J and D Stephens Pty Ltd v Stephens - [2021] NSWWCCPD 4

DETERMINATION OF AN APPLICATION TO STRIKE OUT A PRE-FILING STATEMENT
CITATION:	J & D Stephens Pty Ltd v Stephens [2021] NSWWCCPD 4
APPLICANT DEFENDANT:	J & D Stephens Pty Ltd
RESPONDENT CLAIMANT:	Darren John Stephens
FILE NUMBER:	6627/19
DATE OF DECISION:	19 January 2021
SUBJECT MATTER OF DECISION:	Application to Strike Out a Pre-Filing Statement; s 151DA of the Workers Compensation Act 1987
PRESIDENTIAL MEMBER:	President Judge Phillips
HEARING:	On the papers
REPRESENTATION:	Applicant Defendant:
Mr C Michael, solicitor
EMP Michael Lawyers
Respondent Claimant:
Mr M Howard, solicitor
Stacks Law Firm
ORDERS MADE ON APPLICATION:	1. The Application to strike out the respondent claimant’s pre-filing statement is dismissed. 2. No order as to costs.

INTRODUCTION

This matter concerns an application filed by the applicant defendant employer seeking an order pursuant to s 151DA of the Workers Compensation Act 1987 (the 1987 Act) that the respondent claimant worker’s pre-filing statement be struck out. For the following reasons, the application is dismissed.

BACKGROUND

Mr Stephens, the respondent claimant, has been shearing sheep since the age of 18 years. From July 1992, he was employed by J & D Stephens Pty Ltd, the applicant defendant, as a shearer. Mr Stephens, his father, John Stephens, and mother, Patricia Stephens, were directors of the applicant defendant.[1]
[1] Statement of John Stephens dated 19 November 2003, Application to Strike Out a Pre-Filing Statement (Application), p 46.
From around 1999 onwards, Mr Stephens began to experience pain in his left elbow. His arm would “blow up” and the pain was often “unbearable”, however, he tried to “fob it off” and kept shearing.[2] The symptoms worsened during mid to late 2001, and by February 2002, they had become too severe for Mr Stephens to continue working. He ceased work on 12 February 2002 and has not worked since.
[2] Mr Stephens’ statement dated 3 February 2011, [34]–[35], Notice of Opposition to Strike Out a Pre-Filing Statement (Opposition), p 8.
An Employee’s Compensation Claim was completed on 3 April 2002, giving the date of injury as 11 February 2002.
On 17 June 2002, the employer signed an “Employer’s Report of Injury” form in respect of injury to Mr Stephens on 12 February 2002.[3]
[3] Application, p 26.
Mr Stephens attended a general practitioner and physiotherapist. As his pain continued, a scan was ordered, which Mr Stephens says showed that he had “torn a tendon and it was lo[o]se above [his] elbow”.[4]
[4] Mr Stephens’ statement dated 3 February 2011, [37], Opposition, p 8.
Mr Stephens underwent surgery in the form of left elbow ulna nerve neurolysis, anterior transposition, at the hand of Dr Roberts, orthopaedic surgeon, on 18 June 2002.[5]
[5] Dr Roberts’ operation report dated 18 June 2002, Application, p 348.
Mr Stephens described the surgery as “an absolute failure” and stated that he now has more pain in his arm than before the surgery.[6]
[6] Mr Stephens’ statement dated 3 February 2011, [39], Opposition, p 8.
He says he has since tried steroid injections, pain relief medication, attended pain management clinics, and tried acupuncture and other natural remedies, none of which have helped.
An Application to Resolve a Dispute was registered in the Commission on 13 October 2005, claiming lump sum compensation for permanent impairment and pain and suffering. A Reply was filed on 2 November 2005. The Registrar referred Mr Stephens to Approved Medical Specialist, Dr Alan Nicholls, for assessment. Dr Nicholls issued a Medical Assessment Certificate dated 10 March 2006 in which he assessed Mr Stephens’ whole person impairment at 12%. Accordingly, on 7 June 2006, a s 66A Agreement was registered, the parties agreeing to compensation for 12% WPI and an amount for pain and suffering pursuant to the then s 67.
Mr Stephens served on the applicant defendant a Pre-Filing Statement dated 23 March 2010. The Pre-Filing Statement was subsequently amended; however, the amendment is undated. It appears that the amended Pre-Filing Statement was served in May of 2010.
Mr Stephens submits that “[o]n 10 May 2010 the workers compensation insurer agreed to resolve the Respondent Claimant’s claim for compensation pursuant to sections 66 and 67 of … the 1987 Act … for 21% whole person impairment in respect of an injury to his left upper extremity.”
The applicant defendant served its Pre-Filing Defence on Mr Stephens on 18 June 2010.
On 14 July 2010, Mr Stephens filed an Application for Mediation in the Commission. The Application was discontinued on 4 August 2010.
On 20 October 2010, Mr Stephens served a Further Amended Pre-Filing Statement dated 20 October 2010.
On 29 November 2010, a further Application for Mediation was filed in the Commission. A Response was filed on 16 December 2010.
Mediation conferences were held on 7 February 2011 and 21 March 2011. The parties were unable to reach an agreement and a Certificate of Mediation Outcome was issued on 23 March 2011, concluding the pre-litigation phase.
In around 2010, Mr Stephens began to experience symptoms in his right arm, which he attributes to over reliance on the right arm due to the ongoing left arm symptoms. He consulted his GP who arranged for cortisone injections, however, the right arm continued to deteriorate.
In 2015 Mr Stephens was referred by his General Practitioner to Dr Tsai, orthopaedic surgeon. Dr Tsai recommended surgery to the right arm which Mr Stephens was reluctant to undertake. In 2018 he re-attended on Dr Tsai, who again recommended surgery. Mr Stephens states:
“Due to my anxiety and fear about the possibility that surgery to my right arm would have the same outcome as the surgery to my left arm, I have not yet had the surgery done, but I know that I am going to need to have it done eventually.
The pain in my right arm continues to get worse as time goes on, and it will get to the point where I will not be able to deal with it anymore. It is then that I will have the surgery.
I am not sure exactly when I will be having the surgery, it will depend on how long I can deal with the pain.
Until I have the surgery, my injuries will not stabilise, and in fact, my right arm condition will continue to deteriorate.”[7]
[7] Mr Stephens’ statement dated 26 May 2020, [40]–[43], Opposition, p 14.
On 12 December 2019, the applicant defendant filed in the Commission an Application to Strike Out a Pre-Filing Statement (the Application).
On 17 December 2019, the Commission issued a Direction setting the timetable for the filing and service of submissions. On the same day, the applicant defendant served the Application and annexures on Mr Stephens care of Stacks the Law Firm, who had acted for him in the mediation proceedings.
On 18 February 2020, the applicant defendant wrote to the Commission advising that they had been informed on 14 February 2020 that Stacks were no longer acting for Mr Stephens. It says that on 18 February 2020, it was informed that Stacks were not acting for Mr Stephens at the time that the Application was served on Stacks. The applicant defendant sought an extension of time to serve the Application on Mr Stephens personally. On 20 February 2020, amongst other things, the applicant defendant was directed by the Commission to serve the Application on Mr Stephens personally, which it did on 2 March 2020. The Direction directed Mr Stephens file a Notice of Opposition (Opposition) by 24 April 2020.
Mr Stephens did not lodge a Notice of Opposition by 24 April 2020. On 29 and 30 April 2020, the Commission contacted Mr Stephens by telephone to explain the nature of the Application and to encourage him to seek legal advice, which he did. On 6 May 2020, Stacks the Law Firm advised the Commission that they had received instructions to act for Mr Stephens in respect of the Application to Strike Out the Pre-Filing Statement.
On 7 May 2020, the Registrar issued a Direction setting a fresh timetable for the lodgment and service of the Notice of Opposition and submissions in reply.
A Notice of Opposition was filed on 11 June 2020, and the applicant defendant filed its submissions in reply on 22 June 2020.
Following correspondence sent from the Commission requesting signed statements, Stacks lodged an Application to Admit Late Documents on 9 July 2020 that contained a statement of Mr Darren Stephens dated 29 June 2020 which contained some amendments. In the covering email, Mr Stephens’ solicitor wrote:
“Please see attached herewith for your information, Application to Admit Late Documents (being Statement signed by the claimant on 29 June 2020, together with correspondence identifying the amendments made to the unsigned version), which we have emailed to the registry for filing.
We confirm that the signed Statement of Darren Stephens dated 3 February 2011 has been previously served on the insurer’s representative and filed with the Workers Compensation Commission under Application to Admit Late Documents dated 4 February 2011 filed in respect of WCC proceedings 9826/10.
Unfortunately we have been unable to retrieve a copy of the signed Statement from our archive.”
Later that day, the solicitors for the Applicant Defendant lodged a signed copy of the statement of 3 February 2011. In this matter, I have taken the AALD and signed statement provided by the Applicant Defendant to be properly before me and to the extent necessary, I admit those documents into evidence.
The Commission requested that if the applicant defendant wished to make any submissions in respect of the amended statement, it was to lodge and serve those submissions by close of business on 15 July 2020. No submissions were received by the Commission.
On a number of occasions between July and September 2020, the parties requested the decision on the Application to Strike Out the Pre-Filing Statement be deferred, as they were attempting to negotiate a settlement.
On 22 September 2020, Mr Stephens’ legal representative advised the Commission that “this matter has not been able to be resolved” and requested that the Application proceed to determination.

ON THE PAPERS

Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) provides:
“(6) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
Having regard to Practice Direction Number 1, the documents that are before me, and the submissions by the parties that the matter can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.

LEGISLATION

Section 151A of the 1987 Act provides:
“151A   Effect of recovery of damages on compensation
(1)     If a person recovers damages in respect of an injury from the employer liable to pay compensation under this Act then (except to the extent that subsection (2), (3), (4) or (5) covers the case)—
(a)the person ceases to be entitled to any further compensation under this Act in respect of the injury concerned (including compensation claimed but not yet paid), and
(b)the amount of any weekly payments of compensation already paid in respect of the injury concerned is to be deducted from the damages (awarded or otherwise paid as a lump sum) and is to be paid to the person who paid the compensation, and
(c)the person ceases to be entitled to participate in any injury management program provided for under this Act or the 1998 Act.
(2)     If damages in respect of an injury are recovered from the employer liable to pay compensation under this Act, pursuant to a cause of action that survives for the benefit of the estate of a deceased worker under the Law Reform (Miscellaneous Provisions) Act 1944, the following amounts of compensation are to be repaid out of the estate of the deceased worker to the person who paid the compensation—
(a)the amount of any weekly payments of compensation already paid in respect of the injury concerned,
(b)the amount of any permanent impairment compensation and pain and suffering compensation already paid in respect of the injury concerned.
(3)     If damages are recovered in an action under the Compensation to Relatives Act 1897 in respect of the death of a worker from the employer liable to pay compensation under this Act in respect of the death—
(a)the amount of any compensation under Division 1 of Part 3 paid in respect of the death is to be deducted from the damages (awarded or otherwise paid as a lump sum) and is to be paid to the person who paid the compensation, and
(b)a person recovering those damages ceases to be entitled to any further compensation under this Act in respect of the death of the worker.
(4) If a person recovers motor accident damages (other than damages to which Part 4 of the Motor Accident Injuries Act 2017 applies) from the employer liable to pay compensation under this Act—
(a)the person ceases to be entitled to any further compensation under this Act in respect of the injury concerned (including compensation claimed but not yet paid), and
(b)the amount of any compensation already paid in respect of the injury concerned is to be deducted from the damages (awarded or otherwise paid as a lump sum) and is to be paid to the person who paid the compensation.
(5) If a person recovers damages to which Part 4 of the Motor Accident Injuries Act 2017 applies from the employer liable to pay compensation under this Act—
(a)the person ceases to be entitled to any further compensation under this Act in respect of the injury concerned (including compensation claimed but not yet paid), and
(b)the amount of any of the following compensation already paid in respect of the injury concerned is to be deducted from the damages (awarded or otherwise paid as a lump sum) and is to be paid to the person who paid the compensation—
(i)weekly payments of compensation,
(ii)permanent impairment compensation and pain and suffering compensation, but limited to the amount of any damages recovered for non-economic loss.”
Section 151DA of the 1987 Act provides:
“151DA Time not to run for commencement of proceedings in certain cases
(1)     Time does not run for the purposes of section 151D:
(a1)while the determination of the claim concerned is delayed as permitted by section 281 of the 1998 Act, but not including delay beyond 2 months after the claimant has provided all relevant particulars about the claim as required by section 281(2)(b) of that Act, or
Note—
Delay in determining a claim beyond 2 months is only permitted on the basis that degree of permanent impairment is not fully ascertainable and the insurer has notified the claimant of this. In such a case, paragraph (a) of this subsection can apply (if a dispute about whether degree of permanent impairment is fully ascertainable is the subject of medical assessment) to further prevent time running for the purposes of section 151D.
(a)while a medical dispute as to whether the degree of permanent impairment of the injured worker is at least 15%, or whether the degree of permanent impairment of the injured worker is fully ascertainable, is the subject of a referral for determination by the Commission or a referral for assessment under Part 7 of Chapter 7 of the 1998 Act (including any further assessment under section 329 of that Act), or
(a2)during the period of 1 month after an offer of settlement is made to the claimant pursuant to the determination of the claim as and when required by the 1998 Act, or
(a3)while an assessment under Part 7 of Chapter 7 of the 1998 Act in respect of a medical dispute referred to in paragraph (a) is the subject of a pending appeal under section 327 of the 1998 Act, or
(b)while a pre-filing statement served in accordance with section 315 of the 1998 Act in respect of the claim concerned remains current.
(2)     A pre-filing statement remains current from the time it is served until it is struck out under this section on the application of the person (the defendant) on whom it was served or it is withdrawn by the person who served it, whichever happens first.
(3)     The defendant may apply to the President to have the pre-filing statement struck out by order of the President. Such an application may not be made until at least 6 months have elapsed after the defendant served on the claimant a defence to the claim in accordance with section 316 of the 1998 Act.
(4)     The President may order that a pre-filing statement be struck out but must not do so if satisfied that the degree of permanent impairment of the injured worker is not yet fully ascertainable and the matter is the subject of a referral under Part 7 of Chapter 7 of the 1998 Act for assessment of the degree of permanent impairment of the injured worker.
(5)     A medical dispute is considered to be the subject of a referral for assessment under Part 7 of Chapter 7 of the 1998 Act even if the approved medical specialist has declined to make an assessment of the degree of permanent impairment of the injured worker until satisfied that the degree of permanent impairment is fully ascertainable.
(6)     The President may delegate to a Deputy President any function of the President under this section (except this power of delegation), but only if the President is satisfied that the delegation is necessary to avoid a conflict of interest or the appearance of bias.”
Section 280B of the 1998 Act provides:
“280B Lump sum compensation to be paid before damages recovered
(1) An injured worker cannot recover damages in respect of an injury from the employer liable to pay compensation under this Act in respect of the injury unless and until any permanent impairment compensation to which the worker is entitled in respect of the injury has been paid.
(2) This section does not prevent a claim for damages from being made before any permanent impairment compensation to which the worker is entitled in respect of the injury has been paid.
Note—
This section ensures that an injured worker receives the compensation to which the worker is entitled before damages are recovered (because section 151A of the 1987 Act would prevent the payment of compensation after damages are recovered).”

SUBMISSIONS

Applicant defendant’s submissions

The applicant defendant’s written submissions are quite brief. It notes the Pre-Filing Statement was served on 23 March 2010 and was subsequently amended. It submits an Election to Discontinue proceedings (Mediation) dated 4 August 2010 was served. The applicant defendant recounts a Further Amended Pre-Filing Statement of 20 October 2010 was served on that date and a Certificate of Mediation Outcome was issued on 23 March 2011. It says that the pre-litigation phase was concluded by the issuing of the Certificate of Mediation dated 23 March 2011.
The applicant defendant submits that Mr Stephens has not commenced Court proceedings or taken any other active steps to resolve the matter.
The applicant defendant submits there are policy reasons underpinning s 151DA(3) of the 1987 Act “designed, inter alia, to provide the parties with a degree of certainty by not extending time indefinitely while the Pre-Filing Statement remains current”, citing Southwestern Sydney Area Health Service v Roodenrys.[8]
[8] [2014] NSWWCCPD 43.
It submits that the Application is made more than six months after the service of its reply to the Pre-Filing Statement in accordance with s 151DA(3) of the 1987 Act.
The applicant defendant further submits Mr Stephens is not the subject of referral under Pt 7 of Ch 7 of the 1998 Act for assessment of the degree of permanent impairment and the prohibition in s 151DA(4) does not apply.

The applicant defendant argues there is no reason why costs should not follow the event.

Mr Stephens’ submissions

Mr Stephens commences his submissions by noting that on 10 May 2010, “the workers compensation insurer agreed to resolve” his claim for compensation pursuant to ss 66 and 67 of the 1987 Act for 21% whole person impairment. Mr Stephens agrees with the chronology in the applicant defendant’s submissions at 2.3(1)–(4).
He submits that shortly after his claim for compensation pursuant to ss 66 and 67 of the 1987 Act was resolved in respect of an injury to his left upper extremity, he became aware that he suffered a consequential injury to his right upper extremity.
Mr Stephens contends he has not been compensated pursuant to s 66 of the 1987 Act in respect of his alleged consequential injury to his right upper extremity.
Mr Stephens recounts that as his previous claim pursuant to ss 66 and 67 was made and resolved prior to the amendments to the Workers Compensation Act in 2012, he “is entitled to make one further section 66 ‘top-up’ claim in circumstances where his condition has deteriorated”.[9] He argues that the consequential injury to his right upper extremity has not yet stabilised. He says he requires surgery to repair the injury to the right upper extremity, which he intends to undergo in the future.
[9] Mr Stephens’ submissions, [5].
Mr Stephens submits that his injury to the right upper extremity cannot be assessed until he has had the surgery and his condition has stabilised. He argues that it is his intention that after his condition has stabilised, he will be assessed by an independent medico-legal doctor in order to ascertain his entitlement to make a further claim pursuant to s 66 of the 1987 Act.
Mr Stephens refers to the decision of Sydney South West Area Health Service v Palau,[10] and submits that he should be afforded the opportunity to recover any lump sum compensation to which he is entitled before pursuing a work injury damages claim.
[10] [2012] NSWWCCPD 20 (Palau), [39].
He submits s 280B of the 1998 Act provides that the work injury damages claim cannot proceed unless and until any permanent impairment compensation which he is entitled to has been paid. Reference to s 151A of the 1987 Act is made, where Mr Stephens says the provision operates such that he would be prevented from recovering any additional compensation pursuant to s 66 after damages are recovered in a work injury damages claim. Mr Stephens argues that s 280B(2) of the 1998 Act provides that he is not prevented from claiming damages before the question of permanent impairment compensation has been resolved and paid.
Mr Stephens, relying on Palau, at [40], contends that he should not be prejudiced by striking out his Pre-Filing Statement for failing to prosecute his work injury damages claim with due diligence in circumstances where, by virtue of s 280B of the 1998 Act, he is prohibited from resolving the claim until the dispute in respect of any claim for additional whole person impairment compensation is resolved and paid. He says that for these reasons, the Application should be dismissed.
In support of the Opposition, Mr Stephens has attached two unsigned statements by him dated 3 February 2011, and 26 May 2020 respectively and two medical reports from Dr Tsai, dated 25 March 2015 and 21 June 2018.

Applicant defendant’s submissions in reply

The applicant defendant commences its submissions in reply acknowledging Mr Stephens’ explanation for not commencing proceedings upon completion of the Pre-Filing process on conclusion of the mediation on 21 March 2011 is that his alleged consequential right arm condition has not been finally treated and he has, therefore, been unable to submit a final claim for permanent impairment compensation.
The applicant defendant disagrees that s 280B of the 1998 Act precludes a worker from recovering damages in respect of an injury unless and until any permanent impairment compensation to which the worker is entitled has been paid.
The applicant defendant agrees there is nothing preventing Mr Stephens from commencing Court proceedings and then finalising any permanent impairment entitlements prior to those proceedings being determined. It refers to Mr Stephens’ statement that he began to experience symptoms in his right upper extremity “shortly after” he was assessed to have 21% whole person impairment for his left upper extremity on 10 May 2010. It says that the matter was then allowed to progress to mediation on 21 March 2011. Following the mediation, the applicant defendant notes Mr Stephens says that he sought treatment from Dr Tsai in 2015 where surgery was recommended and a few years later he decided he needed to have the surgery. The applicant defendant notes Mr Stephens’ re-attendance on Dr Tsai in approximately 2018 where the doctor advised that Mr Stephens would need to undergo ulnar nerve surgery. The applicant defendant recounts Mr Stephens said he was anxious about the surgery and he will need to have it done “eventually”, when he reaches the point where he cannot deal with the pain anymore.
The applicant defendant relies upon John Lacey Earthmoving Pty Limited v Campbell-Willis[11] and submits that it is well established that the Pre-Filing Statement is not intended to extend time indefinitely and limitation periods are in place to protect parties from potential prejudice caused by the passage of time between the date of injury and the commencement of court proceedings. The applicant defendant submits that it is now more than 18 years since the injury; more than nine years since the mediation on 21 March 2011; more than five years since Dr Tsai indicated that Mr Stephens’ right upper extremity would continue to deteriorate, and approximately two years since Dr Tsai advised that Mr Stephens would benefit from neurolysis and transposition of the ulnar nerve.
[11] [2007] NSWWCCPD 197 (Campbell-Willis).
It adds that:
“There is no evidence that qualified evidence has been sought to ascertain whether the worker's left arm condition satisfies the definition of Maximum Medical Improvement and is thus capable of assessment for the purposes of finalising permanent impairment entitlements now rather than awaiting surgery that may not be undertaken for many years, or may not be undertaken at all.”[12]
[12] Applicant defendant’s submissions in reply, [3.6].
The applicant defendant concludes that Mr Stephens is effectively seeking to extend time indefinitely.

Relief sought

The applicant defendant seeks that the Pre-Filing Statement dated 23 March 2010, undated Amended Pre-Filing Statement and Further Amended Pre-Filing Statement dated 20 October 2010 be struck out.
Mr Stephens seeks that the Application to Strike Out a Pre-Filing Statement be dismissed, and the applicant defendant pay his costs of the Application.

DISCUSSION

A claim for work injury damages must be brought within three years after the date of injury, except with leave of the court.[13] However, time may be suspended for one of the reasons set out in s 151DA of the 1987 Act. Section 151DA(1)(b) of the 1987 Act suspends time for the purposes of s 151D while a pre-filing statement in respect of the claim remains current. That is, until the Pre-Filing Statement is struck out on the application of J & D Stephens Pty Ltd or withdrawn by Mr Stephens.
[13] Section 151D of the 1987 Act.
An employer may apply to have the pre-filing statement struck out by order, once six months have elapsed after it served the pre-filing defence (s 151DA(3) of the 1987 Act). A pre-filing statement may be struck out by order if the degree of permanent impairment is fully ascertainable (s 151DA(4) of the 1987 Act).
There are no impediments presented by s 151DA(3) of the 1987 Act to the Application being determined at this time. More than six months have elapsed after J & D Stephens Pty Ltd served the pre-filing defence.
There are sound policy reasons for the inclusion of s 151DA(3) in the 1987 Act. The provision ensures that the parties have sufficient time to finalise the pre-litigation phase of the proceedings.[14] It also ensures that there is a degree of certainty to the process and enables the parties to explore resolution and/or mediation of the claim before embarking on litigation.
[14] Pasminco Cockle Creek Smelter Pty Ltd v Gardner [2006] NSWWCCPD 108 (Pasminco).
I accept the Applicant Defendant’s submission that the dispute is not the subject of a referral under Pt 7 of Ch 7 of the 1998 Act, which would prevent me from striking the matter out under s 151DA(4).
In Gardiner v Laing O’Rourke Australia Construction Pty Ltd,[15] Leeming JA held s 280B of the 1998 Act “is necessarily to be read with s 151A, not merely by reason of s 2A(2) of the [1987] Act, but also because of the note in s 280B.”[16] In the same decision, Emmett AJA added that s 151A of the 1987 Act must be considered in light of s 280B of the 1998 Act.[17] His Honour continued:
“Section 280B relevantly provides that an injured worker cannot recover damages in respect of an injury from the employer liable to pay compensation under the [1998] Act in respect of the injury unless and until any permanent impairment compensation to which the worker is entitled in respect of the injury has been paid. Section 280B ensures that an injured worker receives the compensation to which the worker is entitled before damages are recovered because s 151A of the [1987] Act would prevent the payment of compensation after damages are recovered.”[18]
[15] [2020] NSWCA 151; 298 IR 273 (Gardiner).
[16] Gardiner, [88].
[17] Gardiner, [90].
[18] Gardiner, [90].
In Gower v State of New South Wales,[19] White JA held:
“35.   A claim for work injury damages in respect of an injury cannot be made unless a claim for lump sum compensation in respect of the injury is made before or at the same time as the claim for work injury damages ([1998] Act, s 280A). A claim for damages can be made before payment of permanent impairment compensation, but damages cannot be recovered unless and until any permanent impairment compensation to which the worker is entitled has been paid ([1998] Act, s 280B). A claim for permanent impairment compensation is a claim for compensation as a lump sum under s 66 of the [1987] Act. (Definition of ‘permanent impairment compensation’, [1998] Act, s 4). From the commencement of the Workers Compensation Legislation Amendment Act 2012 (NSW) on 27 June 2012 and at all later times material to the present case, the effect of s 66 was that to be entitled to lump sum compensation, an injured worker had to have suffered permanent impairment greater than 10 per cent. Section 66(1A) (introduced by the 2012 amending Act with effect from 27 June 2012) provides that only one claim can be made for permanent impairment compensation in respect of an injury.
36.    Prior to the 2012 amendments to s 66, lump sum compensation was payable under the section on a sliding scale, depending upon whether the degree of permanent impairment was less than 10 per cent, between 10 per cent and 20 per cent, between 20 per cent and 40 per cent, between 40 per cent and 75 per cent or more than 75 per cent.
…
40.    It is only if a person has made a claim for compensation or work injury damages that that person is a ‘claimant’ whose claim can give rise to a medical dispute (Izzard v Dunbier Marine Products (NSW) Pty Ltd [2012] NSWCA 132 at [145] per Barrett JA). An injured worker who is in doubt as to whether or not his or her injury gives rise to the requisite degree of permanent impairment for the purpose of making either a claim for lump sum compensation under s 66 of the [1987] Act or a claim for work injury damages, or who is in doubt as to whether his or her degree of permanent impairment can be ascertained, is not entitled to an advisory opinion by submitting such a question as a medical dispute for determination under Pt 7 of Ch 7.
41.    Court proceedings for the recovery of work injury damages cannot be commenced until a claim for the damages has been made ([1998] Act, s 262). A claim for compensation or work injury damages must be made in accordance with the applicable requirements of the Workers Compensation Guidelines (s 260(1)). …
44.    As noted above at [35], s 280A of the [1998] Act provides that a claim for work injury damages in respect of an injury cannot be made unless a claim for lump sum compensation in respect of the injury is made before or at the same time as the claim for work injury damages.”
[19] [2018] NSWCA 132 (Gower), [35]–[36], [40]–[41], [44].
The crux of Mr Stephens’ case is that whilst there has been a s 66A agreement, he has developed a consequential condition in his right elbow that has resulted from favouring his left elbow. Given the poor result following surgery on his left elbow, Mr Stephens expresses some trepidation in undergoing surgery to his right elbow and submits that he will undergo surgery to his right elbow when the pain is too much.
In essence, he argues that until such time as he undergoes surgery the permanent impairment is not able to be assessed. Mr Stephens refers to the 2012 amendments and submits that as a result of those, he can only make one further claim for permanent impairment compensation. He does not wish to make his further claim until he has undergone surgery to his right elbow and when his permanent impairment has stabilised.
In support of his need for surgery to his right elbow, Mr Stephens relies upon the reports of Dr Tsai dated 25 March 2015 and 21 June 2018.
In the report of 25 March 2015, Dr Tsai recounts the surgery for ulnar nerve decompression and anterior transposition under the hands of Dr Roberts. Dr Tsai notes Mr Stephens’ recovery was complicated by neuritis and he has experienced problems with the left ulnar nerve. Dr Tsai records that when Mr Stephens began to experience problems with his right elbow, he elected to have cortisone injections since 2010, having eight to ten injections and also notes Mr Stephens takes Endone, Panadol and Tramadol for pain relief.
The Doctor also records in the report of 25 March 2015:
“wasting of intrinsic muscles of the right hand as well as wasting of the hypothenar eminence. He has decreased sensation over the ulnar two digits. He also has decreased sensation over the dorsal branch of the ulnar nerve distribution. Froment’s test is negative. His ulnar nerve subluxes anteriorly when he flexes up his elbow and the nerve is very irritable. Otherwise he does not have any tenderness over the lateral epicondyle.”
Dr Tsai reports he has requested Mr Stephens undergo a nerve conduction study to exclude double crush syndrome of his ulnar nerve. The Doctor notes that with Mr Stephens’ current situation, his ulnar nerve palsy probably will continue to deteriorate. Dr Tsai notes there is no guarantee that any surgical intervention will prevent neuritis happening on the right elbow like the left previously.
In the report dated 21 June 2018, Dr Tsai notes it has been three years since he last reviewed Mr Stephens. He says:
“It has been 3 years since I last saw him. His pain is becoming worse and also the ulnar nerve is becoming even more unstable now. He will benefit from neurolysis and also transposition of the ulnar nerve. As you are aware, [Mr Stephens] had bad complications from the same procedure on the left elbow a long time ago and he is still very apprehensive. Unfortunately, at the end of the day, he will need to make a final decision.
I will write to his insurance company to request approval for the procedure. In the meantime he will have another chat with his partner at home.” (emphasis in original)
I note that it is not clear if Dr Tsai did write to the insurer in relation to requesting approval for payment of medical expenses under s 60 of the 1987 Act.
Mr Stephens argues that in accordance with Palau, he should be afforded the opportunity to recover any lump sum compensation to which is entitled before pursuing a work injury damages claim. I note that Palau was issued on 4 April 2012, prior to the introduction of the 2012 amendments.
In Palau, Keating P said at [39]–[41]:
“Section 280B of the 1998 Act prohibits the worker from recovering damages in respect of an injury from the employer liable to pay compensation under this Act unless and until any permanent impairment compensation and pain and suffering compensation to which the worker is entitled in respect of the injury has been paid (my emphasis). As the ‘Note’ to s 280B of the 1998 Act indicates, s 151A of the 1987 Act would prevent the recovery of any additional compensation to which Ms Palau is entitled after damages are recovered. Subsection 280B(2) provides that the worker is not prevented from claiming damages before the question of permanent impairment compensation has been resolved and paid.
The defendant has made no response to the submission that, in the circumstances of this case, s 280B of the 1998 Act provides a powerful argument against striking out the pre-filing statement. It would be an anomalous result indeed if Ms Palau’s pre-filing statement was struck out for failing to prosecute her work injury damages claim with due diligence in circumstances where, by virtue of s 280B, she is prohibited from resolving the claim until the dispute in respect of her claim for additional whole person impairment compensation and pain and suffering compensation is resolved and paid. The fact that the defendant has conceded that the permanent impairment threshold for claiming work injury damages has been reached is irrelevant.
I reject the submission that the worker has not sought to prosecute her claim for work injury damages. There is a dispute in relation to her entitlement to additional compensation due to the alleged deterioration of her condition. So much is clear from the terms of the letter from Thompson Eslick, the defendant’s solicitors, dated 20 July 2001. Although the dispute has not been the subject of a referral under Pt 7 of Ch 7 of the 1998 Act, which would have prohibited me from striking the matter out under s 151DA(4), if Ms Palau’s medical evidence is accepted, her condition has deteriorated to a significant extent and she should be afforded the opportunity to recover any lump sum compensation to which she is entitled before pursuing her work injury damages claim.”
Keating P’s interpretation of the interrelationship of s 280B and s 151A is correct. This is confirmed by Leeming JA’s comment in Gardiner, at [88].
Whilst Mr Stephens may commence proceedings in a work injury damages claim, those proceedings cannot be resolved unless and until any permanent compensation has been paid to him. Implicit in this, is that any claim must be made, determined and any such compensation be paid before the work injury damages claim can proceed to be determined. This is consistent with Gower, at [44] where it was held that Court proceedings cannot commence unless a claim has been made.
I note that Palau was determined prior to the commencement of the Workers Compensation Legislation Amendment Act 2012, which introduced s 66(1A). Section 66(1A) of the 1987 Act provides “Only one claim can be made under this Act for permanent impairment compensation in respect of the permanent impairment that results from an injury.”
Clause 11(1) of Sch 8 to the Workers Compensation Regulation 2016 (the 2016 Regulation) provides that a further lump sum compensation claim may be made in respect of an existing impairment and subcl (2) provides that only one further lump sum compensation claim can be made in respect of the existing impairment. Clause 11 of Sch 8 to the 2016 Regulation (cl 11) is applicable in Mr Stephens’ matter.
In combination, s 66(1A) and cl 11 means that Mr Stephens is now limited to being able to make one further claim for lump sum compensation. A consequence of this amendment is that workers will be inclined to delay making further lump sum compensation until their permanent impairment has settled. The present case is such an example.

As indicated by Dr Tsai, surgery to Mr Stephens’ right elbow may or may not be effective, and his right elbow continues to deteriorate. Like in Palau, if Dr Tsai’s and Mr Stephens’ evidence is accepted, Mr Stephens may have suffered a consequential condition and he should be afforded the opportunity to seek to make a claim for and to recover any lump sum compensation he may be entitled to before pursuing his work injury damages claim.
It is apparent from White JA’s comments in Gower quoted above, that Mr Stephens is unable to commence Court proceedings until such time as he makes a claim for compensation. Whilst there has been a claim in respect of the left elbow, there has not been a claim made in relation to the alleged consequential condition in his right elbow.
As the applicant defendant has gone to some length to point out, Mr Stephens has not yet made what may be his further claim. In my view, in light of White JA’s helpful analysis in Gower, Mr Stephens is somewhat hamstrung in being able to commence proceedings in a work injury damages claim in view of the fact that Mr Stephens has indicated that in the future he will be making a further claim for lump sum compensation.

Prejudice

The applicant defendant has made submissions with respect to the prejudice it faces due to the effluxion of time since the injury. It argues that it is well established that a Pre-Filing Statement is not intended to extend time indefinitely and that Limitation periods exist to protect parties from potential prejudice cause by the passage of time between the date of injury and commencement of Court proceedings, citing Campbell-Willis.
It further argues that there is no certainty Mr Stephens will agree to undergo surgery or indeed whether he will undergo surgery at all. In this respect, Dr Tsai opines that without the surgery, Mr Stephens’ right elbow will continue to deteriorate. Regardless of whether or not Mr Stephens undergoes surgery, Dr Tsai opines that the right elbow condition may change.
I further note the applicant defendant argues:
“There is no evidence that qualified evidence has been sought to ascertain whether the worker’s left arm condition satisfies the definition of Maximum Medical Improvement and is thus capable of assessment for the purposes of finalising permanent impairment entitlements now rather than awaiting surgery that may not be undertaken for many years, or may not be undertaken at all.”
This argument is not clear. I note that Mr Stephens’ left elbow was that elbow which was the subject of the previous complying agreements. In the event that the reference to left elbow, is in fact meant to be the right elbow, I note my above discussion in relation to s 66(1A) and cl 11 of the 2016 Regulation.
In relation to the assertion of prejudice and the issues raised in Campbell-Willis, I have indicated above following Gower, that until Mr Stephens has made a claim in respect of any alleged right elbow consequential condition, it is not possible for him to commence proceedings. Consequently, as he is prohibited from commencing proceedings until he makes a claim, the effluxion of time, in reality has not commenced.
I wish to make one further observation. Following the lodgment of the Pre-Filing Strike Out Application, this matter was adjourned for some time while the parties explored settlement negotiations. Whilst a settlement ultimately did not come to fruition, it is demonstrative that there has been recent action by Mr Stephens in relation to the prosecution of his claim.

CONCLUSION

It is clear from Gower that Mr Stephens cannot commence proceedings until he has made a claim. Whilst he has made a claim that has come to settlement in respect of the left elbow, it is apparent that there may be a further claim made in the future in relation to the alleged consequential condition that Mr Stephens asserts he has developed in his right elbow. Further, even if he could commence Court proceedings, he is unable to conclude those proceedings until such times as his permanent impairment compensation has been resolved and paid. In view of the fact he is only entitled to one further claim which has not yet been made and his reluctance to avoid undergoing surgery to his right elbow, which may be a further claim to be made, I am of the view that it is not appropriate at this time to strike out Mr Stephens’ Pre-Filing Statement.

DECISION

The Application to strike out the respondent claimant’s pre-filing statement is dismissed.
No order as to costs.

Judge Phillips
President

19 January 2021