Isler v Secretary, Department of Education

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	Isler v Secretary, Department of Education [2022] NSWPIC 377
APPLICANT:	Mustafa Kemal Isler
RESPONDENT:	Secretary, Department of Education
MEMBER:	Catherine McDonald
DATE OF DECISION:	13 July 2022
CATCHWORDS:	WORKERS COMPENSATION - Issue estoppel and Port of Melbourne Authority v Anshun Pty Ltd estoppel; lump sum claim in other proceedings referred to Medical Assessor after section 78 of the Workplace Injury Management and Workers Compensation Act 1998 notice issued without application to rely on section 11A of the Workers Compensation Act 1987 (1987 Act) defence; employer sought to rely on section 11A of the 1987 Act defence in later claim for weekly compensation; Manpower v Harris and Fourmeninapub Pty Ltd v Booth considered; Held – finding that employer is estopped from relying on section 11 A of the 1987 Act defence, award for weekly compensation and section 60 of the 1987 Act expenses.
FINDINGS MADE:	1. The respondent is estopped from relying on its proposed defence under s 11A of the Workers Compensation Act 1987 (the 1987 Act).
DETEMINATIONS MADE:	1. Pursuant to s 37 of the 1987 Act, the respondent to pay weekly compensation to the applicant from 9 May 2022 to date and continuing. 2. I grant liberty to apply in writing if the parties are unable to agree on the amount of weekly compensation payable. 3. The respondent is to pay the applicant’s s 60 expenses.

STATEMENT OF REASONS

BACKGROUND

Mustafa Kemal Isler was employed by the Secretary, Department of Education (the Department) as a teacher. He says that he suffered a psychological injury as a result of bullying, harassment, high pressure, high demands, excessive workload and micromanagement. He ceased work as a result of the injury on 17 November 2020.
Mr Isler has two sets of proceedings before the Personal Injury Commission (the Commission). In the current proceedings he claims weekly compensation. The Department accepts that he suffered a psychological injury but disputes that he is entitled to compensation because of s 11A(1) of the Workers Compensation Act 1987 (the 1987 Act).
Mr Isler commenced earlier proceedings (W78/22) in January 2022, seeking lump sum compensation for permanent impairment. He argues that, as a result of an agreement to refer the lump sum claim to a Medical Assessor, the Department is estopped from disputing that he suffered a compensable injury in these proceedings.

PROCEDURAL HISTORY

The procedural history of both matters is complex. The following documents were in evidence before the Commission and considered in making this determination:
(a) Application to Resolve a Dispute and attached documents (ARD), and
(b) Reply.
I also had access to and read the file in W78/22, with the agreement of the parties. Any consideration of the evidence must be undertaken against the procedural background of both sets of proceedings. The documents in W78/22 are:
(a)    ARD and attached documents;
(b)    Reply, and
(c)    the Department’s Application to Admit Late Documents dated 25 March 2022.
I have also had regard to the Certificates of Determination issued by the Commission.
I will summarise the evidence as necessary for the determination of the estoppel issue.
Mr Isler last worked on 17 November 2020. He was paid compensation. A claim for lump sum compensation was made on 25 October 2021. The Department’s solicitors attempted to arrange a medical examination on receipt of the claim but the insurer did not issue a notice under s 78 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) in response to the letter of claim.
The lump sum proceedings in W78/22 were commenced on 10 January 2022, on the basis that the Department’s insurer had failed to determine the claim in the two month period provided for in s 281(2) of the 1998 Act. Mr Isler relied on an injury pleaded in the following way:
“Whilst in the course of employment, the Claimant was subject to bullying, harassment, high pressure, high demands, excessive workload and ongoing micromanagement by his employer.
As a result, the worker developed psychological symptoms and was diagnosed with Major Depressive Disorder with Anxious Distress and Adjustment Disorder.”
The date of injury relied on was the date of the claim for lump sum compensation, being 25 October 2021.
Dr Young, psychiatrist, examined Mr Isler on 18 January 2022 and reported to the Department’s solicitors on 24 January 2022. He considered that Mr Isler’s condition had not reached maximum medical improvement and he did not assess permanent impairment.
The Commission arranged an examination by a Medical Assessor for 9 June 2022.
A Member of the Commission held a telephone conference in W78/22 on 22 February 2022. The telephone conference outcome reveals that the Department’s solicitor told the Member that proceedings had been commenced prematurely, saying that the time to determine the claim had not expired. He said that he did not have instructions to dispute injury but that the insurer was investigating a defence under s 11A. He noted that the time for the insurer to determine the claim would expire on 18 or 19 March 2022. The matter was listed for conciliation conference and arbitration hearing on 22 March 2022.
A s 78 notice was issued dated 17 March 2022. There is no evidence about when it was sent or received. The notice told Mr Isler that the insurer agreed, based on Dr Young’s report dated 24 January 2022, that he had suffered a psychological injury to which employment was the main contributing factor. It said that Dr Young considered that:
“the whole or predominant cause of the psychological disorder is in relation to your perception of being bullied and harassed by the Principal and that this relates to critical comments regarding you performance and the performance management processes which were implemented and the refusal of transfer and leave requests.”
The notice said that compensation was not payable because the injury was wholly or predominantly caused by reasonable actions that the Department took or proposed to take with respect to performance appraisal, discipline and transfer as described in s 11A(1). Mr Isler was told that his weekly compensation would cease on 9 May 2022.
The notice did not raise any issues about Mr Isler’s capacity for work. In his report, Dr Young said that Mr Isler was unfit for work and required treatment. He considered that Mr Isler may be fit for selected duties in the future.
As I understand the evidence and the submissions, both parties were aware at the conciliation conference on 22 March 2022 that the s 78 notice had issued. At the conciliation conference the Member ordered:
“1. The matter is remitted to the President for referral to a Medical Assessor, on or after 29 March 2022, to assess whole person impairment (psychological) as a result of injury on 25 October 2021 (deemed date), noting that an appointment with Medical Assessor Dr Andrews has been arranged for 9 June 2022 at 1pm.
2. The Registrar is requested to furnish the following documents to the Medical Assessor:
a.Application to Resolve a Dispute.
b.Reply.
c.Any report of Dr Young to be filed by the respondent on or before 29 March 2022.”
These proceedings were commenced on 28 March 2022. Despite the notice that payments would cease on 9 May 2022, the claim in these proceedings is for weekly compensation from 17 March 2022. The pleading of the injury is the same as in W78/22.
These proceedings were listed for telephone conference on 26 April before the same Member who had made orders in W78/22. This matter was set down for hearing on
20 May 2022. Mr Isler’s solicitor said that he sought to argue that the referral to a Medical Assessor in W78/22 created an estoppel which prevented the Department from denying injury.
The date of injury was amended at the telephone conference so that it was “18 November 2020 (deemed date)”.
The Member who had dealt with both matters up to that time recused himself and the hearing on 24 May 2022 did not proceed. Orders were subsequently made consolidating the two proceedings and an appeal was lodged from that order. A further order was made splitting the proceedings again and the appeal was discontinued.
Matter W1921/22 was listed for conciliation conference and arbitration hearing. An order was made in W78/22 that the referral to a Medical Assessor should proceed and I understand that an appointment has been made in September 2022.
The claim for weekly compensation was listed for conciliation conference and arbitration hearing on 14 June 2022 when Mr McEnaney of counsel appeared for Mr Isler and Mr Grant of counsel appeared for the Department.
Mr McEnaney explained that he sought to run the estoppel argument. Mr Grant said that he was instructed to deal with the issues in the weekly compensation claim only. After an adjournment to obtain instructions, Mr Grant said that he was prepared to deal with the estoppel argument.
I am satisfied that the parties to the dispute understand the nature of the application and the legal implications of any assertion made in the information supplied. I used my best endeavours in attempting to bring the parties to the dispute to a settlement acceptable to all of them. I am satisfied that the parties have had sufficient opportunity to explore settlement and that they have been unable to reach an agreed resolution of the dispute.

SUBMISSIONS

Before the weekly compensation claim can be considered, it is necessary to determine if the agreement for referral to a Medical Assessor precludes the Department from relying on the defence in s 11A(1). The submissions made on 14 June were directed to that issue only.
Mr McEnaney said that the authorities were clear that a consent order had the same force as an order of the Commission. He argued that the order made on 22 March 2022 in W78/22 was an order in respect of a medical dispute as defined in s 319 of the 1998 Act. Though the s 78 notice in respect of weekly compensation had been issued five days before, raising the defence in s 11A(1), Mr McEnaney said that the referral constituted a finding as to liability. He said that it was open to the Department to apply to raise the dispute before the Member who dealt with W78/22 but that it did not.
Mr McEnaney said that a number of issues were wrapped up in the agreement entered into after the s 78 notice was issued – that Mr Isler was a worker and that he suffered an injury. He relied on the decision in Manpower Pty Ltd v Harris[1] to argue that the consent orders entered into in respect of the lump sum claim necessarily involved an agreement as to the constituent parts of the claim. Mr McEnaney referred to the passage where Roche DP said[2]:
“The Commission is a statutory tribunal and has only those powers conferred on it by the relevant Workers Compensation Acts (the 1987 Act and the 1998 Act) and the Workers Compensation Commission Rules 2010 (the Rules) (Raniere Nominees Pty Ltd (t/as Horizon Motor Lodge) v Daley [2006] NSWCA 235; 5 DDCR 61). The right to compensation under the 1987 Act only arises if a ‘worker’ has received ‘an injury’ (s 9 of the 1987 Act) arising out of or in the course of his or her employment (s 4 of the 1987 Act) and to which employment was a substantial contributing factor (s 9A of the 1987 Act). The right to weekly compensation only arises if incapacity for work (total or partial) results from the injury (s 33 of the 1987 Act). The Commission has no jurisdiction to order the payment of compensation unless it makes a finding on each of these matters, or the employer expressly or impliedly admits them.
Once it is accepted that the words ‘without admission of liability’ are of no effect (Ashenden), the consent orders ‘necessarily involved’ the admission by Manpower that Mr Harris was a ‘worker’ employed by it, that he received an ‘injury’ in the course of or arising out of his employment, that his employment was a substantial contributing factor to that injury, and that he was incapacitated as a result of that injury. Those admissions follow from the face of the consent orders and the history of the matter. That history includes the fact that Manpower originally disputed the claim and then, after receipt of Dr Khan’s report, consented to the Commission making the orders for the payment of weekly compensation at the maximum statutory rate for a single worker with no dependants, as adjusted, under s 40 of the 1987 Act from 28 July 2008 to date and continuing and for the payment of s 60 expenses up to $500.”
[1] [2011] NSWWCCPD 10
[2] At [93]-[94].
In the alternative, Mr McEnaney relied on Roche DP’s obiter comments in Manpower that the estoppel argument could be upheld on an alternative basis on which Mr Isler did rely[3]:
“It is arguable that the principles in Port of Melbourne Authority v Anshun Pty Ltd[1981] HCA 45; 147 CLR 589 (Anshun) apply. These principles usually arise where a party seeks in subsequent proceedings to raise a defence that could and should have been raised in earlier proceedings between the same parties, but was not. In certain circumstances, the party may be estopped from raising that defence in later proceedings. The majority (Gibbs CJ, Mason and Aickin JJ) said (at 602) that there would be no estoppel unless ‘the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it’.
In Anshun, the appellant, the Port of Melbourne Authority, sought to rely in subsequent proceedings on an indemnity given by the respondent, although it had not raised that indemnity in previous proceedings taken by an injured worker against the Authority and the respondent as defendants. Those proceedings concluded with a judgment against each defendant. The High Court held (at 596) that the later claim by the Authority had to fail because ‘the judgment which the Authority seeks to obtain in the present action is one which would contradict the judgment which has been entered in the [previous] action’.
If Manpower’s arguments in the present claim were to be upheld, it would result in a decision that would contradict the previous consent orders. There is no reason why that should be allowed and there are cogent reasons why it should not be allowed. Manpower had every opportunity to contest liability in the first proceedings It had time to investigate the claim, obtain medical evidence, obtain legal advice, and consider its position. Having initially disputed the claim, it later agreed to the making of the consent orders at a teleconference after it received and considered Dr Khan’s report. The evidence on which it relies in the second proceedings (the evidence from Associate Professor Myers) is the same evidence that was available to it in the first proceedings. The subject matter relied upon as a defence in the second proceedings (that Mr Harris has no objective signs of injury or disability) was so relevant to the subject matter of the first proceedings that it was unreasonable of Manpower not to rely on it in those proceedings.”
[3] At [105]-[107].
Mr McEnaney said that Mr Isler had proceeded appropriately by commencing these proceedings in response to the s 78 notice and that the last paragraph of the quote immediately above is directly applicable – the Department had all of the evidence it relied on before the consent orders were entered into in W78/22 including statements obtained in September 2021 and the report of Dr Young dated January 2022 on which it relied in the s 78 notice to say that the injury was wholly or predominantly caused by the relevant reasonable conduct. Mr Isler’s weekly compensation payments were terminated in accordance with the notice. If the Department’s defence in these proceedings was upheld, the award would contradict the previous consent orders.
Mr McEnaney referred to Zeaiter v NSW Department of Education and Training[4] and the authorities cited in that decision with respect to the extent to which orders by consent can create an estoppel, including Land Enviro Corp Pty Ltd v H T T Huntley Heritage Pty Ltd[5] (Land Enviro Corp). If the Department had run the s 11A defence in W78/22 in March 2022 and lost, Mr McEnaney submitted, the orders made would have been identical.
[4] [2009] NSWWCCPD 103.
[5] [2008] NSWSC 185; 72 NSWLR 160 at [63].
Mr McEnaney said that the issue was one of fairness and that the Department had committed to a particular course of conduct in the earlier proceedings. He said that the practice of the Commission was not to refer a permanent impairment claim to a Medical Assessor when fundamental issues such as whether the claimant was a worker or whether an injury had been suffered had not been determined. He said that those cases where a matter was referred to a Medical Assessor before all questions had been determined related to questions of incapacity or the need for surgery and not the amount of lump sum compensation. He noted the authorities with respect to the “division of labour” between Members of the Commission and Medical Assessors such as Haroun v Rail Corporation New South Wales[6] which confirm that issues of fact and liability are determined by members and a dispute as to the degree of impairment is for a Medical Assessor. Mr McEnaney said that the Department has the chance to have the factual issues determined but elected to forego that determination and consented to a referral. It had not sought a reconsideration. If the Department was permitted to have the dispute determined now, any decision would conflict with the earlier consent order.
[6] [2008] NSWCA 192;7 DDCr 139.
Mr Grant made very brief submissions. He said that there was a concession in the lump sum claim that Mr Isler had an injury at work and was entitled to an assessment of lump sum compensation. He said that all of the issues remained “live” until after the Medical Assessment Certificate (MAC) issued and that the defence was still available, assuming that the Department “can persuade a member to allow it to raise the s 11A defence”. The only concession made before the referral was that Mr Isler had suffered an injury.
In reply Mr McEnaney said that there should be finality to this litigation. He said that it is not only an award of compensation which finalises the matter and the liability dispute was finalised by the consent orders so that there was now only a medical dispute in respect of the permanent impairment claim.

FINDINGS AND REASONS

Though the legislation which was then in force is summarised in the passages from Manpower cited above, it is appropriate to review the structure of the legislation as a backdrop for the arguments made.
The 1987 Act begins by defining injury in s 4. Questions of whether or not an injury was suffered or the nature of the injury are dealt with under s 4. Part 2 deals with “Compensation - Liability”. Section 9 provides that a worker who has received an injury shall receive compensation from their employer in accordance with the Act.
The rest of the provisions in Part 2 fall broadly into two categories – either they deal with circumstances in which a worker who has suffered an injury may not be entitled to compensation or they deal with identifying the person obliged to pay (ss 15 – 22C). Even s 9A, which denies compensation if employment is not a substantial contributing factor to an injury, is premised on a finding that there was an injury arising out of or in the course of employment.
Section 11A falls into the first category and provides that a worker is not entitled to compensation for a psychological injury caused by reasonable actions of the employer. It is premised on a finding that a worker has suffered an injury. There is no dispute that Mr Isler received a psychological injury in the course of his employment. Section 11A(1) provides:
“(1) No compensation is payable under this Act in respect of an injury that is a psychological injury if the injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of workers or provision of employment benefits to workers.”

Part 3 of the 1987 Act deals with the payment of compensation benefits and Division 4 provides for the payment of compensation for non-economic loss. Section 65(1) says that the degree of permanent impairment that results from an injury is to be assessed as provided by that section and Part 7 of Chapter 7 of the 1998 Act. Section 66 deals with the payment of compensation in respect of an injury that results in a degree of permanent impairment greater than 10%.
Chapter 7 of Part 7 of the 1998 Act deals with medical assessment. Section 321 provides for referral of medical disputes for assessment. Medical dispute is defined in s 319.
Matter number W78/22 was commenced in the Commission under s 289(3) of the 1998 Act on the basis that the Department’s insurer had failed to determine the claim for lump sum compensation as and when required by the Act. Though it appears there was some discussion at the telephone conference in those proceedings as to whether there was in fact a failure to determine, the question was not argued before me.
At the time the referral to a Medical Assessor was made on 22 March 2022, the s 78 notice had issued. Both parties were aware of it. Despite that, orders were made during conciliation referring the medical dispute as to the extent of permanent impairment to a Medical Assessor. The Member in those proceedings was obliged to conciliate. Schedule 3 Pt 5 cl 6 of the Personal Injury Commission Act 2020 (the 2020 Act) provides:
“6   Commission to attempt conciliation
(1)     The Commission constituted by a non-presidential member is not, in the exercise of its substantive Division functions, to make an award or otherwise determine a dispute referred to the Commission for determination without first using the member’s best endeavours to bring the parties to the dispute to a settlement acceptable to all of them.
(2)     No objection may be taken to the making of an award or the determination of a dispute by the Commission constituted by a non-presidential member on the ground that the member had previously used the member’s best endeavours to bring the parties to the dispute to a settlement.”
The Commission’s practice is set out in Procedural Direction PIC 6 – Medical Assessments (PIC 6). Procedural directions are made by the President under s 21 of the 2020 Act. Members of the Commission, parties and their representatives must comply with applicable procedural directions.
PIC 6 provides that there are two pathways for resolution of permanent impairment disputes – referral to a Medical Assessor or to a Member. Clause 23 provides:
“A liability dispute in relation to a claim for permanent impairment compensation must be resolved, either by agreement between the parties or determined by a member of the Commission, before the degree of permanent impairment is assessed.”
A determination as to whether s 11A precludes the payment of compensation for an injury is a liability dispute – the resolution of that dispute determines whether the employer is liable to pay compensation.
The Procedural Direction reflects the practice of the Commission and the objects of the 2020 Act[7], including that the real issues in the proceedings be resolved “justly, quickly, cost effectively and with as little formality as possible”. That is particularly so where the MAC which will be prepared as a result of the assessment is conclusively presumed to be correct as to the degree of permanent impairment – s 326(1) of the 1998 Act. It is not cost effective for a medical examination to take place unless and until there are no liability issues in dispute because a successful defence to a liability dispute will mean that medical assessment is required.
[7] Section 3.
The only record of what took place in conciliation in W78/22 is the outcome. The parties agreed to referral to a Medical Assessor without a hearing. The consent orders provided that the only dispute between Mr Isler and the Department which was before the Commission had been resolved by the referral of the permanent impairment dispute to a Medical Assessor. The conclusion to be drawn is that there was no longer a dispute about liability in those proceedings.
The medical assessment has not taken place – because of the procedural events summarised at [21] above and because of the backlog in assessments resulting from the pandemic. The orders stand and the Department has not made any application that they be reconsidered.
There is no evidence that the Department made any application under s 289A(4) of the 1998 Act that it be permitted to rely on the s 11A defence in W78/22. The way the argument has proceeded in these proceedings makes clear that it has not. The principles applied when the Commission is considering any application for reconsideration or an application under s 289A(4) require the moving party to act promptly.
Reflecting the presumption that the MAC is conclusive, the practice of the Commission is not to hold a conference before a Member after the MAC has issued in a claim under s 66 of the 1987 Act in the general run of cases when there is no entitlement to pain and suffering compensation. Subject to any medical appeal, a Certificate of Determination setting out a worker’s entitlement is prepared and issued. In this case there is another claim before the Commission because Mr Isler seeks an order for weekly compensation. If he had not, there would be no forum for the s 11A defence to be considered after the issue of the Certificate of Determination.
There are rare cases in which some issues remain to be determined after an assessment of permanent impairment but they tend to be limited to hearing loss cases in which an opinion as to the reasonable necessity of hearing aids is sought or claims where a threshold which impacts on other entitlements is also relevant.
The legislation, the Procedural Direction and the practice of the Commission all lead to the conclusion that there should be no later opportunity to make an application to rely on s 11A in W78/22.

Estoppel

For the following reasons, I am satisfied that the consent order in W78/22 creates an estoppel with respect to the question of injury in these proceedings.
The employer in Manpower contended that consent orders for ongoing weekly compensation made by the Commission did not prevent from later disputing injury and that employment was a substantial contributing factor to the injury and declining liability for weekly compensation. Roche DP held that the employer was estopped by the consent orders from disputing those matters. He said:
“This leaves the consent orders to take effect according to their terms as formal orders of the Commission under Pt 15 r 9 of the Rules. That the Commission made the orders with the consent of the parties does not diminish their legal effect. They were and are as effective as any decision of the Commission made after a contested hearing. Such orders were and are binding on the parties unless and until revoked or varied on appeal or by further order of the Commission. As long as the orders remained on foot, the insurer had no right to stop payments and Mr Harris could have recovered any unpaid weekly compensation under s 362 of the 1998 Act...”[8]
And
“The Commission’s procedures have always placed a strong emphasis on the early resolution of disputes. To that end, the Commission has a process of pre-hearing teleconferences, in addition to conciliation on the day of the arbitration, to help facilitate settlement. The parties are encouraged to reach agreement and settle their dispute. An Arbitrator is not to make an award without first using his or her best endeavours to bring the parties to the dispute to a settlement acceptable to all of them (s 355 of the 1998 Act). They are free to reach agreement with or without formal orders by the Commission. However, once the Commission makes orders, they take effect according to their terms.”[9]
[8] At [96].
[9] At [103].
The conclusion to be drawn from the consent orders referring Mr Isler’s claim to the Medical Assessor is that the Member’s efforts in conciliating the issues in dispute had been successful. There was no attempt in those consent orders to reserve any question for later determination.
The consent orders in Manpower gave rise to a res judicata estoppel – the cause of action was the same, being a claim for weekly compensation. The estoppel relied on here is an issue estoppel, though it was not explicitly characterised that way in submissions.
In Blair v Curran[10], Dixon J said:
“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 judgment, 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 or fact of law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order.”
[10] [1939] HCA 23; (1939) 62 CLR 464, 532.
The cause of action for weekly compensation in these proceedings is not identical to the cause of action for lump sum compensation in W78/22. As Roche DP said in Eraring Energy v Graf[11] there may be several causes of action in compensation cases under the 1987 Act. While the pleaded dates of injury are different because of the operation of the legislation and the fact that the lump claim was commenced first, the injury relied on is identical. The Department did not take any point about the date of the injury.
[11] [2007] NSWWCCPD 6 at [42].
The facts which underpin the consent orders are the same in these proceedings. Before either form of compensation be payable, it was necessary that the parties agree that Mr Isler, being a worker, suffered an injury within the meaning of s 4 of the 1987 Act to which employment was a substantial contributing factor and that there was no defence which precluded the payment of compensation.
I agree that it was necessary that the issue of injury be determined or agreed before referral of the medical dispute to the Medical Assessor. There was no utility in referring that claim to a Medical Assessor while a substantive defence remained undetermined which may have permitted the Department to avoid paying compensation.
The fact that the referral to the Medical Assessor in W78/22 was made by consent is not relevant. In Habib v Radio 2UE Sydney Pty Ltd[12] and in a passage set out in Manpower, McColl JA said:
“Orders made by consent may create an estoppel as between parties, (and, no doubt may be considered for the purpose of determining whether subsequent proceedings would lead to conflicting judgments), however they do so ‘only as to those matters which are necessarily decided’, to ascertain which ‘the court will closely examine all such evidence, if any, as is available and admissible, and, by the aid of such materials, will ascertain whether any and what adjudication of matters in dispute was expressed, or necessarily involved, in the actual decision assented to’: Isaacs v Ocean Accident and Guarantee Corporation Ltd (1957) 58 SR (NSW) 69 (at 75), per Street CJ and Roper CJ in Eq; see generally the helpful discussion of the issue by Barrett J in Land Enviro Corp Pty Ltd v HTT Huntley Heritage Pty Ltd[2008] NSWSC 185; (2008) 72 NSWLR 160 (at [63] – [65]); Abigroup Contractors Pty Ltd (at [146]).”[13]
[12] [2009] NSWCA 231.
[13] At [186].
In Land Enviro Corp , Barrett J described the capacity of consent orders to raise an estoppel:
“It is well-established that orders made by consent may create an estoppel and that, in this respect, an order of dismissal is no different from any other order. In Re South American & Mexican Co; Ex Parte Bank of England [1895] 1 CH 37 at 45, Vaughan Williams J said:
‘It has always been the law that a judgment by consent or by default raises an estoppel just in the same way as a judgment after the Court has exercised a judicial discretion in the matter ... if [the parties] agree upon a result, or upon a verdict, or upon judgment, or upon a verdict and judgment, as the case may be, an estoppel is raised as to all the matters in respect of which an estoppel would have been raised by judgment if the case had been fought out to the bitter end.’”
I agree with Mr McEnaney’s submission that the orders made in W78/22 are the same as those which would have been made if the s 11A defence had been argued and determined.
The effect of the consent orders is that they give rise to estoppels in favour of Mr Isler against the Department with respect to the suffering of a psychological injury to which employment was a substantial or the main contributing factor and that there was no defence which precluded the payment of compensation.

Anshun estoppel

Mr McEnaney’s submissions with respect to Anshun estoppel were confined to directing me to the obiter comments made by Roche DP in Manpower. Mr Grant did not make any submissions on the issue. Because I have found that there is an issue estoppel preventing reliance on the s 11A defence, it is not strictly necessary that I deal with the question.
Phillips P described the operation of Anshun estoppel in Fourmeninapub Pty Ltd v Booth[14]. The President said[15]:
“Anshun estoppel prevents a party from relying on a claim or defence if it unreasonably refrained from including it in the earlier proceedings. In Anshun, Gibbs CJ, Mason and Aickin JJ said:
‘In this situation we would prefer to say that there will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff's claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding.’
Their Honours also said:
‘The likelihood that the omission to plead a defence will contribute to the existence of conflicting judgments is obviously an important factor to be taken into account in deciding whether the omission to plead can found an estoppel against the assertion of the same matter as a foundation for a cause of action in a second proceeding. By ‘conflicting’ judgments we include judgments which are contradictory, though they may not be pronounced on the same cause of action. It is enough that they appear to declare rights which are inconsistent in respect of the same transaction’.”
[14] [2019] NSWWCCPD 25.
[15] At [127]-[128].
After quoting from Habib, the President said:
“It is clear that the objective of Anshun estoppel is the public policy that there are no conflicting judgments on the same set of facts. Applying the relevant principles, it must be determined whether the claim or defence was so closely related to the earlier subject matter that it would reasonably have been expected to have been raised. To answer this question the onus lies on the appellant to demonstrate that the failure to bring a claim in the earlier proceedings was unreasonable, and that there was no valid reason for refraining from doing so.”
The s 78 notice had been issued seeking to rely on the s 11A defence before the referral was made to the Medical Assessor in W78/22. It was not pressed at that time. There has been no determination of the lump sum claim because the medical assessment has not taken place but there will be no opportunity in those proceedings for the issue to be raised.
The Department has not argued in these proceedings that it was still within time to determine the claim when W78/22 was commenced. It did not seek orders granting it leave to rely on the s 11A defence at the telephone conference, though said it was still being investigated. The Department’s insurer had all of the relevant material before the telephone conference from which that matter was listed for conciliation conference and arbitration hearing. The statements are dated in September 2021 and Dr Young’s report in January 2022. No orders were sought at the conciliation conference and arbitration hearing in those proceedings after the notice had issued. In those circumstances, failing to seek leave to rely on the s 11A defence was unreasonable.
In Manpower, Roche DP encapsulated the position, immediately following the passage relied on by Mr McEnaney:
“Anshun estoppel is based on the important public policy principle that ‘there should be finality in litigation and that a party should not be twice vexed in the same matter’ (Johnson v Gore Wood & Co (a firm)[2000] UKHL 65; [2002] 2 AC 1 at 31, quoted by McColl JA in Habib at [86]). These principles are consistent with the Commission’s statutory objectives of providing a “fair and cost effective system for the resolution of disputes under the Workers Compensation Acts” (s 367(1) of the 1998 Act). It is neither fair nor cost effective to allow an insurer to dispute a claim in later proceedings when, armed with all relevant knowledge, it elected not to do so in earlier proceedings over the same subject matter. To allow such conduct invites uncertainty and multiple proceedings over the same issues.”
It is neither fair nor cost effective to allow the Department to rely on the s 11A defence when it elected not to do so in W78/22.
For those reasons, I find that the Department is estopped from relying on its proposed defence under s 11A of the 1987 Act.
Pursuant to s 37 of the 1987 Act, I order the respondent to pay weekly compensation to
Mr Isler from 9 May 2022 to date and continuing and to pay his s 60 expenses.
The parties did not make submissions on the amount of compensation which would be payable. There is no evidence that Mr Isler currently has any work capacity and no submissions were made on the issue.
Mr Isler’s pre-injury average weekly earnings were determined for the purpose of the weekly compensation paid until 9 May 2022 but the list of payments in the ARD does not reflect the current indexed rate. I grant liberty to apply in writing if the parties are unable to agree on the amount which is payable.

[2022] NSWPIC 377

13 July 2022