Dusan Zubic v PPG Industries Pty Ltd (WorkCover)

[2016] VMC 10

IN THE MAGISTRATES’ COURT OF VICTORIA

AT MELBOURNE

WORKCOVER DIVISION  E14199482

BETWEEN:

DUSAN ZUBIC   Plaintiff

-and-

PPG INDUSTRIES PTY LTD   Defendant

MAGISTRATE:   P Ginnane

WHERE HEARD:   Melbourne

DATE OF DECISION:   20 May 2016

CASE MAY BE CITED AS:   Dusan Zubic v PPG Industries Pty Ltd

MEDIUM NEUTRAL CITATION:                 [2016] VMC010

APPEARANCES:COUNSEL   SOLICITORS

For the Plaintiff:  Mr Dealehr  Simon Legal

For the Defendant:  Mr Dunstan  Minter Ellison

Catchwords:claim for weekly payment and medical and like expenses – rejection of claim – reliance on s 134AB (36) of the Accident Compensation Act 1985 – whether compromise by payment for pain and suffering and loss of earning capacity precludes reliance in current proceeding for bilateral shoulder injury – whether principles in Port of Melbourne v Anshun Pty Ltd (1981) 147 CLR 589 apply- doctrine of issue estoppel – whether current proceeding merged with compromise of proceeding for leave to commence common law claim for damages – doctrine of res judicata – whether principle of accord and satisfaction applicable – principles of construction of release – plaintiff’s claim not objectionable

REASONS FOR DECISION

HIS HONOUR:

1. The plaintiff by Amended Complaint dated 8 July 2015 and filed in court with leave, alleges that throughout the course of his employment with the defendant he suffered injury by reason of heavy and repetitive lifting and moving of goods and items. The particulars of injuries given are:

(a)Injury to the right and left upper arms and shoulders

(b)Injury to the neck and cervical spine

(c)Stress, anxiety and depression.

2. The plaintiff claims relevantly :

(i)Reasonable medical and like expenses for the injuries under section 99 of the Accident Compensation Act (the “AC Act”)

(ii)Weekly payments of compensation at the no current work capacity rate from 3 January 2009 to date and continuing

3. The claim brought by the plaintiff in this court consists of a claim dated 29 May 2014 by which the plaintiff seeks compensation in the guise of weekly payments[1]. The claim was accepted by the defendant’s agent and the plaintiff came into receipt of weekly payments commencing in August 2014.

[1] Ex

4. By letter of notification dated 30 June 2015[2] the defendant’s agent wrote to the plaintiff and advised that “from 1 July 2015 you are no longer entitled to weekly payments because:

[2] Ex

You have no entitlement to weekly payments

Pursuant to section 134AB (36) you are not entitled to weekly compensation payments”.

5. The reasons expressed for the decision conveyed to the plaintiff were stated thus:

“On 21 January 2010 a settlement was made for Common law for pecuniary loss & pain and suffering, wherein you received a settlement sum of $360,000”.

6. These reasons are reflected by the defendant by its Further Amended Notice of Defence dated 9 July 2015 and, in particular, paragraph 24 that:

(a)  The plaintiff has no entitlement to the relief sought

(b)  The plaintiff has no entitlement to weekly payments of compensation from 3 the [sic] January 2009 pursuant to Section 134AB (36) of the Act.

(c)  The plaintiff is precluded from bringing this action pursuant to the principals [sic] as set out in Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45.

(d)  The plaintiff continues to be entitled to reasonable medical and like expenses under various claims for the accepted injuries to the right shoulder, left shoulder, back and neck, save for physiotherapy, chiropractic and psychological treatment which had been terminated by the defendant’s authorised agent and are not disputed by the plaintiff.

7. His Honour Magistrate B Wright set the matter down for preliminary oral argument on the matters raised in the defence and that is the mechanism by which the matter comes before me. There is no application by way of a summons under the rules, for example, but neither party disputed the sufficiency of the preliminary question being determined in the current manner. However, regardless of the procedural informality of the application, the effect on the plaintiff if the defendant’s arguments succeeded before me would be that the proceeding would be terminated. Therefore, I should proceed with caution in determining the matter in line with established authorities.

The reliance on Section 134AB (36)

8. Section 134AB (36) of the Act reads:

“If judgment is obtained, or a compromise or settlement made in respect of proceedings referred to in subsection (1) in respect of an injury, the Authority, the employer or self-insurer is not liable-

(a)   where pecuniary loss damages are awarded, to pay weekly payments in respect of the injury; or

(b)   where pain and suffering damages are awarded, to make payments under section 98C or 98E in respect of the injury”.

Why does the defendant contend that the current proceeding is objectionable?

9. The plaintiff refers to a document described as a “Release” entered between it and the defendant dated 28 January 2010. The release consists of a series of “definitions” and those identified by the defendant are:

·“The claim” means the application under section 134AB of the Act and includes the proposed claim at common law in respect of each cause of action which the releasor seeks to maintain.

·“The settlement” means $360,000 being a net settlement amount after the reduction required by section 135AB (25) of the Act.

10. The release itself consists of a series of terms and described as “release and discharge”, “agreements”, “acknowledgement and undertaking,” and all are expressed as supported by consideration in the form of a payment to the plaintiff. The salient parts are:

“The releasor and his or her heirs, executors, administrators and assigns:

1.HEREBY RELEASE AND FOREVER DISCHARGE the releasee and the VWA and their respective successors and assigns from all actions, suits, demands, claims and costs of every description whatsoever which the releasor now has or at any time hereafter may have had or which but for the execution of this agreement could or might have had against the releasee and/or the VWA for or by reason of or arising out of the claim or action.

2.AGREE that they will not bring any further claim or legal proceedings against the releasee or VWA in respect of the matters that are the subject of the claim or action.

3.AGREE to file a notice of discontinuance in the action if requested to do so.

4.ACKNOWLEDGE that the settlement sum represents both pecuniary loss and pain and suffering damages and that the releasee and the VWA are not liable to make any further payments of compensation under the Act apart from medical and like services under section 99 from the date of this release unless or until terminated pursuant to the Act

5.…

In consideration of which the releasee and the VWA

6.AGREE to pay the settlement sum to the releasor’s solicitors  within 21 days of the date on which the signed release is received by the releasee’s  solicitors

7.AGREE to the costs agreement.

8.AGREE to pay to the releasor’s solicitors any costs owing pursuant to the costs agreement within 28 days of such costs being agreed or fixed by a court”

The plaintiff’s response

11. The plaintiff submitted that the present Court proceeding does not involve any issue arising from the earlier proceeding which it pointed out resolved on the basis of a consent order and the execution of the Release.

The claims history

12. The parties introduced into evidence a number of claim documents. I was provided with a Claim form dated 19 October 1999[3] reporting lower back pain. In addition, I was provided with two Impairment Benefit Claim forms with one identifying back and referred pain to both legs, and the other, citing the plaintiff’s back and neck and referred pain to arms and legs as well as headaches. The plaintiff also introduced into evidence a claim form dated 27 January 2005[4] describing a back and neck injury and “slight pain in lower back only”.

[3] Ex P1

[4] Ex P3

The defence to the current proceeding otherwise than by reliance on the settlement of the County Court proceeding and Release

13. In this proceeding the defendant’s Amended Defence to the Statement of Claim contains a number of qualified admissions as regards the plaintiff’s claimed injuries, the effect of the same being:

(i)     That  the plaintiff sustained injuries throughout the course of his employment to his back, neck, right shoulder, left shoulder and consequential depression, anxiety and stress

(ii)   That by notice dated 4 July 2014 liability for the claimed injuries to the right shoulder, left shoulder and depression was rejected and by notice dated 12 April 2011 liability for surgery to the right shoulder was rejected

(iii) That it has agreed to pay various medical and like expenses including pain management, medication, physiotherapy and psychological treatment under various accepted claims for compensation

(iv)  That by notice dated 25 July 2014 liability to pay medical and like expenses was accepted for injuries to the right shoulder, left shoulder and depression and by notice dated 24 September 2014 liability to pay weekly payments for compensation and medical and like expenses was accepted for injuries to the right shoulder, left shoulder and depression

(v)    That by notice dated 30 September 2014 it determined that the plaintiff was no longer entitled to weekly payments of compensation for the claimed psychiatric condition

14. The defendant says that it has paid, continues to pay and has never sought to terminate the payment of reasonable medical and like expenses to the plaintiff for injuries to the right shoulder, left shoulder and depression since the acceptance of the plaintiff’s claim for bilateral shoulders.
15. The original notice rejected liability for the injuries to right shoulder, left shoulder and depression and by further notice rejected liability for surgery to the right shoulder[5].

[5] Ex P5 letter Allianz to plaintiff dated 12 April 2011 regarding request for payment for a right shoulder arthroscopic rotator cuff repair because claim form “dated 19 January 1999 states that your physical injury is for your back and neck”.

16. At all times the defendant has denied liability for injuries set out in the second claim form, namely primary psychiatric injuries, rather than any psychiatric injuries consequential upon the admitted physical injuries as to which it continues to pay.
17. The Deed of Release and consent order must be considered in context.

The defendant’s submissions addressed in context and in detail

18. The defendant developed its submissions by reference to the relevant context consisting of events that presaged the Release.

The plaintiff’s application for leave to commence common law

19. By a Form A dated 26 November 2008, that being the form approved by the Authority under s 134 AB (5) (a) of the Act for claims brought under s 134AB (4) of the Act, the plaintiff sought leave to commence proceedings in the County Court of Victoria for common law damages for Serious Injury. In support of his application he made two affidavits and identified a variety of provided medical reports. In answer to the question posed about the injury or injuries relied upon by him, the plaintiff identified his back and neck as well as mental and behavioural disturbance.
20. In addition, and in accordance with the relevant Ministerial Direction, the plaintiff furnished a Statement of Claim dated 19 June 2006. The Statement of Claim was described to me by counsel as a “draft” but, nonetheless, a document sufficient in form and substance to meet the requirements for the commencement of proceedings seeking a declaration of serious injury under the Act. By it, the plaintiff claimed damages for pain and suffering and loss of earning capacity. Relevant parts of the pleading are:

“3. On or about 8 January 2004 and throughout the course of employment in the period from 20 October 1999 to January 2004, the Plaintiff suffered injury whilst undertaking heavy and awkward lifting, bending and moving at work of tins of liquid, using and driving a forklift and using an export machine

PARTICULARS OF INJURY

Injury to lower back

Injury to discs and soft tissue of the cervical and lumbar spines

Depression, anxiety and stress

Sleeplessness

Sciatica and referred pain into the legs

Aggravation, acceleration and exacerbation of degenerative changes to the lumbar and Cervical Spines

Pain in the right groin and right thigh

5. The Plaintiff is aged 55 years, been born on 26 February 1951. The Plaintiff by virtue of his age, experience and qualifications, together with the injuries, will have periods of unemployment or periods where he will not be able to work, if at all, because of incapacity from his injuries. The Plaintiff claims pecuniary damages. The Plaintiff is in receipt of weekly payments, receiving 75% of his pre-injury average weekly earnings. The Plaintiff was earning a gross wage of $1416.27 at the time of injury”.

21.  The first affidavit made by the plaintiff was sworn 5 November 2005 and a supplementary affidavit was sworn 30 July 2008. The supplementary affidavit was attested via an interpreter, whereas the first, was not. No point was raised before me of this anomaly. The affidavits painted a picture of the plaintiff as a person who was engaged in heavy repetitive work.

22.  Mr Dunstan accepted that if I looked to no more than the Statement of Claim filed in support of the application for Serious Injury then he would be bund to acknowledge that it agitates only in relation to the plaintiff’s back, neck and side and that neither shoulder is relied upon as is the case with the current proceeding. However, Mr Dunstan submitted that the position is otherwise when the affidavits made by the plaintiff that accompanied the application are considered. He referred me to those parts of them in which the plaintiff identified the existence of shoulder pain and the following references contained within the first affidavit, such as:

“On or about 12 December 1984 I injured my back…”

“I found that I had developed some pain problems with my legs”

“I gradually developed a very painful back”

“I found I had a pain to my left hip”

“In about 2001 I started to get some pain in my neck”

“I was suffering from neck pain and pain into my shoulders”

“At about that time I had constant pain in my lower back and my upper back to between my shoulders from the base of my neck”.

23. In relation to the second affidavit, Mr Dunstan directed me to the following references:

“I still suffer considerably with respect to pain in the neck and in particular the lower back. The pain in the lower back radiates down both legs, the right leg being far worse. I still get headaches on a regular basis”.

“In early 2003 whilst I was lifting a heavy box above head height, I injured my left shoulder…In the end it was the pain in my back that caused me to cease work.”

24. Mr Dunstan submitted, therefore, that in light of the matters deposed to by the plaintiff I should be satisfied that he was fixed with knowledge of injury in relation to his shoulders prior to the execution of the Release and that as a result the plaintiff should be forestalled by operation of the “extended principle” referred to as “Anshun estoppel.” In Port of Melbourne v Anshun Pty Ltd (1981) 147 CLR 589 the High Court addressed the “extended principle” expressed by Sir James Wigram V.C. in Henderson v Henderson (1843) 3 Hare, at p 115 as follows:

“Where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case, and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies, except in special cases, not only two points upon which the Court was actually required by the parties to form an opinion and pronounce judgement, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at that time”.

25. Anshun estoppel should not be confused with other estoppels such as issue estoppel.

Findings in relation to and Anshun estoppel and res judicata

26. As to the plea and reliance placed on Anshun estoppel, the matter calls for some consideration but ultimately I have determined that the matters is resolved in the plaintiff’s favour for the following reasons. Although an estoppel can apply following a consent judgment, difficulties can arise in determining what questions were concluded by consent. This was discussed by Beach J in Derks v R&J Fibreglass Pty Ltd [2009] VSC 601 (see para.20). At paragraph 33 His Honour stated that "ordinarily one would think that in order to work out what was or was not in issue in a particular proceeding one would look primarily if not solely at the pleadings and perhaps other documents passing between the parties, (for example, correspondence containing admissions)". Mr Dunstan accepted that if one is confined to the pleading in the form of the draft Statement of Claim, then he concedes there is no reference to the plaintiff’s shoulders. However, Mr Dunstan argued that the grant of leave to commence a claim for damages at common law for serious injury is a gateway provision that once opened and crossed enables a plaintiff to pursue a damages action for all injuries and not merely those the subject of the application. This, Mr Dunstan submitted, meant that it was open to the plaintiff to have pursued his bilateral shoulder injuries in the application for serious injury. He said that not only has the plaintiff deposed in his affidavits of being aware of pain in the areas of the shoulders but that as well he was in possession of medical opinions on examination that identified the very issue.

Discussion of the pre-existing medicine

27. Mr Dunstan introduced into evidence a bundle of medical reports[6] comprising the following:

·Mr J O’Brien medico-legal report on examination of plaintiff at request of defendant’s agent dated 10 September 2008;

·An opinion of a medical panel following on a referral received on 16 March 2007;

·A medico-legal report of Mr Michael Shannon following on examination of the plaintiff at the request of the defendant’s agent dated 21 October 2005

·A medico-legal report of Mr Brian Davie following on examination of the plaintiff at the request of the defendant’s agent dated 14 September 2006

·A medico-legal report of Mr Jonathan Hooper following on examination of the plaintiff at the request of the defendant’s solicitors dated 23 May 2008

·A medico-legal report of Mr Rodney Simm following examination of the plaintiff at the request of the plaintiff’s solicitors dated 29 June 2007

[6] Ex D6

28. Mr Dunstan directed me to those parts of the reports in which reference is made to the plaintiff’s complaint of shoulder pain. For example, at page 2 of the report, Mr O’Brien states the plaintiff having told him “that he was a little uncertain of the exact date, but somewhere between 2002 and 2003 the recurrent episodes of back pain became more frequent. At about the same time, the patient stated, he also became aware of neck pain which radiated to both shoulders. The patient in fact stated that at that time he consulted his local doctor and was sent for some chiropractic treatment, which he underwent for a few months but the patient reported at that time that the treatment aggravated the pain. Because of ongoing pain, the patient stated he was subsequently seen by the company doctor and underwent  further investigations because of ongoing pain, the patient stated he was subsequently seen by the company doctor and underwent further investigations on both his back and neck. He was initially placed on restricted duties and shortly following this, apparently arrangements were made for him to attend Cedar Court where he in fact underwent a Pain Management Program in early 2004. The patient stated that this did help the severity of pain and in fact he continued to work undertaking restricted duties.”

28. Mr Shannon’s report included that:

“In 2003, he started to get soreness in his neck and shoulders and he was getting headaches”.

30. In Mr Hooper’s report the history he recorded included pain in the neck and shoulders occasioned or at least attributed by the plaintiff to his work as regards his left shoulder condition. He reported that the major complaint was of the back and shoulder.
31. In the medical opinion of the medical panel referred to, a finding of aggravation included the existence of referred pain to the plaintiff’s left shoulder.
32. The report from Mr Mangos dated 7 September 2005 also referred to left shoulder complaint and of bilateral shoulder ache.

33. In summary Mr Dunstan submitted the plaintiff could have and should have included the injuries the subject of the current proceeding in the proceeding he initiated for leave to bring a claim for common law damages.
34. Had the plaintiff reached such a point and been granted leave to bring a common law action for damages then this might have called for the matter to be considered differently. But this was not the case. This is because at the very least, a serious injury application is not a final decision[7]. The granting of leave in no sense finally determines the rights of the parties. It is but a preliminary step along the way towards establishing those rights. Thus had the plaintiff passed through the gateway, the recourse and reliance on Anshun may have called for the matter to be assessed and adjudged differently in the sense of the plaintiff not bringing forward for determination all matters of which he was aware and that included bilateral shoulders.

[7] See Laratae v Dean's Pty Ltd [2016] VSCA 71

35. Counsel for the plaintiff submitted, with force in my judgement, that the omission by the plaintiff to include in his draft common law pleading, a claim for bilateral shoulders was not an adversely determinative matter because after all had the matter not been compromised and had the plaintiff being granted leave then it would have been open to him to have included such injuries and had he then failed to do so, then he may well have been caught by the doctrine of Anshun. However, that is not what transpired. That point was never reached. Furthermore, the plaintiff points to the manner in which the agent’s acting for the defendant in the management of the claims administered the matters by disclaiming bilateral shoulders as injuries arising from his original claim and only belatedly accumulating them as injuries subsumed in the settlement by way of the execution of the release and the payment made for the claim then on foot. I find those submissions persuasive. I am not satisfied the current proceeding is precluded by reliance on Anshun estoppel.
36. In addition to reliance on Anshun estoppel the defendant also submitted that the plaintiff’s proceeding in the Court is met by and defeated by a plea of res judicata.  I do not agree. Neither could it be contended that the current proceeding gives rise to a defence of issue estoppel. Let me explain. First, in relation to appreciating the distinction between res judicata and issue estoppel, a good place to commence is with the decision in Blair v Curran (1939) 62 CLR 464 at 531 in which Dixon J compared and contrasted the two and said:

“A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgement, decree or order necessarily established as the legal foundation or justification of its conclusion, whether that conclusion is that a money sum be recovered or that the doing of an act be commanded or be restrained or that rights be declared. The distinction between res judicata and issue estoppel is that in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgement, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgement, decree or order.”

37. When the facts of the current proceeding and the County Court proceeding are considered in light of Blair v Curran, it is readily apparent, that neither a plea of res judicata or of issue estoppel applies. First, there has been no judicial determination involving an issue of fact or law that disposes once and for all of the issue of the plaintiff’s bilateral shoulders injury. Second, it cannot be known, let alone argued, what the consent order encompassed. I was only told that the order was “simple” and “typical” in such matters, but I was not provided a copy of the order dismissing the s 134AB proceeding.
38. I was not told, and therefore do not know, if there were terms of settlement and, if there were, what they embraced. No affidavit was sworn in relation to the settlement. No evidence was given. Of course the recourse to s 134AB of the Act and the avoidance of liability by reliance on the same is expressed to arise when there has been an award of pecuniary loss damages or pain and suffering damages. That was not effected by any Court order but rather was conferred on the plaintiff pursuant to terms contained in the release.
39. Third, the language of the Release that the parties “AGREE that they will not bring any further claim or legal proceedings against the releasee or VWA in respect of the matters that are the subject of the claim or action” is not language that defines what amounts to the “matters that are the subject of the claim or action” or that it should be treated as including bilateral shoulders injury. The acknowledgement cannot be interpreted and applied in isolation but it finds its anchor points by reason of the foregoing language of the agreement.
40. Nothing put in issue as between the parties has passed into judgment. Thus a plea of res judicata cannot be sustained.
41. Fourth, as regards estoppel, in my judgment it could not be said that there is a basis to plead issue estoppel as there is not a sufficiency in the state of affairs of either fact or law that the plaintiff is required to be make good in the current proceeding that has been decided by a compromise and resolution of the County Court proceeding.

Accord and satisfaction

42. What then of the defendant’s plea of accord and satisfaction? It was in reality the ground upon which the defendant focussed its submissions. This argument must also fail.

Principles of accord and satisfaction

43.The common law rule was that the release of a cause of action once accrued had to be by deed under seal: McDermott v Black [1940] HCA 4; 63 CLR 161 at 176 (Starke J); Scaffidi v Perpetual Trustees Victoria Ltd [2011] WASCA 159; 42 WAR 59 at [14] per curiam. However, the common law also recognised that a cause of action could be discharged by an agreement for valuable consideration if it amounted to an accord and satisfaction: McDermott v Black at 183 (Dixon J); Scaffidi v Perpetual Trustees at [16]. In Thompson v Australian Capital Television Pty Ltd [1996] HCA 38; 186 CLR 574, Gummow J (at 610) explained that:

“Accord and satisfaction (the former being the agreement or consent to accept the latter) requires acceptance of something in place of the full remedy to which the recipient is entitled, coupled with provision of the consideration agreed upon.”

44.The defendant has invoked the principles relating to accord and satisfaction to advance its interpretations of the Release Agreement. The defendant’s argument reflected if recited the analysis of Dixon J (Rich and McTiernan JJ agreeing) in McDermott v Black [1940] HCA 4; 63 CLR 161. The key passages from that judgment are as follows (at 183-185):

“The essence of accord and satisfaction is the acceptance by the plaintiff of something in place of his cause of action. What he takes is a matter depending on his own consent or agreement. It may be a promise or contract or it may be the act or thing promised. But, whatever it is, until it is provided and accepted the cause of action remains alive and unimpaired. The accord is the agreement or consent to accept the satisfaction. Until the satisfaction is given the accord remains executory and cannot bar the claim. The distinction between an accord executory and an accord and satisfaction remains as valid and as important as ever. An accord executory neither extinguishes the old cause of action nor affords a new one.

…

The distinction depends on what exactly is agreed to be taken in place of the existing cause of action or claim. An executory promise or series of promises given in consideration of the abandonment of the claim may be accepted in substitution or satisfaction of the existing liability. Or, on the other hand, promises may be given by the party liable that he will satisfy the claim by doing an act, making over a thing or paying an ascertained sum of money and the other party may agree to accept, not the promise, but the act, thing or money in satisfaction of his claim. If the agreement is to accept the promise in satisfaction, the discharge of the liability is immediate; if the performance, then there is no discharge unless and until the promise is performed.”

45.In McDermott v Black, Starke J quoted (at 176) the statement of Lord Atkinson in Morris v Baron & Co [1918] AC 1 at 35:

“There is no doubt that the general principle is that an accord without satisfaction has no legal effect, and that the original cause of action is not discharged as long as the satisfaction agreed upon remains executory... . If, however, it can be shown that what a creditor accepts in satisfaction is merely his debtor’s promise and not the performance of that promise, the original cause of action is discharged from the date when the promise is made.” (Citation omitted.)

46.In Osborn v McDermott [1998] 3 VR 1, Phillips JA (Winneke P and Charles JA agreeing) explained (at 8) the traditional dichotomy:

“Where there is an accord and satisfaction, the agreement for compromise may be enforced, and indeed only that agreement may be enforced, because ex hypothesi the previous cause of action has gone; it has been ‘satisfied’ by the making of the new agreement constituted by abandonment of the earlier cause of action in return for the promise of other benefit. If there be mere accord executory, there is no compromise unless and until what has been agreed upon is performed, with the consequence that only is there no discharge of the existing cause of action pending that performance, but also there is no completed agreement which can be enforced. In that sense, the enforcement of performance under a mere accord executory is a contradiction in terms. The agreement is conditional upon performance so that until performance there is nothing to enforce; and although once performance occurs the agreement becomes unconditional, there will ordinarily then be no performance left to enforce – although the resultant discharge of existing obligations may of course be insisted upon.”

47.Phillips JA qualified this analysis by accepting (at 9) the opinion expressed by Fullagar J in Scott v English that there is another possibility. Fullagar J pointed out (at 453) that it may be necessary:

“to construe the contract to see whether its effect is to discharge the original cause of action absolutely, so that the plaintiff can never thereafter sue on it but can only sue on the new contract, or whether it effects only a conditional discharge, merely suspending the original cause of action, so that, if it is not performed by the defendant according to its tenor, the plaintiff may still maintain that original cause of action.”

48.It follows from Fullagar J’s analysis that there are at least three alternatives: mere accord executory, accord and satisfaction and accord and conditional satisfaction: Osborn v McDermott at 10. What is also evident is that the availability of these alternatives should sound a note of caution about the approach to be adopted to the construction of the Release Agreement by reference to pre-determined categories of accords. As Keane JA has observed in Blue Moon Grill Pty Ltd v Yorkey’s Knob Boating Club Inc [2006] QCA 253 at [20], it is important to focus on what the parties have agreed, rather than with the categorisation of that agreement as an accord and satisfaction, an accord executory or some other kind of accord.

1. Also as regards the correct approach agreement must be construed in accordance with accepted principles of construction: see Scaffidi v Perpetual Trustees Victoria Ltd at [27]. These principles are well established. They require the court to assess the intention of the parties objectively, having regard to the language they have used, the surrounding circumstances known to the parties and the objects the agreement is intended to secure: Taylor v Johnson [1983] HCA 5; 151 CLR 422 at 428 (Mason ACJ, Murphy and Deane JJ); Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; 218 CLR 451 at [22] per curiam; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40]-[41] per curiam; International Air Transport Association v Ansett Australia Holdings Ltd [2008] HCA 3; 234 CLR 151 at [8] (Gleeson CJ).

Equitable principles

50.In McDermott v Black, Dixon J observed (at 186-187) that at law the only case in which a promise not to sue is held to be a bar and in consequence a release or extinguishment of the right of action, is where the promise not to sue is general, that is not to sue at any time (citing Forde v Beech (1848) 11 QB 852 at 871; 116 ER 693 at 700 per Parke B). Dixon J went on to explain that:

“equity did not follow the law in its refusal to give effect to the agreement of the parties. At law an accord and satisfaction was not pleaded in bar of an action upon a specialty but in equity the debt was treated as discharged, and, before the Judicature Act, the creditor was restrained from proceeding at law for its enforcement … . In the same way a parol variation of a contract under seal obtains its effective operation from equitable doctrine … . A release, though not under seal, if given for consideration, was enforced by injunction, and so, too, was an agreement by simple contract not to sue. Accordingly they now constitute good equitable defences to legal demands … . There is no reason to doubt that in the same way equity would give effect to a simple contract not to set up or rely upon specific allegations of fact as part of a common-law cause of action or for that matter as a plea, or part of a plea, answering a cause of action.”

51.As I have noted, Dixon J decided McDermott v Black on the ground that the agreement by the purchasers to withdraw the allegations of misrepresentation, in consideration of an extension of time to complete the contract constituted a release of any cause of action available to the purchaser based on the misrepresentations. However, his Honour would have been prepared to uphold an equitable plea if the legal defence were not enough. Once it was determined that the parties intended that the purchaser should not be at liberty to revive the allegations and rely on them in the proceedings, a court of equity would have no difficulty in restraining an action at law (at 189). See also Scaffidi v Perpetual Trustees at [14]-[21] and cases cited there.

Construction of the Release Agreement

52.It is a basic principle of construction that a contract will be read as a whole and that a court will strain against an interpretation that renders a particular clause nugatory or of no effect: Chapmans Ltd v Australian Stock Exchange Ltd (1996) 67 FCR 402 at 411 (Lockhart and Hill JJ); Sigiriya Capital Pty Ltd v Scanlon [2013] NSWCA 401 at [30] (Leeming AJ, Meagher AJ and Sackville AJA agreeing).

53.In construing the Release therefore, and as I have stated, context is important. The release came into existence following on the instituting of proceedings in the County Court of Victoria for leave to commence a common law proceedings for damages.

54.It is also important to appreciate the issues in contest at the time the release was executed. The plaintiff asserted that on or about 8 January 2004 and throughout the course of his employment in the period from 20 October 1999 to January 2004, he suffered injury to his lower back, injury to discs and soft tissue of the cervical and lumbar spines depression, anxiety and stress and sleeplessness ad pain in right groin and thigh and aggravation of degenerative changes to the lumbar and cervical spines. That was the extent of the litigious controversy when the Release came to be executed.

Discharge of what?

55.The significance to be determined is the effect, if any, of the Release Agreement on the causes of action pleaded by the plaintiff in the current Magistrates Court proceeding.

56.The key provisions of the Release Agreement bearing on this question are those I have reproduced elsewhere in these reasons. They do not release whatever rights the plaintiff may have had against the defendant for bilateral shoulders by the acceptance of the monetary consideration of a claim.

57.In McDermott v Black, the purchaser’s withdrawal of allegations that a vendor of shares had made fraudulent representations in return for an extension of time to complete the purchase of the shares, was construed by the High Court to mean that the purchaser’s cause of action was discharged. Dixon J said this (at 186):

“The untechnical and inexact expression, ‘withdraw allegations,’ no doubt causes some difficulty. But it must be borne in mind that the purpose was to settle or compromise a very definite dispute. ... It would be futile for [the purchaser] to withdraw allegations which he was to be at liberty to revive. The purpose of the withdrawal was not that of social amenity but to complete and close a business transaction. … The withdrawal of the allegations of improper conduct meant, in my opinion, that he would make no claim based upon misrepresentation but would accept the promise of further time instead. … I think that, consistently with principle, the agreement to withdraw in consideration of a grant of time can be regarded as an accord and satisfaction. I am prepared to hold that on this ground the [purchaser’s] cause of action is answered, founded, as it is, on the three misrepresentations withdrawn.”

58.In this case, the exposition of futility by entering into an agreement to compromise a very definite dispute is not set at nought by the compromise not encompassing a different injury for bilateral shoulders. Viewed objectively, the purpose of the release agreement was to resolve “the matters the subject of the claim or action” and to preclude further action “by reason of or arising out of the claim or action”.  The expressed agreement that the plaintiff will disclaim such other action need be addressed in that context. Whilst the release is sufficient in scope to exclude a pre-existing cause of action or matters adjudged to be within the ken and contemplation of the plaintiff as separate injuries known to him, in my view it cannot do more and for the reasons I have expressed the plaintiff should not be regarded as having offended these guiding principles or breached the terms of the release.

Conclusion on accord and satisfaction

59.Did the Release satisfy the plaintiff’s cause of action against the defendant for weekly payments of compensation for claimed left and right shoulder injuries? In my judgment, it did not. The current proceeding does not seek to agitate the previous injury. Indeed I am satisfied that the current proceeding involves different injuries, different claims and different causes of action.

60.Counsel for the plaintiff pointed out that in the administration of the defendant’s claims for injury the defendant’s agent did not accept bilateral shoulders as having anything to do with the claim form for injury relating to his neck until December 2014 when a decision was notified that that the claim for injury by way of bilateral shoulders was treated by the agent as pertaining to the original claim for injury involving the plaintiff’s neck.

61.The plaintiff’s claim in regard to shoulders was made on 29 May 2014 and accepted by letter dated 24 September 2014.

62.It is relevant I think to have regard to the contents of the letter from the defendant’s agent dated 30 September 2014 which was written in regard to claim number 041301004795  with a date of injury noted as 11 February 2005. As so far as is relevant, the letter reads as follows:

“On 29 May 2014 you completed a claim for compensation. Your claim was accepted and weekly payments commenced on 3 January 2009.

The review of your ongoing entitlement to weekly payments was based on the Accident Compensation Act 1985 (the Act) and the available information including:

·Statement of claim dated 19 June 2006, with respect to claim 09040071976

·Release notice with respect to 09040071976

CGU’s decision

CGU Workers Compensation (Vic) Limited (CGU) has determined that from 31 October 2014 you are no longer entitled to weekly payments (with respect to your claimed psychiatric condition) because:

·     You have no entitlement to weekly compensation (with respect to any psychiatric condition) under the Act, pursuant to Section 135A (18)a

Please note that this decision has no effect on your ongoing entitlement to weekly payments with respect your claimed left and right shoulder injuries.

Reasons for this decision

The reasons for our decision are as follows:

·     you submitted a workers injury claim form dated 29 May 2014 for left shoulder, right shoulder depression conditions

·     your claim for compensation (weekly payments and medical and like expenses) was investigated by way of Independent Medical Examinations and subsequently accepted

·     CGU has now received a copy of your statement of claim dated 19 June 2006 with respect your previous claim 09040071976, which stated that the particulars of your injury for that claim included “depression anxiety and stress).

·     The Release notice with respect your previous claim 09040071976, confirmed that a settlement amount of $360,000 was agreed to and represented both pecuniary loss and pain and suffering damages.

·     Pursuant to Section 135 A (18) a of the Act you have no entitlement to weekly compensation (with respect to your claimed depression condition) due to the Common Law settlement for your this condition which included pecuniary loss”

63.I am unable to conclude that the parties were ad idem. Thus, the accord and satisfaction argument in the Amended Defence is not made out.

64.There was a remnant issue about the dates from which payments are sought but in light of my ruling that matters goes away.

65.I will hear the parties as to the further progress of the matter by way of listing.