Kaibau v Gillespie's Produce and Packing Pty Ltd
[2006] NSWWCCPD 168
•1 August 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Kaibau v Gillespie’s Produce and Packing Pty Ltd [2006] NSWWCCPD 168
APPELLANT: Filikesa Kaibau
RESPONDENT: Gillespie’s Produce and Packing Pty Ltd
INSURER:CGU Workers Compensation (NSW) Ltd
FILE NUMBER: WCC12020-04
DATE OF ARBITRATOR’S DECISION: 31 August 2005
DATE OF APPEAL DECISION: 1 August 2006
SUBJECT MATTER OF DECISION: Estoppel; res judicata; effect of prior consent award
PRESIDENTIAL MEMBER: Acting Deputy President Bill Roche
HEARING:On the papers
REPRESENTATION: Appellant: P K Simpson & Co
Respondent: Moroney Betts
ORDERS MADE ON APPEAL: Time to appeal is extended until 6 October 2005.
The Arbitrator’s decision of 31 August 2005 is revoked and the following order made:
“The matter is remitted to a different Arbitrator under section 352(7) of the Workplace Injury Management and Workers Compensation Act 1998 for the Arbitrator to determine the Appellant Worker’s entitlements pursuant to the provisions of the Workers Compensation Act 1987 in accordance with the reasons in this decision.”
The Respondent Employer is to pay the costs of the appeal and of the proceedings in the first Arbitration.
BACKGROUND TO THE APPEAL
On 6 October 2005 Filikesa Kaibau (‘the Appellant Worker/Mr Kaibau’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 31 August 2005.
The Respondent to the Appeal is Gillespie’s Produce and Packing Pty Ltd (‘the Respondent Employer’).
Mr Kaibau was born in Fiji on 1 November 1964 and came to Australia in 1989. He started work with the Respondent Employer as a packer/stacker on 30 August 1989. This was a heavy physical job that required him to be on his feet all day and to lift bags of vegetables weighing from 20 to 50 kilograms. On 16 December 1990 he was moving pallets when a forklift jammed his right foot against the pallet causing an injury to his right ankle. As a result of his injury he ceased work on 20 December 1990 but was able to resume after a short break. He consulted his family doctor and was prescribed medication. He returned to his normal duties but never fully recovered.
He continued to experience pain and swelling in the right ankle and struggled to stay at work. He worked for the Respondent Employer until about 1994 or 1995 when he left.
On 1 September 1995 he filed an Application for Determination in the Compensation Court of NSW (‘the Compensation Court’) (matter 15604 of 1995) seeking lump sum compensation as a result of his December 1990 injury. It is not known what happened to that Application as no further documents have been filed in respect of it.
In 1996 he started work with Chubb Security where he worked as a static guard at train stations. After ceasing work at Chubb’s in 1998 he started work with Costa’s Pty Ltd in 15 March 1999 where he did identical duties to those he performed with the Respondent Employer. He remained with Costa’s until 17 September 2000 when he resigned because of problems with his right ankle.
On 13 March 2002 he filed an Amended Application for Determination in the Compensation Court (matter 60822 of 2001) (‘the First Application’) seeking compensation against the current Respondent Employer as a result of his injury on 16 December 1990 and as a result of the nature and conditions of his employment for various periods through the 1990’s “to date”. The First Application sought weekly compensation from 17 September 2000 to date and continuing and lump sum compensation under section 66 of the Workers Compensation Act 1987 (‘the 1987 Act’) in respect of a 25% loss of use of the right leg at or above the knee plus compensation for pain and suffering under section 67 of the 1987 Act.
This application came on for hearing in the Compensation Court on 20 February 2003 when it was settled (‘the Settlement’) and the following Terms of Settlement were filed:
“By Consent:
Weekly Payments Award in favour of the respondent in respect of the claim for weekly compensation.
s.661. That the Respondent pay the Applicant as lump sum compensation under Section 66:
(i)$9,450 in respect of 13.5% permanent loss of efficient use [sic] right leg below the knee.
s.672. [deleted]
Interest3. That the amount paid under Section 66 is agreed to include interest.
s.604. Award for the respondent in respect of Section 60 expenses.
Costs5. That the Respondent pay the Applicant’s costs including 3 qualifying fees and second conference for $250.00 after they have been agreed and/or Assessed.
6.No interest to be paid on the amounts set out above unless those amounts are not paid within twenty eight (28) days of issue of [sic] Certificate of Medicare pursuant to the Health & Other Services (Compensation) Act 1995.
7.The Applicant acknowledges that he/she has suffered no injury to any other part of his/her body other than the injury the subject of these proceedings while in the employ of the Respondent to date.
8.No interest is payable on any costs or disbursements until twenty eight (28) days after receipt by the Respondent’s solicitor of written confirmation of an agreement on quantum of the same and a valid tax invoice reflecting the agreement, or alternatively receipt of a certificate of assessment from the relevant costs assessor.”
I am prepared to assume that the above Terms of Settlement were entered into an award of the Compensation Court but that award is not before me.
Dr Matalani records in his report of 8 April 2004 that Mr Kaibau returned to work as a laundry machine operator in September 2003 where he worked for three months but was too slow because of his pain. He then worked as a picker and packer for three days but found that his pain was exacerbated and he was unable to continue.
On 5 August 2005 the Appellant Worker filed an Application to Resolve a Dispute (‘the Second Application’) in the Commission alleging injury to his “right leg, back and left leg” as a result of his 16 December 1990 accident. This application sought weekly compensation from 9 November 1993 to date and continuing plus lump sum compensation under section 66 in respect of a 12% permanent impairment of the back and a 5% permanent loss of efficient use of the left leg and under section 67 in the sum of $30,000.00, and “ongoing” hospital and medical expenses under section 60. The Second Application was later amended to claim compensation from 20 February 2003.
By its Reply to Application to Resolve a Dispute filed on 23 August 2004 the Respondent Employer raised 19 grounds of dispute. In particular it denied the Appellant Worker was entitled to any compensation on the grounds of the doctrine of res judicata and estoppel. It also denied that Mr Kaibau had suffered any injury or incapacity.
The Second Application was the subject of three teleconferences. The Appellant Worker’s claim for lump sum compensation was referred to an Approved Medical Specialist (‘AMS’) for assessment. A Medical Assessment Certificate (‘MAC’) was issued on 9 March 2005.
It certified as to the following assessments in respect of conditions said to have resulted from the 16 December 1990 accident:
(a) 15% loss of use of the right leg below the knee less 10% for a pre existing condition giving a net loss of 13.5%;
(b) 10% loss of use of the left leg at or above the knee less 100% for a pre existing condition giving a net loss of zero, and
(c) zero impairment of the back.
At a teleconference held on 20 July 2005 the Arbitrator determined that the matter was one that was suitable to be determined on the papers and the parties were directed to file written submissions on the question of ‘estoppel’. Each party filed written submissions and the Respondent Employer filed further submissions on 23 August 2005.
The Arbitrator found in favour of the Respondent Employer and the Appellant Worker now seeks leave to appeal from that decision.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 31 August 2005 records the Arbitrator’s orders as follows:
“1.The Applicant’s claim is dismissed.
2.No order as to costs.”
ISSUES IN DISPUTE
The issues in dispute in the appeal are whether the Arbitrator erred in:
(a)denying the Appellant Worker procedural fairness by:
(i)not allowing an oral hearing so the complex issue of estoppel could be ventilated;
(ii)seeking written submissions on the issue of estoppel but not on the issue of ‘injury’;
(iii)misleading the Appellant Worker by not adequately specifying the extent of the submissions required;
(iv)considering the ‘further submissions’ filed by the Respondent Employer on 23 August 2005;
(v)proceeding to a final determination without alerting the Appellant Worker that that was her intention;
(vi)contravening Rule 71 of the Workers Compensation Commission Rules 2003 (‘the Rules’)
(b)failing to consider the decision of Rail Services Australia v Dimovski & anor [2004] NSWCA 267 (‘Dimovski’);
(c)preferring the decisions of members of the Commission instead of following and applying Dimovski;
(d)applying the authority of Kuppers v NSW Fire Brigades [2005] NSWSC 193, a common law case, to a workers compensation case;
(e)finding there was an issue estoppel arising from the settlement of 20 February 2003;
(f)finding there was no change in circumstances since the settlement of 20 February 2003 pursuant to section 55 of the 1987 Act;
(g)determining the issue of ‘injury’ without having sought submissions on that issue;
(h)raising and relying on section 9A of the 1987 Act when that section was not in the Respondent Employer’s Reply and the Appellant Worker was not given the opportunity to make submissions on that issue;
(i)failing to give adequate reasons as to why she found that the Appellant Worker’s employment was not a substantial contributing factor to the injury;
(j)finding that Dr Nash’s findings could not be supported;
(k)failing to consider the increased vulnerability of an injured person to consequential injuries, and
(l)failing to consider or decide the Appellant Worker’s entitlement to medical and hospital expenses pursuant to section 60 of the 1987 Act.
LEAVE TO APPEAL
Quantum
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’).
The quantum in issue on the appeal is in excess of $5,000.00 and therefore the threshold in section 352(2)(a) of the 1998 Act is satisfied. No award of compensation has been made in this case but the Arbitrator’s finding would result in the Appellant Worker receiving no compensation and therefore the second limb of section 352(2) does not apply (see Mawson v Fletchers International Exports Pty Ltd [2002] NSW WCC PD 5).
Time
The appeal was originally filed within time on 26 September 2005 but was rejected because it did not attach reasons as to why the appeal could not be determined on the papers. It was lodged again on 6 October 2005 when it was outside the 28 day period allowed in section 352(4) of the 1998 Act.
The Appellant Worker submits that the time to appeal should be extended because there is no prejudice to the Respondent Employer and the appeal is only a few days out of time. The Respondent Employer submits that the question of extension of time is a matter for the Presidential Member.
An extension of time in which to appeal can be granted in certain limited circumstances. Rule 77(8) of the Workers Compensation Commission Rules 2003 (‘the Rules’) provides:
“(8) The Commission constituted by a Presidential member may, if a party satisfies the Presidential member, in exceptional circumstances, that to lose the right to seek leave to appeal would work demonstrable and substantial injustice, by order extend the time for making an appeal.”
The question of extending time to appeal was considered by Justice McHugh in Gallo v Dawson (1990) 93 ALR 479 (‘Gallo’) where his Honour said at 480:
“The discretion to extend time is given for the sole purpose of enabling the court or justice to do justice between the parties: see Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257 at 262. This means that the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time: see Avery v No 2 Public Service Appeal Board [1973] 2 NZLR 86 at 92; Jess v Scott (1986) 12 FCR 187 at 194-5; 70 ALR 185. When the application is for an extension of time in which to file an appeal, it is always necessary to consider the prospects of the applicant succeeding in the appeal: see Burns v Grigg [1967] VR 871 at 872; Hughes at 263-4, Mitchelson v Mitchelson (1979) 24 ALR 522 at 524. It is also necessary to bear in mind in such an application that, upon the expiry of the time for appealing, the respondent has “a vested right to retain the judgment” unless the application is granted: Vilenius v Heinegar (1962) 36 ALJR 200 at 201.”
In the present case the appeal was originally filed in time but was rejected because of a defect in the documentation. That defect was rectified within a few days and the appeal was filed again. The appeal raises important issues that are strongly arguable. In my opinion there will be a substantial injustice to the Appellant Worker if leave to appeal is refused.
I therefore extend the time to appeal until 6 October 2005.
I grant leave to appeal.
PRELIMINARY MATTERS
Section 354(6) of 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.”
The Appellant Worker submits that the issues raised on appeal are difficult and complex and there should therefore be an oral hearing. The Respondent Employer submits that the appeal can be determined on the papers.
I have the benefit of lengthy written submissions from both parties and I do not believe the issues require further argument in an oral hearing.
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by the Respondent Employer that the appeal 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.
SUBMISSIONS AND FINDINGS
Procedural Fairness
It is alleged that the Arbitrator denied the Appellant Worker procedural fairness in that she sought written submissions on the issue of estoppel only, but then proceeded to determine all issues in the case.
In the present case there were three teleconferences held. At the first on 25 October 2004 the Respondent Employer advised the Arbitrator and the solicitor for the Appellant Worker that the matter was contentious and that there was an estoppel arising from the earlier Settlement. As a result the Appellant Worker amended the Second Application to claim compensation from 20 February 2003. The matter was then referred to an AMS for assessment of the Appellant Worker’s section 66 losses and impairments, if any.
The second teleconference was held on 4 April 2005. The Appellant Worker advised that he wished to appeal the MAC issued by the AMS. The matter was adjourned so that could be done. The appeal against the MAC was unsuccessful as the Registrar did not accept that any of the grounds in section 327(3) had been made out (Registrar’s Decision 27 June 2005).
The third teleconference was held on 20 July 2005. The Respondent Employer again asserted its position that the case was not capable of being settled and requested that it be determined ‘on the papers’ as it did not wish to cross examination Mr Kaibau and there had already been three teleconferences. The Appellant Worker requested that the matter be listed for an Arbitration hearing where the issue of estoppel could be ventilated and the parties could explore settlement. The Arbitrator agreed with the course proposed by the Respondent Employer and requested the parties to provide written submissions on the issue of estoppel. No formal direction was issued by the Arbitrator.
In her Statement of Reasons for Decision (‘Reasons’) the Arbitrator stated that she was satisfied that the “documents supplied are sufficient as required by s354(6) of the 1998 Act” (Reasons paragraph 16). She also said that “the parties have agreed to the determination of the matter without a conference or formal hearing”. This is denied by the Appellant Worker who submits that he sought a formal Arbitration hearing.
There is no transcript of the proceedings at any of the teleconferences but the Arbitrator’s notes on the teleconference outcome for 20 July 2005 read as follows:
“There were no offers from the Respondent. The Respondent [sic] has no evidence of a deterioration to warrant a variation on [sic] the award from the Compensation Court. The Applicant stated that the Compensation Court award was by consent and therefore they do not have to prove variation in circumstance [sic]. The Respondent preferred the matter to be determined on the papers due to rising costs. The Applicant’s credit was not in question and no cross examination would by required. In short I found that the matter was suitable to be determined on the papers. Short submission [sic] on the question of estoppel will be provided.
1.The Respondent has 14 days to file submission [sic], the Applicant has 14 days thereafter to Respond.
2.Both parties are to provide up dated wage scheduled [sic] within 28 days.
3.The matter is to be determined on the papers thereafter.”
In its written submissions before the Arbitrator the Respondent Employer submitted that the Commission did not have power to consider whether the Applicant had an incapacity based on the injury to the right ankle because this issue had “already been determined in favour of the Respondent” (Respondent Employer’s submissions page one). It was conceded that incapacity could be found “in relation to the alleged injuries to the back and left leg”. The submissions were mainly directed at the estoppel issue but also devoted three pages to dealing with the medical evidence but only in the context that the Appellant Worker had to show a deterioration in his condition since 20 February 2003 in order to overcome the effect of the estoppel said to arise from the Settlement.
The Appellant Worker’s submissions to the Arbitrator dealt briefly with the estoppel point and that there had been a change in circumstances since 20 February 2003. They also made brief references to the back condition (paragraph nine) and that the MAC does not determine the issue of causation of the back condition. The submissions referred to the medical evidence of Dr Matalani as supporting the argument that there had been a deterioration in the Appellant Worker’s condition. Reference was also made to the report of Dr Gliksman obtained by the Respondent Employer.
On appeal the Appellant Worker’s complaint is that because of the Arbitrator’s request for submissions on estoppel only he did not make any submissions on ‘injury’. It was his understanding that the Arbitrator would make a preliminary finding on estoppel “before a final decision” (Appellant Worker submissions on appeal paragraph nine). The exact basis for that understanding is unclear.
The Arbitrator’s note on the teleconference on 20 July 2005 indicates that she intended to decide all issues ‘on the papers’ without a further teleconference or hearing. Without a transcript it is impossible for me to determine if that view was accurately conveyed to the parties. The note also makes it clear that written submissions were only sought on the issue of estoppel. The Respondent Employer’s submissions before the Arbitrator made it clear that it considered that all issues would be determined by the Arbitrator.
The Commission is bound to comply with the rules of procedural fairness. In Inghams Enterprises Pty Ltd v Zarb [2003] NSWWCCPD 15 Deputy President Fleming referred to section 354 of the 1998 Act which provides that proceedings in the Commission are to be conducted with as little technicality and formality as possible and then said at [25] and [26]:
“25. While this provision modifies the common law rules of procedural fairness in some respects, for instance, in relation to the determination of matters on the papers, it does not alter the fundamental rule that a party is entitled to be heard in relation to the case against it, before the decision-maker exercises the power to make the decision (Twist v Council of the Municipality of Randwick (1976) 136 CLR 110). In this case the Arbitrator expressly told the parties they would have the opportunity to make further submissions on the matter of an award of lump sum compensation, once she had made the relevant finding of fact upon which the issue turned. In my view, it was clearly a denial of procedural fairness to then proceed to determination without allowing the parties to make those submissions. This was not a matter of informality and lack of technicality. There is nothing in section 354 of the 1998 Act which required the Arbitrator in this matter to give the parties the opportunity to make further submissions; however, once she had stated that she was going to follow that course, there is, equally, nothing in the section that excuses her failure to do so.
26. A denial of procedural fairness is an error of law going to jurisdiction (Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11 (‘Bhardwaj’). In this matter the denial of procedural fairness was in relation to the determination of compensation for permanent impairment, and for pain and suffering compensation under sections 66 and 67 of the 1998 Act. The result is that no decision has been effectively made in relation to these entitlements and an Arbitrator must consider this part of the dispute afresh.”
In the present case the estoppel issue was of great importance, but an adverse finding on that issue would not have disposed of the whole claim. It was still necessary to consider the claim for the back and left leg. Therefore, the Arbitrator was in error in restricting the parties to written submissions on estoppel and then proceeding to determine all outstanding issues. The Appellant Worker was entitled to be heard further once the estoppel issue was decided. The failure to afford the Appellant Worker that opportunity was an error of law.
Issue Estoppel and Res Judicata
It is submitted that the Arbitrator was in error in failing to consider and apply the Court of Appeal authority of Dimovski. It is argued that there was no “final judicial decision” involved in the Settlement effected on 20 February 2003 and, therefore, there is no “issue estoppel” or res judicata arising from the by consent orders made by the Compensation Court (Appellant Worker’s submissions paragraph 20).
The Respondent Employer’s submits that the Arbitrator made no finding adverse to the Appellant Worker on the issue of res judicata (Respondent Employer submissions paragraph 4(v)). I do not accept that submission. The Arbitrator made it clear at pages seven and nine of her Reasons that she relied on res judicata and estoppel, together with the lack of evidence of a change of circumstances under section 55, to dismiss the Appellant Worker’s claim. The Arbitrator referred to and relied on the decision of Kuppers v NSW Fire Brigades [2005] NSWSC 193 (‘Kuppers’), stating that Johnson J “confirmed that the determination of an issue by the Compensation Court will bind the parties in subsequent common law proceedings in relation to the same issue” (emphasis added) (Reasons paragraph 30). In the present case there was no “determination of an issue” by the Compensation Court in the First Application. The Settlement was an agreement between the parties. In Kuppers the Compensation Court made extensive factual findings after a lengthy contested hearing. It was those findings that determined several contentious issues between the parties that were binding on the same parties in later common law proceedings arising from the same facts. There was no hearing in the present case.
The Respondent Employer submits that a consent order can create res judicata estoppels. Reliance is placed on Dimovski and on the text The Doctrine of Res Judicata by Spencer Bower, Turner and Handley (‘Spencer Bower’) where the authors state at paragraph 38:
“A judgement or order by consent of the parties may be a res judicata. In such cases the court is discharged from the duty of investigating or further investigating the matters in controversy and does not pronounce a judicial opinion on them; but at the joint request of the parties it gives judicial sanction and coercive authority to what they have agreed and thus converts an agreement which, except by statute, could never operate as a bar into a judicial decision on which a plea of res judicata may be founded. Judgements, orders and awards by consent are as efficacious as those pronounced after a contest, in creating cause of action estoppels and effecting a merger of the causes of action sued on.”
The Respondent Employer also relies on Chamberlain v Deputy Commissioner of Taxation (1998) 164 CLR 502 (‘Chamberlain’) where Justices Deane, Toohey and Gaudron stated at [15]:
“The fact that a judgment is entered by consent may on occasion make it
hard to say what was necessarily decided by the judgment, especially where it
is the defendant who wishes to bring action at a later date: Isaacs v. The
Ocean Accident and Guarantee Corporation Ltd. (1958) SR (NSW) 69 per Street
C.J. and Roper C.J. in Equity, at p 75; cf. Owen J. at pp 79-80. But theprinciple of res judicata holds good in such a case.”
In Chamberlain the plaintiff sued to recover a debt (outstanding tax) and recovered a verdict and judgment against the defendant by consent for $25,557.92. In fact the tax owed was $255,579.20. In subsequent proceedings to recover the correct amount based on the same cause of action the defendant raised the defence of res judicata. That defence was upheld by the High Court. At [21] the majority held:
“The point of the present appeal is that the respondent brought an action against the appellant and recovered judgment against him. He obtained a judgment of the court in which the cause of action upon which he relied merged, thereby destroying its independent existence so long as that judgment stood. And, so long as that judgment stands, it is not competent for the respondent to bring further proceedings in respect of the same cause of action.”
I agree that res judicata, in the absence of an application for a reconsideration under section 350(3) of the 1998 Act, prevents the Appellant Worker from claiming weekly or section 60 compensation for the period up to 20 February 2003, but in the absence of a determination of any factual or legal issues by a competent tribunal it does not prevent a claim being made for compensation after that date. The cause of action on which the Appellant Worker relies in the Second Application has not ‘merged’ in the settlement effected on 20 February 2003 because the settlement, without more, cannot eliminate future rights. An award after that date is not inconsistent with the terms of the settlement reached on that day or the orders made as a result of that settlement.
The above passage from Spencer Bower (paragraph 45) must be read in the light of the provisions of the workers compensation legislation (the 1987 Act and the 1998 Act) and the nature of the relief provided in those Acts. The Commission does not determine lump sum damages on a once and for all basis, but determines rights at a particular point in time. Therefore, the application of the traditional principles of estoppel and res judicata needs to be approached with some caution in the Commission.
The issue of estoppel in the Compensation Court was considered by Judge Neilson in Bruce v Grocon Ltd (1995) 11 NSWCCR 247 (‘Bruce’). His Honour reviewed the relevant authorities and held at 264 that “there was no reason in principle why a determination of this Court could not in appropriate circumstances create a cause of action estoppel” (emphasis added). In the present case there has been no ‘determination’ of the Appellant Worker’s rights to compensation beyond 20 February 2003.
Whether a consent order creates an estoppel in the Compensation Court was considered by Judge Neilson in Anderson v Charles Sturt University (2000) 25 NSWCCR 407 (‘Anderson’) where his Honour said a [30]:
“Parties can ask the Court to enter up an award in accordance with their agreement. The Court, provided jurisdiction exists, can enter up that award. However, even though formed in the terms of a Court award, it is still in effect an agreement between the parties. It does not create any issue estoppel. Mere payment of compensation cannot amount to an estoppel but, at most, if anything, an admission. Such was the decision of Court of Appeal in APD Snack Foods Pty Limited v Vuic [1984] 58 WCR (NSW) 62, a decision of Hutley AP, Glass and Mahoney JJA.”
Since Anderson was decided the question of whether a consent award creates an estoppel was considered by the Court of Appeal in Dimovski. In that case the parties settled a claim by consent for 25% loss of use of a leg and an award was entered in those terms. In later proceedings the worker sought an additional payment under section 66 of the 1987 Act as a result of an alleged increase loss of use of the same leg due to further injuries. The trial judge held that the worker had sustained further injuries which had a permanent effect on the leg but she did not increase the award of 25%.
On appeal it was argued that the earlier consent award created estoppels which meant that if the later injuries had a permanent effect then there had to be an increase in the percentage loss of use awarded. Justice Handley set out the principles in some detail from [9] to [12]:
“9 Mr King submitted that the Judge erred in law in failing to give effect to the estoppel created by the consent award by finding that although the worker had suffered further injuries to his left leg his current loss of use was still only 25%. A consent judgment can create res judicata estoppels: Spencer Bower, Turner & Handley ‘Res Judicata’ 1996 pp 21-2. The estoppels flowing from the consent award bound the second respondent as a party and the appellant as a privy in interest, as the second respondent’s statutory successor: Spencer Bower & Ors (above) pp 119-22.
10 The argument based on issue estoppel involved two propositions. The first was that the consent award conclusively determined that as at 16 October 1996 the worker had a permanent impairment of his left leg at or above the knee of 25% which was the result of an injury or injuries sustained in the employment of the second respondent. This is correct. The second was that he suffered two further injuries to his left leg in the employment of the appellant, one from the nature and conditions of his work, and the other the frank injury on 25 May 1998. This was also correct.
11 If these further injuries caused other than temporary aggravations of the worker’s condition they must have increased the impairment in his left leg. The Judge did not find that they only caused temporary aggravations, but nevertheless found no increased impairment. Accordingly it was submitted that she had disregarded the estoppel. Mr King relied strongly on her statement that the consent award was ‘possibly not reflective of an accurate assessment’.
12 These submissions must be rejected because they are contrary to the principles established in O’Donel v Commissioner for Road Transport (1938) 59 CLR 744. A decision that a worker’s total blindness between 14 September 1934 and 15 February 1935 arose from an injury in the course of his employment was held not to issue estop the employer from contending that his blindness after 15 February 1935 arose from other causes. Evatt J said at 763:
‘The argument involves and is based upon the fallacy that where an issue between A and B related to a state of things which is capable of subsequent alteration, the conclusive determination in A's favour of that state of things as at one date plus conclusive proof that up to a later day there has been no alteration of such state of things establishes in A's favour as against B an estoppel as to the state of things existing at the later day ... this method, thought logically sound, is not permitted by law ... The unsuccessful party is bound by the authoritative determination of every fundamental issue but when a distinct and separate issue arises subsequently, he is not bound to submit to the second issue being established by the combination of a former issue with additional evidence, no matter how strong such evidence may be.’”
Dealing specifically with the consent awards his Honour said at [14]:
“The consent award involved admissions by the parties and these, coupled with the presumption of continuance, were of some weight. However there was much other evidence, lay and expert, relating to the worker’s impairment at the later date and the weight to be given to the admissions and the presumption of continuance was a question of fact for the Judge.”
In the same case Hodgson JA said at [57]:
“The inconsistency point was supported by submissions concerning issue estoppel. However, although an issue estoppel binds the parties as to the issues actually determined, they are not bound in relation to any different issue, not even where the combination of the original issue and extremely strong evidence would support a finding on the second issue: see O'Donel v. The Commissioner for Road Transport and Tramways (NSW) (1938) 59 CLR 747 at 763.”
Applying the above authority to the present case it is clear that a consent award can create an estoppel. However, the extent of that estoppel is quite limited. In my view it can go no further than creating an estoppel on the fact that the Appellant Worker had, as at 20 February 2003, a 13.5% loss of use of his right leg below the knee as a result of injury sustained in or arising out of his employment with the Respondent Employer. The award for the Respondent Employer in respect of the claim for weekly compensation and section 60 expenses creates an estoppel that, as at 20 February 2003, the Appellant Worker had no right to weekly compensation or section 60 expenses up to that date. However, the award does not bind the parties into the future. There was no ‘determination’ as to why there was an award for the Respondent Employer in respect of weekly compensation and hospital and medical expenses as at 20 February 2003. There was no finding that the Appellant Worker had recovered from the effects of his injury by that date or that he suffered no economic loss or incapacity as a result of his agreed loss of use of his right leg below the knee. There were no ‘admissions’ or ‘agreed facts’ to the effect that, notwithstanding his 13.5% loss of use of the leg below the knee, the Appellant Worker was able to earn the same as he had earned in the employ of the Respondent Employer. Therefore, the estoppel can have no greater effect than appears on the face of the terms of settlement. Namely, that as a 20 February 2003 the Appellant Worker had no entitlement to weekly compensation or section 60 expenses.
The case of Almario v Carrington Constructions Pty Ltd (1996) 13 NSWCCR 739 (‘Almario’) is also instructive. In that case the worker settled his claim for lump sum and weekly compensation on 2 May 1994. As part of that settlement he signed two documents, one headed ‘Admissions’ and the other headed ‘Agreed Facts’. The effect of those documents was that the parties agreed, among other things, that the worker had no incapacity after 15 July 1992 as a result of his employment injury. The settlement provided for the payment of lump sum compensation to the worker in respect of loss of efficient use of each leg and a sum for pain and suffering under section 67. The resolution of the claim also involved, consistent with the admissions made, an award for the employer in respect of the claim for weekly compensation. On 15 June 1995 the worker filed a fresh application seeking weekly compensation from 3 May 1994, the day after the consent award in the earlier matter. He also claimed a lump sum in respect of permanent impairment of the back, something not claimed in the earlier proceedings.
At page 746 Burke J noted:
“In relation to the claim in this matter for weekly payments on and after 3 May 1994, even allowing, without deciding, that the effect of the award of Geraghty J on 2 May 1994 raises an estoppel or res judicata, there is no apparent impediment to the worker prosecuting this claim. There is no approbation and reprobation. In this application, the worker patently accepts the absence of relevant incapacity up to 2 May 1994 by making no claim therefor. There is no inherent conflict in his becoming unfit the day following the award of Geraghty J. There may be evidentiary difficulties but no legal preclusion. No order now made would conflict with any order then made either actually or even inferentially.” (emphasis added)
At page 748 his Honour added:
“The claim for weekly payments is in respect of a period of incapacity occurring after the date of the prior award of Geraghty J and therefore not disposed of finally by any order that he made.”
Judge Burke considered the effect of the representations made by the worker in the ‘Admissions’ and ‘Agreed Facts’ and held that those representations spoke at the date they were made and were evidentiary of the facts stated but were not conclusive that the facts remained as stated into the future.
I place great weight on the fact that, in the present case, there were no admissions or agreed facts. There was no representation by the Appellant Worker that he had no incapacity for work as at 20 February 2003 as a result of his right ankle injury with the Respondent Employer. There was no admission that he had recovered from the economic or other effects of his ankle injury. All that arises from the Settlement is a concession by the Appellant Worker that up to 20 February 2003 he had (for reasons not identified) no entitlement to weekly compensation or section 60 expenses. That concession does not create an evidentiary hurdle for him in the current claim as there could have been any number of reasons why he was prepared to make that concession at that time. Therefore, there are no particular ‘evidentiary difficulties’ for Mr Kaibau to overcome before he can recover weekly compensation from 21 February 2003.
What is necessary is for there to be evidence that his incapacity after 20 February 2003 has resulted from his right ankle injury of 20 December 1990. The evidence clearly establishes that the Appellant Worker has an incapacity on the open labour market as a result of his December 1990 right ankle injury. In particular I note the following evidence:
· Dr Matalani stated in his report of 8 April 2004 that Mr Kaibau was unfit for his pre injury work and was, among other things, restricted in his ability to stand and walk;
· Dr Nash reported on 12 May 2004 that the Appellant Worker was unfit for work that required lifting weights in excess of 10 kg, frequent crouching, squatting, kneeling or work on uneven ground;
· the AMS noted on 6 January 2005 that Mr Kaibau “reported a standing tolerance of around 30 minutes limited by sharp pain in his right ankle and a walking tolerance of around 15 minutes” (MAC page five), and
· the MAC assessed the Appellant Worker to have a 15% permanent loss of use of his right leg below the knee as a result of his injury with the Respondent Employer on 16 December 1990 of which 10% was due to pre existing abnormality or condition.
In these circumstances I do not believe it is necessary for the Appellant Worker to show a change in circumstances before he is entitled to recover compensation from 21 February 2003 as a result of the effect of his 16 December 1990 injury.
A similar issue was considered in De Witte v Tawnay Pty Ltd t/as Country Coast Real Estate [2006] NSWWCCPD 109 (‘de Witte’). In that case the worker agreed to an award for the employer in respect of her claim for weekly compensation. In later proceedings seeking weekly compensation from the day after the payments ceased the Arbitrator found for the employer on the grounds that the worker had not established a change in circumstances under section 55 of the 1987 Act. In revoking that decision Acting Deputy President Snell held at [54]:
“Applying the reasoning in Anderson, as I do, in my view the arbitrator has erred in the approach she has taken to the prior consent award. It did not involve any findings by the court, but rather enshrined in an award what was an agreement between the parties. Its legal effect on the later proceedings did not go beyond whatever evidentiary force lay in the admissions by the parties, which were inherent in the terms and consent award. Accordingly it was not appropriate to approach the weekly claim, as the arbitrator did, on the basis the appellant had to demonstrate a change in circumstances since the date of the consent award, if she was to succeed.”
Subject to the fact that Anderson must now be read in the light of Dimovski, I agreed with the approach of Acting Deputy President Snell in de Witte to consent orders in general and to section 55 in particular.
If I am wrong in my view that it is not necessary to show a change in circumstances in order to be entitled to recover compensation after 20 February 2003, I believe the evidence does establish a relevant change in circumstances. The report of Dr Nash of 12 May 2004 notes that the Appellant Worker complained of increasing pain in his right ankle with pain in his knees and back. In addition Dr Nash records Mr Kaibau ceased work on 7 April 2004 because of pain in his ankle and because he was too slow because of his disability. Leaving to one side whether the pain in the knees and back has resulted from the right ankle injury, the increase in pain in the right ankle would be sufficient to indicate a change in Mr Kaibau circumstances.
The Respondent Employer also argues that the Settlement created an issue estoppel and relies on Blair v Curran (1939) CLR 462 at 532 (‘Blair’) where Dixon J (as he then was) said:
“A judicial determination directly involving an issue of fact or law disposes once and for all of the issue, so that it cannot afterwards be raised between the same parties or their privies.”
This case talks about a “judicial determination” of an issue of fact or law. There was no judicial determination involved in the resolution of the Appellant Worker’s case on 20 February 2003. It is submitted that by signing the terms of settlement the Appellant Worker conceded he “did not have an incapacity arising out of his injuries” and “this creates an issue estoppel” (Respondent Employer’s submissions before the Arbitrator page four). By signing the terms of settlement the Appellant Worker conceded he had no entitlement to weekly compensation or hospital or medical expenses as at 20 February 2003. A concession of that kind does not, without more, create an issue estoppel in respect of rights and entitlements beyond that date.
The full quote from Dixon J in Blair is:
“The estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion, whether that conclusion is that a money sum be recovered or that the doing of an act be commanded or be restrained or that rights be declared. The distinction between res judicata and issue estoppel is that in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into 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 of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order.”
The distinction between res judicata and issue estoppel is important in the present case and was considered by the Full Bench of the South Australian Workers Compensation Tribunal in Pond v WorkCover Corporation/Allianz Australia Workers Compensation (SA) Ltd (Wunda Joinery) [2001] SAWCT 69 which said:
"19 The principles of res judicata and issue estoppel are both based on the premise that a party cannot re-litigate that which has already been decided. In the case of res judicata, one need go no further than the formal judgment or order of the relevant adjudicating authority. It speaks for itself. In the case of issue estoppel, one can go further to the sub-stratum of findings upon which the formal judgment or order is based, although there are limitations. These are sometimes described as ‘facts fundamental to the decision arrived at’: Hoystead v Commission of Taxation [1926] AC 155; Blair v Curran (1939) 62 CLR 464 at 531 - 533 per Dixon J (as he then was).”
In the present case the formal order made on 20 February 2003 did no more than determine the parties’ rights up to that date. However, there is nothing in that award that is inconsistent with an award being made in favour of the Appellant Worker after that date. That is so because there was no “sub-stratum of findings” by the Compensation Court upon which the formal order was based. An award for the respondent may be made for any one of several reasons: no injury; a finding that the effect of any work aggravation had ceased; no nexus between the work accident and the incapacity, or a finding that whilst the injury is still causing a loss of use the worker has obtained other employment and suffers no economic loss. None of these findings apply to Mr Kaibau’s case because there was no hearing, no determination of the ‘issues’ and, no admissions or agreed facts. Therefore, other than the matters that are decided on the face of the terms of settlement, there is no issue estoppel because no other ‘issues’ were decided by the Compensation Court on 20 February 2003.
Anshun Estoppel
The Respondent Employer argued before the Arbitrator that the principle enunciated by the High Court in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 (‘Anshun Estoppel’) also prevents the Appellant Worker from succeeding in his current claim. On this issue the Arbitrator said at page eight:
“On the issue of Anshun Estoppel, I find in favour of the Applicant in so far as there was [sic] no symptoms in the back and left leg attributable to the work injury at the time of making the orders and awards and therefore these were not raised or [sic] could have been dealt with in the prior proceedings.”
The Appellant Worker does not challenge this finding in the appeal and it is not dealt with in the Respondent Employer’s submissions on appeal. However, for the sake of completeness, I should comment on this issue so as to avoid confusion at the rehearing which will be necessary in this matter.
Before the Arbitrator it was submitted that the Appellant Worker’s particulars dated 3 June 2004 stated that Mr Kaibau’s back and/or left leg symptoms “started in or about 1999”. It is therefore argued that the principle of Anshun Estoppel prevents Mr Kaibau from now bringing a claim for compensation in respect of his back and left leg because it should have been part of the First Application. It is also submitted that the Settlement in February 2003 included an acknowledgement by Mr Kaibau that he “suffered no injury to any other part of his body other than the injury the subject of these proceedings while in the employ of the Respondent to date” (Settlement paragraph seven).
It is first relevant to note what is involved in Anshun Estoppel. In that case the High Court said at 603:
“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. In this respect, we need to recall that
there are a variety of circumstances, some referred to in the earlier cases,
why a party may justifiably refrain from litigating an issue in one proceeding
yet wish to litigate the issue in other proceedings e.g. expense, importance
of the particular issue, motives extraneous to the actual litigation, to
mention but a few.” (emphasis added)
Anshun Estoppel was explained by Justice Kirby in Lambidis v Commissioner of Police (1995) 37 NSWLR 320 at 322 (‘Lambidis’) where his Honour said that such an estoppel:
“…prevents a party from later relying upon a claim or defence which it has unreasonably refrained from raising in earlier proceedings which were so closely connected with the later subject matter that it might reasonably have been expected that the claim or defence would have been raised?” (emphasis added)
Anshun Estoppel depends on “considerations of public policy and the reasonableness of the conduct of litigants” (per Justice Kirby in Lambidis at 325). In my view there was nothing unreasonable about the Appellant Worker’s conduct in not pursuing a claim for his back and left leg in the First Application.
Whilst Mr Kaibau may well have started to experience pain in his back in or about 1999 that does not establish that he was aware at that time that his back problem was the result of his right ankle injury. The first evidence that the ankle injury may have resulted in an impairment to the back or a loss of use of the left leg at or above the knee was in Dr Matalani’s report of 8 April 2004, more than a year after the Settlement.
The acknowledgement by Mr Kaibau at paragraph seven of the Settlement states that he has suffered no injury to any other part of his body other than the injury the subject of the First Application. A claim in respect of the back and left leg is not an allegation of a new or additional injury. It is an allegation that as a result of the 16 December 1990 injury Mr Kaibau has developed pain in his back and left leg. If that allegation is accepted the compensation for any impairment of the back or loss of use of the right leg at or above the knee will be assessed at the rates applicable on 16 December 1990 (Dimovski at [34]).
Therefore, if it is ultimately found that the Appellant Worker’s back and left leg symptoms have resulted from his right ankle injury, I do not believe that Anshun Estoppel prevents the Appellant Worker from arguing that he is entitled to compensation in respect of those problems. Whether he is entitled to recover compensation for those problems is another matter.
Section 55
In my opinion the Arbitrator was wrong to approach the case on the basis that it was a ‘review’ under section 55 of the 1987 Act. That section states that “any weekly payment of compensation may, because of a change of circumstances, be reviewed by the Commission” (section 55(1)). On ‘review’ the “weekly payment may be ended, reduced or increased” (section 55(2)). In the present case there was no “weekly payment of compensation” to be reviewed and therefore the section has no application.
The Respondent Employer argues that a worker “seeking a review of his weekly payments needs to establish a change of circumstances” (Respondent Employer’s submissions paragraph 5(i)). The Appellant Worker does not seek a ‘review’ of his weekly payments under section 55 of the 1987 Act. He seeks an award of compensation from 20 February 2003 (the correct date should be 21 February 2003). Therefore, as noted above, the question of a ‘review’ does not arise. The Arbitrator was in error in conducting a ‘review’ to determine if there had been a change in circumstances since 20 February 2003.
Finding on ‘Injury’
The Arbitrator found that the Appellant Worker “received an injury to his right knee arising out of or in the course of his employment as a factory worker with” the Respondent Employer on 16 December 1990 (emphasis added) (Reasons paragraph 31). The evidence established that in fact the Appellant Worker injured his right ankle on 16 December 1990 and that he worked for the Respondent Employer as a packer/stacker.
She also found that he did not receive injury arising out of or in the course of his employment with the Respondent Employer “in respect of his back and left leg” (Reasons paragraph 31). However, her Reasons on this issue are unclear. On page nine she stated:
“On the question that deterioration to the back and left knee represents a change in circumstance (s55), I find that on the balance the Applicant has not convinced me of a causal link between the back and left knee pain to the right ankle injury incurred on 16 December 1990. If any link could be found it is minor and not a substantial contributing factor. As such I find there has been no change in the Applicant’s medical condition that would justify a reconsideration of the Award issued by the Compensation Court dated 20 February 2003”.
There are two errors in this finding. First, the Arbitrator’s whole approach to the issue of injury was directed to determining if there had been a change in circumstances under section 55 of the 1987 Act. As noted above, that approach was incorrect. Second, employment has to be a substantial contributing factor to the injury, not the incapacity resulting from the injury (Rootsey v Tiger Nominees Pty Ltd (2002) 23 NSWCCR 725 at 731). Provided there is a direct chain of causation between the work accident (the right ankle injury) and the subsequent condition (back and left knee pain) so that the latter has resulted from the former, a worker is entitled to succeed (Kooragang Cement Pty Ltd v Bates (1994) 35 NSWLR 452 at 462). Therefore, the Arbitrator has applied the wrong test in determining whether the back and left knee condition have resulted from the work injury on 16 December 1990.
Section 60 Expenses
The Appellant Worker’s claim for hospital and medical expenses under section 60 in the Second Application (Part 4.2) is said to be “ongoing”. That claim was dismissed by the Arbitrator on the “principles of res judicata and estoppel” (Reasons paragraph 31). If no expenses have been incurred there is no entitlement to an award under this section in any event (NSW Sugar Milling Co-Operative Ltd v Manning (1998) 16 NSWCCR 606). It is of no assistance to merely claim “ongoing” in the application.
If medical and hospital expenses have been incurred the Settlement will prevent the Appellant Worker from recovering those expenses if they were incurred before 20 February 2003. In respect of expenses incurred after that date their recovery will depend on whether they relate to treatment for the right ankle or for treatment of the back and left leg. If they relate to the latter then recovery will depend on the ultimate finding in respect of that part of the claim at the rehearing.
Subject to compliance with the provisions of section 60, any expenses for treatment to the right ankle after 20 February 2003 are recoverable and are not, for the reasons set out above, affected by any estoppel or res judicata argument.
Conclusion
In light of the errors identified above I believe the appropriate outcome is for the Arbitrator’s decision to be revoked and for the matter to be remitted for a further hearing before a different Arbitrator. It is not appropriate that I determine the matter because the parties will no doubt wish to make further submissions on incapacity and, in respect of the back and left leg, on nexus. In addition, it is impossible for the Appellant Worker’s rights to be fairly determined on the basis of his one page unsigned and undated statement attached to the Second Application. A proper statement will need to be prepared setting out his full work and educational history together with evidence of his work restrictions on the open labour market reasonably accessible to him. Further, notwithstanding the Appellant Worker’s solicitor assertion to the contrary, no amended wage schedule was attached to his written submissions. A further wage schedule will need to be filed.
The Appellant Worker has an undoubted 15% loss of use of his right leg below the knee (90% of which has resulted from the 16 December 1990 injury). At the further hearing the following issues will need to be determined in accordance with these reasons:
(a)have the Appellant Worker’s back and left knee problems resulted from his right ankle injury on 16 December 1990;
(b)if the answer to (a) is ‘yes’, what, if any, entitlement/s does the Appellant Worker have under the 1987 Act as a result of those conditions;
(c)what is the Appellant Worker’s entitlement to weekly compensation from 21 February 2003 as a result of the injury to his right ankle on 16 December 1990, and
(d)whether the Appellant Worker has any entitlement to compensation under section 60 of the 1987 Act for hospital and medical expenses incurred after 20 February 2003.
DECISION
Time to appeal is extended until 6 October 2005.
The Arbitrator’s decision of 31 August 2005 is revoked and the following order made:
“The matter is remitted to a different Arbitrator under section 352(7) of the Workplace Injury Management and Workers Compensation Act 1998 for the Arbitrator to determine the Appellant Worker’s entitlements pursuant to the provisions of the Workers Compensation Act 1987 in accordance with the reasons in this decision.”
COSTS
The Respondent Employer is to pay the Appellant Worker’s costs of the appeal and of the proceedings in the first Arbitration.
Bill Roche
Acting Deputy President
1 August 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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