Fuat v OneSteel Ltd

[2010] VCC 584

IN THE COUNTY COURT OF VICTORIA Revised

Not Restricted

AT MELBOURNE

CIVIL DIVISION

Case No. CI-09-03096

REDIF FUAT	Plaintiff
v
ONESTEEL LIMITED	Defendant

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JUDGE:	HIS HONOUR JUDGE BOWMAN
WHERE HELD:	Melbourne
DATE OF HEARING:	12 April 2010
DATE OF JUDGMENT:	10 June 2010
CASE MAY BE CITED AS:	Fuat v OneSteel Ltd
MEDIUM NEUTRAL CITATION:	[2010] VCC 0584

REASONS FOR JUDGMENT

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Catchwords: Accident Compensation Act 1985 – previous settlement between parties – consent dismissal of application for resumption of weekly payments upon basis that the plaintiff had no current work capacity – additional Terms of Settlement – further claim lodged by plaintiff alleging subsequent deterioration – further proceedings issued – defence filed alleging previous full and final settlement – res judicata and issue estoppel – accord and satisfaction – whether contracting out of Act – whether defence can be maintained – factors to be considered.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Ms K. Galpin	Zenith Lawyers
For the Defendant	Mr M. Richards	Herbert Geer
HIS HONOUR:

General background

1          I am asked to give a preliminary ruling in this matter which involves the operation of the Accident Compensation Act 1985 (“the Act”). In essence, the issue in regard to which the ruling is required centres upon the vexed question of whether a settlement previously entered into and a consent dismissal preclude the plaintiff from returning to court and attempting to establish that, as his condition has deteriorated, he is entitled to claim further statutory benefits in the form of weekly payments of compensation.

2          Ms K. Galpin of counsel appeared on behalf of the plaintiff. Mr M. Richards of counsel appeared on behalf of the defendant. No oral evidence was adduced. The Defendant’s Court Book, which contains all relevant documents, was placed in evidence. Otherwise the matter proceeded by way of helpful and detailed submissions.

Factual background

3          The following findings of fact are made solely for the purposes of this preliminary ruling. They are in no way intended to be determinative of any issue relating to what could be described as the merits of the matter.

4          The plaintiff was employed by the defendant as a production line worker. In the course of his employment with the defendant he suffered injury to the low back, and alleges consequential injuries and symptoms. These include injury to the left leg and knee, allegedly resulting from postural problems which are in turn related to the back injury. These injuries form the foundation of a claim made by the plaintiff and of the subsequent proceedings which have been brought by him and which shall now be described.

5 On 19 September 2002, the plaintiff issued proceedings out of the Magistrates’ Court of Victoria, these proceedings being subsequently uplifted to this Court and there being allocated the number “CI-03-04941”. In the Statement of Claim forming the foundation of such proceedings, the plaintiff alleged that, throughout the course of his employment with the defendant, he was required to carry out heavy and strenuous tasks on a regular daily basis. As a result, he suffered injury to the low back and developed pain in both legs and, in particular, problems with his left knee. A severe psychiatric reaction was also alleged. It was also claimed that, as a result, the plaintiff was incapacitated for work for various periods. It was pleaded that his claim in relation to his back injury had been accepted, but that in relation to his left knee rejected. It was claimed that weekly payments of compensation and payment of medical and like expenses were made. On 9 July 2001, the defendant had notified the plaintiff that his weekly payments of compensation would be terminated on the basis that he had not made every reasonable effort to participate in an occupational rehabilitation service or return to work, and had not made every reasonable effort to return to work in suitable employment. It was further alleged in the Statement of Claim that, as a result of his injuries, the plaintiff had no current work capacity “at all” within the meaning of the Act. The concluding paragraph of the Statement of Claim and the Prayer for Relief are as follows:

“10. As a result of the matters aforesaid, the Plaintiff seeks weekly payments of compensation at the appropriate rate for a worker that has no current work capacity and likely to continue indefinitely to have no current work capacity. In addition to weekly payments, the Plaintiff seeks medical and like expenses.

AND THE PLAINTIFF CLAIMS:

A.	Weekly payments at the appropriate rate for a worker who has no current work capacity and is likely to continue indefinitely to have no current work capacity.
B.	Medical and like expenses.
C.	Interest.
D.	Costs.”

6          The Defence filed on behalf of the defendant contained some admissions, together with a number of denials and the non-admission of certain matters. These included the non-admission of the fact that the plaintiff was acting within the scope of his employment, that he suffered injury arising out of or in the course of his employment and that he was incapacitated for work for various periods. There was pleaded a denial of the allegation that the plaintiff had no current work capacity “at all” and that he was entitled to receive weekly payments of compensation. The allegation of termination on the basis of failure to make every reasonable effort to participate in rehabilitation, suitable employment and the like was admitted. The defence concluded as follows:

“11.	Further, or in the alternative, the Defendant says the Plaintiff is not entitled to weekly payments on the grounds:
(a) The Plaintiff has been paid weekly payments for a period exceeding 104 weeks;
(b) The Plaintiff has a current work capacity;
(c) If the Plaintiff has no current work capacity (which is denied), he is unlikely to continue indefinitely to have no current work capacity.”

7          The matter came on for hearing before His Honour Judge Coish on 9 June 2004. Both sides were represented by counsel. The matter was settled. Before turning to the Terms of Settlement, I shall deal with the orders which were formally obtained. These were as follows:

“1. Leave to amend Statement of Claim by deletion (of)

paragraph B of the prayer for relief.

2.     Defendant to pay the Plaintiff’s costs on Scale D including reserved costs on 25/11/03.

Certify for 2 counsel on 25/11/03.

Senior counsel’s fee at $4,950.

Junior counsel on scale.

3.      Proceeding otherwise dismissed.”

8          Counsel signed Terms of Settlement, which are undated, but presumably were executed on the same day as the formal orders were obtained. In the circumstances of the case, and to assist an understanding of the arguments, I shall set out the Terms of Settlement in full:

“A. Orders having been made this day it is agreed that in full

settlement of all matters at issue between the parties:-

1.    The Defendant will pay (on a without prejudice basis and with a denial of liability) and the Plaintiff will accept Weekly payments of compensation at the rate of 75%

from the date of termination to this date, subject to ─

(a)	Income tax;
(b)	Deduction by the Defendant (of) Centrelink prepayments if any;
(c)	Production of Valid medical certificates.

2.    The Defendant will pay the Plaintiff’s costs as ordered and the Defendant will waive any entitlement to costs arising out of orders made in the Magistrates’ Court on 20 February 2003.

3. It is agreed that the orders made this day are without prejudice to any rights or claims to compensation the Plaintiff may have under sections 98C or 98E of the Act in respect of the injury to his back.

4. It is agreed the Plaintiff’s entitlement to medical and like expenses under section 99 of the Act will continue in accordance with law.

B.

The Plaintiff having tendered his resignation this day and the Defendant having accepted that resignation it is agreed that

1.	The Defendant will pay the Plaintiff an eligible termination payment of $75,000 less the tax payable on that sum.
2.	The Plaintiff will execute a release to be prepared by the solicitors for the Defendant in respect of any other entitlements he may have arising out of his employment with the Defendant.
3.	The Plaintiff will be paid his accrued statutory entitlements to long service and annual leave.
4.	This settlement is without prejudice to any rights the Plaintiff may have to superannuation benefits arising out of his employment with the Defendant.”

9          The plaintiff also executed a Deed of Release which is undated. It is quite a lengthy document, and I shall not set it out in full. The history and basis of the County Court proceeding and brief general background are set out in paragraphs A-D of the prelude to the actual agreement. Paragraph E refers to the cessation of the employment relationship. Paragraph F, which did receive some attention in argument, is as follows:

“F. For the sole purposes of avoiding litigation and costs, the Releasor and the Releasee have agreed to a settlement of the proceedings, the WorkCover claims and (save for his entitlement to seek compensation under Section 98C in respect of the alleged injury to his low back and medical and like expenses pursuant to Section 99 of the Act) any and all rights and entitlements under the Act (including but not limited to weekly payments and compensation pursuant to Sections 98, 98(5), 98A, 98C and 98E) or to damages at common law and any other claims, suits or actions which the Releasor may have had or may have in the future against the Releasee in relation to the Releasor’s employment with the Releasee, its termination or any other matter whatsoever, including but not limited to any claims under the Workplace Relations Act 1986 (C’th), the Disability Discrimination Act 1982 (C’th), the Sex Discrimination Act 1984 (C’th), the Racial Discrimination Act 1975 (C’th), the Human Rights and Equal Opportunity Commission Act 1986 (C’th) and the Equal Opportunity Act 1995 (Vic).”

10        Following the paragraph which has just been set out, there is a further paragraph in the prelude dealing with social security benefits, and there is a heading leading into the matters upon which the parties have agreed. Following that heading, paragraph 1 commences as follows:

“The Releasee promises to pay to the Releasor and the Releasor accepts the promise of the Releasee to pay the following amounts (“the settlement monies”), in full and final settlement of the proceedings …”.

There is then set out again the contents of paragraph F save that, after the words “Equal Opportunity Act 1995 (Vic)”, there is added (“the settlement”), and then:

“(a)	Arrears of weekly payment of compensation (less tax) at the rate of 75% of his PIAWE from 14 August 2001 to 9 June 2004;
(b)	An eligible termination payment of $75,000 (less tax).”

It should be said that “PIAWE” presumably stands for “Pre Injury Average
Weekly Earnings”.

11        Paragraph 2 of the agreement relates to the plaintiff’s resignation of his employment. Paragraph 3, which also received some attention, commences as follows:

“Upon receipt by the Releasor of the settlement monies the Releasor agrees to release and forever discharge the Releasee from all actions, suits, demands, claims, causes of action, liability, damages and costs whatsoever (whether at common law, in equity or under any statute) past, present and future and howsoever arising, for or in respect of the proceedings, the WorkCover claims and (save for his entitlement to seek compensation under Section 98C in respect of the alleged injury to his low back and medical and like expenses pursuant to Section 99 of the Act) any and all past or future rights and entitlements under the Act (including but not limited to weekly payments and compensation pursuant to Sections 98, 98(5), 98A, 98C and 98E) or to damages at common law… (the same Acts as set out in paragraph F are then listed) which the Releasor now has or at any time hereinafter may have or which but for the execution of this Deed could or might have had against the Releasee by reason or arising out of his employment, its termination, the proceedings and the WorkCover claims, or for or in respect of any matter or thing in any way relating thereto.”

12        Paragraph 4 reads:

“The Releasor agrees he will not be any time hereafter (sic) bring or institute any proceedings in law or in equity or under any statute against the Releasee or any person liable to be made a Defendant in respect of the matters aforesaid.”

13        Paragraphs 5 and 6 deal with recovery legislation, whilst paragraph 7 concerns confidentiality. Paragraph 8 in essence deals with breaches and the like by the plaintiff as Releasor of the various covenants, promises, agreements or undertakings contained in the Deed of Release. Should that occur, the plaintiff is said to have irrevocably acknowledged and agreed that all settlement monies paid to him by the Defendant as Releasee shall immediately become due and payable to the Defendant. He also irrevocably agrees and undertakes to consent to judgment being entered against him and in favour of the defendant if proceedings are issued to recover the settlement monies. Paragraph 9 refers to the plaintiff understanding the settlement and the Deed of Release and acknowledging that there has been no duress or the like in relation to its execution. Paragraph 10 relates to the severance of any provisions of the Agreement which are determined by any court to be invalid or unenforceable. Paragraph 11 referring to assignees, transferees and the like.

14        Paragraph 12 reads as follow:

“This Agreement may be pleaded or tendered by the Releasee as an absolute bar to any legal proceedings pursuant to the Release contained in this Agreement and any claims or causes of action brought or made in breach of the terms of this Agreement.”

15        The remaining paragraph provides that the Agreement is governed by the laws of the State of Victoria.

16 On 4 December 2008 the plaintiff issued proceedings out of the Magistrates’ Court of Victoria. That matter has also been transferred to this Court and now bears the number “CI-09-03096”. This is the matter now before me. The relevant allegations in the Statement of Claim assert injuries arising in the course of the plaintiff’s employment with the defendant, these occurring by way of gradual process within the meaning of s.82(6) of the Act, being due to the nature of the employment, and/or occurring throughout the course of the employment and more particularly in or about 1998. A number of injuries are particularised, and these include:

“lower back with radiculopathy to both legs;
left leg and left knee;
psychiatric, depression, anxiety;
sleep disturbance;
sexual dysfunction;
blood pressure increase;
upper gastric condition as a result of taking medication.”

17        The injuries are said to have arisen out of or in the course of the plaintiff’s employment, which employment was allegedly a significant contributing factor to them. It is also alleged that the plaintiff has been and remains incapacitated, and that such incapacity results from or was materially contributed to by the injuries.

18        It is also alleged that the plaintiff lodged a claim form in September 1998, that the claim was accepted by way of notice dated 16 September 1998, and that weekly payments were terminated in July 2001. I shall now set out the following relevant paragraphs in full:

“12. On or about 9 July 2001 the insurer advised the Plaintiff of its decision to terminate his weekly payments on the basis that he had a work capacity.

13. The Plaintiff compromised his entitlement to weekly payments
on or about the 9th of June 2004.

14. The Plaintiff’s condition subsequently deteriorated and on or about October 2007 he made a new claim in the form prescribed by the Act on the First Defendant (being OneSteel Limited, the Second Defendant being the Victorian WorkCover Authority, the possible inclusion of which in the litigation not being of relevance. Hereinafter reference to ‘the defendant’ should be taken as being a reference to OneSteel Limited).

PARTICULARS

The Plaintiff claimed weekly payments of compensation and compensation for medical and like expenses pursuant to section 99 of the Act.

15. By notice dated 17 December 2007 the insurer advised the
Plaintiff of its decision to reject the claim (“the decision”).

16. The Plaintiff was aggrieved by the decision and referred the dispute to the Accident Compensation Conciliation Service. On or about the 19th of June 2008 the Accident Compensation Conciliation Service provided a certificate pursuant to the provisions of the Act, that there was a genuine dispute in respect of their decision.

AND THE PLAINTIFF CLAIMS:

A. Weekly payments of compensation for incapacity, at the appropriate rate, from June 2004 to date and to continue in accordance with the law.

B. Medical and like expenses.
C. Interest.
D. Costs.”

19 The defendant has filed a defence of considerable length. It has denied the injuries as alleged or the resultant incapacity. It has admitted the submission of the original claim in 1998, the acceptance of this and the subsequent termination of weekly payments. Specifically it has admitted the allegations contained in paragraph 12 of the Statement of Claim which were that on or about 9 July 2001 the insurer advised the plaintiff of its decision to terminate his weekly payments on the basis that he had a work capacity. This is an interesting and somewhat surprising admission. Whilst it has no bearing upon the manner in which this case was otherwise presented, I shall return to it subsequently. Paragraph 13 admits that the plaintiff compromised his entitlement to weekly payments as alleged, whilst referring to the alleged full terms of such compromise. The defendant has admitted that the plaintiff has lodged a new claim, whilst, for example, denying deterioration. It has also admitted rejection of the claim and subsequent conciliation. The defence then goes on to allege other matters. These include that the Statement of Claim does not disclose a cause of action; that in respect of the alleged deterioration the plaintiff has not suffered an injury for the purposes of the Act and has not been incapacitated; and that in February 2004 a Medical Panel determined that the plaintiff had a current work capacity, had not suffered an intrinsic injury to either leg, did not suffer from a medical condition of the left knee and did not suffer from a chronic adjustment disorder. In this regard, it is also alleged that, pursuant to s.68(4) of the Act, the opinion of the Medical Panel must be accepted as final and conclusive.

20 Paragraphs 19 and following are directed more precisely to the bulk of the substance of the present dispute. Paragraph 19 contains a denial of entitlement to compensation on the basis that the plaintiff had fully and finally settled his entitlements to compensation pursuant to the Act in respect of the injuries referred to in his Statement of Claim by reason of his agreement that the relevant proceedings be dismissed in consideration of payment of compensation and the eligible termination payment, these being referred to in the Deed of Release and Terms of Settlement. It is further alleged that, pursuant to the principles of res judicata and issue estoppel, the plaintiff’s claim to any entitlement has been determined.

21        Paragraph 20 refers to the agreement made on 9 June 2004 and to the orders made by His Honour Judge Coish as set out above. Paragraph 20(d) refers to the Deed of Release, the minutes of proposed consent orders and the Terms of Settlement. It further refers to the fact that the settlement agreement, insofar as it was oral, was constituted by discussions between counsel and, insofar as it was implied, it was to be implied from the acceptance by the plaintiff of the orders made.

22        Paragraph 21 refers to the payment of compensation, the termination benefit and the plaintiff’s costs. Paragraph 22 asserts that, by reason of the matters referred to in paragraphs 18-20, the plaintiff has released the defendant from any liability to pay compensation in respect of the injuries and is accordingly unable to maintain the proceeding. Paragraph 23 asserts that the defendant has a good defence of accord and satisfaction and that the proceedings should therefore be dismissed. Paragraph 24 contains much of the same factual basis as that asserted in the preceding paragraphs, but puts the alternative defence that the plaintiff is not entitled to compensation by reason of the principles of res judicata and issue estoppel, bearing in mind the dismissal of the earlier proceedings. Paragraphs 25-27 again refer to the settlement of the dispute between the parties, the Release and the defence of accord and satisfaction in respect of the injuries. It is again alleged that the proceedings should be dismissed. Paragraph 28 deals with the additional injuries alleged, such as sleep disturbance and the like, and in essence asserts that, as the plaintiff had not relied upon these injuries in the previous proceedings, he cannot now rely upon them in this proceeding.

23        I have set out summaries and excerpts from relevant documents in some detail so as to assist the understanding of the context in which the present dispute has arisen.

The competing submissions

24        I shall not set out the submissions of counsel in full. Suffice to say that the submissions of Ms Galpin, on behalf of the plaintiff, could be summarised as follows.

25        An additional fact, not disputed, is that, at some time after suffering the initial injury in early 1998 and September 1998, the plaintiff performed some light duties whilst employed by the defendant. In relation to the settlement, it is agreed that the plaintiff, in addition to the $75,000 paid in respect of termination of employment benefits, was paid, as part of the settlement, weekly payments over and above those to which he could possibly have been entitled. An opinion of a Medical Panel of 5 February 2004 found that duties described in a return to work plan of 8 May 2001 constituted suitable employment for him. Further, the issue of determination of payments after 104 weeks must be borne in mind. As part of the settlement, the plaintiff received weekly payments of compensation for a period which far exceeded 104 weeks and in circumstances where a Medical Panel had determined that he had a capacity for suitable employment. Thus, as at the date of the settlement, the plaintiff had no entitlement at law to weekly payments. The defendant, in agreeing to pay the weekly payments which it did, must have been aware of that. Therefore, it must have been paying the additional amount in order to resolve other matters in dispute, such as the incapacity arising from the injury to the left leg.

26 The payment could not be in respect of some form of redemption of weekly payments. It is not permissible to contract out of the Act. At the relevant time, reprint 11 of the Act was applicable and should be considered. Section 115 set out the manner in which an application could be made for a settlement of entitlement. It is not suggested that an application pursuant to s.115 was made. Therefore the position remains that what occurred was an attempt to contract out of the Act.

27 In relation to the Terms of Settlement, these are clearly in two parts. Part A relates to the payment of statutory benefits. Part B concerns the plaintiff’s resignation of his employment with the defendant and the amounts that may be paid in that regard. Hence, the sum of $75,000 is related to the plaintiff’s resignation and has no relevance to statutory benefits. Insofar as the Deed of Release purports to extend to the settlement of any claim for statutory benefits, it is also an attempt to contract out of the Act and is invalid.

28        Issue estoppel has not occurred. The weekly payments now being sought by the plaintiff commenced from a date later than that upon which the dismissal occurred, so that it is a claim for a period different from that for which the plaintiff previously claimed. All that has been determined by the previous litigation is the state of affairs as at the date of the consent dismissal of his claim. Reference is made to the decision of the Supreme Court in the matter of AMP Workers Compensation Services Ltd v Chalkley [1998] VSC 29. The plaintiff is not estopped. He is entitled to have the opportunity of attempting to establish that there has been a change in the prevailing circumstances, in order to prove that he is now entitled to a resumption of weekly payments of compensation.

Submissions on behalf of the defendant

29        The submissions of Mr Richards on behalf of the defendant could be summarised as follows.

30        The defendant relies upon the dismissal of the previous action, particularly when combined with what is contained in the Terms of Settlement and the Deed of Release. The defendant relies upon the doctrine of accord and satisfaction.

31 It is apparent from the manner in which the original Statement of Claim was drawn that the plaintiff was relying upon injuries sustained throughout the course of his employment with the defendant. He made separate claims in relation to his back injury and injury to his left knee. The back injury, which was the subject of the claim form, occurred on 16 September 1998 – in other words, during the “black hole” period. The left knee injury was the subject of a claim form in 2001, and liability was never accepted for it. Payments of compensation were commenced in respect of the back injury, and those payments were terminated pursuant to a notice dated 9 July 2001. Essentially what was relied upon in that notice was that the plaintiff had not made every reasonable effort to participate in an occupational rehabilitation service or a return to work plan, and had not made every reasonable effort to return to work in suitable employment. In other words, payments were terminated as a result of reliance upon s.93CB(4) of reprint 11 of the Act, that being the reprint applicable at the relevant time.

32        In February 2004 questions were referred to a Medical Panel. It is clear from the answer to question 3 of the Certificate of Opinion that as at 5 February 2004 the Panel came to the conclusion that the plaintiff was fit for suitable employment and thus had a current work capacity. That was the situation prevailing when the matter came on for hearing in June 2004. On the basis of the finding of the Medical Panel, the plaintiff had no prospect of establishing that he had an entitlement to compensation, at least for any period beyond the first 104 weeks of payment. The plaintiff had alleged in his Statement of Claim that he had no current work capacity, and was likely to continue indefinitely to have no current work capacity, and it was this claim which was dismissed.

33        Accordingly, what was paid to the plaintiff pursuant to the Terms of Settlement – namely weekly payments of compensation at the rate of 75 per cent from the date of termination (14 August 2001) to the date of the dismissal (9 June 2004) – was an amount which the plaintiff could not possibly have obtained from the court. That is so even leaving to one side the further amount paid to him associated with the termination of his employment and other possible actions or benefits. It is quite apparent that a further amount over and above what the plaintiff could have obtained by way of weekly payments was paid to him in consideration of something, and that something was the finality of his claim.

34 Reference is made to paragraph F in the prelude to the agreement in the Deed of Release. The settlement therein described is one of all WorkCover claims save for certain exceptions, and all rights and entitlements under the Act, again subject to certain exceptions. Settlement is also in relation to damages at common law and any other claims, suits or actions which the plaintiff may have had or may have in the future against the defendant in relation to the employment. In this regard, it is pointed out that the Deed of Release embraces a settlement of common law proceedings. Pursuant to s.134AB(36) of reprint 11 of the Act, if pecuniary loss damages are awarded in common law proceedings, there is no ongoing liability to make weekly payments.

35        Reference is also made to the decision of the Supreme Court in Derks v R J Fibreglass Pty Ltd [2009] VSC 601.

Reply on behalf of the plaintiff

36 Ms Galpin’s reply on behalf of the plaintiff could be summarised as follows. Given that the principal incident of injury to the plaintiff’s back occurred in 1998 during the “black hole” period and for which a remedy at common law is not available, it is unrealistic to allege that the Deed of Release was in fact a common law settlement which removes the plaintiff’s right to seek further weekly payments of compensation. For many years it has been determined that parties cannot contract out of the Act – see Perkins v GIO Workers Compensation (Victoria) Ltd (delivered 12 December 1995). That decision also dealt with issue estoppel and res judicata.

Ruling

37

I am of the opinion that the dismissal of the plaintiff’s earlier claim on 9 June 2004 and the execution of Terms of Settlement on his behalf on that day and of the Deed of Release neither separately nor cumulatively preventing him from bringing his present claim. I am not of the view that the special defences raised by the defendant operate so as to prevent him from so doing. I can understand chagrin on the part of the defendant which, pursuant to the Terms of Settlement and the Deed of Release, would appear to have paid to the plaintiff more than he could conceivably have hoped to obtain had he litigated the original action. It may well be that, in so doing, it believed that it was obtaining finality in relation to all aspects of certain parts of the plaintiff’s claim, and particularly in relation to weekly payments of compensation. In that regard, it may well have been that it was intending to be finished with the plaintiff “once and for all” (save for very limited exceptions), and believed that it had achieved this. However, as was stated by His Honour Judge Higgins in Perkins:

“It is the Court’s function to determine objectively the agreement reached between the parties. The subjective reasoning of each member of Counsel as to the ultimate legal consequences of the settlement so reached is not strictly relevant to my task.”

38        In the present case, whether one side believed that it was leaving important options open (as indicated by Ms Galpin), whereas the other believed that those important matters were being finalised, is not really to the point. The beliefs of the respective parties are not of overwhelming significance in this particular context even if it were being positively argued (which it is not) that the parties were not ad idem. I might say that, if they were not ad idem, my ultimate finding that the plaintiff is not precluded from bringing this action would be reinforced. There is no evidence that the parties were ad idem, although there was an indication from the Bar table that they were not.

39        I can also appreciate that the conclusion to which I have come may create some difficulties in relation to the disposal of cases of this nature. I am well aware of the desirability of cases being resolved and fully contested litigation being decreased as a result. However, expediency cannot prevail over the wording and apparent intent of legislation.

40        I am also aware of the fact that, for the benefit of litigants and the courts, there should be an end to litigation. I am conscious of the observations made, for example, by Murphy J in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 at 605 as follows:

“These notions of res judicata and issue estoppel are founded on the necessity, if there is to be an orderly administration of justice, of avoiding a re-agitation of issues, and preventing the raising of issues which could have been and should have been decided in earlier litigation.”

41        That finality in litigation is desirable is a well-accepted concept. However, this concept must also be viewed in the context of the individual case and the particular legislation which is applicable.

42 The defence of accord and satisfied necessarily embraces arguments concerning the ability of parties to contract out of the Act. There is very substantial overlapping. As a result, in the reasons and matters of significance which follow, there shall be some intermingling of the two related concepts.

43        In arriving at the conclusion which I have reached, namely that the plaintiff is not precluded from issuing further proceedings, the following matters seem to me to be of significance. They are not listed in order of importance.

(a)  The original proceedings were fought on the basis of the contesting of a notice of termination of payments, that being dated 9 July 2001. That notice was in turn based upon s.114(2)(b) of the Act, which basically asserts that the worker in question is no longer entitled to weekly payments of compensation. As previously stated, the grounds set out in the notice of termination take one back to s.93CB(4). At the relevant time, that stated as follows:

“Where a worker does not make reasonable efforts to return to work and in particular does not comply with the requirements of sub-section (3) that are applicable in his or her case, the worker’s entitlement to further weekly payments in respect of the injury shall thereupon cease and determine.”

Sub-section (3) refers to such things as the failure to make every reasonable effort to participate in an occupational or rehabilitation service or a return to work plan or to make every reasonable effort to return to work in suitable employment. It was upon these particular grounds that the notice of termination was based. I would point out that the word “reasonable” precedes the word “effort”. Further, the provisions refer to occupational rehabilitation, a return to work plan, and suitable employment. Hence, a capacity for some sort of employment, whether before or after retraining, seems to lie at the heart of these provisions. If there is no capacity for suitable employment, whether with or without rehabilitation and the like, and there is not likely to be any such capacity indefinitely, logically payments should continue. In addition, in the original Statement of Claim of 2002, the plaintiff specifically asserted in paragraphs 9 and 10, as well in the Prayer for Relief, that the plaintiff had no current work capacity and was likely to continue indefinitely to have no current work capacity. The defendant specifically denied this in its defence. Indeed, the relevant portion of the opinion of the Medical Panel of 5 February 2004 is directed towards the issue of suitable employment, and the defendant relied upon this, amongst other matters, in its defence to the present litigation. Further, the issue of payments continuing beyond the 104 week period (on the basis of the existence of a current work capacity) was pleaded in the original defence. Thus, the question of whether or not the plaintiff had no current work capacity and this situation was likely to continue indefinitely was central to the litigation commenced in 2002 and settled in 2004. Further, as earlier stated, in the current defence, the fact that payments were terminated on the basis of a work capacity is admitted.

Accordingly, the consent dismissal of the earlier proceeding on 9 June 2004 impacted upon various issues, but a key one was the question of the plaintiff’s work capacity. Termination of weekly payments on such a basis seems to me to involve a state of affairs that is not necessarily permanent. I would refer to the following extract from the judgment of McDonald J in Chalkley:

“35. In McDonald v Director-General of Social Security [1984] F.C.R. 345 the Full Court of the Federal Court considered the meaning of “permanently incapacitated” as contained in s.24 of the Social Security Act 1947 (C’th) which provided –

“A person above the age of 16 years who…is permanently incapacitated for work…shall be qualified to receive an invalid pension”.

36.       Woodward J at p.361 said –

“The vital contrast between temporary and permanent incapacity must be based upon an assessment of future prospects at the time the decision is made. It is not inconsistent with the notion of permanent incapacity that the pensioner’s position should be reviewed from time to time. Unexpected improvement in the person’s condition, advances in medical science, the achievement of fresh skills, or even changes in the labour market, could bring to an end an incapacity which had been thought to be permanent.

In my view the true test of a permanent, as distinct from a temporary, incapacity is whether in light of the available evidence, it is more likely than not that the incapacity will persist in the foreseeable future.”

37. In my view, the test enunciated by his Honour has application to the meaning of the phrase “totally and permanently incapacitated” under the Act. The finding on 30 November 1994 that Chalkley was “totally and permanently incapacitated” under the Act was not more than a finding at time (sic) that he was totally incapacitated and that it was more likely than not that the total incapacity would persist in the foreseeable future. A finding that a person is totally and permanently incapacitated at a particular time does not mean that that person will in fact be totally incapacitated in the future. A number of factors subsequent to such a finding such as on (sic) “unexpected improvement in the person’s condition, advances in medical science, the achievement of fresh skills, or even the improvement in the labour market” or the opportunity to learn fresh skills from participating in an approved “occupational rehabilitation service” may bring an end to the incapacity or reduce it. The issue of a worker’s incapacity and whether it is total at a particular time or whether it is total and permanent at a particular time may well vary as a fact from time to time. The finding by the magistrate on 30 November 1994 that Chalkley was totally and permanently incapacitated did not give rise to an estoppel preventing the appellant from raising in subsequent proceedings between it and Chalkley the issue, that at a time subsequent to the finding of the court, that Chalkley was then not totally incapacitated or not totally and permanently incapacitated. The finding that as at 30 November 1994 that Chalkley was totally and permanently incapacitated was no more than a finding that it was more likely than not that such incapacity would persist in the future but it was not determinative of whether such incapacity did in fact persist in the future.”

Applying such an approach to the present case, the dismissal of the claim on 9 June 2004 amounted to no more than a finding that, as at that date, the plaintiff was not entitled to weekly payments at the appropriate rate for a worker who had no current work capacity, and was likely to continue indefinitely to have no current work capacity. In accordance with the decision in Chalkley, it is not a finding that the plaintiff was any more than “likely” to continue indefinitely to have no current work capacity. Having regard to the wording of the relevant provisions, the court could not make a finding, whether by consent or otherwise, that the plaintiff would always have a disability insufficient to meet the statutory requirements in relation to lack of capacity. In other words, the very wording of the legislation in relation to capacity is based upon the state of affairs existing at the time of determination and, at best, a certain amount of “crystal ball gazing” as to what may subsequently occur. The wording of the Act does not preclude a revisiting of the situation if there is a deterioration in the situation in relation to the worker’s capacity for suitable employment. In other words, the Act effectively contemplates a temporary position which is the “other side of the coin” from that contemplated in cases such as McDonald and Chalkley. Just as there may be such things as “unexpected improvement in a person’s condition” there may also be a deterioration not anticipated at the time of the original determination.

(b) I would also agree with and adopt His Honour Judge Higgins’ reasoning in Perkins in relation to res judicata and issue estoppel. As was said at p27 of this very careful judgment:

“A worker’s health is not a static condition. It may vary from time to time and so will the entitlement to payments. But the cause of action created by S.82, is maintained.

There will, of course, be situations where a decision by a Magistrate will create both an issue estoppel and a res judicata. A decision that the worker did not sustain injury in respect to which the worker’s employment was a significant contributing factor will be final. The judgment dismissing the claim will create a res judicata. But whereas as here the Magistrate’s orders have the effect of dismissing the plaintiff’s claim for weekly payments based upon an allegation of total incapacity, they could not prevent a claim from being made in respect of a discrete period of time at a later date, a claim for payments based upon total incapacity.”

(c)	The decision in Derks is of assistance in relation to issue estoppel and res judicata. In that decision Beech J mentioned the additional difficulties that are encountered when a consent judgment has been entered for a defendant. His Honour also described the pleadings in the earlier proceeding as being of critical importance. The earlier pleadings are of particular relevance in establishing what were the live issues in that previous proceeding. In the present case the original pleadings reveal a multitude of issues, even if some of these may not have been the subject of discussion prior to the consent dismissal being obtained. For example, the occurrence of injury in the course of employment is not admitted in the defence. Resultant incapacity for work is not admitted. Difficulties in relation to complying with a return to work plan are not admitted. That the plaintiff has no current work capacity is denied. The defendant asserts that the plaintiff had been paid weekly payments for a period exceeding 104 weeks; had a current work capacity; and that the plaintiff was unlikely to continue indefinitely to have no current work capacity. The consent dismissal does not specify any particular ground upon which the plaintiff failed, or nominate any particular section of the Act pursuant to which the proceeding has been dismissed. In those circumstances the decision in Derks would tend to support the proposition that the principles of issue estoppel or res judicata do not apply so as to support the defendant’s contentions.
(d)	Accordingly, it seems to me that the principles of res judicata and issue estoppel do not operate so as to prevent the plaintiff from pursuing further litigation in an attempt to establish a change of circumstances and a revived entitlement to weekly payments. Those principles would prevent him from challenging the proposition that he did not have an entitlement as at 9 June 2004 when his claim for the resumption of weekly payments was dismissed. Those principles, and particularly that of issue estoppel, might well prevent him from asserting that, as at 9 June 2004, he was likely to continue indefinitely to have no current work capacity. However, and bearing in mind what has been set out above, they do not prevent him from attempting to establish that, as at some later date, circumstances have changed, he no longer has a current work capacity and that this state of affairs is likely to continue indefinitely.
(e)	Having determined that the plaintiff is not prevented from bringing his action by reason of the principles of res judicata and issue estoppel, I turn now to the related issues of accord and satisfaction and the agreement between the plaintiff and the defendant as embodied in the Terms of Settlement and Deed of Release, and the effect of such agreement. A similar situation was considered by His Honour Judge Higgins in Perkins. As in that case, I am quite satisfied that an agreement was reached, and that such agreement was one whereby the defendant paid a greater amount than the plaintiff may well have obtained in consideration of his relinquishing any entitlement to future weekly payments. As in Perkins the issue for determination is whether such an agreement is valid and enforceable, bearing in mind the provisions of the Act. Again as with Perkins, at the time that this agreement was entered into, a scheme for redemption or settlements of weekly payments was contained in s.115 of the Act. In this regard, His Honour Judge Higgins stated in Perkins as follows:

“Although there is no specific provision in the Act which states that a redemption is prohibited unless it complies with S.115, the inescapable inference is that the legislature intended such a result. In my opinion the degree of particularity with which the legislature has addressed its mind to the subject matter of redemptions or settlements as set out in section 115, can only mean that it is intended to prohibit any agreements that fail to meet the criteria. See the discussion of the application of the rule “expressio unius est exclusio alterius” in Pearce 2nd Edition Statutory Interpretation in Australia at pps.44- 45.”

I respectfully agree with the above observations. Further, at the time that the agreement was reached in the present case, s.115 had been present in the Act for a considerable period. His Honour Judge Higgins came to the conclusion that such section was not an anachronism. His Honour’s ultimate conclusion was as follows:

“I therefore conclude that the plaintiff and defendant entered into an agreement whereby the plaintiff would accept a sum of money so as to extinguish her future rights to weekly payments of compensation and that such an agreement does not comply with S.115 and therefore is proscribed by the Accident Compensation Act 1985.”

I agree, and have come to the same conclusion.

(f)	The defence of accord and satisfaction was raised in the case of Warren v Jennifer A. Yates Pty Ltd [2006] VCC 1780. It failed in that case. His Honour Judge Dyett was of the view that there was no evidence that the parties were consensus ad idem in relation to a release from all liability to pay compensation. His Honour found that the consent orders (dismissing the claim with no order as to costs) would constitute a defence of accord and satisfaction to a claim for weekly payments up until the date of the order. The situation is somewhat similar in the present case, although, of course, it involves the execution of terms of settlement and the Deed of Release, but I would respectfully agree with the approach adopted by His Honour. The defence of accord and satisfaction may operate up until the date of the consent orders, but not thereafter. The defence of accord and satisfaction is interwoven with the argument as to whether or not it is permissible to contract out of the Act. I have found that it is not.
(g)	I am not persuaded by any argument that, because the Deed of Release contains, inter alia, a reference to a settlement of common law proceedings, s.134AB(36) of reprint 11 of the Act has the effect that there is no ongoing liability to make weekly payments. Firstly, the plaintiff has not issued any common law proceeding against the defendant. As we know only too well, s.134AB, which is in the nature of a code, contains an elaborate procedure in relation to the bringing of such a proceeding. There is no suggestion that such procedure has been followed in the present at case, or that either the defendant or the court granted to the plaintiff leave to bring such a proceeding. Secondly, even if such a proceeding was on foot, it would be difficult indeed to identify whether any part of the money paid pursuant to the Deed of Release was in the nature of pecuniary loss damages. The Deed of Release specifically states that the amounts paid by the defendant to the plaintiff are, firstly, arrears of weekly payments of compensation and, secondly, an eligible termination payment. Arguments based upon potential payment of pecuniary loss damages seem to me to be without merit.
(h)	Paragraph 18(h) of the defence states as follows:

“By reason of section 68(4) of the Accident Compensation Act 1985, the Medical Panel’s opinion must be accepted as final and conclusive by any court, body or person.”

The Medical Panel opinion to which reference is made was that of 5 February 2004 when such Panel determined that the plaintiff had a current work capacity and did not suffer leg or left knee injuries or conditions, or from a chronic adjustment disorder and the like. Certainly the Act prescribes that such an opinion is final and conclusive. However, and particularly in relation to the question of work capacity, that opinion must be seen in context. The relevant question and answer is as follows:

“Question 3. Does the work described in the attached return to work plan, dated 8 May 2001, constitute suitable employment for the Plaintiff?

Answer:  Yes.”

The opinion is dated 5 February 2004. The opinion is final and conclusive on the point that, as at 5 February 2004, the described return to work plan constituted suitable employment for the plaintiff. It does not determine the question as to whether, some six years later, some particular return to work plan, or indeed the return to work plan of 8 May 2001, constitutes suitable employment for the plaintiff. The existence of the opinion does not preclude the plaintiff from bringing this action.

44        In determining this matter, I have confined my reasons to what is revealed by examination of the pleadings and what was presented in argument. The defendant has admitted, in essence, that its decision to terminate the plaintiff’s weekly payments was on the basis that he had a work capacity – see paragraph 12 of the Statement of Claim of 4 December 2008 and paragraph 12 of the defence filed on 20 January 2009. Whilst this would not seem to sit particularly well with the notice that was served, it is the admitted state of affairs pursuant to the pleadings. Of course, in the pleadings in the original matter, the defendant alleged that the plaintiff was not entitled to weekly payments of compensation on the grounds that payments had been paid for a period exceeding 104 weeks and the plaintiff had a current work capacity or was unlikely to continue indefinitely to have no current work capacity. Thus, the question of capacity had been squarely raised from the outset. One of the reasons why I have ruled in favour of the plaintiff is that, as previously discussed, and as discussed in cases such as Chakley and Perkins, an injured person’s health and capacity are not static conditions.

45        In summary, and after consideration of the pleadings, the other documents, and the arguments as advanced in this case, I am of the view that the plaintiff is not precluded from pursuing his present claim. It may be that he will have to establish some change in circumstances which has occurred since the dismissal of his previous claim and the execution of the documents to which I have referred. However, he is not precluded from attempting so to do. I shall hear the parties as to what is to occur in relation to the future conduct of the matter and as to any ancillary orders that are required.

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