Nemesis v Meatpak Australia Pty Ltd

[2020] SASCFC 22

SUPREME COURT OF SOUTH AUSTRALIA

(Full Court)

NEMESIS v MEATPAK AUSTRALIA PTY LTD

[2020] SASCFC 22

Judgment of The Full Court

(The Honourable Chief Justice Kourakis, The Honourable Justice Nicholson and The Honourable Justice Parker)

31 March 2020

WORKERS' COMPENSATION - PROCEEDINGS TO OBTAIN COMPENSATION - DETERMINATION OF CLAIMS

WORKERS' COMPENSATION - PROCEEDINGS TO OBTAIN COMPENSATION - DETERMINATION OF CLAIMS - APPEALS, JUDICIAL REVIEW AND STATED CASES - QUESTION OF LAW

Appeal against a decision of the Full Bench of the South Australian Employment Tribunal (the Full Bench and the Tribunal respectively) in which it allowed an appeal against an order of a Deputy President of the Tribunal setting aside consent orders.

The consent orders, made in 2012, purported to award lump sum compensation for permanent impairments, pursuant to s 43 of the now repealed Workers Rehabilitation and Compensation Act 1986 (SA) (the repealed Act), from which the appellant was suffering, or might suffer in the future, by reason of an injury sustained in 2009. The consent orders expressly referred to impairments to the appellant’s right knee but also ordered that he had ‘no further or other entitlements pursuant to section 43’ (the no further entitlements order).

A claim subsequently made by the appellant for lump sum compensation for permanent impairments to his hip, neck and lower back was dismissed by a Deputy President. The appellant did not appeal that decision but instead brought the application to set aside the consent orders.

Two questions of law arise on the appeal:

1. Whether the Workers Rehabilitation and Compensation Tribunal (the WRCT) was empowered by s 88DA of the repealed Act to make consent orders which purported to resolve claims for lump sum compensation for future disabilities which neither existed nor were claimed to exist as at the time the order was made (ground 3.2).

2. The scope of the power of the Tribunal to set aside its determinations pursuant to s 110 of the Return to Work Act 2014 (SA) (grounds 3.1 and 3.3).

Held per Kourakis CJ (Nicholson and Parker JJ agreeing), granting permission to appeal and dismissing the appeal on grounds 3.1 and 3.3, and allowing the appeal on ground 3.2:

1.     The subsequent legislative change is not a proper ground on which a judgment could be set aside.

2.     The only consideration warranting the setting aside of the no further entitlements order in this case is the invalidity of the order insofar as it purports to preclude an award for lump sum compensation for a permanent impairment contracted after the date of the order. The consent orders must be set aside because, unless amended, it is beyond power.

Workers Rehabilitation and Compensation Act 1986 (SA) ss 43, 88DA, 88H; Return to Work Act 2014 (SA) s 110, sch 9 cl 34, referred to.
Nemesis v Return to Work SA [2016] SAET 24; Nemesis v Return to Work SA [2017] SAET 54; Return to Work SA v Nemesis [2018] SAET 140; Stephenson v Return to Work Corporation of South Australia [2019] SASCFC 89; Return to Work SA v Stephenson [2018] SAET 29, discussed.
Clone Pty Ltd v Players Pty Ltd (In Liq) (2018) 264 CLR 165; Luison v SA Brush Co Pty Ltd (1980) 47 SAIR 324, considered.

NEMESIS v MEATPAK AUSTRALIA PTY LTD
[2020] SASCFC 22

Full Court:  Kourakis CJ, Nicholson and Parker JJ

1. KOURAKIS CJ: This is an appeal against a decision of the Full Bench of the South Australian Employment Tribunal (the Full Bench and the Tribunal respectively) in which it allowed an appeal against an order of a Deputy President of the Tribunal setting aside consent orders (the setting aside decision). The consent orders purported to award lump sum compensation for permanent impairments, pursuant to s 43 of the now repealed Workers Rehabilitation and Compensation Act 1986 (SA) (the repealed Act), from which the appellant, Mr Nemesis, was suffering, or might suffer in the future, by reason of an injury sustained on 18 November 2009. The consent orders were made on 24 July 2012 and expressly mentioned impairments to Mr Nemesis’ right knee but went on to order that Mr Nemesis had ‘no further or other entitlements pursuant to section 43’. A claim subsequently made by Mr Nemesis for lump sum compensation for permanent impairments to his hip, neck and lower back was dismissed by a Deputy President of the Tribunal (the further claim decision). Mr Nemesis did not appeal that decision but instead brought the application to set aside the consent orders which is the subject of this appeal.

2. Two questions of law arise on the appeal. The first question raised, by ground 3.2 of the Notice of Appeal, is whether the Workers Rehabilitation and Compensation Tribunal (the WRCT) was empowered by s 88DA of the repealed Act to make consent orders which purported to resolve claims for lump sum compensation for future disabilities which neither existed nor were claimed to exist as at the time the order was made.

3. I would allow the appeal on ground 3.2.  The orders could properly have awarded a lump sum for all permanent impairments from which Mr Nemesis was, at that date, suffering.  The effect of an order so expressed would be that Mr Nemesis could have no further entitlement to lump sum compensation for a permanent impairment which he suffered on that day.  However, the WRCT had no power, either on a contested adjudication or by consent, to preclude Mr Nemesis from receiving lump sum compensation for permanent impairments from which he might suffer in the future.  In purporting to do so, the consent orders conflated Mr Nemesis’ existing entitlements, which it could declare, and Mr Nemesis’ rights under the repealed Act which the order could not abrogate or diminish.

4. The second question, raised by grounds 3.1 and 3.3 of the Notice of Appeal, concerns the scope of the power of the Tribunal to set aside its determinations. The application to set aside the consent orders was made pursuant to s 110 of the Return to Work Act 2014 (SA) (the RTW Act). The application was grounded, in part, on subsequent legislative amendments which, from 1 July 2015, limited a worker’s entitlement to ongoing weekly payments of income maintenance to 104 weeks, except for a seriously injured worker, being a worker whose whole person impairment (WPI) was assessed at 30 per cent or more. The transitional provisions of schedule 9 of the RTW Act provided that a worker whose WPI had been assessed at 30 per cent or more under Part 4 Division 5 of the repealed Act before 1 July 2015 was taken to be seriously injured under the RTW Act.[1]  As a result of these legislative changes operating on the consent orders, Mr Nemesis’ entitlement to income maintenance ceased on 30 June 2017 and his entitlement to reimbursement of medical expenses ceased on 30 June 2018.  I acknowledge that the power of industrial and workers compensation tribunals to set aside consent awards, and the considerations relevant to the exercise of that power, may be wider than it is for courts of general jurisdiction.  Nonetheless, I would hold that the subsequent legislative change is not a proper ground on which a judgment could be set aside because to so hold would be to frustrate the transitional provision.  I would grant permission to appeal on grounds 3.1 and 3.3 but dismiss the appeal on these grounds. 

   [1]    Return to Work Act 2014 (SA) sch 9 cl 34.

5. I elaborate on my reasons below.

   The legislation

6. Section 88DA of the repealed Act provided:

   The Tribunal may, with the consent of all parties to proceedings, enlarge the scope of the proceedings to include questions that are not presently at issue in the proceedings.

7. Section 110 of the RTW provided:

   The Tribunal may amend or set aside a decision or order of the Tribunal―

   (a)     by consent of the parties; or

   (b)     if the interests of justice require that the decision or order be amended or set aside.

   The injuries and their treatment

8. In 2009, Mr Nemesis worked as a general hand and delivery driver for Holco Meat.  On 18 November 2009, in the course of a delivery, his truck rolled after he had parked it, pinning Mr Nemesis between the truck and another car.  His right leg was badly crushed, to the point where it was thought that an amputation might be necessary.  Surgery, and extensive other treatment, saved his leg.

9. After the accident, an emergency arterial repair was performed and for two weeks thereafter Mr Nemesis’ right leg from the knee down was open and refrigerated.  He was hospitalised for five weeks before being discharged on crutches.  Mr Nemesis undertook rehabilitation in a gym until he reached a point at which his orthopaedic surgeon, Dr Sood, was prepared to repair his knee. 

10. Major reconstructive surgery was performed on Mr Nemesis’ right knee in July 2010.  There were subsequent complications, including a failure of a synthetic graft to incorporate.  Dr Sood proposed to investigate the knee and remove any articulated debris.

11. On 14 September 2010, Mr Nemesis told his treating psychologist that use of crutches had caused pain in his shoulder, trapezius and neck.

12. On 18 September 2011, Dr Sood reported that the posterolateral complex reconstruction was clinically intact but there was an expected degree of laxity.  There was muscular wasting of Mr Nemesis’ right thigh and calf. 

13. Mr Nemesis’ general practitioner, Dr Jennings, reported on 30 November 2011 that Mr Nemesis had a ‘reduced range of motion in his right hip and ankle’ and advised that his solicitors should pursue a claim for those disabilities.  Dr Jennings noted that both shoulders were painful, probably because of the use of crutches.  However, Dr Jennings did not make an assessment of any impairment of Mr Nemesis’ hip, neck or shoulder functions.

14. Notwithstanding Dr Jennings’ gratuitous legal advice, no claim was made for those impairments before the consent orders were made on 24 July 2012. 

15. On 4 September 2012, Mr Nemesis told an occupational therapist that he had a feeling of his left hip, back and neck going ‘out’ and gait disturbance. 

16. Further arthroscopic repairs of Mr Nemesis’ knee were performed in June 2013 and September 2015.

17. An arthroscopic labral tear repair of Mr Nemesis’ hip was performed in February 2015. In a report dated 12 March 2015, Dr Sood opined that Mr Nemesis’ labral injury was most likely caused at the time of the initial trauma, but came to the fore much later because treatment of his knee was given precedence.

    The consent orders

18. In 2012, Mr Nemesis made a claim for permanent impairment of his right knee and for associated scarring pursuant to s 43 of the repealed Act. Employers Mutual Limited (EML) determined that Mr Nemesis’ WPI was 21 per cent. Mr Nemesis’ general practitioner assessed his overall impairment at 32 per cent. Negotiations resulted in EML putting a ‘final’ offer of $61,368 based on an overall combined impairment of 26 per cent.

19. Mr Nemesis instructed his solicitor to accept the offer and acknowledged in those instructions that:

    … the settlement of my WorkCover case brings all s 43 WorkCover matters to an end in relation to all injuries sustained during the course of my employment since the beginning of WorkCover irrespective of the employer or the body part involved.

20. On 24 July 2012, the consent orders were made by the WRCT. Paragraph 1 of the consent orders varied the decision of WorkCover SA (now known as the Return to Work Corporation of South Australia) to ‘reflect’ entitlements to a 16 per cent WPI in respect of Mr Nemesis’ knee and a 12 per cent WPI in respect of scarring of that knee. The consent orders provided that Mr Nemesis was ‘entitled to $61,368.00’ pursuant to s 43 of the repealed Act for the combined impairment.

21. Paragraph 2 of the consent orders provided:

    The worker has no further or other entitlements pursuant to section 43 out of the disability sustained on 18 November 2009, and any other disability arising or sustained on any other date from employment with the employer, and any sequel to any such disability, arising or sustained on any date.

22. I will refer to that paragraph as a ‘no further entitlements order’. Apparently, a clause to that effect is commonly included by WorkCover SA in those consent orders which are intended to give ‘a full s 43 discharge’, whatever that may mean.

    The further claim decision

23. On 5 May 2014, Mr Nemesis sought lump sum compensation on account of alleged injuries to his neck and lower back arising out of the incident on 18 November 2009.  WorkCover SA’s agent Gallagher Bassett rejected that claim.  Mr Nemesis disputed that determination.  In the course of that dispute, the initial claim rejected by Gallagher Bassett was expanded to included impairments for Mr Nemesis’ left and right hip.  Gallagher Bassett contested Mr Nemesis’ claims on the grounds that they were precluded by the earlier consent orders.  Gilchrist DPJ upheld WorkCover SA’s determination on the ground that Mr Nemesis’ claims were precluded by the principles of issue estoppel and res judicata.[2]

    [2]    Nemesis v Return to Work SA [2016] SAET 24.

24. On the trial before Gilchrist DPJ, Mr Nemesis testified that he was not told that the settlement would exclude claims for disabilities in other body parts.  Mr Nemesis gave evidence that he had not pursued a claim for other injuries at that point because his focus was on his leg.  He said that he knew at the time that he had ‘issues with his neck, back and hips’.  A written statement made by Mr Nemesis dated 22 December 2015 was also put in evidence and relevantly stated:

    [46]My right hip is impaired due to the altered gait from my right knee injury.  This injury did not present itself straight away.  I noticed that it was grinding and it was sore, it also effected [sic] my walking.

    …

    [55]I started noticing issues with both my neck and lower back at the same time that my knee injury occurred, but they become more prominent and established around the time my hip was operated on.

    …

    [57]The pain in these areas began quite subtly but then started to build up to become an issue as they are now.  Dr Meegan’s report says that these issues starting [sic] appearing around two years ago.  However I believe that they have been there the whole time, but as my knee and hip were the primary injuries, I did not notice the smaller problems.

25. In cross-examination, Mr Nemesis conceded that he was aware, before the making of the consent orders, that he ‘had trouble’ with his neck, back and hip.  Mr Nemesis gave the following evidence:

    Thank you. Now, I think you made a claim for further section 43 payments for injuries to your hip, neck and lower back sometime in May 2014?---Correct.

    And what I wanted to ask you about, if I may, is when you first noticed problems with your hip and your lower back, and your neck, okay?  Now, in relation to your neck and your lower back, I think you first became aware of problems in those two areas at around the same time of your initial injury in 2009.   Is that right?---That’s right.

    Thank you.  And in relation to your hip, you first started to notice some problems with your hip shortly after your initial injury in 2009.  Is that right too?---Correct.

    And I think you say, and I just want to confirm that this is accurate to ensure there is no doubt about it, in paragraph 18 of your affidavit that at the time of the consent orders, the claims for your hip, your back and your neck had not gone in.  And when you say, ‘Had not gone in,’ you mean hadn’t been submitted at that time?---That’s correct.

    But you go on to say that you had never brought them up, even though you were physically feeling problems in your neck, back and hip at that time.  When you say, ‘At that time,’ you’re referring to the time of the consent orders, aren’t you?---I always had problems in my neck, back and hip, but there was a lot of pressure on saving my leg and my life.

    Sure?---The importance was on my leg, saving my leg.

    Sure.  I think what I’m getting at is you were aware in many months leading up to the making of consent orders that you had trouble with your neck and your back, and your hip?---Correct.

26. Gilchrist DPJ dismissed Mr Nemesis’ further claims for the following reasons:[3]

    [17]In connection with this application Mr Nemesis claims that it was never explained to him that the settlement would exclude other body parts. He said that he understood that the settlement was in connection with his right leg and associated scarring only. He said that he knew at the time that he had issues with his neck, back and hips, but had not then pursued them as his focus was on his leg. He could not explain why he signed the statement of instructions given the terms that it included and in particular the term as set out above.

    …

    [35]In this case I think the consent order speaks for itself. In consideration for the payments of certain impairment ratings that were within a range of possible assessments, some higher, some lower, Mr Nemesis agreed to abandon any claim that he might have otherwise have had in connection with any other s 43 entitlements. In doing so he was partaking in the process of give and take that the Full Bench of the Workers Compensation Tribunal unanimously endorsed in WorkCover/Vero Workers Compensation (SA) Ltd (Nursing Agency of Australia Pty Ltd) v Mathie. It seems to me that that is the end of the matter.

    [36]If it were appropriate to consider the surrounding circumstances, I would be reinforced in coming to that conclusion. There was clear evidence of knowledge of other potential s 43 entitlements at the time when the consent order was made. The parties and their advisors can be taken to have read Dr Jennings’ report. Mr Nemesis said that he was aware of problems with other body parts. The statement of instructions specifically alludes to the fact that the settlement includes the discharge of any entitlements to lump sum compensation for other body parts. There is no reason to doubt Mr Hancox’s evidence of his usual practice. There is no reason to think that he was not aware of the potential for other claims and that the offer that he put was intended to secure their discharge. There is no reason to doubt that he deliberately inserted the all injuries discharge in the consent order to reflect that and to reflect the fact that an agreement had been reached for them to be discharged as confirmed by Mr Nemesis’ statement of instructions to his lawyers.

    (Footnote omitted)

    [3]    Nemesis v Return to Work SA [2016] SAET 24 at [17], [35]-[36].

27. Gilchrist DPJ’s reasons for dismissing Mr Nemesis’ further claims are inconsistent with the decision of this Court in Stephenson v Return to Work Corporation of South Australia[4] (Stephenson) to which I refer below.  Importantly, and because of the mistaken approach taken by the Deputy President, his Honour did not make findings on whether Mr Nemesis suffered any other impairments and, if so, whether they were permanent as at the time of the consent orders.

    [4] [2019] SASCFC 89.

    The setting aside decision

28. In 2016, Mr Nemesis made an application to set aside the consent orders.  On 23 June 2017, Lieschke DP granted the application and set aside the consent orders.

29. On the application to set aside the consent orders pursuant to s 110 of the RTW Act, Lieschke DP made the following limited findings as to Mr Nemesis’ other disabilities at the time of the consent orders:[5]

    [60]I accept the applicant’s submission that there is no evidence he was then aware of other permanent impairments, or that he then had, or may soon have had, a right to claim compensation for permanent impairments to his hip, neck or low back. I find there is no evidence he thought any of these conditions had reached maximum medical improvement, or had been advised by any doctor that improvement was unlikely or deterioration was likely. The advice of Dr Jennings falls well short of this. Awareness of ‘issues’, even two and a half years after the initial trauma, is very different to awareness of permanent impairments. A claim for assessment of permanent impairment cannot be based just on having a physical issue or problem. Having an issue merely indicates a possibility of future permanent impairment, and therefore of a possible future legal right.

    [61]For completeness I add there was no evidence any other claim had been foreshadowed, contemplated or claimed by the time the orders were signed. There was no more than the potential for a future claim or claims under the Act for different permanent impairments if the problematic hip, neck and/or low back issues did not recover through time or treatment, or were made worse through secondary bio-mechanic mechanisms.

    [5]    Nemesis v Return to Work SA [2017] SAET 54 at [60]-[61].

1. I pause here to observe that Lieschke DP also approached the question from the perspective of Mr Nemesis’ awareness of his injuries.  A party’s subjective understanding of a consent order is generally immaterial unless it constitutes a vitiating circumstance.  The order must, save in exceptional circumstances, as Gilchrist DPJ observed, speak for itself.  However, since the decision of this Court in Stephenson, it is clear that consent orders, like the adjudicative orders of the Tribunal, can only determine a dispute over a claim for compensation for what is, or at least alleged to be, a presently existing disability.

2. Lieschke DP continued:[6]

   [72]I find the discharge for consideration was not of any question or issue regarding any entitlement then in existence or then capable of being defined or assessed. The discharge was of potential future rights that may come into existence. The discharge in reality excluded or prevented the applicant’s potential future access to ss 43 & 43A for possible future entitlements arising from the 2009 trauma. The discharge was a contract to exclude possible future liability only.

   In that paragraph, Lieschke DP focussed on the relevant question but did not make a finding on whether Mr Nemesis was suffering the additional impairments for which he was claiming s 43 compensation at the time the consent orders were made.

   [6]    Nemesis v Return to Work SA [2017] SAET 54 at [72].

3. On the merits of the application, Lieschke DP observed:[7]

   [57]I accept that the 2012 compromise and order were expressly limited to lump sum compensation, and were not intended to exclude the true level of impairment being considered for entitlement to different rights. Given the small category of serious injured workers, the rarity of the type of general discharges under consideration and the facts of determined and potential WPI’s, these circumstances are exceptional and highly prejudicial to the applicant.

   [58]I also accept that even the whole of the higher amount paid in 2012 is so obviously grossly disproportionate to the foregone compensation the applicant may otherwise be entitled to, that the result of the 2012 agreement cannot possibly be described as the outcome of the usual give and take of a conciliation process.

   (Footnote omitted)

   [7]    Nemesis v Return to Work SA [2017] SAET 54 at [57]-[58].

4. The Deputy President found that Mr Nemesis’ additional claims were arguable.[8] 

   [8]    Nemesis v Return to Work SA [2017] SAET 54 at [62].

5. The Deputy President, finding that the consent orders were not authorised by s 88DA of the repealed Act or the Rules of the Tribunal, concluded:[9]

   [73]As such I conclude the Tribunal’s jurisdiction to make order 2 was not authorised by r 26(4), and therefore order 2 was highly irregular.

   [74]In my opinion the interests of justice require the whole order to be set aside on each of two separate grounds. In the context of the Act, order 2 has had a seriously unjust impact on the applicant, and the injustice requires correction.

   [75]The first ground is that there is grossly disproportionate unintended prejudice to the applicant from order 2, arising in exceptional circumstances. In my opinion the prejudice to the applicant far outweighs the public interest in not disturbing the orders. The other factors of timeliness and arguable case are consistent with my conclusion. As remedy, setting aside the whole order also cures the prejudice to the respondent.

   [76]The second separate ground is that order 2 was not made within the jurisdiction of the Tribunal, as explained above. As this term was solely about potential compensation rights rather than related employment rights, the interests of justice very strongly require it to be set aside. It clearly outweighs the public interest considerations, and again timeliness and arguable case considerations are consistent with this conclusion. I would also set aside the whole order on this ground to cure the respondent’s prejudice.

   [77]Pursuant to s 110(b) I set aside the whole of the order of 24 July 2012. As a result all section 43 claims, including for the right leg and scarring are now to be listed for hearing and determination.

   [9]    Nemesis v Return to Work SA [2017] SAET 54 at [73]-[77].

   Decision of the Full Bench

6. The Full Bench of the Tribunal set aside Lieschke DP’s decision.

7. The Full Bench accepted that on an application pursuant to s 88H of the repealed Act with respect to a consent order, an irregularity in the underlying agreement ‘might be a predominant indicator warranting the setting aside of the consent order’.[10]  The Full Bench identified that ‘the most critical factor which influenced the Deputy President in his discretionary exercise was the weight he gave to what he described as the grossly disproportionate unintended prejudice resulting in exceptional circumstances from the retrospective change in compensation laws’.[11]  The Full Bench correctly observed that if that consideration was an irrelevant one, the Deputy President’s decision was vitiated by an error of law.

   [10] Return to Work SA v Nemesis [2018] SAET 140 at [41], quoting The State of South Australia (Primary Industries and Resources SA) v Wenham [2006] SAWCT 28 at [48].

   [11] Return to Work SA v Nemesis [2018] SAET 140 at [51].

8. The Full Bench discussed the implied limits on the discretion conferred in wide terms by s 110 of the RTW Act:[12]

   [59]Whilst s 110(b) of the RTW Act is to be read liberally, the fact that it can be taken to confer power on the Tribunal to set aside or amend a decision or order in aid of the control of its own processes indicates there are some parameters to the exercise of the power. That is, it would appear that the circumstances in which the Tribunal exercises the power must in some way relate to the processes of the Tribunal when the decision or order was made, such that any intervention can be justified by the need to control those processes, and alleviate any injustice arising from the impugned effect of those processes when required.

   [60]If that be correct, the question then becomes whether the repeal of the WRC Act and its replacement by the RTW Act, and the effect that had on the respondent’s legal rights some three years after the consent orders, is a matter which can be taken into account when the Tribunal is considering the exercise of a power to control its own processes by setting aside the consent orders.

   [12] Return to Work SA v Nemesis [2018] SAET 140 at [59]-[60].

9. On that question, the Full Bench concluded:[13]

   [61]We are of the view that, in the circumstances of this case, the subsequent change in the compensation law cannot be a relevant consideration. This is despite that the subsequent changes can be accepted as having adversely affected the respondent. They have curtailed his entitlement to ongoing income support and reimbursement of medical expenses, and make any future entitlement in that regard contingent on his establishing a qualifying level of WPI which was not a consideration at the time of the consent orders and which he cannot pursue in light of those consent orders. Despite these adverse effects, the fact of the new legislation and its retrospective effect cannot be a relevant consideration in the exercise of the s 110(b) discretion is because it has no connection with the processes whereby the consent orders came to be made.

   [13] Return to Work SA v Nemesis [2018] SAET 140 at [61].

10. On the question of the factual findings concerning the state of Mr Nemesis’ injuries at the time of the consent orders, the Full Bench said:[14]

    [64]We note a tension between the conclusion of the Judge as to the respondent’s knowledge of potential s 43 entitlements, and the finding of the Deputy President of the respondent’s lack of awareness of other permanent impairments. However, properly understood, we take the Deputy President not to have been seeking to contradict the unchallenged findings of the Judge, but to have been endeavouring to develop a more nuanced approach to what exactly the respondent understood at the time. We take the matters accepted by the Deputy President to indicate that, despite the respondent having an awareness of issues with respect to other body parts which might have had the potential to become s 43 entitlements, he was not aware of any actual permanent impairments, or of whether he had or may have in future a right to claim compensation for such impairments. The distinction the Deputy President made ultimately made [sic] was between awareness of issues and awareness of actual or potential permanent impairments.

    [65]These were matters which may have been relevant to the proper exercise of the s 110(b) discretion by the Deputy President, but they are not matters which can be taken to undermine the integrity of the bargaining process leading to the consent orders given the findings and conclusions of the Judge in the first Nemesis decision.  Accepting that to be the case, the subsequent statutory changes to which the Deputy President had regard in concluding there was ‘grossly disproportionate unintended prejudice’ were an irrelevant consideration.  The reliance upon them caused the exercise of the discretion to miscarry.

    …

    [80]Although r 26(1) does not specifically state its purpose is connected with the enlargement of the scope of proceedings under s 88DA, and uses slightly different language, including the ability to ‘refer’ issues for determination by the Tribunal, and to apply for an ‘expansion’ of issues in dispute, read as a whole, and having regard to the specific reference to s 88DA in r 26(4), there is no doubt that the rule is intended to facilitate the s 88DA process.

    [81]Paragraphs (1) to (3) inclusive of r 26 outline the process that may be taken to formalise an enlargement of issues. No such process was initiated in this case. To the extent that there can be taken to be an expansion of the questions at issue to incorporate para 2 of the consent orders, it can only be by the deeming operation of r 26(4), and the inference able to be drawn from the inclusion of para 2 of the consent orders and its endorsement by the Tribunal.

    (Footnote omitted)

    [14] Return to Work SA v Nemesis [2018] SAET 140 at [64]-[65], [80]-[81].

11. On the question of the power of the Tribunal to make the consent orders pursuant to s 88DA of the repealed Act, the Full Bench held:[15]

    [86]The first and most obvious point to be made is that s 88DA does not use the word ‘entitlement’, nor make any reference to whether such entitlement must be actual, potential, or capable of definition or assessment, or of being agreed or determined. It states, quite simply, and broadly, that the Tribunal may, with consent, enlarge ‘the scope of the proceedings’, so as to allow it ‘to include questions that are not presently at issue in the proceedings’. There is nothing on the face of s 88DA which suggests that the Tribunal is empowered only to grant an enlargement to include a question at issue involving a s 43 entitlement when there is a right to that compensation which is actual and defined rather than potential.

    …

    [88]The scheme of the WRC Act does not contemplate that the s 88DA power is confined as suggested. Multifarious issues may arise on a claim for compensation. Disputes may arise over whether there was any injury at all, or whether an alleged entitlement exists or is capable of being established, or as to the extent of an alleged entitlement with respect to an admitted injury. A worker may suffer multiple injuries which give rise to a range of actual or potential entitlements to different species of compensation which may become manifest at differing times, especially given that many claims are the result of alleged consequential injuries. Claims and asserted entitlements may be at various stages in their development such that some may be capable of being defined and assessed and others not when settlement negotiations take place and when a s 88DA enlargement order is made. The stage that such claims have reached in their definition or assessment, or their status as ‘actual’ or ‘potential’ claims, however those categories might be defined, does not dictate whether they can be included as questions at issue in the proceedings, nor whether they can be the subject of consent orders.

    [89]The approach taken by the Deputy President is not consistent with the objects of the WRC Act in particular that set out in s 2(1)(f) of reducing litigation and adversarial contests to the greatest possible extent. It would significantly restrict the ability of parties to compromise claims in a timely and pragmatic manner by terms including not only a settlement of the dispute referred into the Tribunal but of any other actual or potential claims for entitlements which may or may not be able to be established. If a worker is aware of a condition which may be related to a work injury, but is uncertain as to whether the connection with work can be established, or as to whether, if it can, there is any compensable entitlement, it is open to the worker to defer settlement of that potential claim, or of any claims, until the extent of the potential entitlement is further defined or assessed. Such matters were adverted to in the decision of Forte v Return to Work SA and Construction Glazing Ply Ltd.

    [90]Our approach is consistent with that taken by the Full Bench in Return to Work SA v Stephenson, which was delivered after the decision in this matter was reserved. The decision concerned the issue as to whether a worker was estopped from pursuing further s 43 claims by consent orders in similar although slightly narrower terms than para 2 of the consent orders in these proceedings. Those further s 43 claims had been included in consent orders under s [sic] formal s 88DA enlargement. It had been found at first instance that at the time of the making of the consent orders the worker was aware of symptoms which later developed into the disputed impairments, and of their connection with his injuries and treatment, but that he was not aware that they might develop into impairments, and that it was not in the contemplation of the parties that such potential impairments would be encompassed by the consent orders. It was found that the consent orders had to be read down accordingly and did not apply to the disputed impairments.

    (Footnotes omitted)

    [15] Return to Work SA v Nemesis [2018] SAET 140 at [86], [88]-[90].

12. As is apparent from the last cited paragraph, the decision of the Full Bench was founded on the correctness of its earlier decision in Return to Work SA v Stephenson,[16] which decision was overturned on appeal to this Court.

    [16] [2018] SAET 29.

13. In Stephenson, I made the following observations on the scope of s 88DA of the repealed Act:[17]

    [17] [2019] SASCFC 89 at [20]-[23], [25].

    Construction of s 88DA

    [20]I return to the construction of s 88DA. The noun phrase ‘questions that are not presently at issue’ must concern the entitlements of a worker to compensation under the WRC Act. …

    [21]The structure of the WRC Act and the textual references to ‘a dispute’, ‘a notice of dispute’, or ‘a disputed decision’ strongly suggest that the questions must be ones that could be the subject of a claim made pursuant to s 52 of the WRC Act.  That is to say, the questions that the proceeding can be enlarged to encompass are ones that concern whether the worker has an impairment of a kind for which the WRC Act provides compensation.

    [22]Moreover, the noun phrase must have the same meaning whether invoked in the conciliation or adjudicative proceedings of the Tribunal.  Parliament could not have intended to allow the parties by consent to transform the Tribunal from a specialist tribunal exercising the jurisdiction conferred by ss 92D and 94A of the WRC Act into a court of general jurisdiction.  I note in this respect that a determination or order made by the conciliation officer is an order of the Tribunal.

    [23]What then constitutes a question about entitlements to compensation arising under the WRC Act?  Plainly enough, there need not be a finding, or agreement, or even evidence, of a compensable injury before there can be a controversy over whether a worker has an entitlement under the WRC Act.  Whether or not a worker has a compensable injury at all may also be a subject of controversy.

    …

    [25]It will be necessary to consider more closely the precise nature of the questions that can be asked and resolved in enlarged proceedings. It is sufficient for now to observe that the relevant questions, when a dispute over a worker’s rejected claim is adjudicated, are essentially threefold:

    ●     Is the worker suffering any injury or impairment?

    ●     How was it caused?

    ●     On the application of the WRC Act properly construed, what award of compensation, if any, should be made?

14. On the hearing of Mr Stephenson’s claim, it was found that he was not suffering the additional impairments, for which he was then claiming lump sum compensation, at the time an earlier consent order, which included a ‘no further entitlements’ clause, was made.

15. Mr Stephenson’s contention on the appeal was:[18]

    [43]… the Tribunal had power or jurisdiction to make a determination or order as to entitlement on a claim for lump sum compensation at the time the determination or order was made, but did not have power or jurisdiction to order or determine that there could never be such an entitlement in the future.

    [18] Stephenson v Return to Work Corporation of South Australia [2019] SASCFC 89 at [43].

16. That contention was accepted but was qualified as follows:[19]

    [44]That contention should be accepted.  I only add, by way of observation, that there is no statutory obstacle to an agreement which confers benefits on a worker of a kind or amount which could not be the subject of an award of compensation in exchange for the worker consenting to a particular determination of his claims for compensation for identified injuries alleged to have been suffered.  In that aspect of the negotiations there is room for ‘creativity’, but the room does not extend to the framing of the Tribunal’s orders.  Those orders are limited by the text and structure of the WRC Act.

    [45]Mr Stephenson’s claim has proceeded on the premise that he was not suffering the digestive system and mastication and deglutition impairments when the consent order was made.  It follows that there can be no cause of action estoppel. 

    [46]I observe, however, that on the other hand, if, as a matter of fact, Mr Stephenson did have an impairment, it would not matter that the procedures by which an assessment of that impairment is undertaken for the purposes of s 43 of the WRC Act had not yet been undertaken. Mr Stephenson’s contention and submissions to that effect conflates the existence of an underlying entitlement with the procedure necessary to prove the impairment and justify an award pursuant to s 43.

    [19] Stephenson v Return to Work Corporation of South Australia [2019] SASCFC 89 at [44]-[46].

17. In summary, in Stephenson, this Court held that a consent order pursuant to s 88DA of the repealed Act may validly and effectively determine that a worker does not have an entitlement to lump sum compensation pursuant to s 43 of the repealed Act for any existing impairment by way of compromise of a claim or claims for compensation as at the date of the order, whatever may be the case in fact, but it cannot exclude the operation of the repealed Act on permanent impairments which the worker subsequently contracts. Such an order may be made either standing alone or in conjunction with an award of lump sum compensation. In Stephenson, the finding was that Mr Stephenson was not suffering any impairment at all.  For that reason, the issue of permanency was not expressly referred to.  However, a consent award can only be made if it is agreed that the impairment is permanent.  A consent order that the worker is not entitled to lump sum compensation may be made on the basis that he or she is not relevantly impaired, or that if impaired, the impairment is not permanent, or that the worker does not suffer specified or any compensable injuries at all. 

1. It is necessary to explicate the very nature of the exercise of judicial power which underpins the decision in Stephenson. On an exercise of judicial power, a legal dispute is resolved by applying the applicable law to the facts as found, the resulting judgment acting as a new charter embodying the entitlements and obligations of the parties. On a claim for lump sum compensation, s 43 of the repealed Act is the relevant law which conferred a right to receive lump sum compensation on workers, and a corresponding obligation on the Return to Work Corporation to pay it, when, as a matter of fact, a worker suffers a permanent impairment. An order of the Tribunal, made by consent or otherwise, may make an award premised on the existence of a permanent impairment on that date or deny any such entitlement on the premise that there is no compensable injury at all, or that there is no impairment, or that the impairment is temporary. What an order cannot do is abrogate or vary the right conferred by s 43 of the repealed Act.

2. The no further entitlements order in this case did not purport to deny an entitlement to any compensation by declaring that there was no compensable injury.  That ground on which a consent order might preclude an entitlement to compensation can, therefore, be put aside.  The no further entitlements order can, therefore, only validly preclude claims for permanent impairments which existed at the time it was made.

3. A worker becomes entitled to compensation pursuant to s 43 of the repealed Act when a disability gives rise to an impairment that is permanent. The evidence that the impairment is permanent and its quantification may be obtained at a later time but an entitlement to a lump sum pursuant to s 43 does not accrue unless and until the impairment is a permanent one. A finding has not been made in this case that, as at the date of the no further entitlements order, Mr Nemesis was, or was not, suffering permanent impairment to his hip, neck or lower back. If he was, he is precluded from claiming additional lump sum compensation for them because he compromised them by consenting to an order that he was not, at that time, entitled to any additional lump sum compensation. If impairment of his hip, neck or lower back only became permanent after the no further entitlements order was made, he is not precluded by it from receiving lump sum compensation for them.

4. The difficulty presented here is that if the no further entitlements order is wholly set aside, Mr Nemesis would be permitted to bring a claim for s 43 compensation for impairments which, if they were permanent at the time of the order, were precluded by it. The appeal was called back on before this Court on 23 December 2019 for further submissions on this question.

5. Counsel were asked whether an appropriate order might be to amend the no further entitlements order to read that Mr Nemesis did not suffer any impairment, other than to the right knee for which he was entitled to s 43 compensation as of the date of the order. Both parties eschew any such approach and take the position that the consent orders should stand or fall as a whole. In particular, the respondent submits that the compensating authority had consented to an award higher than it had determined because of the inclusion of the no further entitlements order. Accordingly, the consent orders must be set aside because, unless amended, it is beyond power.

   Scope of s 110

6. I turn to the second question. I accept that there are reasons to be found in the purpose and operation of workers compensation schemes. Section 110 of the RTW Act should not be read narrowly by reference to the much more limited powers of courts of general jurisdiction to set aside their orders outside of the ordinary appeal process.[20] 

   [20] Clone Pty Ltd v Players Pty Ltd (in liq) (2018) 264 CLR 165; Luison v SA Brush Co Ltd (1980) 47 SAIR 325.

7. A serious disabling condition may, for example, be misdiagnosed, the true extent of the disability only appearing after a consent order has been made. Alternatively, workers with a limited understanding of either the English language or the nature of their entitlements might consent to awards which are grossly disproportionate to their entitlements. Of course, the interests in the finality of litigation apply in the workers compensation jurisdiction as elsewhere. The point I wish to make is that there are particular circumstances affecting the workers compensation jurisdiction which may call for a wider construction of the power conferred by s 110 of the RTW Act.

8. However, a change in the law cannot be one of those circumstances.  First, if an amendment of legislation were to be recognised as a circumstance warranting the setting aside of an order, all orders made on the basis of the repealed or amended provisions would be attended by much uncertainty.  It cannot be said that legislative amendments to workers compensation statutes are frequent.  Secondly, consent orders or adjudications are premised on there being no change in the law.  A change in legislation does not falsify the legal premise on which a consent order is made.  Finally, of course, if a change in legislation does warrant a setting aside of a consent order, the very purpose of the legislative amendment may be subverted.

   Conclusion

9. The only consideration warranting the setting aside of the no further entitlements order in this case is the invalidity of the order insofar as it purports to preclude an award for lump sum compensation for a permanent impairment contracted after the date of the order. 

10. But for the position taken by the respondent, I would have allowed the appeal only for the purpose of varying the no further entitlements order to provide that the sum awarded was for all of the permanent impairment from which Mr Nemesis was suffering at the date of the order.  However, in accordance with the position of both parties, that the consent orders should either stand or fall as one, I would allow the appeal, quash the decision of the Full Bench and set aside the consent orders.

11. NICHOLSON J:         I agree with the Chief Justice.

12. PARKER J:         I agree with the reasons of the Chief Justice and the orders he proposes.