Derks v CSR Virdian Ltd

[2019] VMC 6

IN THE MAGISTRATE'S COURT OF VICTORIA

AT MELBOURNE
WORKCOVER DIVISION

Case No. J12709329

JOHN DERKS

v

CSR VIRIDIAN LIMITED

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MAGISTRATE:	B R Wright
WHERE HELD:	Melbourne
DATE OF HEARING:	27 June 2019
DATE OF RULING:	2 August 2019
CASE MAY BE CITED AS:	Derks v CSR Virdian Ltd
MEDIUM NEUTRAL CITATION:	[2019] VMC006

REASONS FOR RULING

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CATCHWORDS - Workers compensation – Application for reinstatement of weekly payments for limited period – Previous 104 week termination – Previous dismissal and terms of settlement in County Court – Whether accord and satisfaction – Whether appropriate conciliation certificate issued prior to these proceedings – Effect of agreement to reinstate weekly payments at later date – Workplace Injury Rehabilitation and Compensation Act s. 273(1)

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr D Dealehr	Carbone Lawyers
For the Defendant	Mr P Trigar	Lander & Rogers

HIS HONOUR:

1In these proceedings Mr Derks seeks reinstatement of weekly payments for a right knee injury with consequential effects on other bodily parts and his psyche.  Pursuant to the Accident Compensation Act 1985 (“the AC Act”) he seeks weekly payments from 1 January 2006 to 4 November 2017. In fact, his weekly payments were reinstated from that later date, 4 November 2017 onwards by the authorised agent, Allianz. He continues to be in receipt of weekly payments for his right knee injury.

2The defendant has raised a threshold issue in these proceedings in that it says that Mr Derks issued County Court proceedings for the same injury as a result of the 104-week termination of weekly payments, which were dismissed by consent of the parties on 22 July 2005.  Further, by way of contemporaneous terms of settlement, Mr Derks agreed to accept 17 weeks weekly payments at the 75% rate, from 17 November 2004 “ in full settlement of the relief sought” in those proceedings.

3It was also agreed he would continue to receive payment of his reasonable medical and like expenses, which has continued to date. The terms of settlement stated that the defendant paid those benefits “with a denial of liability”, whatever that means. 

4The defendant initially raised a defence of issue estoppel and res judicata in these proceedings, but now does not seek to proceed with those defences.  However, it does say that there is a defence of accord and satisfaction, and that these proceedings should be dismissed accordingly.

5Almost all the facts are agreed in this case.

6The only claim form in this case submitted by Mr Derks is dated 27 November 1989 and alleged an injury to the right knee when he tripped, leading to “strain and fractured knee cap” (sic.) on 27 February 1989 (“the injury”).

7Liability was admitted and Mr Derks commenced to receive weekly payments and payment of his reasonable medical and like expenses.

8On 18 October 2004 Allianz issued a 104-week notice, seeking to terminate his weekly payments for the injury on the basis he did not have a “current work capacity” likely to last indefinitely and did not have a serious injury pursuant to the provisions of the AC Act as at that time.

9As stated, he issued County Court proceedings as a result of that termination, in respect of which court orders were made and terms of settlement signed by the legal representatives of the parties. 

10The parties agreed that Mr Derks has had several operations, on at least his right knee, since 2004 paid for by the defendant. I note that in a previous decision, Derks v R&J Fibreglass (del. 13 August 2008), I set out his evidence of injury to and treatment for the right knee involving that later employer, as well as the employer in the present case.

11The statement of claim in the present proceedings alleges he sought reinstatement of his weekly payments on or about 29 September 2014.  When I asked for details, I was told that Mr Derks had telephoned Allianz on a number of occasions seeking reinstatement. I was not given any further detail or evidence.

12Allianz received an email from Mr Simon (his solicitor) on 4 November 2017 saying he would be grateful for weekly payments to be paid to Mr Derks “who has had a significant worsening of his injuries”.

13On 10 November 2017 Allianz emailed Mr Simon that Mr Derks had apparently telephoned Allianz “enquiring about weekly reinstatement of his wages”.  Allianz informed Mr Simon it had not “received any request for reinstatement of his wages”, presumably referring to the lack of any formal written application.

14On 24 November 2017 Allianz emailed Mr Simon a copy of the terms of settlement in the earlier proceedings, stating there was “no further entitlement to weekly compensation payments”.  Mr Simon replied on the same day stating “this does not apply to the current claim” pointing out that Mr Derks had had further treatment with a change of circumstances where his condition had worsened significantly. He had had numerous operations which had been “accepted” (by Allianz) and asked them to review the matter urgently.

15On 20 February 2018 Allianz emailed Mr Simon that they were having Mr Derks assessed by Dr Ratnayake, a psychiatrist, and would decide on the request for reinstatement after the report was received. 

16On 27 February 2018 Allianz sent an email to Mr Simon, attaching a notice rejecting the request for weekly payments dated the same date. That notice referred to a request for reinstatement on 4 November 2017.

17The notice of rejection states that Allianz had considered the 4 November 2017 request, the earlier 104-week notice, the terms of settlement and three recent medical reports.  It refused reinstatement on the basis Mr Derks had “no current work capacity” likely to last indefinitely.

18On 27 February 2018 Mr Derks completed a request for conciliation to the Accident Compensation Conciliation Service (“the ACCS”), seeking conciliation for the “failure to pay weekly wages and backpay”.

19It seems that an earlier request for conciliation was made on 23 November 2017, based on Allianz's failure to respond to the reinstatement request.  I was not referred to any separate conciliation certificate in that regard, though it may have lapsed while Mr Derks was being considered for reinstatement later.

20When the February 2018 conciliation request was being considered, an ACCS conciliator on about 18 April 2018 referred the medical dispute as to reinstatement to a medical panel, with some other minor medical and like treatment issues. Amongst other questions the medical panel was asked whether Mr Derks had “no current work capacity” which was likely to last indefinitely.

21On 4 July 2018 a medical panel delivered its opinion, inter alia, that Mr Derks had “no current work capacity which was likely to last indefinitely”.

22It found he had a post-traumatic osteoarthritis to the right and left patellofemoral joints, medication induced erectile dysfunction, and a major depressive disorder relevant to the “above claimed knee injuries”. 

23On 8 July 2018 Mr Simon emailed the ACCS that he accepted the opinion and sought weekly payments (for his client) from 1 January 2006. On 9 July 2018 Allianz emailed the ACCS that it accepted the medical panel opinion and would reinstate weekly payments from 4 November 2017.

24On 12 July 2018 Allianz emailed the ACCS that it would not reinstate weekly payments from January 2006, as there were no medical certificates between 2006 and 2016. On 13 July 2018 Mr Simon emailed the ACCS he did not agree for reinstatement from 4 November 2017, stating incapacity went back to January 2006.

25On the material before me there is a gap until 26 July 2018 when the ACCS conciliator issued a conciliation outcome certificate, stating the dispute was a resolved on the basis that “the authorised agent will pay weekly payments in accordance with the Act”. The conciliator certified that the conciliation had been completed.

26Subsequent to that, there was continuing correspondence between Allianz and Mr Simon as to whether Allianz had earlier medical certificates and whether weekly payments should be reinstated prior to 4 November 2017. This correspondence continued even after 17 August 2018 when the present proceedings were issued in this court.  Suffice it to say, both parties maintained their same position before me.

27Mr Craig Smith, a team leader from Allianz, was called to give evidence.  He said when the application for reinstatement came in, he sought advice from a legal manager and was told “to look at the claim on the merits despite the previous court outcome”.

28No advice was sought from any senior legal manager. The decision was made to assess Mr Derks' entitlement. He said he did not dispute a referral to a  medical panel and did not defend the reinstatement application on the basis of the previous court outcome.  It is clear from the material that at all times Allianz was aware of the previous orders and the terms of settlement that I have set out.

29After Allianz received the medical panel opinion it emailed the ACCS on 9 July 2017, agreeing that it was bound by the opinion.  A conciliation certificate was issued. They agreed to reinstate weekly payments from 4 November 2017, being the date of application to reinstate weekly payments. He did not know if any submissions were made by Allianz to the medical panel.  The referral was considered by a senior legal manager who could have raised issues in the referral.

30He agreed they considered the previous court outcome prior to the referral to the medical panel. However, there was a policy or directive that “we had to consider all claims on the merits, despite any previous court outcome”.

31He was asked about the reference to paying weekly payments from 11 August 2016 based on medical certificates. He stated that there was only a one-day medical certificate for that date. 

32That completes the evidence for this ruling.

33Although the statement of claim refers to an injury pursuant to the AC Act it seems that having regard to this dispute arising after 1 July 2014 that Part 6 of the Workplace Injury Rehabilitation and Compensation Act 2013 (“the WIRCAct”) is relevant to the determination of these proceedings, at least by way of procedural aspects, pursuant to s.6(6)(b) of the WIRC Act.  I any event, there is no real difference as compared to the AC Act provisions.

34The parties identified three main issues in considering the defendant's application to have these proceedings dismissed at this stage. (1) Has there been a conciliation certificate issued pursuant to s.49(1) of the AC Act (s.273(1) of the WIRC Act), prior to these proceedings being issued?  (2) Having regard to any accord and satisfaction defence, what is the effect of Allianz agreeing to reinstate weekly payments from 4 November 2017?  Can any special defence be now raised at all by the defendant in those circumstances?

35Thirdly, do the principles of accord and satisfaction apply to these proceedings, subject to the previous point, based on the outcome and terms of settlement of the earlier court proceedings?

36The first issue to consider with these proceedings have been validly issued. That is, is there a certificate in accordance with s.273(1) of the WIRC Act?  Although such certificate is often referred to as a “genuine dispute” certificate because of other provisions in the WIRC Act, these words are not used in that provision. Rather, the requirement is for a conciliator to certify that he or she is, “satisfied that all reasonable steps have been taken by the claimant to settle the dispute”.

37In this case, the conciliator noted that the dispute was resolved on the terms that the authorised agent would pay weekly payments in accordance with the Act.  It can be seen from the above that the parties were in strong disagreement about the commencement date of reinstatement of those weekly payments.  Rightly or wrongly, the conciliator noted the dispute was resolved by the making of weekly payments.  By noting that the dispute was resolved, the conciliator must have been satisfied that the claimant (worker) had taken all reasonable steps to settle the dispute.

38Thus, despite the fact the parties were still in some disagreement, the conciliator, I believe, should be regarded as having certified in accordance with s.273(1) of the WIRC Act.

39Next, I need to consider whether the defendant can now raise the accord and satisfaction issue, or indeed any special defence, having regard to its agreement to reinstate, and continue to make, weekly payments from 4 November 2017. 

40I raised with counsel whether it could be said that this amounted to a binding waiver of the accord and satisfaction defence issue.  Needless to say, both counsel took up opposite positions on this point in accordance with their client's interests, but did not develop their submissions by argument and/or refer to any relevant case law on this waiver issue.

41Rather, counsel for Mr Derks relied on what he referred to as to the “Ansett v Taylor” argument (see, Ansett v Taylor [2006] VSCA 171) as to a prior admission. Counsel for the defendant simply disputed the relevance of that case.

42I pointed out to counsel that Ansett v Taylor had been revisited by the Court of Appeal in Sednaoui v Amac [2017] VSCA 66. I refer to paragraphs [67-68] of that decision as follows :-

'The observation in Ansett v Taylor that an admission of the type here under discussion "should ordinarily be regarded as very significant" is, with respect, undoubtedly true.  But, it is an observation only and not a statement of legal principle.  To regard to the words used in this observation in Ansett v Taylor as if they were provisions of a statute defining in precise and permanent terms the significance of any admission constituted by the acceptance of a claim form would be erroneous'.

Similarly, while an employer/respondent may, in a particular case, be able to explain the circumstances of a particular admission so as to reduce the weight that might be given to it, the mere failure by such a party to call such evidence, without more, does not mandate a conclusion favourable to the claimant/worker.  As with most questions of admissibility and weight, each case is dependent upon its own facts and circumstances'.

43In the present case, the unchallenged evidence before me is that the authorised agent at all times knew of the court order and the terms of settlement in the earlier proceedings, as constituting a defence to the reinstatement of weekly payments. It was only after the return of the Opinion that they agreed to reinstate weekly payments. Rightly or wrongly that they believed that the VWA  was bound by the medical Panel opinion, despite any other possible defence.

44At no stage did they imply, or expressly concede, that the orders and the terms of settlement in the earlier proceedings did not constitute a valid defence to the reinstatement of weekly payments. They took what could be regarded as a model litigant approach.

45Of course, normally any such issue as to jurisdiction should be resolved prior to any referral to a medical panel (see, Benedos v Casa Vini, CCV, per Judge GD Lewis, del. 16 October 2003).

46There is no doubt that all parties, and indeed this court, are bound by the medical panel opinion (see, s.313(4)). However, that provision cannot overcome basic entitlement issues. For example, if the claimant was not a worker or a deemed worker pursuant to the WIRC Act, then surely s.313(4) cannot override that basic issue. Certainly, it would have been prudent for the accord and satisfaction issue to be raised with the conciliator and dealt with prior to the referral to the Medical Panel. Unfortunately, this was not done.

47Thus, I must now determine whether the defence of accord and satisfaction applies in this case. 

48Again, both counsel referred to several decisions in this court and the County Court in this regard.  Those documents include Fuat v OneSteel [2010] VCC 584, Turner v Clinical Labs [2016] VMC 9, Breen v VWA [2012] VMC 21, Bucic v Arnej [2014] VMC 17, Zubic v PPG [2016] VMC 10, Bunney v Ryan Moves (MCV, Magistrate Saines, del. 5 April 2013) and Ozbilgi v Bradnams [2011] VSCA 210.

49In Ozbilgi the discussion as to accord and satisfaction was obviously obiter dicta to the main aspect in that decision.

50I do not see the relevance of Breen as it did not involve accord and satisfaction.  Similarly, Zubic was decided on the basis that the new proceedings related to different claims and different injuries. 

51In Turner Magistrate Garnett simply held, in similar circumstances to the present, that such terms of settlement and court order did not distinguish outright a claim for weekly payments beyond 130 weeks provided that the worker could demonstrate later “deterioration” leading to “no current work capacity likely to last indefinitely”. 

52In Bucic, which is one of my decisions, I upheld an accord and satisfaction defence. However, the terms of settlement in that case were in respect of proceedings involving an initial rejection of a claim rather than a 104/130-week termination case.  Similarly, Bunney involved a rejected claim as well.

53Such a distinction is important in this case, as can be seen from the judgment in Perkins v GIO (CCV, Judge Higgins, del. 12 December 1995), as referred to by Judge Bowman in Fuat and paragraphs 43(e) and (f) in my decision in Bucic.

54In this case, I respectfully agree with Judge Bowman, Judge Higgins and Magistrate Garnett.  The terms of settlement and the consent order in the earlier proceedings in this case do amount to accord and satisfaction up to the date of the consent orders, but not thereafter.  Thus, Mr Derks is not precluded from claiming he is entitled to seek reinstatement of weekly payments beyond 104 weeks, provided he can satisfy the evidentiary onus of requisite “deterioration” or “change of circumstances”, however it is put.  Obviously, this will be a matter of evidence and submissions by the parties.

55I will continue hearing this case according to the parties' availability. I emphasise that I am not setting out the necessary test to be applied or evidence required. That will be a matter of evidence and submissions before me.