Mount Thorley Operations Pty Ltd v Farrugia

[2020] NSWDC 798

District Court

New South Wales

Medium Neutral Citation:

Mount Thorley Operations Pty Ltd v Farrugia [2020] NSWDC 798

Hearing dates:

03 September 2020

Date of orders:

03 September 2020

Decision date:

03 September 2020

Jurisdiction:

Civil

Before:

Neilson DCJ

Decision:

Application for Medical Panel struck out.

Catchwords:

COAL MINERS WORKERS COMPENSATION

EFFECT OF A REDEMPTION

W worked for E for about 20 years in an open cut coal mine. His last day of work was 17 November 1999 - On 20 March 2001 Bishop CCJ approved a lump sum redemption of $100,000, which sum was paid to W shortly thereafter – On 7 April 2020 W made a claim for lump sum compensation for 5% severe bodily disfigurement, caused by solar skin damage – On the same day he applied for a medical panel to assess his claim – E, by summons, moved the Court to strike out the application for a medical panel – Question before the Court was whether the redemption redeemed the employer’s liability to W for solar skin damage which he was not aware of at the time of the redemption.

Held: the redemption had redeemed the employer’s liability for a latent injury to W’s skin, an organ of his body – Application for Medical Panel struck out.

Legislation Cited:

Workers Compensation Act 1987

Cases Cited:

Durno v Coal Mines Insurance Pty Ltd (unreported, 23 July 2018)

Texts Cited:

Gould’s Medical Dictionary, 1979, McGraw-Hill

Schmidt's Attorneys' Dictionary of Medicine, 1992, Matthew Bender

Category:

Principal judgment

Parties:

Mount Thorley Operations Pty Ltd – Plaintiff
Angelo Lino Farrugia – Defendant

Representation:

Counsel:
T. Rowles – Plaintiff
D. Benson – Defendant

File Number(s):

RJ00219/20

Publication restriction:

Nil.

Judgment

1. HIS HONOUR: By summons filed on 7 July 2020, the plaintiff, Mount Thorley Operations Pty Ltd seeks to strike out a referral to a medical panel, an application for which was made by the defendant, Mr Angelo Lino Farrugia, on 16 June 2020.

2. The application for referral to a medical panel bears plaint number RJ200 of 2020. The application for the medical panel recites that a claim for compensation was made under s 66 of the Workers Compensation Act 1987 on 7 April 2020. The application seeks the assessment of "severe bodily disfigurement (being an injury which is not, or is not wholly, compensable under the table of permanent injuries)". The application was supported by a report of Dr Peter Hopkins, which bears the date 19 November 2019 and was received by the worker's solicitors on or about 2 December 2019. The injury alleged was a deemed injury, occurring on 7 April 2020 when the defendant made a claim for a lump sum compensation pursuant to s 66. The nature of the injury was "solar skin damage causing severe bodily disfigurement". The nature of the “accident” was "exposure to HV radiation/sunlight in the course of employment".

3. I shall hereafter refer to the plaintiff as the employer and to the defendant as the worker. The worker had been employed by the employer for 20 years. He last worked for the employer on 17 November 1999. He said that in sworn evidence given to the Compensation Court of New South Wales constituted by Bishop CCJ (as his Honour then was) on 20 March 2001. It was also during that evidence that he said that he had been working in the coal mining industry for 20 years.

4. There is before me as exhibit A, a claim and incident history made by the insurer of the employer, that is describes these injuries: on 15 February 1989, a broken right third finger; on 20 October 1989, a strain of various body parts; on 21 December 1994, a contusion of a left rib and of the left elbow; on 5 June 1987, a neck strain and a strain of each shoulder; on 18 November 1992, a claim for boilermaker's deafness or deafness of the like origin; on 11 October 1995, a claim for a strained back, a further claim for bilateral shoulder strains and a further claim for a strain of the neck; a further claim for industrial deafness on 13 February 1996; on 4 September 1999, a strain of the left knee, a strain of the neck and a strain of one shoulder. Subsequent to the cessation of the worker's employment with the employer, there was a further claim for industrial deafness in 2010.

5. Accordingly, it can be seen that no claim was ever made by the worker on the employer during the period of his employment for any skin damage, or severe bodily disfigurement. The only evidence that might be relevant about what occurred to the worker during his working period with the employer between 1979 and 1999 was that on 23 September 1994 he was referred by Dr Lee of Singleton Heights to Dr Sippe; I understand that Dr Sippe is a dermatologist. The referral was for "dermatitis on hands/feet". That is an unusual way of describing solar skin damage and, considering that workers in or about an open cut coal mine do not go bare shod on duty, it is unlikely that the damage to the worker's feet was caused by exposure to sunlight. The inference to be drawn from the inclusion of feet in the referral and the diagnosis of dermatitis is that this was not a referral for sun induced skin damage, although the worker in oral evidence today thought it was, but it does not appear to have been so.

6. On 13 March 2001, the employer filed an application for determination in the Compensation Court of New South Wales seeking a redemption of its liability to the worker. That was assigned matter number 1181 of 2001. Redemption was sought in the sum of $100,000. The application lists injuries occurring on 15 February 1989 to the third finger of the worker's right hand; on 24 April 1990 an injury to a left rib and left elbow; on 1 November 1992 an injury to the neck and both shoulders; on 29 March 1995 an injury to the neck; on 11 October 1995 an injury to the back, neck and both shoulders; and on 4 September 1999 an injury to the left knee, neck and shoulder; and, finally, on 20 October 1989 a strain on "various occasions". That appears to have been taken from exhibit A before me, which I have already quoted. Thereafter, the application contains this matter:

"Together with the nature and conditions of employment from 1 January 1981, which may have caused, aggravated, or accelerated the above conditions, together with injuries to the worker's head, whole spine, pelvis, both shoulders, both upper and lower limbs, eyes, sexual organs, functional overlay, anxiety or depression and any disease including disease of the heart, epilepsy and vascular condition and all other senses and organs of the body, but excluding industrial deafness or disease of the lungs."

As I have already indicated inferentially, those proceedings were listed before Bishop CCJ on 20 March 2001 at Newcastle. The worker was represented by Mr Alan Brown of Counsel, instructed by Mr Warland, a solicitor with Reid & Reid.

7. Prior to entering the witness box, the worker had executed a consent to redemption application; the original of that documents is exhibit K before me. The relevant parts of that consent are these:

"I, Angelo Lino Farrugia, consent to the making of an Award in accordance with the annexed Short Minutes of Order.

I acknowledge that the total effect of the making of this Award has been explained to me by my Counsel/Solicitor.

In giving this consent, I appreciate that the payment of the lump sum referred to in the said Short Minutes will bring to an end, as from 1 January 1981, my right to all entitlements under the Workers Compensation Act 1926, or under the Workers Compensation Act 1987 in respect of the injuries the subject of the said Short Minutes, which I have or may have in the future, including:

1. weekly payments of compensation of all kinds, including those pursuant to s 11(2), in the event of a failure by my employer to provide suitable employment.

2. medical, hospital and all such like expenses provided by s 10 of the Workers Compensation Act 1926, or div 3 of pt 3 of the Workers Compensation Act 1987 (as amended).

3. any lump sum provided to [sic] s 16 of the Workers Compensation Act 1926 and Div 3 and 4 of Pt 3 of the Workers Compensation Act 1987.

I agree to execute, if called upon to do so, a document wherein I shall release the employer from all liability at common law, or for breach of statutory duty which may be used to prevent me from succeeding in any action for damages in any other Court in respect of the above mentioned injuries."

8. The Short Minutes of Order provide this:

"1. Liability of employers to make weekly payments:

(a) in respect of the injuries referred to in the Application for Determination may be redeemed in whole as from 1 January 1981 by the payment of $100,000 in addition to any payments made.

2. Employer to pay the worker's costs.

3. Noted that the worker agrees the said sum also redeems liability under ss 10 and 16 of the Workers Compensation Act 1926 (as amended) and under Div 3 and 4 of Pt 3 of the Workers Compensation Act 1987 (as amended).

4. Noted that the worker undertakes to the employer to execute a common law release if called upon to do so.

5. Other orders or notations:

(a) Payment of a lump sum will also redeem the employer's liability in respect of injuries and incidents of injury arising out of or in the course of the worker's employment with the employer, including injury from the nature and conditions of the said employment and including injuries to the head, whole of the spine, pelvis, both shoulders, both upper and lower limbs, sexual organs, functional overlay and the aggravation, acceleration and causation of any disease, including disease of the heart, epilepsy and vascular condition and all other senses and organs of the body, but excluding industrial deafness or disease of the lungs.

(b) [omitted as irrelevant]."

9. As is normal in a redemption application, the worker gave oral evidence. There is a transcript which is exhibit J. On p 2, commencing at line 1, the following evidence was given:

"Q. You know that it involves all parts of your body, in addition to your neck and your arm?

A. Yes.

Q. Looking at the two documents produced to you, the top one is the consent to redemption application, is that your signature on the base of that page?

A. Yes.

Q. Before you signed, did you read that page and the short minutes of order that are before you?

A. Yes.

Q. Did Mr [Warland], solicitor, go through the documentation and explain its effect to you?

A. Yes. Yes, he did, yes."

A little later, this evidence was given, commencing at line 12:

"Q. Do you know that should his Honour approve this settlement and the moneys are paid, the weekly payment you're getting will all come to an end?

A. Yes.

Q. You won't be able to claim future weekly payments from Coal Mines Insurance?

A. Yes.

Q. In respect of any relevant injury that you may have suffered during your coal mining career?

A. Yes.

Q. That's been explained?

A. Mm hmm.

Q. You won't be able to look to Coal Mines Insurance for reimbursement of your medical and hospital expenses in the future?

A. Yes.

Q. You won't be able to get lump sums for the percentage losses, or impairments, or pain and suffering, in addition to those who are paid in 1994. That's been explained?

A. Yes.

Q. You won't be able to sue for damages. That's been explained as well?

A. Yes."

10. In accordance with his undertaking, the worker did, on 20 March 2001, execute a common law deed of release; a copy of that document is exhibit H.

11. At the time that the worker was giving evidence to Bishop CCJ and at the time he executed the common law release, which happened to be on the same day, the worker was living on the Sturt Highway at Tarcutta. He had given evidence to his Honour that he had been living in Singleton, but he had put his house on the market at Singleton. He was living in Tarcutta because that is where his son was living and he had bought a house near Wagga Wagga some years earlier intending to retire there and it had a large outstanding mortgage. This was put forward to his Honour as a reason to approve the redemption so that the worker could retire to his retirement home near Wagga Wagga.

12. The significance of that is only this, the worker swore an affidavit on 24 July 2020. In it he said that he had lived in Wagga Wagga until 2013 when he sold that house and moved to his current abode at Metford which is in the Hunter Valley. Later in his affidavit he said this:

"30. The first time I was told that I had permanent sun damage was when I was living in Wagga Wagga, which was about nine years ago. This information was told to me by Dr Burgess, GP.

31. Dr Burgess prescribed creams that I had to buy [from] the chemist to apply to the damaged skin. Dr Burgess paid particular attention to my ears.

32. I have also been told of the damage to my skin by the doctor to whom I currently attend at East Maitland Medical Centre in East Maitland."

There is nothing before me from Dr Burgess, nor from any doctor practising at East Maitland.

13. The only medical evidence before me is from Dr Peter Hopkins, who is a general practitioner practising at Lambton. I am told that Dr Hopkins was qualified by the worker's solicitors. Under the heading "on examination", Dr Hopkins said this:

"There were obvious skin changes on sun exposed parts of his body. There were solar keratoses on the top of both ears, his forehead and temples. The dorsal surface of both hands and forearms had marked sun damage, with skin thickening and pigment changes. The parts that were not sun exposed had little, if any, aging changes, with no significant skin lesions seen. There were marked differences proportional to the length of time some parts of his body were in the sun."

The doctor went on to express the view that the worker had sustained damage to his face, ears, forearms and hands as a direct response to prolonged exposure to sunlight during his working hours as an open cut coal miner at Mount Thorley. Dr Hopkins diagnosed 5% severe bodily disfigurement related to sun exposure. The doctor's opinion, of course, does not bind me, nor would a medical panel. It is up to a judge to assess whether there be severe bodily disfigurement.

14. In an attempt to shorten these proceedings, the employer asked me to inspect the worker's damaged body areas, which I did. I could not detect any discernible damage to the worker's ears, forehead or nose, or any area of his face, but the dorsal aspects of his hands and forearms and upper arms to the level of a short sleeved shirt were decidedly damaged and pigmented and I could not exclude the possibility that severe bodily disfigurement does exist. As I told Counsel at the time I would need to be guided, not only by what Dr Hopkins had to say, but also what a medical panel might say, but in particular what any professional dermatologist might say.

15. What I am asked to do is to construe the effect of the redemption application. Mr Rowles, who appears for the employer, cited to me a decision of Scotting DCJ, sitting in the Dust Diseases Tribunal, Durno v Coal Mines Insurance Pty Ltd (unreported, 23 July 2018, plaint number not shown on judgment). His Honour in that case had to deal not with the construction of a redemption application, but the construction of a deed of release. His Honour relevantly considered the appropriate law in a number of paragraphs:

22. The principles of contractual interpretation can be stated as follows.

23. First, interpretation is the ascertainment of the meaning which the document would convey to a reasonable person having all of the background knowledge which would reasonably have been available to the parties at the time of entering into the contract: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at [40]. The purpose of the contract, i.e. what the parties were trying to achieve, is important: Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337.

24. Second, evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the meaning is ambiguous or susceptible of more than one meaning: Codelfa at 352 per Mason J, confirmed by the High Court as binding authority in Western Export Services Inc v Jireh International Pty Ltd [2011] HCA 45 at [3]-[5].

25. Third, the meaning which a document would convey to a reasonable man is not the same thing as the meaning of its words. The meaning of words is a matter of dictionaries and grammar; the meaning of a document is what the parties using those words against the relevant background would have reasonably understood them to mean: Investors Compensation Scheme v West Bromich Building Society [1998] 1 WLR 896 per Lord Hoffman.

26. Fourth, the rule that words should be given their ‘natural and ordinary meaning’ reflects the common sense proposition that we do not easily accept that people have made linguistic mistakes, particularly in formal documents. Even if something must have gone wrong with the language the law does not require judges to attribute to the parties an intention which they plainly could not have had: Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429

27. In Karam v ANZ Banking Group Limited & Ors [2001] NSWSC 709 at [406] Santow J set out the principles applicable to construting releases or purported releases by reference to the following propositions:

(1) In construting a release… the Court should ascribe to the release the meaning that the release would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties at the time that they signed the document containing the release: ICS v West Bromwich BS [1998] 1 All ER 98 per Hoffman at 114.

(2) In order for the Court to give effect to what in an objective sense the contracting parties intended, it is clear that a party may agree to release claims or rights of which it is unaware and of which it could not be aware, provided clear language is used to make plain that that is its intention: see Salkeld v Vernon [1758] EngR 153 (1758) 1 Eden 64, 28 ER 608 per Lord Keeper Henley.

(3) Consistent with this emphasis on intention, general words in a release are limited to what was specifically in the contemplation of the parties at the time when the release was given: Grant v John Grant and Sons Pty Ltd (1954) 91 CLR 112 per Dixon CJ, Fullagar, Kito and Taylor JJ; Iletriat Pty Limited v McInnes (NSWCA, 17 April 1997, unreported) per Priestley JA with whom Grove AJA and Handley JA agreed).

(4) Although there are no special rules of construction, such as a contra proferentern requirement, in the absence of clear language courts have been slow to infer that a party intended to surrender rights and claims of which it was unaware and could not have been aware: BCCL v Ali [2001] 1 All ER 961 at 966 per Lord Bingham, (contrast Lord Nicholls in BCCL v Ali(supra) at 971/72 who was of the view that for the purposes of construction a general release is simply a term in the contract).

(5) Although each release should be considered against its own matrix of facts, an example of this line of “cautionary principle” (Lord Bingharris phrase) is frequently cited judgment of the High Court of Australia in Grant v John Grant & Sons Pty Limited(supra), where Dixon CJ, Fullagar, Kitto and Taylor JJ (at 125) referred with approval to the proposition put by Sir Frederick Pollock in his “Principles of Contract” (Stevens: London 1950) 13^th ed at 412, that “in equity a release shall not be construed as applying to something of which the party executing it was ignorant.”

(6) Despite the fact that, strictly speaking, releases are subject to no special rules of construction, a transaction in which one party agrees in general terms to release another from any claims upon it does have special features: BCCL v Ali at 984 per Lord Hoffman.

(7) In such circumstances it may well be appropriate to imply an obligation upon the beneficiary of such a release to disclose the existence of claims of which it actually knows and which it also realises might not be known to the other party: BCCL v Ali at 984 per Lord Hoffman, for such an obligation is consistent with a concern to protect parties from sharp practice, by preventing advantage being taken of the known ignorance of the conceding party: BCCL v Ali per Lord Nicholls at 973

Unfortunately, it appears that that judgment has not been uploaded into Case Law.

16. Importantly, both the application, filed by the employer in matter number 1181 of 2001 in the Compensation Court and the short minutes of order initialled by Bishop CCJ (as his Honour then was) on 20 March 2001 and award, which was entered by the Registrar of the Compensation Court, provide that the lump sum paid to the worker redeemed the liability of the employer for:

"Injuries and incidents of injury arising out of or in the course of the worker's employment with the employer, including injury from the nature and conditions of the said employment, including the aggravation, acceleration or causation of any disease, including disease of the heart, epilepsy and vascular condition and all other senses and organs of the body, but excluding industrial deafness or disease of the lungs."

This is the bargain struck between the worker and his employer in respect of which the employer paid to the worker and the worker accepted, $100,000.

17. The worker submits that it was unknown to him, when he took the lump sum, that he would develop the solar skin damage that he now has and that this should be seen as a form of latent injury, of which the worker was completely unaware. However, a disease of the lungs, by which it is generally assumed to be meant a dust disease, is an inherently latent injury. Furthermore, there is no suggestion that at any time prior to redemption the worker had any problem with his heart, or suffered from epilepsy, or suffered from any vascular condition; in other words, these could in fact all be latent injuries.

18. The redemption went on to include the employer's liability for any disease, including disease of other senses and organs of the body. The skin is an organ of the body. If one consults Gould's Medical Dictionary this definition is given of skin: "the organ that envelopes the body, composed of the dermis and epidermis. Nomina Anatomica: cutis". In Schmidt's Attorneys' Dictionary of Medicine there is an extended description of skin; it commences thus "The thin layer of tissue which covers the outer surface of the body. Is divided, anatomically, into two main strata, the superficial scarf skin and the deeper true skin". What the dictionary referred to as scarf skin is normally known as the epidermis; the true skin is usually known in this country as the dermis, although according to Schmidt, it is the derma. There are four layers of the epidermis and two layers of the dermis. The top layer of the dermis is the papillary layer and the deeper layer is the reticular layer. The papillary layer contains the endings of the sensory nerves and the capillaries, that is the thinnest of the blood vessels. To draw blood, one has to penetrate into the capillary layer of the dermis; as anyone who practices criminal law knows, to inflict a wound, one has to penetrate both the epidermis and the dermis.

19. One of the books which I find constantly of utility is a short monograph published by Dr George Palmer, an eminent dermatologist, in 1983 called "Skin: Notes on Common Disorders". On p 82 of the work, the doctor commences to describe tumours of skin. The first part refers to benign tumours and the second part concerns pre malignant tumours. Under that is this matter:

"Solar Exposure

In Australia, we have a fair skin population living in a climate where exposure to ultra violet light is very high. This constant exposure to UV light from early childhood produces degenerative changes in the skin over the years, mainly in the upper zones of the dermis and the epidermis.

This change is known as collagen degeneration, or solar degeneration of the skin and is seen clinically as a mottling, furrowing and loss of elasticity of the exposed skin.

It is on skin damaged in this way that most common pre malignant and skin diseases in Australia arise.

The Solar Patient

Patients with sun damaged skin must be instructed to wear hats and sun filters when out in the sun so as to keep further lesions to a minimum. They must be seen annually and examined for suspect lesions, which can then be cauterised or treated by freezing in an early stage. In this way, the need for X ray therapy and surgery can

be averted and tragedy avoided.

Prevention of skin cancer should start in early life in the home and in schools, where children of fair complexion should be encouraged to wear hats and long sleeves to avoid unnecessary solar exposure.

Pigmented moles are aggravated by solar exposure and sunlight may precipitate malignancy in a lentigo and in junctional naevi. Therefore, patients with lesions of these types should minimise their exposure."

The Doctor then considers pre malignant lesions, of which he lists eight, the first of which is solar keratosis, another of them is lentigo and it is worth noting this "This is a flat, brown or black spot on exposed skin, which usually shows junctional activity. This is the lesion which gives rise to most melanomata in Australia". Under the heading "Malignant Tumours", the Doctor discusses basal cell carcinomata, squamous cell carcinomata, melonomata, Sarcomata and lymphoma. I do know that the worker had solar keratoses on his ears, but I do have any diagnosis for the problems in his forearms.

20. I have quoted Dr Palmer's work because it marries with something submitted by the defendant. In [16] of his written submissions, Mr Rowles said this:

"It is noted from the defendant's affidavit, sworn 24 July 2020, that the defendant attests to considerable sun exposure over the period of time from August 1981 to November 1999. The dangers of excessive sun exposure, giving rise to skin damage in various forms, was well known throughout the community for some considerable period of time prior to the commencement of the defendant's exposure and it is not credible to assert that the risk of the defendant developing skin conditions as a result of exposure to sunlight was not something reasonably within the contemplation of the parties at the time of the redemption and the entering into the Deed of Release."

It is common in this country for people to know that exposure to sunlight can damage the skin. One only has to consider the common condition of sunburn. The worker was aware of sunburn when he worked: his affidavit attests to that. Dr Palmer's work in 1983 records what was then well known in the community and is still well known. Even as a schoolboy, I was made to wear a hat in the playground. It has become more prevalent over the more recent decades, but such was the case in the 1950s.

21. Looking at the words contained in the short minutes of order, it is appropriate to describe the degenerative process of exposure to sun as a disease and it is a disease of one of the organs of the body. It is clear that the worker knew, from what he was asked by his Counsel and what he had been told by his solicitor, that this was a full and final settlement in respect of all injuries he may have sustained with the employer, other than industrial deafness or a disease of the lungs.

22. It must be remembered that the only work related cause for the worker's current claim could be his exposure to sunlight while working at the Mount Thorley open cut mine between August 1981 to his last day of work on 17 November 1999. The worker may not have foreseen that he might develop skin damage because of exposure to sunlight, but the fact is he would have been advised, and clearly was, that the settlement that he entered into, the settlement that he accepted, included the effect of the work that he had done on all parts of his body, other than damage to his sense of hearing and a disease of the lungs.

23. Accordingly, I hold that the employer's liability to make any payment in respect of skin damage was redeemed by the redemption approved on 20 March 2001 and it is common ground that the redemption sum was paid within a relatively short period of time thereafter. There is, importantly, no point in permitting this matter to go to a medical panel.

24. For those reasons, the application for a medical panel in matter number RJ200 of 2020 is struck out.

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Decision last updated: 11 January 2021