| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : NYDEGGER -v- THE GEO GROUP AUSTRALIA PTY LIMITED [2013] WADC 15 CORAM : REGISTRAR KINGSLEY HEARD : 13 DECEMBER 2012 DELIVERED : 1 FEBRUARY 2013 FILE NO/S : CIV 2377 of 2009 BETWEEN : ELISABETH NYDEGGER Plaintiff
AND
THE GEO GROUP AUSTRALIA PTY LIMITED
Defendant
Catchwords: Practice - Application by defendant pursuant to Order 16 Rules of the Supreme Court - Issue estoppel - Deed of settlement in Dispute Resolution Directorate - Application by defendant as plaintiff by counterclaim pursuant to Order 14 Rules of the Supreme Court - Determination sought that the deed of settlement was valid and binding - Specific performance sought for plaintiff to execute the agreement Legislation: Nil
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Result: Application pursuant to Order 16 Rules of the Supreme Court allowed
Application pursuant to Order 14 Rules of the Supreme Court allowed as to finding that the deed of settlement is valid and binding
Order 14 Rules of the Supreme Court application adjourned for further hearing
Representation: Counsel:
Plaintiff : Mr G McIntyre SC
Defendant : Mr H O'Sullivan
Solicitors:
Plaintiff : Paul O'Halloran & Associates
Defendant : SRB Legal
Case(s) referred to in judgment(s):
Blair v Curran (1939) 62 CLR 464
Geraldton Building Co v Cramer [2001] WASCA 244
Kuligowski v Metrobus [2004] HCA 34
Masters v Cameron (1954) 91 CLR 353
Somodaj v Australian Iron and Steel Ltd [1963] HCA 50
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1 REGISTRAR KINGSLEY: By an endorsed writ dated 11 August 2009, the plaintiff (Nydegger) claimed damages for negligence for personal injuries/psychiatric problems sustained on or about 25 September 2003 and on or about 4 December 2003 during the course of her employment. The defendant (GEO) entered an appearance in January 2010. By a chamber summons dated 30 May 2012, GEO sought orders that the action be removed from the inactive list, which order was made on 19 June 2012.
2 By a chamber summons dated 9 July 2012, GEO sought orders that Nydegger file and serve a statement of claim, failing which the action be struck. On 31 July 2012, an order was made that unless within 14 days of the date of the order, Nydegger do file and serve a statement of claim the action be struck out and judgment entered for GEO with costs to be taxed. 3 Nydegger filed a statement of claim on 9 August 2012. On 22 August 2012, GEO filed an application pursuant to O 16 Rules of the Supreme Court seeking orders that judgment be entered for GEO. GEO filed a defence on 22 August 2012 and on 30 August 2012 filed an amended defence. On 30 August 2012 GEO brought a counterclaim against Nydegger claiming a declaration that an agreement between GEO and Nydegger is valid and binding, and an order that Nydegger specifically perform the agreement and particular execute a deed recording the terms of the agreement. 4 GEO has brought an application for summary judgment pursuant to O 14 r 1. 5 The applications by GEO are supported by the affidavit of Justin James Dyson sworn 21 November 2012. Nydegger has not filed any affidavit.
Context 6 The context is taken from Dyson's affidavit. The action involves a claim by Nydegger for alleged injuries sustained on or about 25 September 2003 and on or about 4 December 2003, in the course of her employment with the GEO Group. Nydegger commenced an application (SD1317/07) in the Conciliation and Review Directorate at WorkCover seeking workers compensation payments. Pursuant to orders made by an arbitrator, the parties filed a joint statement of agreed facts and issues in dispute dated 15 January 2010. (Page 4)
7 In essence, the joint statement agreed that Nydegger was a worker for the relevant period and that she sustained a personal injury in the course of employment. There was dispute as to whether Nydegger suffered a disease caused by stress, and the form of the psychiatric condition; GEO asserting the condition was a mild adjustment disorder with mixed anxiety and depressed mood which is multi-factorial, and Nydegger asserting that the disease was a major depressive disorder (appendix A) as diagnosed by the DSM-IV-TR criteria. Further, the parties were in dispute over the level of Nydegger's incapacity, with Nydegger asserting that the level of her capacity was total. 8 On 1 February 2010, SD1317/07 was listed for arbitration before an arbitrator. At commencement the arbitration was stood down and the parties commenced settlement negotiations. Nydegger was represented at arbitration by senior counsel and counsel on instructions from her solicitor and GEO represented by a solicitor. 9 The uncontradicted evidence is that Nydegger and GEO entered into a deed to settle SD1317/07, the relevant terms being that settlement was to be by way of a s 92(f) Workers Compensation and Injury Management Act 1981 (the Act) deed to cover the plaintiff's worker compensation and common law claims arising out of or in the course of her employment and that Nydegger undertake to sign a deed of discharge prepared by GEO's solicitors in its standard format and that Nydegger undertakes to dismiss her WorkCover applications by consent. Nydegger has not signed the deed of discharge, nor consented to the dismissal of her WorkCover application. 10 On 12 March 2010, separate Form 22 proceedings (AP81/08) in the Directorate were commenced by Nydegger seeking a substantive determination of her dispute the subject of application SD1317/07. At a hearing GEO objected on the grounds that the workers compensation claim had been compromised by the settlement agreement. An arbitration hearing in SD1317/07 was programmed, with a statement of issues, facts and contention being filed by GEO (dated 31 March 2010) and by Nydegger (dated 3 May 2010). A statement of evidence by Nydegger was filed dated 31 August 2010. 11 After the arbitration hearing on 22 October 2010, the Acting Director gave his decision in application SD1317/07 on 18 February 2011. The Acting Director held that Nydegger had capacity to enter into the settlement agreement, but that her claim under the Act had not been ousted by that agreement because, unless and until the Director of (Page 5)
WorkCover is appraised of the settlement agreement in accordance with the procedure provided for in sub-paragraph (i) of s 92(f) of the Act, which had not occurred, the matter could not be regarded as concluded. 12 GEO appealed that decision to Commissioner McCann. In his decision dated 20 June 2011, Commissioner McCann found for GEO with respect to the binding nature of the settlement agreement. 13 The issue before Commissioner McCann was whether the provision in sub-paragraph (ii) of s 92(f) of the Act which prohibits a worker from commencing or continuing a claim for compensation under the Act begins to operate when the worker enters into an agreement to settle an action for common law damages. The Commissioner, in his reasons, detailed the factual background and the legislation, with particular focus on s 76 and s 92 of the Act. Commissioner McCann at [14] and [15] stated that the purpose of s 92 is generally (but not exclusively) to prevent double recovery by permitting an injured worker to recover either common law damages or compensation under the Act, but not both. Section 92 only applies when a worker has commenced an action for common law damages. In this case Nydegger commenced an action for common law damages on 12 August 2009. 14 Commissioner McCann was of the opinion that the phrase 'settled by agreement' in the opening lines of paragraph f [s 92] means unconditionally settled in the sense that a worker's common law cause of action has merged in the agreement. The Commissioner then went on to consider the nature and terms of the settlement agreement and was of the opinion that the agreement fell within the second of the three classes of contract referred to in Masters v Cameron (1954) 91 CLR 353 [38]. Commissioner McCann stated that a contract within the second class is enforceable at common law and in equity and, subject to the discretion of the Supreme Court, a recalcitrant party is liable to an order for specific performance to complete it [38]. 15 Commissioner McCann then comments [40] that agreements which fall within the first or second Masters v Cameron class are also subject to an implied condition that each party would do all things reasonably necessary for the performance of the agreement. At [41] the Commissioner states that Nydegger's common law cause of action has merged into the settlement agreement, as has her claim under the Act. The Commissioner then finds at [43] that the settlement agreement was binding. As a result of that finding, proceedings in the directorate were adjourned indefinitely. (Page 6)
GEO's argument 16 GEO argues that the findings made by the Arbitrator and Commissioner McCann each give rise to an issue estoppel. Both the Arbitrator and Commissioner McCann were exercising judicial powers with authority to determine matters finally. Each made findings of fact which disposed of the relevant issue once and for all. Thus Nydegger is estopped from denying the existence, validity and enforceability of the settlement agreement. GEO also argued that there being no appeal from the relevant findings of Commissioner McCann, Nydegger cannot now mount a collateral attack on the findings.
Nydegger's argument 17 Nydegger argues that the issues as to whether an agreement was entered into which is binding on the parties is a question of mixed law in fact and is not one which should be determined in a summary fashion. The issue whether Nydegger reached an agreement is an issue of fact which must be determined by the normal judicial decision making process of considering the oral evidence of relevant witnesses, in particular Nydegger in the course of a trial. Nydegger's counsel argued that the findings of the arbitrator or Commissioner cannot be relied upon as they are conclusions reached in the course of resolving a dispute in respect of a claim for statutory entitlement and determining whether that claim and that dispute was to continue or had come to an end. The issue before the Arbitrator or the Commissioner was not one in relation to common law damages and therefore the issues are not identical.
Issue estoppel 18 It is still the law that the principle underlying issue estoppel is that stated by Dixon J in Blair v Curran (1939) 62 CLR 464, 531: A judicial determination directly involving an issue of fact or of law disposes once and for all of the issue so it cannot afterwards be raised between the same parties or their privies. 19 Where the plea is one of issue estoppel, the focus of attention is on what issues were raised or decided. The operation of issue estoppel is restricted to those matters which form the ingredients of the cause of action. As Dixon J stated in Blair's case (532) 'nothing but what is legally indispensible to the conclusion is thus finally closed or precluded'. As stated in Cross on Evidence (8th Australian edition, 2010) 'only a decision about a matter which it was necessary to decide – a decision (Page 7)
which is fundamental or cardinal to the judgment – can create an issue estoppel' [5080].
Was the settlement agreement a fundamental issue? 20 In my opinion the finding by Commission McCann that a valid and binding agreement was entered into was central to his determination. The process contemplated by s 92(f) of the Act could only be enlivened once there had been a finding of a settlement agreement – that is, an agreement otherwise than by a judgment. For the Commissioner to find that Nydegger has been statutorily prohibited from continuing with her claim, unless and until the settlement agreement is disapproved by the Director, could only be made by a finding that there is a valid and binding settlement agreement. 21 As a result of finding the agreement binding on Nydegger, the Commissioner found that her cause at common law has merged into the agreement. 22 Nydegger's counsel argued that Commissioner McCann did not have power to determine common law damages and therefore the issues are not identical. However, in my opinion, the issue properly before the Commissioner is the validity of the agreement, not common law damages. I am reminded that the legislative intent of s 92 of the Act is to prevent double recovery by an injured worker against their employer. 23 Thus the issue before the Commissioner is whether the worker's action for damages has been settled by agreement (s 92(f)). In my opinion the Commissioner has the jurisdiction to make that finding. This finding is an essential step in ensuring there is no double recovery. Under s 92(f) of the Act there is an obligation to advise the Directorate of the agreement. The Director may disapprove the agreement but that disapproval does not avoid the settlement. By a disapproval a worker may commence or continue a claim under the Act, but the amount that may be recovered is to be reduced by the amount of the settlement (see Geraldton Building Co v Cramer [2001] WASCA 244).
A competent tribunal 24 For the doctrine of estoppel to apply the judicial decision which is said to create the estoppel must be final. The defining feature of a final decision is that it be completely effective unless and until it should be rescinded, altered or amended (see Somodaj v Australian Iron and Steel Ltd [1963] HCA 50). (Page 8)
25 Whilst the issue was not seriously argued before me, a finding that the tribunal was a competent tribunal is a necessary element for a finding of estoppel. In my opinion the decision of the Arbitrator, and that of the Commissioner, were final (see Kuligowski v Metrobus [2004] HCA 34).
Conclusion 26 In my opinion, GEO's O 16 application succeeds. In my opinion the Commissioner, having found that there is a valid and binding agreement as between Nydegger and GEO and that the common law damages claim has merged into the agreement, GEO has a good defence to the claim.
On the counterclaim 27 GEO by counterclaim seeks a declaration that the agreement is valid and binding, and that Nydegger do perform the agreement, particularly by executing the agreement. Consistent with my reasons above, I find that the agreement between Nydegger and GEO is valid and binding. 28 I have not heard argument on the form of orders in relation to Nydegger performing the agreement, and in particular, its execution. For that reason I will hear counsel on the form of orders and on costs.
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