McKenzie v Healthscope Operations Pty Ltd
[2020] VSCA 309
•2 December 2020
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S EAPCI 2020 0046
| KEITH McKENZIE | Applicant |
| v | |
| HEALTHSCOPE OPERATIONS PTY LTD (t/a JOHN FAWKNER PRIVATE HOSPITAL) | Respondent |
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| JUDGES: | BEACH, KYROU and OSBORN JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 19 November 2020 |
| DATE OF JUDGMENT: | 2 December 2020 |
| MEDIUM NEUTRAL CITATION: | [2020] VSCA 309 |
| JUDGMENT APPEALED FROM: | [2020] VSC 217 (Moore J) |
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ACCIDENT COMPENSATION – Workplace injury – Weekly payments – Entitlement to weekly payments terminated – Decision to terminate entitlement disputed – Dispute between parties referred to conciliation – Dispute settled – Proper construction of terms of settlement – Whether terms of settlement precluded worker from applying for further weekly payments – Whether worker’s entitlement to weekly payments beyond agreed period terminated – Whether settlement agreement constituted impermissible ‘contracting out’ of provisions of Accident Compensation Act 1985 – Accident Compensation Act 1985, ss 91E, 93A, 93B, 93C, 93 CD, 114 and div 3A.
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr I D McDonald QC with Mr L B R Allan | Slater & Gordon |
| For the Respondent | Mr S A O’Meara QC with Mr S E Gladman | IDP Lawyers |
BEACH JA
KYROU JA
OSBORN JA:
In April 2012, Keith McKenzie (‘the applicant’) commenced employment with Healthscope Operations Pty Ltd (‘the respondent’) as a theatre technician at John Fawkner Private Hospital. In May 2014, he lodged a claim for compensation under the Accident Compensation Act 1985 (‘the AC Act’) in respect of a psychiatric injury that allegedly arose out of the course of his employment in March 2014. The claim was accepted by an agent (‘the agent’) of the Victorian WorkCover Authority (‘the VWA’), and the applicant commenced receiving compensation by way of weekly payments, and medical and like expenses, in respect of the claim.
On 17 March 2016, the agent notified the applicant of its decision to terminate his entitlement to weekly payments and medical and like expenses from 20 April 2016. On 13 April 2016, the applicant disputed that decision and requested that the dispute be conciliated by the Accident Compensation Conciliation Service (‘the ACCS’). On 5 July 2016, the dispute was settled without the need for a conciliation conference.[1]
[1]Cf s 290(a) of the Workplace Injury Rehabilitation and Compensation Act 2013 (‘the WIRC Act’), which permits the ACCS to exercise its conciliation functions under div 2 of pt 6 of that Act ‘without having any conciliation conference’.
Following the settlement, the applicant received weekly payments of compensation from 20 April 2016 until 29 October 2016. Weekly payments then ceased. The central issue in this case is whether the settlement reached on 5 July 2016 precludes the applicant from claiming weekly payments of compensation after 29 October 2016. On 10 September 2018, a magistrate upheld a contention by the respondent that the settlement precluded the plaintiff from claiming weekly payments after 29 October 2016.[2] An appeal by the applicant to this Court, on a question of law,[3] was dismissed on 28 April 2020.[4]
[2]McKenzie v Healthscope Operations Pty Ltd (Unreported, Magistrates’ Court of Victoria, Barrett M, 10 September 2018).
[3]Pursuant to s 109 of the Magistrates’ Court Act 1989.
[4]McKenzie v Healthscope Operations Pty Ltd [2020] VSC 217 (‘Reasons’).
The applicant now seeks leave to appeal against the order made in the Trial Division dismissing his appeal from the Magistrates’ Court. For the reasons that follow, the application for leave should be granted and the appeal allowed.
Background to the dispute and settlement agreement
By its letter of 17 March 2016, to which we have already referred, the agent notified the applicant of its decision that, from 20 April 2016 the applicant would no longer be entitled to weekly payments and medical and like expenses. The decision was said to be based on the AC Act and ‘the available information’ which was said to include an independent medical report. The reasons for the decision given in the letter were: that the applicant’s incapacity for work was not materially contributed to by an injury arising out of or in the course of his employment, or which entitled him to compensation; and that the medical and like expenses he was claiming were not reasonable and/or necessary, or were not for an injury which entitled him to compensation under the AC Act.
As we have already observed, on 13 April 2016, the applicant disputed this decision and lodged a request for conciliation with the ACCS. That request was acknowledged by the ACCS on 18 April 2016.
On 5 July 2016, a matter of days before a scheduled conciliation conference, there was a telephone conference between an employee of the agent (Stephen Farrell) and Steve Briffa of WorkCover Assist.[5] Mr Briffa, who is not a lawyer, represented the applicant in the conciliation process. Following that conversation, Mr Briffa sent an email to Mr Farrell, copied to the applicant’s solicitor and the conciliation officer appointed in respect of the dispute, Nicole Kepert. The email was in the following terms:
[5]WorkCover Assist is a free service provided by the VWA in respect of conciliations under the AC Act.
The dispute has been resolved without the need for a conference.
I have instructions from the worker and his solicitor to accept your offer of weekly payments to 130 weeks and ongoing medical and like expenses.
The worker has been notified that the conciliation conference listed for this Thursday will be cancelled.
Could you please confirm the 130 week termination effective date?
You mentioned earlier today that the 130 week termination effective date would take effect in November 2016.[6]
[6]Emphasis in original.
Later the same day, Mr Farrell sent an email addressed to Mr Briffa, and copied to Ms Kepert and the applicant’s solicitor. Notwithstanding that the email was addressed to Mr Briffa, and only copied to Ms Kepert, that email provided:
Good afternoon Nicole,
Further to Stephen’s e/mail GB [the agent] is prepared to resolve on the following basis;
Recommendation: The Agent will make weekly payments from 20/04/16 to 29/10/16 but not thereafter in accordance with the Act. The Agent will reinstate the reasonable cost of medical and like expenses relevant to the claimed injury from 20/04/16 ongoing in accordance with the Act.
A little later the same day, Ms Kepert emailed Mr Farrell, copied to Mr Briffa and the applicant’s solicitor, saying that she would ‘issue the outcome certificate on that basis’. A conciliation outcome certificate was then issued in the following terms:
This dispute relates to a decision dated 17 March to terminate weekly payments and medical and like expenses for a psychological condition from 20 April 2016.
I have discussed the issues with the parties. Pursuant to Section 290 of the WIRC Act, I confirm that I have received sufficient information to enable me to exercise my functions without the need for a conciliation conference or further information.
I recommended pursuant to Section 294(1)(a) of the WIRC Act that the Authorised Agent agreed [scil, agree] to make weekly payments from 20 April 2016 to 29 October 2016 but not thereafter in accordance with the Act. The Agent will reinstate the reasonable cost of medical and like expenses relevant to the claimed injury from 20 April 2016 ongoing in accordance with the Act.
The parties accepted this recommendation and agree that this dispute is resolved on these terms.
Payment of compensation in accordance with a recommendation is not an admission of liability (Section 300(1) of the WIRC Act).
Pursuant to Section 296(2)(d) of the WIRC Act, this Outcome Certificate certifies that each party to this dispute is bound by this result and these terms of resolution.
This Outcome Certificate is evidence of:
the resolution of this dispute between the parties; and
the terms on which this dispute has been resolved.
Conciliation has been completed.[7]
[7]It should be noted that, while not material to the outcome of these proceedings, the statements in the conciliation outcome certificate that the conciliation officer had had discussions with the parties and made a recommendation which had been accepted by them, were untrue. The only relevant communications between the parties and the conciliation officer were those set out above.
Weekly payments of compensation were then made to the applicant until 29 October 2016, but not thereafter.
On 14 March 2017, the applicant, in reliance on the opinion of a medical panel dated 1 February 2017, requested the agent to reinstate his entitlement to weekly payments of compensation. On 22 March 2017, the agent rejected this request, enclosing a copy of the conciliation outcome certificate issued on 5 July 2016, and stating that the matter had been resolved at conciliation ‘for weekly payments until 29 October 2016’.
On 17 July 2017, the agent informed the applicant that it had determined to decline his request for the reinstatement of his entitlement to compensation in the form of weekly payments. Again, the agent referred to the conciliation outcome certificate and stated, in substance, that his request was precluded by the settlement agreement made on that date.
Magistrates’ Court proceeding
On 10 October 2017, the applicant filed a complaint in the Magistrates’ Court. In that proceeding, he sought an order that the agent’s decision of 17 July 2017 be set aside, and a declaration that he was entitled to weekly payments of compensation. Subsequently, the respondent filed a notice of defence in which it pleaded, among other things, that the applicant was ‘barred or precluded from claiming or receiving weekly payments after 29 October 2016 by reason of the doctrine of accord and satisfaction’.
In August 2018, the respondent’s defence of accord and satisfaction was heard as a preliminary issue by Barrett M. On 10 September 2018, his Honour gave reasons for judgment in which he upheld the respondent’s defence of accord and satisfaction.
In his reasons for judgment, the magistrate recorded the applicant’s principal submissions as follows:
(1)There was no evidence in the email correspondence or otherwise that consensus ad idem existed between the parties such that the settlement in July 2016 forever barred [the applicant] from any future claim of weekly payments;
(2)Even if agreement was reached, such agreement was contrary to legal authority that it is not possible to contract out of [the AC Act].
After reviewing the evidence, and authorities referred to in the course of argument, the magistrate rejected the applicant’s submissions, upheld the respondent’s accord and satisfaction defence, and held that the applicant was ‘precluded from proceeding with his claim for weekly payments’.
Trial Division proceeding
On 8 October 2018, the applicant filed a notice of appeal, pursuant to s 109 of the Magistrates’ Court Act 1989, in the Supreme Court. The notice of appeal identified 10 questions of law, and contained nine grounds of appeal.
On 26 July 2019, the applicant’s appeal came on for hearing before Moore J. At the commencement of the hearing, senior counsel for the applicant[8] told the judge that, while there were ‘quite a number of grounds’, there were two issues raised by the appeal: first, whether there was an accord and satisfaction; and secondly, whether it was permissible to contract out of the provisions of the AC Act.
[8]Not counsel who appeared in this Court.
In relation to the first issue (described by the applicant as being ‘whether the parties were ad idem’), the applicant submitted that the weekly payments dispute which was conciliated, and the subject of the settlement agreement, related only to the applicant’s entitlements under the AC Act until the end of the ‘second entitlement period’. The reference to the ‘second entitlement period’ is a reference to that expression as defined in s 91E of the AC Act. That section defines the ‘first entitlement period’ as an aggregate period not exceeding 13 weeks, in respect of which a weekly payment has been paid or is payable; and the ‘second entitlement period’ as an aggregate period of a further 117 weeks after the expiry of the first entitlement period, again in respect of which a weekly payment has been paid or is payable. Thus, the reference to 130 weeks in the email from Mr Briffa to Mr Farrell on 5 July 2016, and the reference by the applicant in his submissions to the end of the second entitlement period (130 weeks).
In relation to the second issue (whether the parties could lawfully ‘contract out’ of the provisions of the AC Act), relying principally on the decision of Perkins v GIO Workers’ Compensation (Victoria) Limited,[9] the applicant submitted that if the agreement ‘amounted to an accord and satisfaction of all of [the applicant’s] past, present and future entitlements under [the AC Act]’, then the agreement was of no legal force because it is ‘impermissible to contract out of [the AC Act]’.
[9]Unreported, County Court of Victoria, Judge Higgins, 12 December 1995 (‘Perkins’).
The judge rejected the applicant’s submissions in relation to the first issue, concluding that the applicant’s arguments did not raise a question of law,[10] and otherwise involved questions of fact which turned on the evidence adduced in the Magistrates’ Court.[11] The judge concluded his analysis of the first issue by saying that the applicant had ‘failed to establish any error in the magistrate’s finding of fact which would constitute an error of law’.[12]
[10]Reasons [53].
[11]Ibid [56].
[12]Ibid.
In relation to the second issue (the ability or otherwise of the parties to contract out of the AC Act), after careful analysis, the judge held that the analysis and conclusion in Perkins, upon which the applicant relied, could not be accepted.[13] Contrary to the analysis in Perkins, the judge held that the AC Act did not prevent the parties from, in the specific circumstances of this case, entering into the settlement agreement, and compromising the applicant’s entitlement to future payments of weekly compensation.[14]
[13]Ibid [98].
[14]Ibid [101]–[107].
The proceeding in this Court
In his application for leave to appeal to this Court, from the judge’s dismissal of his appeal from the Magistrates’ Court, the applicant identified 12 grounds of appeal. Those grounds included assertions that the judge failed to properly consider the applicant’s arguments, erred in his application of authority, erred in failing to conclude that it was not open to the magistrate to make particular findings, and erred in failing to apply Perkins — which was described by the applicant as the commencement of a ‘considered line of authority’, Perkins having been applied in a number of Magistrates’ Court and County Court decisions.
It is neither helpful nor necessary to set out each of the applicant’s proposed 12 grounds of appeal. As the argument unfolded, it became plain that there were two real issues in dispute between the parties: first, the proper construction of the settlement agreement; and secondly, in the event that the first issue was determined against the applicant, whether the agreement (or any part of it) was not enforceable against the applicant because it involved an impermissible contracting out of the provisions of the AC Act.
The respondent’s written case in this Court was, understandably, directed to answering the various assertions made by the applicant in his written case. However, in oral argument, senior counsel for the respondent accepted that, notwithstanding the way in which the applicant had previously put his case in relation to the absence of a so-called ‘consensus ad idem’, the proper construction of the settlement agreement was the primary issue in dispute between the parties, both before the judge hearing the appeal and in this Court. Moreover, he also accepted (correctly) that the proper construction of the settlement agreement was a question of law.
Applicant’s submissions
In relation to the proper construction of the settlement agreement, the applicant submitted that the critical words in the email exchange were ‘but not thereafter’. He submitted that, ‘at best, the expression is ambiguous’, and that ‘it was not open to find that it meant that the parties agreed that the applicant would be forever barred from claiming compensation in the future as a result of this agreement’.
The applicant submitted that the reference, in the first of the 5 July 2016 emails, to the ‘130 week termination effective date’ showed that, in context, the dispute that was settled between the parties concerned the applicant’s entitlement to weekly payments up to the end of the second entitlement period referred to in s 93B of the AC Act. There was, he submitted, no warrant for construing the settlement agreement as compromising the applicant’s entitlement to weekly payments after the end of the second entitlement period (being, as we already noted, a period of 130 weeks during which a weekly payment has been paid, or is payable).
In further support for the contention that the settlement agreement did not compromise any entitlement the applicant might have had to weekly payments after the end of the second entitlement period, the applicant observed that in order to obtain weekly payments beyond the end of the second entitlement period, he was required to satisfy a more stringent test than that which applied during the first and second entitlement periods. During the first and second entitlement periods, the applicant was entitled to weekly payments at differing rates if he established that he had either ‘no current work capacity and no current weekly earnings’ or, while incapacitated, ‘a current work capacity’ or ‘no current work capacity but [he] has current weekly earnings’.[15] However, after the end of the second entitlement period, the applicant is required to establish that he has ‘no current work capacity and [he is] likely to continue indefinitely to have no current work capacity’.[16]
[15]See ss 93A(3) and 93B(3) of the AC Act.
[16]See s 93C(1)(a) of the AC Act. But see also s 93CD of the Act, to which s 93C(1) is subject.
The applicant submitted that the more stringent test he was required to satisfy after the end of the second entitlement period was one that could only be considered and/or satisfied once the second entitlement period had expired, and the state of the applicant’s injury, and any incapacity, were then known. It was, he submitted, unlikely that the parties would have sought to compromise a claim for weekly payments after the second entitlement period at a time before it was known whether the applicant had ‘no current work capacity’ which, at that time, was ‘likely to continue indefinitely’.
In relation to what we have referred to as the second issue, the applicant submitted that if the settlement agreement had the effect contended for by the respondent (disentitling the applicant to make any claim for weekly payments beyond the end of the second entitlement period) then the agreement was proscribed by the AC Act. The applicant’s argument was that if the respondent’s construction of the settlement agreement is correct then the applicant ‘has redeemed his future entitlements in exchange for a few weeks of compensation that is not the subject of any legislative overview or court approval’. The applicant submitted that, on the authority of Perkins, the AC Act did not permit a worker and an employer (the applicant and the respondent in this case) to enter into such an agreement.
Respondent’s submissions
The respondent submitted that the settlement agreement fell to be construed in the context of the notice, sent by the respondent to the applicant on 17 March 2016, terminating the applicant’s entitlement to weekly payments and medical and like expenses. In relation to the proper construction of the settlement agreement, the respondent accepted that the emails of 5 July 2016 that preceded the conciliation outcome certificate were relevant.
The respondent submitted that, on its proper construction, the settlement agreement involved an agreement to pay weekly payments until a certain date, ‘but not thereafter, in accordance with [the AC Act]’. That is, the parties agreed that weekly payments would be paid until 29 October 2016 and ‘that there were not thereafter to be payments made in accordance with the Act’.
Relying upon this Court’s decision in Victorian WorkCover Authority v Balogh,[17] the respondent submitted that the March 2016 notice of termination terminated, not merely the applicant’s payments of weekly compensation and medical and like expenses, but also his entitlement to those payments and compensation. In making that submission, the respondent relied upon the terms of the notice and the following passage in the judgment of Nettle JA (with whom Vincent JA and Hansen AJA agreed) in Balogh:
[17][2004] VSCA 200 (‘Balogh’).
I also recognise a degree of inconsistency in the drafting of s 114. For example, s 114(1) refers to the Authority terminating a worker’s entitlement to weekly payments whereas the other sub-sections refer to the termination of weekly payments. But upon analysis it may be seen that the section employs the two conceptions interchangeably.
In one sense the reference in s 114(1) to terminating the entitlement to payments must be read as a reference to terminating payments. A worker’s entitlement to payment starts and terminates when the Act says that it does; not when and if the Authority asserts that it does. Relevantly, the Authority’s function is to give effect to an entitlement to payments established by the Act by making payments in accordance with that entitlement and to give effect to the termination of an entitlement caused by the Act, by ceasing payments consequent upon that termination of the entitlement.
Equally, however, while sub-s 114(1) may for that reason be taken as referring to the termination of weekly payments, and the other sub-sections do in fact refer to the termination of weekly payments, each of them is also concerned with the termination of the entitlement to payments. As has been seen,
sub-s 114(12) provides that if the procedure laid down by s 114 for the termination of payments is not complied with, the worker may sue to recover the payments that would have been payable if the procedures had been complied with. That means that there is a continuing entitlement to payments until notice has been given. While the Act has elsewhere dictated that the entitlement to payments has ceased, s 114 provides in effect that it will continue until the notice procedures have been complied with.
It follows in my opinion that a notice under s 114 is capable of being as much a notice to terminate the entitlement to payments as it is a notice to terminate payments themselves. Where a notice of termination is given when a worker is not in receipt of payments, the termination can only be a notice of termination of the entitlement to payments. Where a notice of termination is given when a worker is in receipt of payments, the termination is of both the entitlement to payments and of the payments themselves.[18]
[18]Ibid [14]–[17] (emphasis in original).
The respondent submitted that the notice of termination terminated the applicant’s entitlement to compensation (weekly payments and medical and like expenses) as well as the payment of them. The settlement agreement, however, only reinstated the applicant’s entitlement to medical and like expenses, and contained an agreement to pay weekly payments (the applicant’s entitlement to which was not restored by the terms of the settlement agreement) for the period 20 April 2016 to 29 October 2016.
In the respondent’s submission, the settlement agreement, having not restored the applicant’s entitlement to weekly payments, that entitlement remained terminated by the terms of the March 2016 termination notice. As was observed in argument, on that submission, it would not have made any difference whether the words ‘but not thereafter’ were contained in the settlement agreement.
Turning to the second issue (whether the agreement involved an impermissible contracting out of the provisions of the AC Act), the respondent submitted that the judge was correct to reject Perkins for the reasons given by him at Reasons [84]–[107].
The proper construction of the settlement agreement
The principles governing the construction of the settlement agreement are not in dispute. The agreement is to be construed objectively, by reference to its text, context and purpose.[19] The context in the present case includes the March 2016 termination notice. The termination notice is an objective circumstance, external to the settlement agreement, which was known to the parties, and thus a matter to which recourse may be had.[20]
[19]Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104, 116 [46] (‘Mount Bruce’).
[20]Ibid 117 [50].
In relation to the use of the words ‘but not thereafter’ in the settlement agreement, there are two possible constructions.
The first possibility is that the words ‘but not thereafter’ form part of the settlement agreement in which it is recorded that the respondent will make weekly payments of compensation for a specified period, ‘but not thereafter’ in the sense that there is no agreement between the parties about the payment of weekly payments after that period. This is the construction for which the applicant contends.
The other possible construction is that the words ‘but not thereafter’ involve a release by the applicant of any entitlement to weekly payments after the end of the specified period; further or alternatively, the words are a statement that, because the settlement agreement does not provide for the reinstatement of the applicant’s entitlement to weekly payments, the applicant has no such ongoing entitlement as a result of the terms of the termination notice and the settlement agreement. This is the construction contended for by the respondent.
An underlying premise of the respondent’s submission is that the March 2016 termination notice terminated the applicant’s entitlement to weekly payments, which entitlement was not reinstated by the terms of the settlement agreement (in contrast to the applicant’s entitlements to medical and like expenses). Thus, it was submitted that when weekly payments ceased on 29 October 2016, the applicant had no entitlement under the provisions of the AC Act to further weekly payments.
In our view, it may be accepted that the applicant’s entitlement to weekly payments was so terminated.[21] That is not to say, however, that the applicant could not make a further application or claim to a subsequent entitlement to weekly payments, depending upon the facts of his case, and the level of any incapacity then arising from the injury he suffered in the course of his employment in March 2014. Indeed, so much appears to be expressly contemplated by s 93CD(1) of the AC Act, which provides:
A worker who has a current work capacity and is, or has been, entitled to compensation in the form of weekly payments under this Division, may make an application at any time, in accordance with this section to the Authority or self-insurer, … for a determination that the worker’s entitlement to weekly payments does not, or will not, cease by reason only of the expiry of the second entitlement period.
[21]See Balogh [2004] VSCA 200 [14]–[17].
The following points may be made in relation to notices given under s 114 and the consequences of an entitlement to weekly payments being terminated:
(1)First, as Nettle JA observed in Balogh, there is a degree of inconsistency in the drafting of s 114, in that the two conceptions of termination of an entitlement to weekly payments and termination of weekly payments appear to be employed interchangeably.[22] Thus it cannot be said that there is some clear delineation in the AC Act between the termination of an entitlement to weekly payments as against the termination of those payments.
(2)Secondly, s 93CD(1) permits a worker, in the circumstances described therein, to apply, ‘at any time’, for a determination that his or her entitlement to weekly payments ‘does not, or will not, cease by reason only of the expiry of the second entitlement period’. Thus, the AC Act permits a claim to an entitlement to weekly payments to be made after such an entitlement has terminated. Moreover, there is nothing in s 93CD(1) that limits a worker’s right to make such a claim only where his entitlement has ceased because of the expiry of the second entitlement period. Section 93CD(1) permits a worker to claim an entitlement not otherwise provided for by other provisions of the AC Act. It does not take away a right to claim an entitlement that otherwise arises under that Act — in this case a right to claim an entitlement under s 93C to weekly payments after the expiry of the second entitlement period.
[22]Balogh [2004] VSCA 200, [14].
Additionally, our view that the settlement agreement did not preclude the applicant from making a claim for weekly payments in respect of a period after 29 October 2016 finds some support in the following submission, made by the respondent during the course of the Magistrates’ Court proceeding:
If the Court finds that [the applicant] is barred from requesting reinstatement of weekly payments of compensation as a result of the doctrine of accord and satisfaction, [the respondent] concedes that if he can show a change in circumstances in respect of his condition, he may be entitled to further payments of compensation.
While the respondent in this Court sought to confine that submission to a case involving a ‘new’ injury which is a recurrence or a deterioration or an acceleration of an initial injury,[23] we are not persuaded that the submission was so limited.
[23]‘Injury’ being defined in the AC Act to include ‘a recurrence, aggravation, acceleration, exacerbation or deterioration of any pre-existing injury or disease’: see s 5(2) of the AC Act and s 3 of the WIRC Act.
In oral argument, the respondent sought to draw parallels between the present case and the decision of this Court in Ozbilgi v Bradnams Windows & Doors Pty Ltd.[24] Ozbilgi was a case concerning issue estoppel and res judicata. In that case, the worker had made a second claim for weekly payments after litigation — involving a notice issued by an authorised agent of the VWA, terminating the worker’s entitlement to further weekly payments as a result of the worker’s failure to make reasonable efforts to return to work, as required by s 93CB of the AC Act — had been dismissed.[25]
[24][2011] VSCA 210 (‘Ozbilgi’).
[25]A section subsequently repealed by s 31 of the Accident Compensation Amendment Act 2010.
The worker disagreed with the agent’s decision, as set out in the notice terminating his entitlement to weekly payments. Following an unsuccessful conciliation, the worker commenced a proceeding in the County Court in which he sought weekly payments. The proceeding was settled on terms whereby the agent agreed to pay weekly payments for a specified period, subject to the worker providing relevant medical certificates. Upon the settlement of the proceeding, the County Court made a consent order for costs in the worker’s favour, but otherwise dismissed the proceeding.
In Ozbilgi, this Court[26] identified the ‘sole ultimate question’ in the County Court proceeding as being whether the worker’s entitlement to weekly payments had ceased under s 93CB in accordance with the disputed termination notice.[27] The Court held:
By dismissing the proceeding, the County Court has determined this matter adversely to [the worker]. [The worker] is now estopped from asserting that his entitlement to weekly payments had not ceased in accordance with the notice.[28]
[26]Warren CJ, with whom Buchanan JA and Sifris AJA agreed.
[27][2011] VSCA 210, [36].
[28]Ibid.
While the Court looked at the construction of the settlement agreement entered into in Ozbilgi, and expressed a view that the interpretation contended for by the worker permitting him to make a subsequent claim for weekly payments was ‘unlikely’,[29] it ultimately decided that it was not necessary to express a concluded view on that issue, having regard to its conclusion on the estoppel issue.[30]
[29]Ibid [46].
[30]Ibid [47].
In our view, there are few parallels between Ozbilgi and the present case. First, Ozbilgi was ultimately a case about issue estoppel. It was not a case that dealt in any detail with issues concerning the proper construction of settlement agreements. Secondly, the settlement agreements entered into in each case are different in their terms and context. Thirdly, accepting that each termination notice provided relevant context for the construction of each settlement agreement, the terms and bases of termination of each of the termination notices was different. Rather than attempting to construe the settlement agreement in the present case by reference to a different settlement agreement entered into in a different context in another case, it is this Court’s function to construe the settlement agreement before it in accordance with the principles referred to in Mount Bruce.
In our view, the context in which the present settlement agreement was entered into supports the applicant’s construction of the agreement. It seems plain to us that the dispute that was resolved on 5 July 2016 was a dispute concerning the applicant’s entitlement to weekly payments up until the end of the second entitlement period (130 weeks). So much is clear from the first of the emails sent on that day (5 July 2016). Moreover, there is nothing in the provisions of the AC Act preventing the applicant from claiming weekly payments beyond the end of the second entitlement period, provided that his level of incapacity caused by his initial injury in March 2016 met the requirements of the Act. We think it an unlikely construction that, in the absence of clear words of release, the parties’ intentions, objectively ascertained, were to compromise any entitlement the applicant may have had to weekly payments beyond the end of the second entitlement period.
It follows that the applicant’s proposed grounds of appeal that took issue with the judge’s construction of the words ‘but not thereafter’ (ground 8 being the best example of such a ground) must be accepted. Accordingly, there will be a grant of leave to appeal, the appeal will be allowed, and orders will be made which will result in the remittal of the applicant’s proceeding to the Magistrates’ Court for hearing and determination in accordance with these reasons.
The contracting out issue
Having regard to our conclusions with respect to the proper construction of the settlement agreement, and in view of the fact that the appeal will be allowed on ground 8, it is strictly not necessary for us to say anything further about the question of whether the settlement agreement, on the respondent’s construction of it, constituted some impermissible contracting out of the provisions of the AC Act. We would, however, wish to make the following brief observations.
First, there are no provisions of the AC Act which expressly prevent parties from ‘contracting out’. If the parties in the present case had entered into terms of settlement, in which the applicant clearly and unambiguously released the respondent from any liability to make weekly payments of compensation beyond the end of the second entitlement period, then no provision of the AC Act prevented them from so doing.
Secondly, Perkins is not authority for any general proposition that parties (workers on the one hand, and the VWA, agents and employers on the other hand) cannot enter into agreements which compromise a disputed claim for compensation. If Perkins were authority for any such proposition, then it would have been wrongly decided and should not now be followed by any court.
Thirdly, div 3A of the AC Act contains provisions permitting workers to apply for voluntary settlements.[31] Those provisions specify the circumstances in which such an application may be made, the procedure for making the application, and the method by which a settlement is to be calculated. Consistently with Perkins, it may reasonably be argued that settlements of the kind described in div 3A are governed by the operation of the provisions in that division. Non-compliance with a particular provision may not necessarily, however, invalidate any particular settlement. The question of the validity or otherwise of any settlement entered into in breach of a provision in div 3A is one that more likely falls to be resolved in accordance with the principles identified by the High Court in Project Blue Sky Inc v Australian Broadcasting Authority.[32] That issue is one that does not fall for consideration in the present case.
[31]Division 3A contains s 115, which formed an important component of the analysis in Perkins which led to the ultimate result that the settlement agreement in that case was proscribed by the AC Act.
[32](1998) 194 CLR 355, 388–9 [91]. See further, Davis (a pseudonym) v The Queen (2016) 55 VR 1, 23 [88].
Conclusion
Leave to appeal will be granted, the appeal allowed, and orders made which will result in the remittal of the proceeding to the Magistrates’ Court for hearing and determination in accordance with these reasons.
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