Raniere Nominees Pty Ltd v Daley

[2005] NSWCA 121

Reported Decision: 66 NSWLR 594

Court of Appeal

CITATION:	Raniere Nominees Pty Ltd v Daley & Anor [2005] NSWCA 121 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	4 April 2005
JUDGMENT DATE:	22 April 2005
JUDGMENT OF:	Hodgson JA at 1; Tobias JA at 2; Stein AJA at 62
DECISION:	(1) Appeal allowed; (2) The orders made by Judge Hughes on 3 December 2003 be set aside; (3) The application by the second respondent under s 144(5) of the Workers Compensation Act 1987 that the appellant reimburse the WorkCover Authority Fund under s 145 in respect of amounts paid by the second respondent to Ms Daley pursuant to the orders made by consent by Judge Walker on 31 July 2003 be remitted to the Workers Compensation Commission for determination; (4) The second respondent pay the appellant's costs of the proceedings before Judge Hughes on 3 December 2003 and of the appeal

CATCHWORDS:	WORKERS COMPENSATION - Reimbursement of WorkCover Authority under s 144(3) of Workers Compensation Act 1987 - Employee applied to Compensation Court to have claim determined - Employer and Authority named as respondents - Matter settled as between employee and Authority - Authority sought reimbursement from employer - Whether Court had power to make an order for reimbursement without employer's liability to employee having been determined or agreed - Whether sufficient for the making of an order for reimbursement that settlement between employee and Authority was reasonable
LEGISLATION CITED:	Workers Compensation Act 1987 Law Reform (Miscellaneous) Provisions Act 1946 Compensation Court Repeal (Transitional) Regulation 2003 Workplace Injury Management and Workers Compensation Act 1998
CASES CITED:	GRE Workers Compensation Insurance (NSW) Limited v Nohil Pty Limited (1996) 13 NSWCCR 74 James Hardie & Co Pty Limited v Seltsam Pty Limited (1998) 196 CLR 53 Cockatoo Dockyard Pty Limited v Commonwealth of Australia [2001] NSWCA 468 King v Victoria Insurance Company Limited [1896] AC 250 GRE Insurance Limited v QBE Insurance Limited (1985) 3 ANZ Insurance Cases § 60-622
PARTIES:	Raniere Nominees Pty Limited Helen Louise Daley WorkCover Authority of New South Wales
FILE NUMBER(S):	CA 40270/04
COUNSEL:	A: C Jackson 1: N/A 2R: J E Maconachie QC / J Trainor
SOLICITORS:	A: Roach & Halligan 1R: N/A 2R: WorkCover NSW, Sydney

LOWER COURT JURISDICTION:	Compensation Court
LOWER COURT FILE NUMBER(S):	16259/02
LOWER COURT JUDICIAL OFFICER:	Hughes J

CA 40270/04
CC 16259/02

HODGSON JA
TOBIAS JA
STEIN A-JA

Friday 22 April 2005

RANIERE NOMINEES PTY LIMITED V HELEN L. DALEY & ANOR

Judgment

1 HODGSON JA: I agree with Tobias JA.

2 TOBIAS JA: The appellant, Raniere Nominees Pty Limited, appeals against an order made on 3 December 2003 by Hughes CCJ of the Compensation Court of New South Wales whereby his Honour ordered that the appellant reimburse the WorkCover Authority of New South Wales (the Authority) such amount or amounts as may have been paid by the Authority out of the WorkCover Authority Fund (the Fund) to Helen Daley (Ms Daley) in respect of compensation and costs awarded against the appellant including the costs of the Authority. His Honour also ordered the appellant to pay the Authority's costs of the application made to him on 3 December 2003.

The background history

3 The appellant is the owner of a motel known as "The Horizon Motor Lodge" located in Port Macquarie. Ms Daley was employed by the appellant as a housemaid. She alleged that whilst cleaning one of the motel's rooms on 26 September 2000, she ran into a bed thereby injuring her back and left leg.

4 At the time Ms Daley was injured, the appellant was uninsured within the meaning of s 140(2)(a) of the Workers Compensation Act 1987 (the Act). Accordingly, Ms Daley made a claim under the Uninsured Liability and Indemnity Scheme (the Scheme) pursuant to s 140(1) and in accordance with s 141 of the Act. It would appear that the Authority refused to satisfy that claim pursuant to s 143(2).

5 Accordingly, being dissatisfied with the decision of the Authority in respect of her claim, Ms Daley applied to the Compensation Court of New South Wales pursuant to s 144(1) of the Act for a determination of her claim. That application was filed on or about 26 March 2002 and, in accordance with s 144(2)(a) of the Act, named the appellant and the Authority as respondents to the application.

6 The application was made in the standard form for applications made under s 144 and, relevantly, was in the following terms:

"Application is hereby made, particulars of which are set out herein, for the determination of the liability of, and amount of compensation payable, by the Respondent(s) and an award:
(a) ...
(b) Ordering the Second Respondent to cause payment of the compensation and costs awarded against the First Respondent to be made out of the WorkCover Authority Fund established under section 18 of the WorkCover Administration Act 1989.
(c) Ordering the First Respondent to reimburse the WorkCover Authority such amount or amounts as may be paid out of such Fund in respect of the compensation and costs awarded against the First Respondent and in respect of the costs of the Second Respondent."

7 In the application, the "First Respondent" was Raniere Nominees Pty Limited and the "Second Respondent" was the Authority.

8 In the particulars annexed to the application, Ms Daley relevantly claimed the following compensation:

(i) Section 66 lump sum of $26,250 in respect of a 35% permanent loss of efficient use of the left leg at or above the knee (to include below the knee).

(ii) Section 66 lump sum of $7,200 in respect of a 12% permanent impairment of the back.

(iii) Section 66 lump sum of $14,100 in respect of a 30% permanent loss of sexual organs.

(iv) Section 67 lump sum of $20,000 in respect of pain and suffering.

9 Both the appellant and the Authority filed an Answer to the application in which each denied liability on multiple grounds including the assertion that Ms Daley did not receive any injury at all or, if she did, that it did not arise out of or in the course of her employment with the appellant and that she was not incapacitated as she alleged.

10 At this point, the history of the matter becomes a little murky. However, it appears reasonably clear that Ms Daley's application was listed for hearing before the Compensation Court constituted by his Honour Judge Walker QC on 31 July 2003. We were informed from the Bar table that on that day, and before the matter was formally called on for hearing, negotiations took place between the legal representatives of Ms Daley and the Authority which resulted in the matter being settled as between those parties.

11 Those Terms of Settlement (the Terms) were relevantly as follows:

"By consent the Court orders that:
1. …
2. The second respondent pay to the applicant lump sum compensation under s 66 as follows:
a) $26,250 in respect of 35% permanent loss of use of the applicant's left leg at and above the knee (including the left leg below the knee).
b) $7,200 in respect of 12% permanent impairment of the applicant's back.
c) -
Award for the respondents in respect of the claim for permanent loss of use of sexual organs.
3. The second respondent pay to the applicant lump sum compensation under s 67 for $16,550 in respect of pain and suffering.
4. …
5. …
6. The second respondent to pay the applicant's costs … forthwith after agreement or assessment."

There were various other orders or notations not presently relevant. The Terms were signed by the legal representatives of both Ms Daley and the Authority as well as by Judge Walker.

12 Although it does not appear in the Terms, we were informed that the proceedings were then stood over for mention before Judge Walker on 16 September 2003. On that day the matter was mentioned before his Honour who then disqualified himself from further participation. It appears that the reason the matter was stood over from 31 July 2003 was for the purpose of the Authority seeking reimbursement from the appellant of the amounts it was ordered to pay to Ms Daley pursuant to the Terms.

13 It will be appreciated from the foregoing that the appellant was not party to the settlement entered into between Ms Daley and the Authority. The appellant was represented by experienced counsel (Mr Lowe) before Judge Walker. Mr Lowe apparently had no instructions to settle the matter in accordance with the Terms or at all as a consequence whereof he declined to sign them. It would appear to be accepted that Mr Lowe informed Judge Walker that he could not sign the Terms as that would involve impliedly accepting the reasonableness of the Terms which he had no instructions to do. According to Mr Trainor, counsel for the Authority, he had no recollection of Mr Lowe indicating to Judge Walker that the appellant objected to the Terms although it is clear that the appellant did not consent to an award being made in favour of Ms Daley in accordance with them.

14 Although it became somewhat confused, it would also appear that Mr Trainor did not, when the matter was before Judge Walker on 31 July 2003, seek an order pursuant to s 144(5) that the judge, when making orders in accordance with the Terms, provide for the reimbursement of the Fund by the appellant under s 145. Nevertheless, it seems apparent that the matter was adjourned to enable such an application to be made. Unfortunately, there is no transcript available of the course of the proceedings before Judge Walker.

The relevant statutory provisions

15 At this point of the narrative it is convenient to refer to the relevant statutory provisions. Ms Daley's claim for compensation was made pursuant to s 144(1) of the Act. Her application to the Compensation Court for determination of that claim required the appellant and the Authority to be joined as respondents to those proceedings. Section 144(3) is in these terms:

"The Compensation Court may hear and determine any such application and may make such orders in relation to the application as the Compensation Court thinks fit."

16 Of particular relevance to the present case is s 144(5). It provides as follows:

"(5) An order under subsection (3) may provide for the reimbursement of the WorkCover Authority Fund under s 145."

17 Section 145 is headed "Employer or Insurer to reimburse Authority". Subsection 1 empowers the Authority to serve on a person who, in its opinion, was, in respect of an injured worker to or in respect of whom a payment has been made under the Scheme, an employer at the relevant time, a notice requiring that person, within a period specified in the notice, to reimburse the Fund an amount (not being an amount exceeding the amount of the payment made) specified in the notice.

18 Section 145(3) provides as follows:

"A person on whom a notice has been served under subsection (1) in respect of an injured worker may, within the period specified in the notice, apply to the Compensation Court for a determination as to the person's liability under this Act.

19 Section 145(4) and (5) are also relevant and are in the following terms:

"(4) The Compensation Court may hear any such application and may:
(a) make such determination in relation to the application, and
(b) make such awards or orders as to the payment of compensation under this Act to or in respect of the injured worker concerned,
as the Compensation Court thinks fit.
(5) In any proceedings under subsection (4), a certificate executed by the Authority and certifying that:
(a) the payments specified in the certificate were paid to or in respect of an injured worker named in the certificate, and

(b) a person named in the certificate was, in the opinion of the Authority, liable at the relevant time to pay to or in respect of the injured worker compensation under this Act or work injury damages,

is (without proof of its execution by the Authority) admissible in evidence in any proceedings and is evidence of the matters stated in the certificate."

The course of the proceedings before the primary judge

20 The proceedings then came before his Honour Judge Hughes on 3 December 2003. Counsel for the Authority, Mr Trainor, informed his Honour that the application before him was for an order that the appellant reimburse the Authority for the sums paid out by it under the Scheme pursuant to the award made in accordance with the Terms. He made it clear that his client was seeking an order under s 144(5) of the Act. He further informed the primary judge that the only evidence he proposed to tender was the Terms together with two medical reports which had been served on the Authority by Ms Daley's solicitors. He informed his Honour that it was not his intention to call Ms Daley to give evidence.

21 When asked the relevance of the medical reports, Mr Trainor informed his Honour that they were tendered in order to meet any complaint by the appellant, if it be in dispute, as to the adequacy of the settlement. His Honour resisted the idea of having to revisit the adequacy or otherwise of the Terms.

22 When his Honour asked for a transcript of the proceedings before Judge Walker in order to ascertain the nature of the objection of the appellant's counsel (Mr Lowe) to the Terms, Mr Trainor responded as follows:

"I did not make a note of the objection of the uninsured. I say that I do not have a recollection of Mr Lowe objecting to the terms of settlement being handed up. I do not know that it is necessarily correct for the first respondent to assert that the first respondent objected to the terms of settlement on the basis that it was excessive at the time. I have no independent recollection of the point but I just cannot accept it from the Bar table. So that is our position. In terms of the substantive matter there is a discretion, the discretion is to take in 144(5) it is exercised more often than not in the case of uninsured respondents before the Court. The situation is what we really need to ascertain is why the first respondent maintains that it should not be made, is it because it believes that the settlement was excessive. If that is the ground then the medical report which I am seeking to tender is clearly relevant. Is it because that the matter was settled outside and around the first respondent. If that is the ground then that is a totally different issue, but really we need to know from Mr Sweeney's client what it is that they object to. Is it the fact that they were settled around or – "

23 Counsel for the appellant, Mr Sweeney, ultimately responded stating that the issue was whether the Authority was entitled to reimbursement because, on his instructions, Ms Daley did not suffer an injury in the course of her employment and the amounts awarded pursuant to the Terms were excessive and should not have been awarded. He said:

"It is quite clear, your Honour, that Mr Lowe did not sign the terms of settlement. It is quite clear that the issue of reimbursement was an issue that was not determined by the Court, that issue was stood over to be determined ultimately today. That is the issue that has to be litigated. … As I have submitted on my instructions there is an issue as to injury and on my instructions there is an issue as to quantum."

24 After referring to the fact that no evidence was tendered before Judge Walker and that there was merely a settlement between Ms Daley and the Authority, Mr Sweeney pointed out to his Honour that, if evidence had been taken and the matter determined thereon, so that the relevant issues had been ventilated, then the problem with which he was currently faced would not have arisen. When his Honour suggested that he should "call the whole thing off and start it again", Mr Sweeney indicated to his Honour that he had no power to do that as the Authority had paid to Ms Daley the monies which she was awarded pursuant to the Terms and there was no proper basis upon which they could be set aside. When it was suggested by the primary judge that the appellant wished to re-litigate the issues of whether Ms Daley had been injured or whether the injury had been caused by her employer, counsel responded by indicating that there was no wish to re-litigate the issue as those issues had never been litigated in the first place.

25 Mr Trainor then said that on the issue of the adequacy of the settlement, the two medical reports that he sought to tender were admissible. His Honour's response was that

"they might be admissible but I do not have to take any notice of them – I mean I have to take notice of them but when I finally determine something, as the Court of Appeal says, the assessment of doctors are only a guide."

26 His Honour then admitted the medical reports but, apparently, only on the basis that they proved that Ms Daley had been injured. In this respect he said that he was

"not interested in anything other than if the worker injured. Whether or not she was injured with the Respondent or not I do not care, all I want to know is there was an injured person involved in the case and that is all I am taking notice of, that medical evidence on that basis."

27 Mr Sweeney then reiterated that he wished to cross-examine Ms Daley. This was resisted by Mr Trainor on the basis that that was unnecessary with respect to his case for an order under s 144(5). The reports were tendered but his Honour continued to resist any suggestion that Ms Daley's claim should be re-litigated when it had been settled. Nevertheless, Mr Sweeney objected to those parts of the reports that set out the history given to the doctor by Ms Daley to which his Honour responded in these terms:

"I do not think the applicant should be inconvenienced at all, I think it is a disgrace that this whole thing started. I think it was the obligation of Mr Lowe [then counsel for the appellant] to make the objection at the time. I think it is a disgrace that the applicant is inconvenienced like this by your client, absolute disgrace."

A little later on, he said that it was:

"a disgrace that Mr Lowe did not make the objection at the time."

28 As I understand his Honour, he was complaining about the fact that Mr Lowe did not object to the Terms when appearing before Judge Walker, a matter to which I shall return.

29 Mr Sweeney then submitted that although Ms Daley's rights were not in jeopardy, the appellant should be entitled to test the histories that she gave to the doctors upon the basis that if it could not do that, then the appellant would be denied procedural fairness.

30 His Honour then asked:

"But why did not Mr Lowe tell Judge Walker I do not agree with this settlement as a proper one, I do not agree to this settlement as a proper one and I object to you settling it because in the application for determination that I issued, that is to say that it was before the Court issued by the applicant, there is an order that Judge Walker stood over … ordering the first respondent to reimburse the worker."

The following exchange then took place:

"Mr Trainor: Your Honour, can I just clarify, I do not say that Mr Lowe did not say that I simply say I do not have a recollection of it.
Mr Sweeney: The note that I have from Mr Lowe he says in the note to his own solicitors that he refused to sign the terms of settlement, he had no instructions to do that, he explained that that would have involved impliedly accepting the reasonableness of the offer and he advised the Court."

31 Mr Trainor then submitted to his Honour that the contents of Mr Lowe's note to his solicitor indicated that he had not made an objection to Judge Walker and that he had no recollection of him saying "we object to these terms of settlement, we object to the award being entered".

32 Nevertheless, Mr Sweeney made it clear to his Honour that Mr Lowe did not sign the Terms and that it was quite clear that the appellant did not consent to them.

33 Mr Sweeney then asked the primary judge to make a ruling in relation to the admissibility of the histories contained in the reports. His Honour replied, saying that he was not going to look at the history - all he wanted to know was that Ms Daley had been injured and he did not care

"whether she was injured on her way in the ambulance or jumped off the building or anything else, only that she is an injured person."

The primary judge's judgment

34 After referring to the Terms and noting (at [6]) that, compared to the amounts claimed by Ms Daley in her application, the amount awarded to her under those terms was approximately $17,650 less than her claim, the primary judge stated (at [7]) that the appellant had submitted that an order should not be made pursuant to s 144(5)

"because the settlement was unreasonable."

35 His Honour then referred (at [8]) to the fact that the appellant was uninsured but had given no explanation as to why it was uninsured. What this had to do with the issue is somewhat difficult to fathom. He then said this (at [9]):

"At the settlement there is some evidence from the Bar table and there is no doubt that Mr Lowe did not sign the terms of settlement and made some protest about the settlement and that he did not agree with it. However, there is no evidence of Mr Lowe when the matter was first called on said 'this case has got to run' or words to that effect. There was no word from Mr Lowe that at the time of this case is excessive or that Judge Walker ought not to sign the terms of settlement, that it ought to be voided because they were excessive or improper as it later was alleged."

36 Having noted (at [10]) that the evidence before him did not indicate that

"a vigorous objection to the way that this case was settled"

had been made and after referring to the purpose of the Scheme to cover injured workers where their employer fails to take out insurance, his Honour (at [10]) observed that

"it then fell to the WorkCover Authority to defend the case that was brought by the applicant, Helen L Daley. They did that by preparing medical reports and all the relevant evidence, as did Mr Lowe and as did, I dare say, Ms Daley's solicitors. I have some of the documents here but nevertheless competent counsel like Mr Trainor and the WorkCover Authority's solicitors decided on the day that to compromise the claim, and there is no doubt the claim is compromised because it is far less than the applicant sought. They compromised the claim and settled with the respondent."

37 The primary judge then acknowledged (at [11]) that the Authority had different interests to the appellant and that as the appellant was uninsured it came to the Compensation Court "without clean hands". He continued:

"They have failed to comply with the law of New South Wales in taking out insurance and they now complain that their point of view is not properly put. I do not see that there was a denial of natural justice for the first respondent. They were adequately represented by competent counsel and competent solicitors and if they wanted to make a protest, the time to make the protest was when it was before Judge Walker."

38 The primary judge then concluded (at [12]) that he could see no reason why he should not exercise his discretion in favour of the Authority and order the appellant to reimburse the Authority for the monies it had paid Ms Daley.

The submissions on the appeal

39 The appellant submitted that the primary judge erred in the following respects:

(a) there was no power in the Compensation Court to make an order pursuant to s 144(5) of the Act unless either that Court had determined, after a hearing on the merits, that the appellant as Ms Daley's employer was liable to pay her compensation under the Act or, the appellant had agreed, as a consequence of a settlement to which it was a party, to pay such compensation;

(b) the primary judge denied the appellant procedural fairness when he made an order pursuant to s 144(5) in circumstances where there had been no hearing on the merits and consequent determination of the appellant's liability to pay Ms Daley compensation and where it was neither a party nor had consented to Ms Daley's claim being settled in accordance with the Terms;

(c) there was no power in the Compensation Court to make an order under s 144(5) in the absence of the Authority serving on the appellant a notice pursuant to s 145(1);

(d) if the Compensation Court did have power to make an order under s 144(5), his Honour's discretion whether to make such an order miscarried in that he took into account irrelevant considerations, namely, that the appellant (because it was uninsured) did not have " clean hands " and that it had failed before Judge Walker to vigorously object to the settlement and insist on Ms Daley's application being heard and determined on its merits;

(e) when making an order under s 144(5) there was no power in the Compensation Court to require the reimbursement of any costs and expenses incurred by the Authority in relation to Ms Daley's claim for compensation as any order made under that provision is confined to reimbursing the Fund amounts paid to Ms Daley under the Scheme.

40 The Authority made the following submissions:

(a) section 144(3) was to be widely construed in the same way as s 145(4): GRE Workers Compensation Insurance (NSW) Limited v Nohil Pty Limited (1996) 13 NSWCCR 74 at 81 per Cole JA;

(b) the Compensation Court was empowered to make orders under s 144(3) without having determined the worker's application on its merits;

(c) it was therefore open to that Court to make orders under s 144(3) in accordance with the Terms;

(d) provided that settlement was reasonable, the Compensation Court had power to make an order under s 144(5);

(e) the adequacy and reasonableness of the settlement was an issue before the primary judge which he resolved in favour of the Authority;

(f) the primary judge's discretion in making an order under s 144(5) did not miscarry.

Did the primary judge err?

41 Once an application is made to the Compensation Court for determination of a worker's claim pursuant to s 144, that Court may, pursuant to s 144(3), either hear and determine the claim upon its merits and thereupon make orders in relation to the application in accordance with that determination or, as the appellant concedes, it may make orders pursuant to terms of settlement reached between the parties. So in the present case it was clearly open to Judge Walker to make orders in accordance with the Terms entered into between Ms Daley and the Authority.

42 Section 144(5) empowers the Compensation Court to

"provide for the reimbursement of the WorkCover Authority Fund under s 145."

Accordingly it must follow that an order made by the Compensation Court under s 144(3) may only provide for reimbursement of the Fund in circumstances where such reimbursement may be mandated under s 145. Thus s 145 becomes the governing provision as to the making of a provision for reimbursement in an order made under s 144(3).

43 Section 145(1) contemplates the service of a notice, by the Authority on an employer of an injured worker to or in respect of whom a payment has been made from the Fund under the Scheme, requiring that employer to reimburse the Fund in respect of an amount not exceeding that payment. Subject to the waiver by the Authority of any liability of an employer under subsection (1) pursuant to s 145(2), an employer upon whom such a notice has been served may apply to the Compensation Court pursuant to s 145(3) for a determination

"as to the [employer's] liability in respect of the payment concerned."

44 Pursuant to s 145(4), the Compensation Court is empowered to hear any such application and may make such determination in relation to that application, and such awards or orders as to the payment of compensation under the Act to or in respect of the injured worker, as it thinks fit.

45 In my opinion, these provisions make clear that an employer upon whom a notice is served is entitled to apply to the Compensation Court for a determination as to its liability in respect of any payment made by the Authority to an injured worker under the Scheme. It must follow that that liability relates to that of the employer to pay compensation to the injured worker under the Act. Accordingly, subject to the provisions of s 145(5), the fact that the Authority has made a payment to the injured worker under the Scheme, whether of its own motion pursuant to s 143(1)(a) or pursuant to an order of the Compensation Court made under s 144(3), is not conclusive of the employer's liability to reimburse the Fund from which that payment is made. That liability, if not otherwise conceded by the employer, is to be determined by the Compensation Court pursuant to s 145(4).

46 That the employer's liability to reimburse the Fund in respect of the amount of any payment made to the injured worker under the Scheme is a reference to its liability to pay the injured worker compensation under the Act is, in my opinion, confirmed by the terms of s 145(5). That subsection provides for the admissibility of a certificate executed by the Authority certifying firstly, the amount of any payment made to the injured worker and, secondly, that the person named in the certificate (the employer) was in the opinion of the Authority

"liable at the relevant time to pay to or in respect of the injured worker compensation under [the] Act."

Such a certificate becomes evidence of the matters stated in it. However, it is not conclusive and it is open to the employer to prove that at the relevant time it was not liable to pay compensation to the injured worker under the Act.

47 Returning to the power of the Compensation Court to provide for reimbursement under s 144(5), I have already expressed the opinion (at [42] above) that such a provision can only be made by the Court where the employer is otherwise required to reimburse the Fund under s 145. Although the appellant submits that the power under s 144(5) cannot be exercised by the Compensation Court unless s 145 is engaged by the service of a notice under subsection (1), I do not think that such a construction is correct. It seems to me that the purpose of s 144(5), given the context of the application before the Compensation Court to which it relates, is to engage so much of s 145 as is applicable in the circumstances.

48 Clearly s 144 proceeds upon the basis that there has been no payment by the Authority to the injured worker from the Fund and, in fact, that a claim for such a payment has been refused under s 143(2). No payment has been made to satisfy the injured worker's claim: hence the making of an application under s 144(1). But what is engaged, in my view, is the implicit requirement of s 145(3) and (4) that the employer, either by agreement or by court determination, be liable to pay the injured worker compensation under the Act in an amount not exceeding that payable by the Authority to the worker pursuant to an order made against the Authority under s 144(3).

49 In my opinion it follows from the foregoing that, firstly, in the absence of any agreement by the employer that it is relevantly liable, a provision may only be made pursuant to s 144(5) in an order made under s 144(3) where the Compensation Court determines that the employer is liable to pay the claimant referred to in s 144(1) compensation under the Act. Secondly, where, in an application made under s 144(1), the injured worker and the Authority settle the amount of any such compensation and orders are made in accordance with the terms of that settlement, the Compensation Court has no power under s 144(5) to provide for the reimbursement of the Fund by the employer under s 145 in respect of the amount of compensation ordered to be paid by the Authority unless and until, absent agreement, it has determined that the employer is in fact liable to pay that compensation.

50 Thirdly, it is insufficient for the making of a provision for reimbursement pursuant to s 144(5) that the Compensation Court determines that the settlement reached between the injured worker and the Authority was reasonable. So much is confirmed by the terms of s 145(5). Had the Authority's submission to the contrary of this proposition been correct, then one would have expected that s 145(5) would have provided that the certificate referred to would be either conclusive of the matters stated in it and, in particular, the matters referred to in subparagraph (b) relating to the liability of the employer at the relevant time to pay the injured worker compensation under the Act, or conclusive that the amount paid to the worker should be deemed reasonable. As the certificate is neither, but is merely evidence of the Authority's opinion as to the employer's liability, it follows that whether or not a settlement between the worker and the Authority is reasonable has no bearing upon whether or not the employer is in fact liable to pay the injured worker compensation in an amount not exceeding that which the worker has received from the Fund pursuant to the Scheme.

51 In support of its submissions, the Authority sought, somewhat faintly, to rely upon the decision of the High Court of Australia in James Hardie & Co Pty Limited v Seltsam Pty Limited (1998) 196 CLR 53 which was applied by this Court in Cockatoo Dockyard Pty Limited v Commonwealth of Australia [2001] NSWCA 468. Both those cases involved cross-claims between defendants pursuant to s 5(1)(c) of the Law Reform (Miscellaneous) Provisions Act 1946. It was suggested by the Authority that those decisions could support the proposition that the purpose of the Act, and in particular s 144, was to provide the employer with an opportunity to resist the making of a provision for reimbursement pursuant to s 144(5) by objecting to the making of orders pursuant to terms of settlement to which the employer was not a party. As no such objection had been made in the present case by the appellant, notwithstanding the opportunity to do so, it followed that it was too late for the appellant to complain.

52 It was further submitted that the Compensation Court was empowered to make a provision pursuant to s 144(5) where the employer had had the opportunity to join in the settlement but had failed to do so. I would reject both these submissions.

53 In my opinion, neither of the authorities referred to shed any light upon the issues in the present case. Although in James Hardie Gaudron and Gummow JJ referred (at 63 [19] and [20]) to the right of the appellant in that case to seek deferral of the entry of judgment until determination of the issue of the liability of the appellant to the plaintiff for the purposes of the appellant's contribution claim against the respondent, the context of their Honour's remarks was the effect of s 5(1)(c) of the Law Reform Act and its application to the situation which in fact came to pass in that case. No similar context exists in the present case. At the end of the day, the Authority conceded as much.

54 I have made reference above to the Authority's submission that the nature of the Act is such that it was sufficient for the appellant to be given the opportunity before Judge Walker to raise objection to the Terms and to seek a hearing on the merits. As it is submitted that it failed to do so, it follows according to the Authority that the primary judge was correct in finding that there was no denial of procedural fairness. Accordingly, it was not open to the appellant to submit before the primary judge that a provision for reimbursement could not be made by him pursuant to s 144(5) unless there was a hearing on the merits and a determination as to the appellant's liability to pay compensation to Ms Daley under the Act. This was particularly so where, as the appellant accepted, it was not open to it, not being a party to the Terms, to seek to reopen the settlement: cf King v Victoria Insurance Company Limited [1989] AC 250 at 255; GRE Insurance Limited v QBE Insurance Limited (1985) 3 ANZ Insurance Cases § 60-622 at 78,821-78,822.

55 Although not the subject of an express contention by the Authority, implicit in its submissions was the following. Firstly, on the authority of James Hardie it was always open to the appellant to object to the making of orders pursuant to the Terms unless and until the Compensation Court had determined its liability to pay compensation to Ms Daley under the Act. Secondly, although it could not, on the authority of King, seek to reopen the terms of the settlement entered into as between Ms Daley and the Authority, the appellant could have sought to set aside any orders made by Judge Walker where it had objected to the entry of such orders so as to enable it to obtain a hearing on the merits as to its own liability to Ms Daley. As the primary judge found as a matter of fact that no such objection had been taken and as any appeal to this Court is only on a question of law, it was not open to this Court now to set aside the primary judge's order for reimbursement.

56 In my opinion, there is no merit in those submissions. Firstly, they run counter to the view I have expressed above that there is no power in the Compensation Court to make provision for reimbursement pursuant to s 144(5) in orders made under s 144(3) unless, in accordance with s 145, the employer's liability to pay compensation to the injured worker under the Act has been determined or agreed. Secondly, although listed for hearing, the case only came before Judge Walker as a mention for the purpose of handing up the Terms and for the making of orders pursuant thereto. Although the proceedings were adjourned to enable the Authority to seek reimbursement pursuant to s 144(5), no such application was made before Judge Walker at the time. Therefore the occasion for the making of the objection referred to above had not arisen. There is certainly no doubt that when the issue of making a provision for reimbursement pursuant to s 144(5) came before the primary judge, the relevant objection was made.

57 In my opinion, the legislation in the present case (being quite different to that the subject of James Hardie), does not support the underlying proposition of the Authority to the effect that all the Act requires is for the employer to be given the opportunity to raise objection to the terms of settlement and to seek a hearing on the merits before orders in accordance with those terms are made. In my view the Compensation Court has no power to make a provision in an order made under s 144(3) for reimbursement of the Fund by the employer pursuant to s 144(5) unless and until, where the matter is in issue, it has determined that the employer is in fact liable to pay compensation to the injured worker under the Act in an amount which does not exceed that payable pursuant to the terms of settlement.

58 It also follows that any provision for the reimbursement of the Fund under s 145 made pursuant to s 144(5) is confined to the amount in respect of which an employer is required to reimburse the Fund under s 145, namely, an amount not exceeding the amount of any payment made or ordered to be made by the Authority to the worker under the Scheme. Accordingly, the primary judge was in error in ordering the appellant to reimburse the Fund in respect of the costs of the Authority in defending Ms Daley's claim for compensation being the proceedings which were resolved by Judge Walker pursuant to the Terms.

59 For the sake of completeness I should add this. As I have noted above, the Authority submitted that, contrary to my conclusion on the issue, it was sufficient if the primary judge found that the Terms were reasonable. It further submitted that in fact his Honour had so found. In my opinion there was no such finding. Although his Honour refers to the fact that Ms Daley's claim was compromised at a lesser amount than she sought, and although the medical reports obtained on her behalf were tendered by the Authority, no reference was made to them or their relevance by the primary judge in his judgment and, in argument, his Honour had made it clear that he confined their relevance to establishing no more than that Ms Daley was in fact injured.

Conclusion

60 In my opinion the appellant has succeeded on the appeal and is entitled, before a provision is made pursuant to s 144(5) that it reimburse the Fund under s 145 to a hearing on the merits as to its liability to pay compensation to Ms Daley under the Act. The determination of this issue must be remitted to the Workers Compensation Commission: Compensation Court Repeal (Transitional) Regulation 2003, clause 7(1); Workplace Injury Management and Workers Compensation Act 1998, s 353.

61 I would therefore propose the following orders:

(1) Appeal allowed;

(2) The orders made by Judge Hughes on 3 December 2003 be set aside;

(3) The application by the second respondent under s 144(5) of the Workers Compensation Act 1987 that the appellant reimburse the WorkCover Authority Fund under s 145 in respect of amounts paid by the second respondent to Ms Daley pursuant to the orders made by consent by Judge Walker on 31 July 2003 be remitted to the Workers Compensation Commission for determination;

(4) The second respondent pay the appellant's costs of the proceedings before Judge Hughes on 3 December 2003 and of the appeal.

62 STEIN A-JA: I agree with Tobias JA.

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