Department of Education & Training v Coyle
[2006] NSWWCCPD 95
•22 May 2006
| WORKERS COMPENSATION COMMISSION | |||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | |||||
| STATUS: Decision set aside on Appeal: Coyle v Department of Education and Training [2007] NSWCA 192 | |||||
| CITATION: | Department of Education & Training v Coyle [2006] NSWWCCPD 95 | ||||
| APPELLANT: | Department of Education & Training | ||||
| RESPONDENT: | Karen Coyle | ||||
| INSURER: | New South Wales Treasury Managed Fund | ||||
| FILE NUMBER: | 8271-04 | ||||
| DATE OF ARBITRATOR’S DECISION: | 30 March 2005 | ||||
| DATE OF APPEAL DECISION: | 22 May 2006 | ||||
| SUBJECT MATTER OF DECISION: | Agreement to pay compensation; section 234 of the Workplace Injury Management and Workers Compensation Act 1998; estoppel; incapacity. | ||||
| PRESIDENTIAL MEMBER: | Acting Deputy President Anthony J. Candy | ||||
| HEARING: | On the papers | ||||
| REPRESENTATION: | Appellant: | Moray & Agnew, Solicitors | |||
| Respondent: | Bondfield Riley, Solicitors | ||||
| ORDERS MADE ON APPEAL: | The decision of the Arbitrator, dated 30 March 2005, is revoked and the following decision is made in its place: | ||||
| (a) Award for the Respondent in respect of the Applicant’s claim for weekly payments of compensation from 1 February 2003 to 17 September 2003. | |||||
| (b) No order as to costs. | |||||
BACKGROUND TO THE APPEAL
Karen Coyle (‘the worker’) was employed by the Department of Education and Training (‘the employer’) as a teachers aide. She made a claim for workers compensation, including weekly compensation, on 18 September 2002 in respect of psychological injuries suffered while employed at Forest House School, Surry Hills.
The employer’s insurer, New South Wales Treasury Managed Fund (‘the insurer’) initially accepted liability and compensation was paid from 18 September to 22 October 2002. Liability to make payments was then denied pursuant to section 11A of the Workers Compensation Act 1987 (‘the 1987 Act’).
Payments were later made to 18 December 2002 and following correspondence between the worker’s then solicitor and the insurer, the insurer agreed to pay compensation up to 31 January 2003. Compensation payments were still later resumed from 18 September 2003.
The entitlement of the worker to weekly compensation for the period 1 February 2003 to 17 September 2003, which was agreed at $15,356.24, was the subject of the claim before the Arbitrator. In a decision dated 30 March 2005 the Arbitrator found in favour of the worker and the employer sought leave on 27 April 2005 to bring an appeal under section 352 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) against that decision.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 30 March 2005 records the Arbitrator’s orders as follows:
“1.That the Respondent pay to the Applicant weekly benefits compensation for the period 1 February 2003 and 17 September 2003 in the sum of $15,356.24.
2.That the Respondent pay the Applicant’s costs as agreed or assessed.”
ISSUES IN DISPUTE
The issues in dispute in the appeal are:
(a)Whether the worker is estopped because of an alleged agreement of 18 September 2003 from making a claim for weekly payments from 1 February 2003 to 17 September 2003.
(b)What is the worker’s entitlement for weekly compensation for that period.
(c)Whether, if the worker were estopped, ‘special circumstances’ exist to disallow reliance on the estoppel.
ON THE PAPERS REVIEW
The employer does not oppose the appeal being decided on the papers. The worker, however, indicates that the matter should be argued orally if any doubts are entertained as to the correctness of the worker’s submissions.
For the reasons given by Deputy President Byron in Fletcher International Exports Pty Limited v Adams [2006] NSW WCCPD 11 at paragraph 17 the attitude of the worker indicates a misunderstanding of the inquiry which must be made pursuant to section 354(6) of the 1998 Act prior to embarking on the determination of the appeal.
Section 354(6) of the 1998 Act provides:
“(6)If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by the employer that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
LEAVE
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act.
The amount of compensation at issue on the appeal satisfies section 352(2) of the 1998 Act and all of it is at issue on the appeal.
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
Leave to appeal is granted.
EVIDENCE
For the Worker
The worker set out her work history with the employer and the circumstances in which she suffered injury. She had sought relocation to a school in the Lismore area and had moved there in January 2003 awaiting the offer of a suitable position from the employer. She was looking for work as a teachers aide at schools in the area. She was successful in obtaining only a small number of hours per week on a casual basis at Wyrallah School. After moving to Lismore she ceased anti-depressant medication and relied on alternative methods of treatment including meditation.
She had only been paid compensation to 18 December 2002 and had instructed Sydney solicitors to act for her in relation to her claim for weekly compensation. She describes deterioration in her condition in August/September 2004 [sic]. She consulted her current solicitors who referred her to a psychiatrist, Dr Pearson, whom she saw on 30 January 2004. She started psychotherapy and saw a local doctor, Dr Brian Witt. The earliest of Dr Witt’s WorkCover medical certificates is dated 25 February 2004.
Dr Pearson reported on 11 February 2004 to the worker’s solicitor. He had with him certain documents, including a report from Dr Derek Lovell dated 12 June 2003. Dr Lovell, a psychiatrist also, had seen the worker at the request of the insurer. Dr Pearson thought she had developed a major depressive illness which had responded to anti-depressive treatment. She had consulted Dr Lovell at a time when her illness was in remission and she was capable of returning to work. Dr Pearson accepted Dr Lovell’s view that she had been capable of returning to full-time work in the early part of the year [which I take to be 2003]. There had, however, been a progressive recurrence of depressive symptoms in the preceding six months, that is, since July 2003.
It appears that while she was in Sydney prior to January 2003 she had been referred by her general practitioner to a psychiatrist in Sydney whom she saw three times. No reports from this doctor are relied on.
An Application to Admit Late Documents was received on 29 October 2004. The document in question was obtained by a Direction to Produce given to the employer and was in fact a substantial bundle of documents from the employer’s Audit Directorate, being statements, correspondence, reports, records and summaries. The author of the document is said to be one Graham Buckingham, Principal Investigator (Audit), and its date 7 June 2004. In fact many of the attachments to this document are dated earlier than this and have various authors. The investigation by Mr Buckingham was, it appears, brought about by a letter of complaint by the worker which is in the bundle of documents and appears undated. It is not necessary, I think, to go into great detail as to what the report of Mr Buckingham states. It is sufficient for me to say that it gives support to the worker and casts doubt on the availability of a section 11A defence to the employer. These additional documents were received into evidence by the Arbitrator.
For the Employer
Relevant documentary evidence is as follows:
(a)On 23 October 2002 the insurer wrote to the worker advising that it was ceasing payments of compensation on the grounds that the employer had acted reasonably with respect to performance issues. Compensation was to be paid up to 23 October 2002. (There is a discrepancy as to the date to which compensation was initially paid, either 22 or 23 October 2002. Nothing turns on this.)
(b)On 12 June 2003 the insurer wrote to the worker’s then solicitor enclosing the report of Dr Derek Lovell of 12 June 2003. The insurer indicated that it was prepared to pay weekly compensation up to 18 December 2002 which was the period for which the worker had WorkCover medical certificates.
(c)On 1 July 2003 the worker’s then solicitor conveyed by facsimile to the insurer a Certificate of Unfitness up to 31 January 2003 and asked the insurer to consider paying to that date.
(d)On 12 September 2003 the same solicitor wrote to the insurer as follows:
“We refer to your letter dated 12th June 2003 and to our facsimile dated 1st July 2003 which enclosed a WorkCover certificate up to 31st January 2003.
We understood from our discussion with you that it was likely you would meet the claim up to 31st January, 2003 in view of the certificate and in view of the fact that Dr Lovell did not see our client until six months after that period closed.
We are instructed by our client that she will accept payment up to 31st January, 2003 to resolve the dispute.
Would you please advise within seven days whether this is acceptable as alternatively we are instructed to commence proceedings in the Workers Compensation Commission.”
(e)On 18 September 2003 the insurer replied to the solicitor in the following terms:
“We refer to the above claim for workers compensation benefits and acknowledge receipt of your letter dated 12/09/2003.
We confirm, that payments have been made to the Department of Education up to the 31/01/2003 as agreed.”
SUBMISSIONS
By the Worker
These address two issues:
(a)Whether the worker is estopped from making a claim for weekly compensation for the relevant period.
(b)The worker’s entitlement if she is found to be not estopped.
Reliance is placed on section 33 of the 1987 Act which gives an entitlement to weekly compensation during a period of incapacity and also on section 234 of the 1998 Act which provides that that Act and the 1987 Act apply despite any contract to the contrary. It is submitted that no agreement can extinguish the worker’s entitlement to compensation under the 1987 Act. It is further said that there is no formal release in the correspondence.
The worker makes submissions regarding the doctrine of estoppel and relies on a decision of the Supreme Court of New South Wales, namely: First Capital Partners v Sylvatech [2004] NSWSC 846 (3 September 2004, McDougall J). In fact the decision referred to is Cockatoo Dockyard v Commonwealth of Australia [2004] NSWSC 841( McDougall J 17 September 2004) (‘Codock’). It is submitted that this case is authority for the proposition that an estoppel may be avoided where there are ‘special circumstances’. The report of Mr Buckingham is said to constitute ‘special circumstances’.
Reliance is also placed on the decision of Neilson J in Anderson v Charles Sturt University (2002) 25 NSWCCR 407 (‘Anderson’) at paragraphs 28 and 29 in particular.
It is said that the employer did not allocate a position to the worker upon her removal to the Lismore area. It submitted that there are no contemporaneous medical certificates as to incapacity for the period in question and reliance is placed on the report of Dr Pearson of 11 February 2004 and that of Dr Lovell of 12 June 2003. It is said that the worker was not fit to return to work full-time as a teachers aide at her former place of employment and that she had a partial incapacity over the period in question.
By the Employer
The letters between the insurer and the worker’s former solicitor are said to give rise to a binding agreement. That agreement, it is said, was entered into on 18 September 2003. The employer denies that any formal release is required. Reliance is also placed by the employer on Anderson wherein Neilson J sets out (at paragraph 19) the ingredients of estoppel.
So far as ‘special circumstances’ is concerned, the employer points out that the worker instigated the investigation which gave rise to the report of Mr Buckingham and this was done by her letter of 11 August 2003. This date appears on page 4 of Mr Buckingham’s report and is the date the Audit Directorate of the employer received correspondence from the Independent Commission Against Corruption to which the worker had complained. It is also the date of a statement which Mr Buckingham took from the worker which is attached to his report. It is argued that the worker’s decision to resolve her claim on a compromise basis before she became aware of the outcome of the investigation should not form the basis for later overturning a settlement reached between the parties.
So far as incapacity is concerned, the employer points to the absence of WorkCover medical certificates or other contemporaneous medical evidence. Reliance is placed on the opinion of Dr Lovell of 12 June 2003 and the agreement of Dr Pearson with it nearly seven months later. The employer disputes that Dr Pearson’s opinion is sufficient to create an entitlement to compensation from 31 July 2003.
SUBMISSIONS ON THE APPEAL
The Employer’s Submissions
The employer submits that the Arbitrator made errors of fact, made findings of fact contrary to the evidence and was not entitled to come to the decision reached on the basis of the available evidence.
The Worker’s Submissions
The worker repeats the written submissions made on the arbitration. It is said that there is no issue estoppel but it is conceded that the Arbitrator made an error of fact in saying that the employer had possession of the Audit Report of 10 June 2004 at the time it agreed to make payments of compensation up to 31 January 2003. (The Audit Report was signed by Mr Buckingham on 7 June 2004 and approved for release by the Assistant Director of Audit on 10 June 2004, hence the two dates which have been given to the same report.) The evidence referred to in that document existed in September 2003 and the evidence constituted ‘special circumstances’ as referred to in ‘Codock’. It is submitted that, despite the obvious error by the Arbitrator, his decision was correct.
DISCUSSION AND FINDINGS
Settlement
The Arbitrator found that a settlement had been reached and that the employer was entitled to rely on that as an estoppel to further proceedings unless there were special circumstances or other reasons why the estoppel ought to be waived.
In the light of the clear error of fact by the Arbitrator, I am obliged to review the decision and that review is by way of rehearing (Ross v Zurich Workers Compensation Insurance [2002] NSW WCCPD7), not a hearing de novo.
I now proceed to that review. It is clear that the employer raised the defence of contractual release initially. The reference to the worker being ‘estopped’ has perhaps raised quite unnecessary discussion of the principles of estoppel. I realise that an estoppel may arise from the conduct of the party but, nevertheless, it appears to me that this matter properly falls to be determined as a matter of contract.
The first question is whether a contract was ever concluded. In my view, the correspondence between the parties establishes that it was. There is clearly offer and acceptance.
The second question is whether there is sufficient certainty in terms of the agreement. Again, I think it is reasonably clear that it is. The worker, through her solicitor, was claiming weekly compensation from 18 December 2002 on a continuing basis and offered to settle that claim if compensation were paid to 31 January 2003. The period of entitlement to compensation which was being settled was not specified but I consider that the approach of the employer to be correct, namely to limit the supposed settlement to the date of the insurer’s letter of 18 September 2003, being the date of acceptance of the offer made by the worker’s solicitor.
Payment of compensation for the period 19 December 2002 to 31 January 2003 is obviously consideration for the worker abandoning her further claim up to 18 September 2003.
The worker was of full legal capacity and had the assistance of her solicitor who is well known for his experience and expertise in the workers compensation area.
The question remains whether the contract is illegal being in breach of the workers compensation legislation, namely section 234 of the 1998 Act. The precise operation of section 234 is open to some doubt. It is clear that that section would prevent parties from prospectively contracting out of the provisions of the Act. It is clearly another matter, in my view, for the parties to agree as to the appropriate measure of compensation after a compensable injury has occurred. The only limitation on this latter form of agreement is in situations where a future liability is sought to be settled. In such cases it is necessary to have regard to the provisions of the 1987 Act relating to commutations, namely Part 3 Division 9 of the 1987 Act (sections 87D to section 87K). The worker refers to the provision made in the legislation (section 66A of the 1987 Act) for the registration of agreements in respect of permanent impairment compensation or pain and suffering compensation. Such registration has effect despite section 234 of the 1998 Act (section 66A(6)). Once the agreement is registered the worker is not entitled to receive additional compensation in respect of the impairment from the Commission except in the case of an increase in the degree of permanent impairment which occurs after the impairment to which the agreement relates (section 66A(7)).
There is no corresponding provision for the registration of an agreement as to the entitlement to past weekly compensation. I note, however, the provisions of rule 75 of the Workers Compensation Commission Rules 2003 which permits the Commission to make an order in accordance with the agreement of parties as to the settlement of a dispute. It is not clear that the Commission has any independent function in relation to making such order. It is also not clear that the making of a consent order by the Commission confers any greater binding quality on the agreement than it would have had, had this not been done.
There has been no authority given to me which would support the proposition that parties may not agree as to the entitlement to past workers compensation. If it were otherwise, every dispute as to entitlement to past compensation would have to be determined by the Commission. I cannot believe that this is the intention of the legislature and this would clearly make the operation of the workers compensation legislation extremely slow, clumsy and expensive. I conclude that the parties may come to a binding agreement and have done so in this case. I draw considerable comfort in this regard from the decision of Burchett AJ in Zreika v QBE Workers Compensation [2005] NSWSC 573 in which his Honour held that an agreement to settle a claim was enforceable by order of the Supreme Court. In his judgment his Honour quotes a passage from the judgment of Gleeson CJ in Baltic Shipping Company v Dillon (the “Mikhail Lermontov”) (1991) 22 NSWLR 1 at 9:
“The general policy of the law is that people should honour their contracts. That policy forms part of our idea of what is just. Moreover, there is a particular policy of the law to encourage resolution of litigation by settlement, and that particular policy is not advanced by encouraging plaintiffs who settle litigation and later repent of their bargains to seek to avoid their contracts on the basis that they were made in circumstances of emotional vulnerability.”
As Burchett AJ said at paragraph 3, “this reasoning is equally applicable to various other grounds on which a party may seek to avoid being held to his bargain”.
There have been no submissions in relation to mistake, possibly being a reason to avoid the agreement between the parties and accordingly I do not intend to deal with that question.
Estoppel and special circumstances
Both parties have, surprisingly, relied on the same authority, namely Anderson. That was a case of alleged issue estoppel. In that case a consent award providing for compensation under section 66 and section 67 was entered in earlier proceedings. In later proceedings Neilson J, the trial judge, gave a judgment in which he found that there was no evidence that the worker’s degenerative condition had been made permanently worse by the type of work done while employed by his employer. At this point the counsel for the worker raised the question of estoppel and the matter was adjourned for later argument. I gather that the worker relies among other things on the passage which occurs at paragraph 28 page 417 of the judgment which is as follows:
“Furthermore, I still have difficulty in seeing how where the party has reached a compromise settlement, an estoppel arises which prevents the court from determining a case on its true merits and justice as the court is required to determine.”
His Honour refers to the decision of Ferrari J in Ashenden v Stewarts & Lloyds (Australia) Pty Ltd [1970] 44 WCR (NSW) 285. His Honour also refers to the decision of the Court of Appeal in the same matter which is reported at [1972] 2 NSWLR 484. At paragraph 30, Neilson J states the following which I think is of relevance in the present case:
“Parties can ask the Court to enter up an award in accordance with their agreement. The Court, provided jurisdiction exists, can enter up that award. However, even though formed in the terms of a court award, it is still in effect an agreement between the parties. It does not create any issue estoppel.”
His Honour held that no estoppel arose in that case. It should be noted in Anderson that the earlier claim which had been settled was for a different form of compensation than that which was later claimed. In the present case the claim settled was identical with that later brought.
His Honour at paragraphs 19, 20, 21, 22, 23 sets out the ingredients of estoppel. It is said that these ingredients are to be found in this case. They are, in brief:
·A representation
·An inducement to rely on that representation
·A reliance upon the representation
·Some detriment flowing to the person who alleges that he has the benefit of the estoppel.
Without going into the matter in great detail, I believe that all of these ingredients of estoppel have been made out which is what I understand the Arbitrator decided.
Reference needs to be made to the case substantially relied on by the worker, namely ‘Codock’. That like Anderson was a case of issue estoppel, and it hardly needs to be said that the facts in this case do not give rise to an issue estoppel. It is, if anything, estoppel by agreement or representation.
‘Codock’ was a decision of McDougall J. There had been a prior arbitrator’s award between the parties. This gave rise to an issue estoppel. The defendant sought to argue that as a matter of discretion no issue estoppel should be held to apply. The defendant relied on a decision of the House of Lords in Arnold v National Westminster Bank Plc. [1991] 2 AC 93. The relevant passage of the judgment of Lord Keith of Kinkel is set out at paragraph 51 of the judgment of McDougall J. This passage is as follows:
“In my opinion your Lordships should affirm it to be the law that there may be an exception to issue estoppel in the special circumstance that there has become available to a party further material relevant to the correct determination of a point involved in the earlier proceedings, whether or not that point was specifically raised and decided, being material which could not by reasonable diligence have been adduced in those proceedings. One of the purposes of estoppel being to work justice between the parties, it is open to courts to recognise that in special circumstances inflexible application of it may have the opposite result ...”
In ‘Codock’ the defendant argued that estoppel should not apply since there was no appeal from the Arbitrator’s decision and it was in any event wrong. McDougall J did not accept these arguments.
In this case the worker sought to rely on the ‘special circumstances’ of the later discovery of the Audit Investigation Report, A1 62/03 of 7 or 10 June 2004 and the Arbitrator accepted this argument having held that there was an estoppel. I am of opinion that the Arbitrator erred in doing so as a matter of law for the following reasons:
(a)The doctrine of ‘special circumstances’ has not been extended to estoppel by agreement or representation.
(b)The worker in this case must be taken to be saying “Had I known in 2003 what the audit report of June 2004 would say I would not have entered into an agreement to settle my claim for past weekly compensation in September 2003”. It seems to me that the flaw in this argument is that the worker from her statement, relied on in these proceedings and the statement taken from her on 11 November 2003 by Mr Buckingham and attached to his report of 7 June 2004, clearly knew all matters relevant to her claim for compensation. What she did not know, however, was the conclusion to which Mr Buckingham would later come supporting her claim. I do not consider the discovery of the Audit Report could constitute ‘special circumstances’ in this case, if such doctrine has any operation in estoppel by agreement or representation, which I doubt.
Incapacity
Although it is strictly not necessary to deal with this question in view of the conclusions to which I have come in relation to agreement and estoppel, I will do so, in the event that I should be found to have decided those legal questions wrongly.
Incapacity generally is a question of fact. The Arbitrator accepted the gaps in the worker’s case and refers to the employer’s failure to provide suitable duties and to better manage her claim. Where a party bears the onus of proving a fact and the question is whether there is any evidence of that fact, it is in my opinion a question of law. There is no evidence of incapacity until approximately late July or August/September 2003. The former date comes from Dr Pearson’s report of 11 February 2004 and the latter from the worker’s own statement of 14 May 2004. The only medical evidence of incapacity comes from Dr Pearson who saw her on 30 January 2004. There are no contemporaneous medical certificates for the period in question and Dr Lovell, who saw her for the employer on 12 June 2003, found her fit for full-time work. Dr Pearson agrees with Dr Lovell’s opinion. The opinion of Dr Pearson regarding unfitness six months earlier is necessarily inexact and at variance with the worker’s own statement.
It should be noted that the reference of the Arbitrator to the employer’s failure to provide suitable alternate employment, assumes the existence of an incapacity in the worker at the time of such failure. As I have earlier said, there is no such evidence of incapacity.
As a matter of law, in my opinion, the Arbitrator erred in finding the worker incapacitated and entitled to compensation from 1 February 2003. There does, however, remain a period not precisely defined from perhaps August/September 2003 to 17 September 2003. In the absence of contemporaneous medical certificates, I think the Arbitrator erred in finding the worker incapacitated for this latter period also.
DECISION
The decision of the Arbitrator dated 30 March 2005 is revoked and the following decision is made in its place:
(a)Award for the Respondent in respect of the Applicant’s claim for weekly payments of compensation from 1 February 2003 to 17 September 2003.
(b)No order as to costs.
COSTS
It is not appropriate, in my view, to award costs in this matter, although the appeal has succeeded. For that reason, I make no order as to costs of the appeal.
Anthony J. Candy
Acting Deputy President
22 May 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ANTHONY J. CANDY, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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