Friend v Comcare

Friend v Comcare involved a dispute between Ms Friend, a former employee, and Comcare, the Commonwealth's workers' compensation insurer, over the interpretation of the Safety, Rehabilitation and Compensation Act 1988 (Cth). Ms Friend had settled her complaints of discrimination, sex discrimination, and sexual harassment with the Australian Federal Police (AFP) for a lump sum of $1.25 million. Comcare argued that part of this lump sum was a recovery of damages for injuries in respect of which compensation was payable under the Act, seeking to reduce its liability for workers' compensation accordingly. The court had to determine whether any part of the lump sum constituted damages or a recovery of damages under s 48(1)(a) of the Act.

The primary issue was whether the lump sum payment, which settled a variety of claims, constituted damages or a recovery of damages under s 48(1)(a) of the Act. The court examined Comcare's argument that a part of the lump sum was in respect of injuries for which compensation was payable under the Act, thus subject to s 48. The court found that Comcare's assertion was speculative and not supported by the evidence. It held that Comcare could not establish that the lump sum was a recovery of damages without direct proof that it was in respect of injuries for which compensation was payable. The court emphasised that the onus of proof lay with Comcare to show that the lump sum was a recovery of damages, and it could not rely on mere conjecture or speculation.

The court concluded that Comcare's interpretation of ss 48(1)(a) and (7) of the Act was incorrect. It ruled that the mere fact that a lump sum settled various claims did not allow for the inference that part of it related to injuries for which compensation was payable under the Act. The court found that Comcare had not provided sufficient evidence to establish that any part of the lump sum was a recovery of damages. Therefore, the court declared that no part of the $1.25 million lump sum constituted damages or a recovery of damages under s 48 of the Act.

The final orders declared that no part of the $1.25 million lump sum constituted damages or a recovery of damages under s 48 of the Act, dismissed Comcare's cross-claim, and set deadlines for the filing of evidence and submissions regarding the order for costs. The court's decision underscored the need for clear evidence to establish that a payment constitutes a recovery of damages under the Act.