Newman v NSW Fire Brigades
[2007] NSWWCCPD 142
•18 June 2007
| WORKERS COMPENSATION COMMISSION | ||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSITITUTED BY AN ARBITRATOR | ||||
| STATUS: Decision upheld on appeal: New South Wales Fire Brigades v Newman [2008] NSWCA 82; (2008) 5 DDCR 423 | ||||
| CITATION: | Newman v NSW Fire Brigades [2007] NSWWCCPD 142 | |||
| APPELLANT: | Kathleen Newman | |||
| RESPONDENT: | NSW Fire Brigades | |||
| INSURER: | Allianz Australia Insurance Limited | |||
| FILE NUMBER: | WCC16005-06 | |||
| DATE OF ARBITRATOR’S DECISION: | 2 March 2007 | |||
| DATE OF APPEAL DECISION: | 18 June 2007 | |||
| SUBJECT MATTER OF DECISION: | Sections 149 and 151Z(1) of the Workers Compensation Act 1987; whether worker had ‘recovered damages’. | |||
| PRESIDENTIAL MEMBER: | Deputy President Bill Roche | |||
| HEARING: | On the papers | |||
| REPRESENTATION: | Appellant: Adams & Partners | |||
| Respondent: Hicksons | ||||
| ORDERS MADE ON APPEAL: | The Arbitrator’s decision and orders dated 2 March 2007 are revoked and the following orders made: | |||
| “1. The matter is remitted to a different Arbitrator for determination of the Applicant’s (Ms Newman’s) outstanding rights consistent with the reasons given in this decision and with the provisions of Workers Compensation Act 1987 and Workplace Injury Management and Workers Compensation Act 1998 and | ||||
| 2. The Respondent (NSW Fire Brigades) is to pay the Applicant’s costs, in the event that she is otherwise entitled to recover costs.” | ||||
| The Respondent Employer is to pay the Appellant Worker’s costs of the appeal. | ||||
BACKGROUND TO THE APPEAL
On 28 January 2000 Kathleen Newman (‘the Appellant Worker/Ms Newman’) was injured in a car accident when travelling between fire brigades in the course of her employment with NSW Fire Brigades (‘the Respondent Employer/the Fire Brigade’). As a result of her injuries she claimed weekly and lump sum compensation. Her claim was accepted and she was paid medical expenses and weekly compensation. A claim for lump sum compensation was subsequently made in the Compensation Court of NSW (matter No. 56787 of 2000).
Ms Newman retained the solicitors Burt & Allen (Mr Burt) to act for her in respect of her rights, if any, under the relevant motor accident legislation (‘the CTP claim’). On 16 February 2000 Mr Burt forwarded an “Accident Notification Form” and “Statutory Declaration” to “The CPT Claims Department, MMI Insurance Limited DX 10154 Sydney Stock Exchange”. The claim was accepted and MMI Insurance Limited (‘MMI’) provisionally admitted breach of duty of care by letter addressed to Burt & Allen dated 26 June 2000. At some stage in 2000, MMI changed its name to Allianz Australia Advantage Limited (‘Allianz’). On 16 February 2001 Allianz wrote to Burt & Allen confirming that breach of duty of care in relation to the circumstances of the accident was admitted, seeking particulars of, among other things, all workers compensation payments received and adding:
“We note that your client is in receipt of Workers Compensation benefits. Kindly confirm whether your client intends to pursue the CTP claim.”
By letter dated 16 March 2001 Burt & Allen provided detailed particulars to Allianz of Ms Newman’s injuries and advised of the name, address and reference of the relevant workers compensation insurer (GIO Australia Ltd, 52-58 Clarence Street, Sydney Claim No FB93B-83124). Further particulars were provided on 20 March 2001 and a medical report in support of the claim was served on Allianz on 16 May 2001.
At some stage in 2001 Mr Burt received instructions from Ms Newman to pursue her workers compensation rights and not to proceed with the CTP claim (see statement by Mr Burt 8 February 2007, paragraph 10).
The claim for lump sum compensation was settled in the Compensation Court on 11 September 2001 in the following terms:
“1. That the respondent pay the applicant $3,750 as lump sum compensation under section 66 in respect of 5% loss of efficient use of the applicant’s right leg at or above the knee;
2. That the respondent pay the Applicant $8,000 as lump sum compensation under section 66 in respect of 20% impairment of the applicant’s neck;
3. That the respondent pay the Applicant $9,000 as lump sum compensation under section 66 in respect of 15% impairment of the applicant’s back;
4. That the respondent pay the Applicant $8,000 as lump sum compensation under section 66 in respect of 10% loss of efficient use of the applicant’s right arm at or above the elbow;
5. That the respondent pay the applicant $11,250 under section 67;
6. That any claim for interest be dismissed;
7. That the respondent pay to the applicant [sic] medical and like expenses up to the sum of $ [sic] upon production of accounts and receipts and valid HIC Notice of Charge;
8. The respondent pay the applicant’s costs as agreed or assessed provided that no interest will be payable on any costs until 28 days after costs have been agreed or assessed and only payable from the date of agreement or assessment.”
In March 2002 Mr Burt was telephoned by a claims officer at Allianz who offered to “settle the CTP claim, on the basis of payment of my professional costs agreed in the sum of $1,500.” (Mr Burt’s statement 8 February 2007, paragraph 11). This conversation was confirmed in a letter from Burt & Allen to Allianz dated 22 March 2002 which stated:
“Further to our telephone conversation we confirm that this matter has been settled by way of a Workers Compensation Commutation and there is no further claim outstanding.
We note agreement of our Professional Costs of $1,500.00 and look forward to receiving payment thereof in due course.” (emphasis added)
The reference to a commutation was inaccurate, as Ms Newman had effected no such settlement.
Mr Burt’s statement of 8 February 2007 added at paragraph 11:
“Thereafter I engaged in correspondence with Allianz and with the applicant, who executed upon my advice an agreement for release and indemnity as provided by Allianz, to give effect to the agreement to pay my professional costs. Those costs ultimately were paid by Allianz by way of a cheque received on or about 23 August 2002. The cheque was banked into my office account in payment of my invoice for costs dated 14 August 2002.” (emphasis added)
The above paragraph is consistent with the letter from Burt & Allen to Ms Newman on 26 March 2002 which stated:
“As you are aware in order to protect all of your rights when you instructed us in respect of your Workers Compensation Journey Claim we also lodged a claim under the Motor Accident’s Compensation Act to protect all of your interests.
As we explained your rights under the Workers Compensation Act were more valuable however we lodged the other claim for the sake of caution.
Finally, the Motor Accident’s Act insurer Allianz has agreed to pay our costs in respect of the work involved in lodging the claim and answering certain particulars etc.
Accordingly they have forwarded to us a Deed of Release which they request that you sign and return to our office in order that we can be paid our costs in respect of that work and they can close their file.
Accordingly we would be pleased if you could sign the agreement where indicated and return it to our office for our further attention.” (emphasis added)
The letter was inaccurate in referring to a ‘Deed of Release’. The document forwarded by Allianz was headed “Agreement for Release and Indemnity” (‘the Release’). After setting out the names of the relevant parties the Release provides:
“THE FACTS:
A.You have lodged a claim under the Motor Accidents Compensation Act 1999 (‘the Act’) for injuries sustained as a result of a motor vehicle accident at M4 Motorway Parramatta on or about 28th January, 2000, involving a motor vehicle with registration number UKD-900, owned and driven at the time of the accident by Robert Simpson.
B.The owner and the driver are insured by the Insurer in respect of the claim.
C.Pursuant to section 78 of the Act the Insurer has the power to settle and compromise claims on behalf of the owner and the driver.
THE AGREEMENT
1.The Insurer will pay you $1,500, One Thousand Five Hundred Dollars, in full and final settlement of all claims which you may have under the Act against:
§the owner, driver or their respective successors, executors, administrators, heirs and assigns and
§the Insurer
in respect of the accident.
2. The Insurer is entitled to deduct from the payment:
a) all amounts paid or payable by the Insurer for Social Security benefits, and
b) any amounts paid or payable to your employer or the employer’s Workers Compensation Insurer in respect of payments to you or on your behalf by way of Workers Compensation, and
c) any amounts paid or payable due to the Health and Other Services (Compensation) Legislation Amendment Act 2001 and related Acts and
d) any amounts previously paid to you by the Insurer, and
e) any other amounts paid or payable by the Insurer on your behalf including all medical and other expenses payable under the Act, and including such amounts that are paid or become payable after the date of this Agreement but before making payment to you, and
f)any fees incurred in respect of non attendance at medical examinations.
3. In consideration of the payment, you agree:
a)not to commence or proceed with any action, suit or proceeding in respect of injuries sustained in the accident.
b)to pay to any parties entitled all amounts that are payable but have not been deducted by the Insurer pursuant to paragraph 2, and also to pay to any parties entitled all outstanding medical, hospital, air ambulance and other out of pocket expenses.
c)to acknowledge where settlement sum exceeds $5,000.00, you will advise the HIC of settlement of the claim within 28 days of the date of this Agreement.
d)to indemnify and keep indemnified:
· the owner, the driver or their respective successors, executors, administrators, heirs and assigns and
· the Insurer
against any claims, losses, damages, actions, suits or proceedings in respect of injuries sustained by you in the accident.
4.a) You warrant, and acknowledge that it is the basis of this settlement, that you have suffered no other injury likely to give rise to a Compulsory Third Party claim the Insurer or any of its Insured prior to the date hereof except as previously disclosed the Insurer or its legal representative.
b)You acknowledge that this settlement includes settlement of all claims so notified and agree that without further payment you will if called upon to do so sign a Deed of Release in favour of <Allianz Australia Insurance Limited/CIC Allianz/FAI Allianz> and its Insured in respect of any such claim.
5.This Agreement is not an admission by the owner, the driver or the Insurer of any liability for your claim.
Dated at 9th [sic] on this April [sic] day of… 2002.”
Attached to the Release is an Authority to Receive which reads:
“I, Kathleen Newman, hereby authorise you to pay any monies awarded to be paid to me by way of verdict or award or agreed to be paid to me by way of settlement to my solicitors Burt & Allen.”
The Release was signed by Ms Newman on 9 April 2002 and returned to Allianz by Mr Burt on 10 May 2002. A further letter was sent from Burt & Allen to Allianz on 15 August 2002 enquiring when they could expect to receive the cheque for $1,500.00. Allianz forwarded a cheque in that amount to Burt & Allen on 23 August 2002.
On 25 September 2003 Allianz wrote to Hicksons (the Fire Brigade’s current solicitors) advising that Ms Newman’s claim had been settled on 9 April 2002 for $1,500.00 and suggesting, “that you seek costs through the plaintiff”. The relevance of this letter is unclear but it highlights the fact that the Fire Brigade’s solicitors knew about the settlement by at least September 2003. Ms Newman remained in receipt of compensation benefits until 11 September 2004.
By letter dated 18 August 2004 Ms Newman’s current solicitors (Adams & Partners) wrote to the Fire Brigade claiming additional lump sum compensation. The then solicitors for the Fire Brigade (Turks Legal) wrote on 29 November 2004 stating that as Ms Newman had received damages as a result of the Release signed by her in April 2002 she had no entitlement to any further compensation because of the operation of section 151Z of the Workers Compensation Act 1987 (‘the 1987 Act’). An Application to Resolve a Dispute was filed in the Workers Compensation Commission (‘the Commission’) in late 2004 (matter No. 17110-2004) but was discontinued on 16 February 2005.
On 11 October 2006 an Application to Resolve a Dispute (‘the Application’) was filed in the Commission by Ms Newman in which she sought additional lump sum compensation and medical expenses as a result of the injuries sustained in the car accident.
By its Reply filed on 2 November 2006 the Fire Brigade disputed Ms Newman’s entitlement to further compensation because, among other reasons, she had “received damages in respect of any injuries suffered by her on 28 January 2000 by way of settlement in April 2002.”
The matter was listed for hearing before a Commission Arbitrator on 15 February 2007. After hearing submissions from counsel for both parties the Arbitrator delivered a reserved decision on 2 March 2007 in which he made an award in favour of the Fire Brigade.
On 27 March 2007 Ms Newman seeks leave to appeal that decision.
LEAVE TO APPEAL
Monetary Threshold
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’).
There is no issue that the thresholds in section 352(2) are satisfied.
Time
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
I grant leave to appeal.
PRELIMINARY MATTERS
Section 354(6) of the 1998 Act provides:
“(6)If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
The Appellant Worker submits that the appeal involves complex issues of statutory construction and the Commission would be assisted by oral submissions. I have the benefit of detailed written submissions from both parties. The issues are not such that oral submissions are likely to advance the arguments set out in the written material.
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by the Respondent Employer that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 2 March 2007, records the Arbitrator’s orders as follows:
“1.Award in favour of the Respondent.
2.No order as to costs.”
ISSUES IN DISPUTE
The issues in dispute in the appeal are whether the Arbitrator erred in:
(a)holding that section 151Z(1)(c) of the 1987 Act prevented Ms Newman from pursing her claim in the light of section 149(1)(h) of that Act;
(b)holding that the Release prevented Ms Newman from pursuing her claim instead of determining the real question, namely, whether in light of the evidence section 151Z(1)(c) of the 1987 Act applied having regard to section 149(1)(h);
(c)holding that any agreement between the parties could negate the proper application and effect of section 151Z(1)(c) and section 149(1)(h) of the 1987 Act;
(d)holding that the Release related to damages within section 151Z(1)(c) in circumstances where no deductions were made under clause 2 of the agreement, and, in the alternative to (c),
(e)not reading the Release in its proper context and having regard to its intended purpose in accordance with Grant v John Grant & Sons Pty Ltd (1954) 91 CLR 112 (‘Grant’). Had he done so he would have held the Release was designed only to pay an amount for Ms Newman’s costs and not to compensate her in damages for her injuries.
SUBMISSIONS
The Appellant Worker’s submissions depend on the construction of the sections 151Z and 149, both contained in Part 5 of the 1987 Act. Section 149 provides:
“149 Definitions
(1) In this Part:
‘damages’ includes:(a) any form of monetary compensation, and
(b) without limiting paragraph (a), any amount paid under a compromise or settlement of a claim for damages (whether or not legal proceedings have been instituted),but does not include:
(c) compensation under this Act, or
(d) additional or alternative compensation to which Division 8 of Part 3 applies, or
(e) an award of compensation or direction for compensation under Part 2 or Part 4 of the Victims Compensation Act 1996 , or
(f) a sum required or authorised to be paid under a State industrial instrument, or
(g) any sum payable under a superannuation scheme or any life or other insurance policy, or
(h) any amount paid in respect of costs incurred in connection with legal proceedings, or(i) damages of a class which is excluded by the regulations from this definition.
(2) A reference in this Part to compensation payable under this Act includes a reference to compensation that would be payable under this Act if a claim for that compensation were duly made.”
Section 151Z(1) provides:
“151Z Recovery against both employer and stranger
(1) If the injury for which compensation is payable under this Act was caused under circumstances creating a liability in some person other than the worker’s employer to pay damages in respect of the injury, the following provisions have effect:
(a) the worker may take proceedings both against that person to recover damages and against any person liable to pay compensation under this Act for payment of that compensation, but is not entitled to retain both damages and compensation,
(b) if the worker recovers firstly compensation and secondly those damages, the worker is liable to repay out of those damages the amount of compensation which a person has paid in respect of the worker’s injury under this Act, and the worker is not entitled to any further compensation,
(c) if the worker firstly recovers those damages the worker is not entitled to recover compensation under this Act,
(d) if the worker has recovered compensation under this Act, the person by whom the compensation was paid is entitled to be indemnified by the person so liable to pay those damages (being an indemnity limited to the amount of those damages),
(e) if any payment is made under the indemnity and, at the time of the payment, the worker has not obtained judgment for damages against the person paying under the indemnity, the payment is, to the extent of its amount, a defence to proceedings by the worker against that person for damages,
(e1) if any payment is made under the indemnity and, at the time of the payment, the worker has obtained judgment for damages against the person paying under the indemnity (but judgment has not been satisfied), the payment, to the extent of its amount, satisfies the judgment,
(f) all questions relating to matters arising under this section are, in default of agreement, to be settled by action or, with the consent of the parties, by the Commission.” (emphasis added)
The Appellant Worker submits:
a) section 151Z(1)(b) only applies in circumstances where a worker “recovers firstly compensation and secondly those damages”. The reference to “those damages” is a reference to the damages referred to in section 151Z(1)(a). Accordingly, the sum recovered by the worker must be ‘damages’ against the third party to fall within the concept of “those damages” in section 151Z(1)(b);
b) ‘damages’ are defined in section 149 to include any form of monetary compensation and any amount paid under a compromise settlement (whether or not legal proceedings have been instituted), but do not include “any amount paid in respect of costs incurred in connection with legal proceedings…”;
c) the costs incurred by Burt & Allen in respect of Ms Newman’s CTP claim were costs incurred “in connection with” anticipated legal proceedings in respect of the car accident, and the correspondence between Burt & Allen and Allianz makes it clear that the money received by Ms Newman was in respect of legal costs only;
d) the fact that the Release provided for the payment of $1,500.00 in purported full and final settlement of all claims which Ms Newman may have under the Motor Accidents Compensation Act 1999 arising out of the accident was not to the point;
e) the $1,500.00 was paid for legal costs and was not ‘damages’, therefore, section 151Z(1)(b) does not apply and the Arbitrator was in error in failing to determine whether the amount received by Ms Newman was ‘damages’ within sections 151Z and 149.
f) the Arbitrator was in error in holding that on an objective view of the Release Ms Newman had received $1,500.00 in “full and final settlement of all claims she had under the Act, with the consequent legal repercussions” (Statement of Reasons for Decision (‘Reasons’) paragraph 41);
g) the Arbitrator failed to make factual findings in the light of the whole of the evidence and was not limited to the terms of the Release. The Arbitrator was obliged to consider the Release in its context so as to determine the intention of the parties and the circumstances in which it was made (Grant);
h) the evidence that the $1,500.00 was for costs only was not inconsistent with the express words of the Release;
i) the Arbitrator was in error in failing to take into account the fact that Allianz made no deductions for workers compensation payments as it was entitled to do under clause 2 of the Release. That it did not do so was objective evidence that the amount was received for legal costs only and was consistent with other evidence in the case;
j) the terms of the 1987 Act are paramount and the parties could not contract out of the statutory provisions, and
k) the workers compensation legislation is remedial legislation and any doubt or ambiguity should be construed in favour of the worker (per Kirby P (as he then was), with Meagher and Cripps JJA agreeing, in J Odlin Shop Fitting International Pty Limited v Kaljanac (1993) 29 NSWLR 632 at 639-640; and Fullagar J in Wilson v Wilson’s Tile Works Pty Limited (1960) 104 CLR 328 at 335).
The Respondent Employer submits:
a) the Release reflected an agreement between Ms Newman and Allianz to settle her claim for $1,500.00;
b) that there was another agreement between Ms Newman and her then solicitor to pay their costs in the sum of $1,500.00 does not change the effect of that settlement document from being a document that places it under section 151Z(1)(c). The payment was to her and if she decided to forward that money towards costs, that does not change the effect of the document;
c) its position is supported by the decision of Judge Neilson in Schon v Axbond Pty Limited (1997) 15 NSWCCR 122 (‘Schon’) where it was held that although an agreement may be for a small amount of money, that does not prevent the employer relying on section 151Z, and
d) the money was not accepted just for costs. The fact that Ms Newman took the money and used it to pay her legal costs does not bring the payment within the definition of section 149(1)(h).
DISCUSSION AND FINDINGS
This matter turns on the construction of the Release and the application of sections 151Z and 149. On the question of the construction of the Release the Appellant Worker referred the Arbitrator to Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 (‘Toll’) where the High Court said at [40] (omitting footnotes):
“This Court, in Pacific Carriers Ltd v BNP Paribas, has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.” (emphasis added)
The Arbitrator quoted the above passage and concluded “an objective view by the party receiving the document would be that the Applicant had accepted $1,500 in full and final settlement of all claims which she had under the Act, with the consequent legal repercussions.” (Reasons paragraph 41). He accepted the Respondent Employer’s argument that counsel for Ms Newman was in fact referring to two agreements: one between Mr Burt and Allianz that the money to be paid in full and final settlement of Ms Newman’s claim would be used for the payment of Mr Burt’s costs and the original agreement as evidenced in the Release which attracts the provisions of section 151Z (Reasons paragraph 42).
The Arbitrator’s approach was not consistent with the principles discussed by the High Court in Toll and did not consider the “surrounding circumstances known to the parties”. Nor did it take into account “the purpose and object of the transaction”. In this respect the Arbitrator was in error.
The relevant surrounding circumstances were set out in the letters from Burt & Allen dated 22 and 26 March 2002. The letter of 22 March 2002 made it clear that agreement had been reached for the payment of Burt & Allen’s professional costs in the sum of $1,500.00. That was confirmed in the letter of 26 March 2002 to Ms Newman where Mr Burt stated, “Allianz has agreed to pay our costs” and “accordingly they have forwarded to us a Deed of Release…in order that we can be paid our costs.” These letters made it clear beyond doubt that the agreement between Ms Newman and Allianz was one that involved Ms Newman giving up her right to pursue her claim for damages in return for Allianz agreeing to pay her costs, agreed at $1,500.00. The agreement effected was no different to the situation where a plaintiff sues at common law and agrees to settle on the basis of a verdict for the defendant with an order that the defendant pay his or her costs in an agreed sum. If such a settlement was effected no plausible argument could be mounted that the plaintiff had recovered damages.
The same result follows in the present situation. The objective evidence from the surrounding circumstances leading up to the execution of the Release establishes that that document was intended to provide the insurer with a release from its potential liability to Ms Newman in return for the payment of her legal fees. To suggest that by the payment of the $1,500.00 Ms Newman had recovered damages is contrary to the reality of the situation as evidenced by the letters of 22 and 26 March 2002, Mr Burt’s statement, the modest sum involved and the fact that the whole of that sum was paid directly to Burt & Allen for costs. Ms Newman recovered nothing.
The authority of Schon can be validly distinguished from the present claim. In that case the worker was injured in a car accident that gave rise to rights at common law and under the workers compensation legislation. The claim against the negligent driver was settled with the execution of a Deed of Release providing for the payment to the worker of $1,700.00 in full settlement and discharge of her claim. At page 126G it was noted that counsel for Ms Schon conceded that his client signed the deed of release and “had received [the] $1,700 referred to in the deed of release” (emphasis added). Unlike the present matter, there was no evidence tendered or submission made that the payment provided for in the Deed of Release was not intended as damages, but only as costs.
The above conclusion is reinforced when one considers that clause 2 (b) of the Release entitled the insurer to deduct from the payment any amounts paid or payable to the Fire Brigade’s workers compensation insurer in respect of payments to Ms Newman or on her behalf by way of workers compensation. Consistent with the Appellant Worker’s argument that the payment of $1,500.00 was for costs only, no deduction was made as permitted under clause 2 notwithstanding the fact that Allianz knew Ms Newman had received workers compensation benefits and was aware of the name and address of the workers compensation insurer (see [3] above).
In Waston v The Council of the City of Newcastle (1962) 106 CLR 426 (‘Watson’) the High Court considered the meaning of ‘recovered damages’ in the context of section 64 of the Workers Compensation Act 1926 which was in similar terms to section 151Z(1) of the 1987 Act. At 445-446 Windeyer J said:
“Moreover, throughout s. 64 the word ‘recover’ must, it seems, mean not the
recovery of a judgment for damages or of an award of compensation, but the
actual receipt of moneys, whether as the result of satisfaction of a judgment
or award or by the settlement of a claim. The scheme of sub-s. (a) seems to
require this meaning. The word ‘retain’ demands it: and the provision for
payment to the employer ‘out of such damages’ assumes a judgment satisfied,
not a judgment that has proved fruitless. There is nothing surprising in this;
for it is the meaning that the word ‘recover’ commonly has
in workers’ compensation law…” (emphasis added)
Kirby P (as he then was) considered the above passage in Hoover (Australia) Pty Limited v Combatti (1989) 18 NSWLR 235 (‘Combatti’). In that case judgment was entered in favour of the worker against the negligent driver for $19,847.06. By the time judgment was entered the worker had received workers compensation benefits of over $32,000.00. In an effort to retain his workers compensation entitlements he declined to accept the $19,847.06, which the defendant then paid to the Registrar of the District Court. Kirby P, with Samuels and Meagher JJA agreeing, held that as the District Court Rules required the Registrar to “pay out the money to which suitors are entitled” (245F) that obligation meant that payment to the Registrar was, in effect, equivalent to payment to the worker and the worker had ‘recovered damages’ and was no longer entitled to receive workers compensation benefits.
The conclusion I have reached is consistent with the principles stated in Watson and Combatti. A worker has not ‘recovered damages’ unless he or she has actually received money as damages, whether as a result of satisfaction of a judgment or the settlement of a claim. The surrounding circumstances in the present matter make it clear that it was never intended that the settlement would result in ‘the actual receipt’ of money by Ms Newman and she did not in fact receive any money.
The money paid to Burt & Allen was always intended to be for costs and was applied for that purpose. Section 149 makes it clear that ‘costs’ are not ‘damages’. It follows that Ms Newman did not ‘recover damages’ under section 151Z and her entitlement to claim compensation benefits under the 1987 Act remains intact.
DECISION
The Arbitrator’s decision and orders dated 2 March 2007 are revoked and the following orders made:
“1.The matter is remitted to a different Arbitrator for determination of the Applicant’s (Ms Newman’s) outstanding rights consistent with the reasons given in this decision and with the provisions of Workers Compensation Act 1987 and Workplace Injury Management and Workers Compensation Act 1998 and
2.The Respondent (NSW Fire Brigades) is to pay the Applicant’s costs, in the event that she is otherwise entitled to recover costs.”
COSTS
The Respondent Employer is to pay the Appellant Worker’s costs of the appeal.
Bill Roche
Deputy President
18 June 2007
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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