicitors to pursue those instructions, and that he believed that the solicitors were asking him to do something consistent with those instructions. Of course, as we now know, that was not the case.
I was referred by Mr Watson to the decision of the High Court in Petelin v Cullen (1975) 132 CLR 355 concerning the doctrine of non est factum, which is a doctrine relating to contract law. I was referred in particular to the passage commencing at the bottom of page 359 and extending over to page 360 in the report of that case.
It is plain that in order to make out a claim of non est factum the person seeking to make out that claim has a heavy onus to bear and that the claim can only be made out in limited circumstances such as where the person cannot read, being blind or illiterate, where the person cannot complete a document without advice as to what they were doing or where they simply had no understanding in their mind and were not capable of having any understanding in their mind as to what was the purport of a particular document. At the top of page 360, Their Honours said:
“To make out the defence the defendant must show that he signed the document in the belief that it was radically different from what it was in fact and that at least as against innocent persons his failure to read and understand it was not due to carelessness on his part.”
That seems to me simply to underscore the narrow class of persons who the High Court has defined can take advantage of the defence of non est factum. In the present case there is no question of the applicant being blind or illiterate or of unsound mind, or indeed of suffering from any mental disability. Neither is he aged and infirm. He clearly had the capacity to understand perfectly what he was doing but either he chose not to develop that understanding or he was led away from developing that understanding by the letter received from his solicitors. In short he, like his solicitors, was careless.
The conclusion I draw is that the applicant cannot fall into the class of persons who can make out the defence of non est factum.
Likewise on the issue of mistake I was referred by Mr Watson to the decision of the High Court in Taylor v Johnson (1982-3) 151 CLR 422, and in particular to the statement which appears on page 432 of the reported decision, where Their Honours said:
“The particular proposition of law which we see as appropriate and adequate for disposing of the present appeal may be narrowly stated. It is that a party who has entered into a written contract under a serious mistake about its contents in relation to a fundamental term would be entitled in equity to an order rescinding the contract if the other party is aware that circumstances exist which indicate that the first party is entering into the contract under some serious mistake or misapprehension about either the content or subject matter of that term and deliberately sets out to ensure that the first party does not become aware of the existence of his mistake or misapprehension.”
It is put by Mr Watson that in order to avoid the consequences of an election on the basis of mistake the applicant must satisfy me that there was some conduct on the part of Comcare that would in general terms lead to a conclusion that it would be unconscionable to permit Comcare to rely upon the election.
It was put to me by Mr Hassall, particularly by a reference to the decisions of Khoury v Government Insurance Office (1984) 165 CLR 622 and Sargent v ASL Developments Ltd (1974) 131 CLR 634 that I should not draw so narrow a boundary around the doctrine of mistake, particularly with reference to the making of an election. Those two cases that he took me to involved the making of an election to sue under contract law and so need to be treated with some caution in respect of the interpretation of an election under the statutory scheme in the SRC Act.
Even, however, if Mr Hassall was right that it is not necessary to point to fault on behalf of Comcare, and clearly there was no fault on the part of Comcare in this matter, I am not persuaded that the applicant has established grounds for a finding that his election is void by reason of mistake.
Such a finding in the context of this case would be to permit the applicant to take advantage of what he conceded was his own foolishness or alternatively, to permit him to take advantage of apparent carelessness on the part of his own agent, his firm of solicitors. It would do considerable violence and possibly render unworkable the scheme of which s. 45 forms an essential part if injured employees could escape from the consequences of making an election simply by reference to their carelessness or the carelessness of their solicitors.
A similar conclusion was reached by the Administrative Appeals Tribunal in Robertson v Comcare [2002] AATA 96. While I do not draw special comfort from that decision I believe that it supports generally the conclusion that I have myself reached. The Tribunal in that case found that it had no jurisdiction to review the applicant’s claim for compensation under ss.24, 25 and 27 of the SRC Act, because a valid election had been made. It is worth noting, however, that the AAT did have jurisdiction to decide whether a valid election had been made: Crowe v Comcare (No 1) [2002] FMCA 146. That is what the AAT did in that case.
I conclude that the election made by the applicant in these proceedings was a valid election. The formal requirements for an election were met and the election was relevantly communicated to Comcare. The applicant is bound by his election, notwithstanding that the carelessness of his solicitors, and himself led him to make an election he did not intend to make.
It was not necessary for Comcare to treat the election as void. In those circumstances s.45 operated of its own force to terminate the applicant's application for statutory compensation and Comcare was entitled to refuse to pursue further that application. Accordingly I will dismiss the application for relief under the AD(JR) Act.

I certify that the preceding thirty-three (33) paragraphs are a true copy of the reasons for judgment of Driver FM

Associate:

Date: 2 August 2002