Victorian WorkCover Authority v Sharma
[2011] VSC 641
•16 December 2011
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2009 8914
| VICTORIAN WORKCOVER AUTHORITY | Plaintiff |
| v | |
| NALIN KANT SHARMA | Defendant |
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JUDGE: | EMERTON J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 31 August and 1 September 2011 | |
DATE OF JUDGMENT: | 16 December 2011 | |
CASE MAY BE CITED AS: | Victorian WorkCover Authority v Sharma | |
MEDIUM NEUTRAL CITATION: | [2011] VSC 641 | |
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ACCIDENT COMPENSATION – Injury suffered in road traffic accident while defendant working overseas – Injured defendant instituted and settled proceedings in respect of the injury in the overseas jurisdiction – Injured defendant also received compensation under the Accident Compensation Act1985 (Vic) - Claim by the Victorian WorkCover Authority for recovery of compensation under s 85(6) of the Accident Compensation Act 1985 (Vic) – Meaning of the words ‘whether within or outside Australia’ under s 85 of the Accident Compensation Act – Whether s 85(6) of the Accident Compensation Act is limited to preventing ‘double dipping’ – Whether s 85(3) of the Accident Compensation Act allowed the Victorian WorkCover Authority to cease paying medical benefits - Accident Compensation Act 1985 (Vic) ss 39, 84B, 85, 93A, 93B, 99 – Transport Accident Act 1986 (Vic) s 93 – Order made for repayment of compensation – Counterclaim dismissed.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr A N Murdoch | Wisewould Mahony |
| For the Defendant | In person |
TABLE OF CONTENTS
Introduction......................................................................................................................................... 2
Background......................................................................................................................................... 3
The parties’ competing contentions................................................................................................ 4
Issues.................................................................................................................................................... 6
In relation to the Authority’s claim...................................................................................... 6
In relation to Mr Sharma’s counter-claim............................................................................ 7
Factual issues....................................................................................................................................... 7
What payments were made by the Authority under the Act?............................................... 7
What did Mr Sharma recover in the South African proceedings?......................................... 8
Was there any agreement as to recovery by the Authority under s 85(6)?......................... 10
Is section 85 of the Act applicable?............................................................................................... 20
Is s 85(6) of the Act limited to preventing double dipping?..................................................... 22
Is the Authority estopped from relying on s 85(6) by reason of any agreement entered into with Mr Sharma?.............................................................................................................................................. 26
Is the Authority’s claim statute barred?........................................................................................ 27
Analysis of the Authority’s claim.................................................................................................. 27
Counterclaim..................................................................................................................................... 29
Conclusion......................................................................................................................................... 32
HER HONOUR:
Introduction
The plaintiff (the ‘Authority’) seeks to recover from the defendant, Mr Nalin Sharma, an amount equivalent to damages paid to Mr Sharma in proceedings brought by him in the Republic of South Africa for injuries that he suffered in a road accident in there. Mr Sharma has also claimed compensation from the Authority under the Accident Compensation Act1985 (Vic) (the ‘Act’) in respect of those injuries. This proceeding concerns the operation of s 85(6) of the Act, which provides for the recovery by the Authority of payments of damages or compensation made under the laws of jurisdictions outside Victoria where the injured person has also received compensation under the Act.
Mr Sharma retained solicitors to defend the proceeding and bring his counterclaim, and was represented by counsel at the many directions hearings and on the applications that took place prior to trial. However, he represented himself at the trial because of the late withdrawal of counsel and his solicitors due, so the Court was informed, to advice given by his counsel in conference the day before. Despite the withdrawal of his legal team, Mr Sharma said he wished to pursue his defence and counterclaim and Mr Sharma’s solicitors remained in court throughout the trial (seated at the bar table) to assist him with documents.
Nonetheless, throughout the trial the Court remained conscious of its duty to ‘assume the burden of endeavouring to ascertain the rights of parties which are obfuscated by their own advocacy.’[1] The Authority was also reminded of its obligations as a model litigant and was asked to put before the Court arguable alternative constructions of s 85 of the Act.[2]
[1]Neil v Nott (1994) 121 ALR 148, 150.
[2]Transcript 127.
Background
In late 1997, Mr Sharma travelled to South Africa in the course of his employment with Mirabelle Trading Pty Ltd. Mirabelle Trading carried on the business of salvage and, on 28 October 1997, Mr Sharma and a colleague, Ms McAllister, were travelling from Pretoria to Botswana to inspect a disused railway line. They were involved in a head-on collision with another car driven by Mr Horatias Pule. Mr Sharma suffered extensive injuries and was hospitalised in South Africa for over five weeks. He was then transferred to the Alfred Hospital in Melbourne for further treatment.
At the time of the accident, Mr Sharma was 58 years old. He has not worked since the accident.
Soon after the accident, on 8 December 1997, Mr Sharma made a claim for compensation under the Act, and shortly thereafter, the Authority commenced making payments to or on behalf of Mr Sharma. Over the next 10 years, payments were made to Mr Sharma under various provisions of the Act, including for lost income, medical and other expenses, and for pain and suffering. Mr Sharma’s weekly payments ceased in 2004 when he turned 65, and payments of medical and like expenses ceased in April 2009.
On 11 February 2002, Mr Sharma commenced legal proceedings in South Africa claiming damages against the South African Road Accident Fund (the ‘RAF’) in respect of his injuries from the road accident (the ‘South African proceedings’). On 27 February 2004, the question of liability was determined by the Transvaal Provisional Division of the High Court of South Africa, which apportioned liability for the road accident as 80% to Mr Pule and 20% to Mr Sharma. An appeal was dismissed on 29 May 2005.
The RAF then entered into negotiations with Mr Sharma’s attorneys, Baker Mohammed Siritzky (‘BMS’), in relation to quantum of damages. On 29 October 2008, Mr Sharma accepted a settlement offer for R4,584,398.84 (the ‘South African settlement sum’) and an indemnity from the RAF in respect of 80 percent of his future medical expenses. On 13 January 2009, the RAF made a payment to BMS of the settlement sum and on 21 January 2009, BMS remitted the amount of A$615,028.62 to Mr Sharma’s bank account in Australia.
The Authority claims to be entitled to recover from Mr Sharma an amount equal to the South African settlement sum pursuant to s 85(6) of the Act. It contends that the amount that it is entitled to recover is A$680,178.84.
Section 85(6) of the Act provides that if a person receives compensation under the Act in respect of an injury and subsequently obtains damages or an award of damages, accepts a payment into court or settles or compromises a claim in respect of the injury under the law of any place outside Victoria, the Authority is entitled to recover from that person the amount of compensation paid under the Act or an amount equal to the damages or payment obtained or made, settled or compromised - whichever is the lesser amount.
The parties’ competing contentions
It is the Authority’s case that as Mr Sharma received compensation under the Act for his road accident injuries and subsequently settled his claim in respect of those injuries in South Africa for a lesser amount than the compensation paid to him under the Act, s 85(6) of the Act applies and the Authority is entitled to recover from Mr Sharma an amount equal to the South African settlement sum.
Mr Sharma denies that the Authority is entitled to recover the amount claimed or, indeed, any of the South African settlement sum. In his Amended Defence,[3] he does not admit that he settled the South African proceedings in the sum of R4,584,398.84 and says further that the South African settlement sum did not include, or did not include by way of total indemnity, components in relation to the following expenses:
[3]Dated 18 November 2010.
(a)hospital expenses;
(b)‘primary allied health providers’;
(c)‘referred allied health providers’;
(d)aids and appliances;
(e)other costs; or
(f)tax.
Mr Sharma says that, rather than recovering moneys as a result of the South African proceedings, he lost the sum of $23,850.00.[4]
[4]Comprising an amount that he was required to pay to Ms McAllister because he was found to be partly responsible for the accident, legal fees paid to his South African legal representatives, caregiver costs and reimbursement of costs incurred by his other employer (Sharma Bros) in managing his affairs during his period of incapacity.
Mr Sharma submits that, in any event, the Authority is estopped from recovering under s 85(6) of the Act by reason of an agreement that was entered into between him and the Authority in relation to compensation recovered in the South African proceedings. The agreement alleged by Mr Sharma is to the effect that the provisions of s 85 of the Act would not apply to Mr Sharma. This agreement, according to Mr Sharma, is contained in a memorandum of understanding and a draft deed of agreement produced by the Authority, along with oral representations made by the solicitors for the Authority.
In final submissions, Mr Sharma argued more generally that s 85 of the Act, and s 85(6) in particular, does not apply to awards of damages, settlements or compromises made outside Australia. He contends that the words ‘any place outside Victoria’ mean a place outside Victoria but within Australia, and that s 85(6) only enables the recovery of damages, awards, settlements or compromises made or obtained within Australia (but outside of Victoria).
Mr Sharma also argued that the Authority’s claim was stale, because any cause of action it may have had accrued on the date of his injury in October 1997, and was therefore barred by s 5(1)(d) of the Limitation of Actions Act 1958 (Vic).
Mr Sharma has made a counterclaim alleging that the Authority has underpaid him in respect of both weekly payments and medical expenses. He alleges that weekly payments were not made to him in accordance with the Act and that the Authority had no right to stop paying his medical expenses in reliance on s 85(3) of the Act. He counterclaims for damages in the amount of $397,460.96.
In respect of the counterclaim, the Authority submits that the Court has no jurisdiction to determine a dispute about the payment of benefits by reason of the exclusive jurisdiction conferred on the County Court of Victoria by s 39 of the Act, and that the counterclaim alleging underpayment of weekly payments is statute barred, as Mr Sharma became ineligible for weekly payments by reason of his age in October 2004 and no payments of weekly benefits were made to him after that date.
The Authority says further that weekly payments were made to Mr Sharma in accordance with ss 93A and 93B of the Act, which ‘cap’ the benefit payable. The amounts to which Mr Sharma claims to have been entitled exceed the maximum benefit payable.
The Authority contends that it was entitled under s 85(3)(e) of the Act to terminate Mr Sharma’s medical benefits once the South African proceedings were pending.
Issues
The issues for determination by the Court are:
In relation to the Authority’s claim
(a) Does s 85 of the Act apply to awards of damages, settlements or compromises of claims made or obtained outside of Australia?
(b) If so, is the right to recover under s 85(6) limited to amounts recovered overseas for which equivalent payments have been made under the Act? Should the amount be reduced to take into account the cost to the person of making the overseas recovery?
(c) Is the Authority estopped from relying on s 85(6) by reason of any agreement entered into with Mr Sharma?
(d) Is the Authority’s claim statute barred?
In relation to Mr Sharma’s counter-claim
(e) Does the Court have jurisdiction to entertain the counterclaim insofar as it alleges the underpayment of weekly benefits?
(f) Is Mr Sharma’s counter claim in respect of the underpayment of weekly benefits statute barred?
(g) If the Court has jurisdiction to entertain the counterclaim and it is not statute barred, did the Authority underpay Mr Sharma in respect of weekly benefits?
(f) Was the Authority entitled to cease to pay Mr Sharma’s medical expenses under s 85(3)?
Factual issues
What payments were made by the Authority under the Act?
The Authority tendered a certificate under s 239A of the Act which shows that:
(a) weekly payments were made to Mr Sharma from 12 November 1997 to 16 October 2004 ($237,197.45);
(b) hospital fees and other medical expenses (including ambulance, pharmaceutical, optical and dental) were paid from 29 October 1997 until 2 April 2009 (hospital = $175,141.82; Doctor = $114,503.55; Primary Allied Health Providers = $87,059.88; Referred Allied Health Providers = $43,634.48; Aids and Appliances = $11,167.80);
(c) a lump sum for maims under s 98/98A was paid on 21 October 1999 ($161,390.00);
(d) costs for travel and accommodation were paid at various times between 27 January 1998 and 8 July 2008 (Other Costs = $38,206.84).
The net balance shows payments having been made to or on behalf of Mr Sharma totalling $868,166.32 (excluding tax).
What did Mr Sharma recover in the South African proceedings?
Mr Sharma does not dispute that he brought the South African proceedings and that there was a monetary settlement of his claim in those proceedings.
Ms Lindsey Steele, a legal and compliance executive for the RAF, gave evidence via video link in relation to the file maintained by the RAF for Mr Sharma’s claim in South Africa. She said she had reviewed the RAF file and made reference to it in the course of her evidence.
Ms Steele explained that the RAF is a statutory body which compensates victims of motor accidents in South Africa. The accident compensation system that the RAF administers is a fault based system, which means that it only compensates persons to the extent that their negligence did not cause the accident. It pays medical expenses both past and future, compensation for loss of earnings both past and future, and ‘general damages’, which are non-pecuniary damages for pain and suffering, loss of amenity and so on.
Ms Steele confirmed that the South African court had made a determination apportioning 80% of the liability for the accident to Mr Pule and 20% to Mr Sharma. After the question of liability was determined, the RAF and Mr Sharma entered into settlement discussions through their attorneys. On 21 June 2007, the RAF made a settlement offer which Mr Sharma did not accept. After some correspondence, the RAF reinstated the offer in October 2008 and it was accepted by Mr Sharma.
Ms Steele gave evidence that attorneys for the RAF, Gildenhuys Lessing Malatji (‘GLM’), gave written advice to the RAF on 24 October 2008 in relation to the settlement. The GLM advice was in evidence. It records that on 21 June 2007, the RAF instructed GLM to file a ‘tender’ (offer) made up as follows:
Compensation: Sum ZAR: Sum A$: Past medical expenses $428,159.46 Future medical expenses Undertaking limited to 80% Past loss of earnings $304,149.13 Future loss of earnings A$59,009.30 General damages R600,000.00 Sub-total R600,000.00 $791,317.89 Less 20% apportionment R120,000.00 $158,263.57 Sub-total R480,000.00 $633,054.32 Less 20% contribution to McAllister R35,238.38 $18,864.00 Total R444,761.62 $614,190.32
The GLM advice records that Mr Sharma refused to accept the offer and that the matter could not proceed to trial due to an error that had been made in the office of the Registrar. This led to the matter being postponed sine die, with costs reserved. Copies of Mr Sharma’s tax records were obtained from the Australian Taxation Office and advice was given that there was no basis to increase the offer. According to the GLM advice, ‘sanity had prevailed’ and Mr Sharma’s attorneys advised that they had instructions to accept the RAF’s offer. GLM advised the RAF to let Mr Sharma’s attorneys know that the offer was still open for acceptance.
Attached to the GLM advice is a document headed ‘Offer to Settle’ dated 21 June 2007 in the amount of R444,761.62 plus the Rand equivalent on the date of payment of A$614,190.32. It includes an undertaking in respect of 80% of future medical expenses.
On 23 October 2008, Mr Sharma’s attorneys, BMS, wrote to GLM to inform them that they had been instructed to accept the offer of settlement dated 21 June 2007.
Ms Steele explained that the RAF was entitled to deduct from Mr Sharma’s claim the amount that was paid to Ms McAllister in respect of Mr Sharma’s liability to her (20%). She gave evidence that an amount of approximately R4.5 million was transferred to Mr Sharma’s solicitors on 13 January 2009. Extracts from the RAF’s electronic payment system were tendered showing that an amount of precisely R4,584,398.84 was paid to BMS at that time.
Ms Steele confirmed that in addition to the payment of the South African settlement sum, the RAF paid legal costs directly to Mr Sharma’s attorneys. An amount of R81,277.65 was paid in April 2006 in respect of the liability portion of the claim, and an amount of R271,895.98 was paid in January 2011 in respect of the quantum part of the claim.
Was there any agreement as to recovery by the Authority under s 85(6)?
Mr Wilson Yap, a solicitor at Wisewoulds Mahoney, managed the recovery process on behalf of the Authority. He gave extensive evidence about negotiations between the Authority and Mr Sharma concerning the amounts that the Authority would be entitled to recover from Mr Sharma and Mr Sharma would be entitled to retain if he was awarded damages in the South African proceedings. Those negotiations spanned several years.
What follows is derived from Mr Yap’s unchallenged evidence, supported by documentation in Wisewoulds’ file that was tendered in evidence by the Authority.
Mr Yap gave evidence that he was given conduct of the matter in about 1999. However, apart from an initial contact with Mr Sharma in 1999, Mr Yap did not communicate further with Mr Sharma until around 2004. Following discussions with Mr Sharma and his solicitors, Mr Yap prepared a ‘memorandum of understanding’ concerning the recovery by the Authority of amounts paid or to be paid to Mr Sharma as a result of the South African proceedings.
The memorandum of understanding comprises a single page in table form setting out heads of compensation in the left hand column and, in the right hand column, the understanding as to which of Mr Sharma or the Authority would retain compensation paid under the relevant head. It provided in substance that:
(a) Mr Sharma would retain payments for past medical and associated costs incurred and paid in South Africa and the Authority would recover payments for medical and associated costs incurred and paid by the Authority in Victoria;
(b) The Authority would retain payments for future medical costs and Mr Sharma would continue to be entitled to compensation for medical and like expenses under the Act;
(c) Mr Sharma would reimburse the Authority for payments of past weekly benefits and retain the balance of the award from the RAF for past loss of wages. Mr Sharma would thereafter cease to be entitled to weekly benefits under the Act; and
(d) Mr Sharma would reimburse the Authority for the s 98A/C/E lump sum benefits he had received and retain the balance of the award from the RAF for general damages for pain and suffering. Mr Sharma would not be entitled to compensation pursuant to s 98A/C/E of the Act.
The memorandum of understanding also provided that the Authority be consulted in relation to litigation and settlement strategies, and that instructions for settlement of past and future medical and associated costs had to be sought from the Authority.
The memorandum of understanding was forwarded to Mr Sharma in March 2004, along with a letter from Wisewoulds stating that the Authority ‘was agreeable to the in principle agreement concerning the joint claim to the RAF’ as set out in the memorandum and advising that a formal deed of agreement would be required if the memorandum was acceptable to Mr Sharma.
Mr Yap told the Court that he was informed that Mr Sharma was happy with the memorandum of understanding and that, as a consequence, he proceeded to draft a formal deed of agreement. However, as Mr Yap had no knowledge of the quantum of Mr Sharma’s claim in the South African proceedings to enable him to work out the actual amounts to be retained by Mr Sharma or recovered by the Authority, when he prepared the draft deed of agreement he made provision for payments using mathematical formulae to allow dollar figures to be inserted at a later time. Although he repeatedly requested information as to the quantum of Mr Sharma’s claim in South Africa,[5] Mr Yap said that he did not receive that information until 2007 or 2008.
[5]For example, Mr Yap gave evidence that Mr Sharma gave him the name of the attorneys in South Africa who were representing him – BMS – and told him that he could correspond directly with BMS. Mr Yap wrote to BMS to advise them that Wisewoulds acted for the Authority and requested documents relating to the South African proceedings. However, he did not hear back from BMS.
Mr Yap also gave evidence that in 2005 he obtained by his own means a copy of the decision on liability in the High Court of South Africa.
The draft deed of agreement prepared by Mr Yap recited that:
· The Authority had made and was continuing to make payments of compensation to Mr Sharma;
· Mr Sharma had the right, pursuant to the law of South Africa, to claim compensation for loss and damage suffered by him wrongfully caused by the driving of Mr Pule;
· Mr Sharma proposed to take, or had taken, proceedings pursuant to the law of South Africa for compensation for loss and damage; and
· The Authority desired to recover from Mr Pule or his insurer the amount of compensation paid and to be paid to and on behalf of Mr Sharma pursuant to the Act in respect of his injuries.
The draft deed of agreement also recited that the Authority had agreed that, if Mr Sharma recovered compensation pursuant to the law of South Africa, the provisions of s 85, and in particular s 85(3), would not apply so as to disentitle Mr Sharma to continue to receive payments of compensation in respect of his injuries pursuant to s 99 of the Act. Hence clause 1 of the draft deed of agreement provided that:
(1) The VWA hereby promises that it shall not –
(a) terminate the Plaintiff’s entitlement to compensation pursuant to the Act, and in particular pursuant to s 99 of the Act, by reason of the provisions of s 85(3)-(5) of the Act;
(b) save in accordance with this Agreement, seek to recover from Sharma pursuant to s 85(6) or s 114F of the Act, or otherwise, the payments of compensation paid to or on behalf of Sharma in respect of the injuries.
The draft deed of agreement therefore contemplated that the Authority would not exercise its rights under s 85 of the Act.
Clause 2 of the draft deed of agreement recorded Mr Sharma’s agreement that if he received compensation or damages in the South African proceedings (including a settlement or compromise), he would pay to the Authority part of the compensation or damages received by him in the South African proceeding calculated in accordance with the deed of agreement. By clause 5, Mr Sharma agreed to include in his claim in the South African proceedings ‘all amounts which the VWA has paid, is continuing to pay or may become liable to pay pursuant to the Act in respect of the injuries’. So far as I can tell, the division and allocation of the damages paid to Mr Sharma in the draft deed of agreement broadly reflected those in the memorandum of understanding.
The draft deed of agreement provided that the costs of the South African proceedings to be shared by Mr Sharma and the Authority.[6] It further provided that if Mr Sharma did not pay the Authority the amount or amounts due to it pursuant to the agreement within 21 days of the receipt by Mr Sharma of compensation or damages payable to him, the Authority would be entitled to bring proceedings to recover such amount or amounts payable to it as a debt owed to it by Mr Sharma.
[6]Based on the proportion of the amount awarded or paid in the South African proceedings to the amount that the Authority was entitled to recover.
The draft deed of agreement was sent to Mr Sharma for his consideration in January 2005.
Mr Sharma did not respond to the Authority about the draft deed. However, on 15 March 2005, Wisewoulds received a letter from Mr Sharma (presumably in response to an earlier request from Wisewoulds) advising that he did not have a copy of the judgment or any of the court papers filed in South Africa. In this letter, Mr Sharma effectively (although not expressly) responded in part to the draft deed of agreement by proposing a calculation for what he described as ‘the ratio of distribution for loss of wages’.[7] Based on his calculation, Mr Sharma asserted that the percentage of loss of income due to the Authority should be 24.5% of the (South African) award.
[7]This calculation proceeded on the basis that his weekly income at the time of the accident was $1,500. With superannuation and holiday pay it totalled $1,766 per week.
Mr Yap told the Court that he found this response unsatisfactory. It only touched upon one aspect of the draft deed of agreement and did not deal with the remainder.
Mr Yap gave evidence that notwithstanding Mr Sharma’s silence on the draft deed of agreement, he remained in contact with Mr Sharma and his solicitors in 2005 and 2006, pressing for information about the claim in the South African proceedings in order to work out the proportion or the amount that Mr Sharma would have to reimburse to the Authority. However, nothing was said about the draft deed of agreement and he did not ask Mr Sharma or his solicitors about it.
According to Mr Yap, his communications with Mr Sharma and his solicitors intensified in 2007, because the South African proceedings were then progressing towards a trial on quantum of damages. Mr Yap said he spoke with Mr Sharma by telephone in January 2007, before Mr Sharma left for South Africa to be examined by the RAF’s solicitors. Mr Sharma made suggestions as to amounts that would be reimbursed to the Authority under certain heads of damage. According to a file note made by Mr Yap at the time, this included past and future wages, pain and suffering and medicals. Mr Sharma’s proposal was that the Authority be reimbursed as to 24.5% of the award for past and future wages, as to 50% of the award for pain and suffering and for the entirety of the medical expenses that Mr Sharma recouped from the South African proceedings.
Mr Yap confirmed that no agreement was reached with Mr Sharma along those lines. He gave evidence that he sought instructions from the Authority about Mr Sharma’s proposal, but as the Authority remained ‘in the dark’ about the extent of Mr Sharma’s claim in the South African proceedings it could not agree to his proposal.
On 21 March 2007, Wisewoulds received a letter from Mr Sharma’s solicitors, Ravi James, who sought a meeting to discuss matters, and stated that it was not Mr Sharma’s inclination to go along with the proposal in the draft deed of agreement. The letter reiterated that Mr Sharma would be willing to consider a settlement that involved payment of 24.5% of the amount he would finally receive in his bank in Australia (after all deductions) for loss of earnings up to the age of 65 and a percentage of the net amount received by him in his bank in Australia against medical expenses up to the settlement date. Mr Sharma would retain the balance of the settlement, but would not claim from the Authority any further medical expenses except for treatments that were under way.
Mr Yap gave evidence that a meeting was held on 19 April 2007 at which Mr Sharma made the same or a very similar proposal. The Authority did not agree to it. A further similar proposal was made again by Ravi James on 4 May 2007 by telephone. At this point, Mr Yap informed Ravi James that the Authority would consider recovery proceedings under s 85 of the Act and again asked for details of the quantum of Mr Sharma’s claim in the South African proceedings. Mr Yap also agreed to forward to Ravi James a printout of all the compensation that the Authority had paid to Mr Sharma.
Mr Yap gave evidence that he had a further telephone conversation with Ravi James on 17 May 2007, in the course of which the issue of Griffiths v Kerkemeyer[8] damages was discussed in the South African context. Mr Yap again raised s 85 of the Act and expressed the view that it did not distinguish between heads of damage.
[8](1977) 139 CLR 161.
On 17 May 2007, Wisewoulds wrote to Ravi James concerning the operation of ss 85 and 114F of the Act, and the possibility that Mr Sharma might be required to reimburse the Authority for the whole or part of compensation received under the Act in the event of a successful claim in South Africa. Wisewoulds’ letter also stated that the Authority reserved its right to terminate Mr Sharma’s entitlement to compensation under s 85(3)(e) of the Act and to exercise its recovery rights. This letter attached a standard form letter to Mr Sharma advising him of the existence of ss 85 and 114F of the Act, and that if he was successful in his claim in the South African proceedings:
(1)The Authority will seek to recover against you the amount of compensation paid under the Act or an amount equal to the damages or payment obtained or made, settled or compromised in the South African proceedings, whichever is the lesser amount; and
(2)Your entitlement to compensation under the Act, including any compensation for future medical, care and like expenses, will cease. This is notwithstanding the Authority’s or QBE’s right to terminate your entitlement to compensation pursuant to s 85(3)(e).
Mr Yap gave evidence that he then had a conversation with Mr Sharma about s 85 of the Act. Mr Sharma told Mr Yap that he wanted to reach agreement about the percentages that he would reimburse the Authority from any award in the South African proceedings. Mr Yap told Mr Sharma there could be no agreement about percentages until he received a letter from Mr Sharma’s South African lawyers about the quantum of Mr Sharma’s claim in the South African proceedings.
In May 2007, Wisewoulds wrote to the RAF’s lawyers, GLM, enclosing a certificate pursuant to s 239A of the Act certifying the amounts of compensation paid by the Authority in the period 28 October 1997 to 28 May 2007 in respect of Mr Sharma’s injuries. Those amounts were summarised as follows:
Compensation:
Sum (A$):
Weekly benefits
A$298,820.00
Medical and like expenses
A$428,159.46
Lump sum benefits for maims
A$161,390.00
Total
A$888,369.46
The letter to GLM noted that the Authority continued to pay medical and like compensation and that in the event that Mr Sharma was successful in recovering damages or in obtaining a settlement or compromise in the South African proceedings, the Authority would be entitled to recover against Mr Sharma the amounts of compensation paid under the Act or an amount equal to the damages payment obtained or made, settled or compromised in the South African proceedings, whichever was the lesser amount, and to terminate Mr Sharma’s entitlement to compensation under the Act, including any compensation for future medical and like expenses.
This letter was forwarded to Mr Sharma and his lawyers, along with the s 239A certificate.
Mr Yap gave evidence that Mr Sharma subsequently contacted him and queried whether the Authority could claim directly against the RAF. On 15 June 2007, Mr Sharma contacted him again, saying he wanted his ‘future medicals’ to continue to be met by the Authority because this was very important to him and the RAF indemnity in his favour was not worth anything to him. He did not want to have to claim for future medical expenses against the RAF.
However, on that same day, Wisewoulds received a letter from Ravi James, noting that discussions concerning contributions could not be completed to a satisfactory resolution, that Mr Sharma was due to leave for South Africa and had requested the matter be concluded at that stage. The letter requested that any further correspondence be directed to Mr Sharma.
Mr Yap gave evidence that while Mr Sharma was in South Africa in the period following 15 June 2007, Mr Sharma telephoned him and made further offers in respect to the amounts to be reimbursed to the Authority. By this stage, Mr Sharma’s offers were being made in dollar amounts. Mr Yap said that during this period, there were at least three offers and counter-offers, none of which resulted in agreement. Mr Yap understood Mr Sharma’s offers to have been precipitated by the fact that the RAF had made an offer to Mr Sharma by that time.
Wisewoulds received a copy of the RAF offer dated 15 June 2007. The offer was for R444,761.62 plus the rand equivalent of A$455,426.08. In addition, it included an undertaking in respect of 80% of Mr Sharma’s future medical expenses.
Mr Yap gave evidence that he was not informed of a second offer made on 21 June 2007 with an increased Australian dollar figure of $614,000. He said he had only become aware of the second offer in the last few days.
According to Mr Yap, when Mr Sharma returned to Australia, he telephoned Mr Yap to re-make some of his earlier offers. This did not lead to any agreement between the parties.
Mr Yap gave evidence that ‘all of a sudden’ on 6 July 2007, Mr Sharma wrote to Wisewoulds, saying that he had decided to agree to all the terms of the draft deed of agreement sent to him in January 2005. Mr Sharma had signed two copies of the draft deed of agreement and sent them to Wisewoulds by courier. Mr Yap told the Court that neither Mr Sharma nor his legal representatives had said or communicated anything to him about the draft deed of agreement since it was sent to Mr Sharma in January 2005.
On 4 September 2007, Mr Sharma telephoned Mr Yap to let him know that he had not settled the South African proceedings, that he was due to have further medical procedures and that he was willing to abandon the claim on the basis that the RAF paid his South African legal fees only. During this conversation, Mr Yap told Mr Sharma that he had returned the draft deed of agreement two years too late and that it was ‘no longer valid for acceptance’ by Mr Sharma.
On 7 November 2007, Mr Sharma rang Mr Yap to let him know that the South African proceedings stood abandoned until he asked his solicitors to revive them. Mr Sharma said he would not make an offer to the Authority in writing. He wanted the Authority to first accept an offer before putting it in writing. Mr Yap suggested a mediation. Mr Sharma offered a sum of money to the Authority with an ‘irrevocable authority’, by which he meant that he would assign to the Authority the RAF’s indemnity in respect of his future medical costs.
Mr Yap wrote to Mr Sharma on 23 November 2007 to confirm Mr Sharma’s verbal offer to the Authority. There was a conference in December with Mr Sharma. At this meeting, Mr Sharma again said he wanted ‘future medicals’ and to remain on the scheme under the Act. He again offered to pay the Authority a sum of money and to give the Authority an irrevocable authority to obtain payments from the RAF in respect of his future medical expenses.
On 30 May 2008, Wisewoulds wrote to Mr Sharma, referring to Mr Sharma’s letter of 6 July 2007 which had enclosed the draft deed of agreement signed by Mr Sharma. Wisewoulds explained why the Authority considered it no longer open to Mr Sharma to accept the offer in the draft deed of agreement.
It is the Authority’s position that there has been no agreement with Mr Sharma in terms of the draft deed of agreement or otherwise and that it is entitled to seek to recover the ‘lesser amount’ under s 85(6) of the Act.
Is section 85 of the Act applicable?
Section 85(1) of the Act in force at the time Mr Sharma sustained his injuries (October 1997) provided as follows:
(1)This section shall apply where an injury is caused to or suffered by a worker which gives the worker a right to claim compensation or a right of action under the law of any place outside Victoria in circumstances which would otherwise have entitled the worker or the worker’s dependents to compensation under this Act.
By contrast, s 85(1) of its current form provides:
(1)This section shall apply where an injury is caused to or suffered by a worker which gives the worker a right of action under the law of any place outside Victoria (whether within or outside Australia) in circumstances which would otherwise have entitled the worker or the worker’s dependents to compensation under this Act. [Emphasis added]
Mr Sharma submitted that the Authority ‘doctored’ the Act when it alerted him to the operation of s 85 in 2007, because the words ‘(whether within or outside Australia)’ did not appear in s 85 at the time of his injury.
Mr Sharma correctly points out that the words in parenthesis ‘(whether within or outside Australia)’ were inserted after the words ’of any place outside Victoria‘ throughout s 85, including in sub-s (6)(b), by the Accident Compensation and Transport Accident Acts (Amendment) Act 2003 (Vic). It is Mr Sharma’s submission that the insertion of the words in parenthesis in 2003 shows that prior to this date, s 85 was not intended to refer to places outside of Victoria which were outside of Australia. Mr Sharma draws support for this construction from the Second Reading Speech for the Accident Compensation and Transport Accident Acts (Amendment) Bill 2003, in which the Minister explained what were described as the ‘cross-border arrangements’ that were inserted into the Act by the Bill:
Consistent with the government’s longstanding agreement in principle to develop a framework for coverage of workers operating temporarily in another jurisdiction, Victoria agreed to pursue complementary legislation with New South Wales and Queensland following the Workplace Relations Minister’s Council meeting in May 2002. Subsequent to this the other States and Territories have also agreed to work towards the introduction of similar legislation.
To this end, the Bill will implement cross-border arrangements for workers compensation to:
reduce the need for employers to obtain workers compensation coverage for a worker in more than one jurisdiction at one time and to allow employers to readily determine in which jurisdiction to insure their workers;
insure that workers working temporarily in another jurisdiction have access to workers compensation entitlements available in their “home” jurisdiction (including whatever arrangements apply in relation to common law; and
provide certainty for workers as to their workers compensation entitlements.[9]
[9]Victoria, Parliamentary Debates, Legislative Assembly, 16 October 2003, 1158 (Rob Hulls).
The Minister’s Second Reading Speech also states that the Bill provides consistency in the compensation entitlements of workers temporarily employed interstate.
Counsel for the Authority, Mr Murdoch, submitted that the insertion of the words in parenthesis in s 85 by the 2003 amendments was for the purposes of clarity only. The 2003 amendments included amendments to achieve the new cross-border arrangements within Australia for the payment of compensation (by way of weekly payments and so forth) where a worker suffered injury outside of Victoria but within Australia. As a corollary, s 84 of the Act, which provided for compensation in respect of injuries ‘outside Victoria’ was amended to refer to injuries suffered outside Australia only. However, s 84B was inserted to prevent the payment of compensation twice, whether the second payment of compensation was made pursuant to the laws of another state of Australia (pursuant to the new cross border arrangements) or pursuant to the laws of another country altogether. The words in parentheses were inserted in s 84B to make this clear. The same words were also inserted in s 85 to make it clear that s 85 was not limited to entitlements arising outside of Australia but included entitlements arising both within and outside of Australia.
Mr Murdoch also referred the Court to Dodd v Executive Air Services Pty Ltd,[10] in which the Full Court considered the meaning of the words ‘outside Victoria’ in s 7 of the Workers Compensation Act1958 (Vic). The question there was whether the words ’outside Victoria‘ in relation to the place of the injury had a meaning that was constrained by words describing the location of the place of work that preceded them. The Court held that they were to be given their ordinary meaning, namely ‘the rest of the world outside Victoria’.[11]
[10][1975] VR 668.
[11]Ibid 672.
I agree that the ordinary meaning of the words ’outside Victoria‘ means anywhere - whether inside or outside of Australia - that is not Victoria. I am also persuaded by the legislative history described by counsel for the Authority that the words in parenthesis were added for the purposes of clarification, given the changes that were made to s 84 of the Act.
As a result, s 85(6) will apply if Mr Sharma has received compensation under the Act in respect of his injuries and has subsequently obtained an award of damages, or settled or compromised his claim in the South African proceedings. To hold otherwise would enable Mr Sharma to ‘double dip’ in that, at the very least, he would be entitled to retain the amount received for his medical expenses by virtue of the settlement of the South African proceedings even though those expenses have already been paid by the Authority under the Act.
Is s 85(6) of the Act limited to preventing double dipping?
Wisewoulds’ letter to the solicitors for the RAF dated 28 May 2007 sets out the heads of damage and the relevant amounts for which Mr Sharma had been compensated under the Act as at that date. These heads of damage and benefits included weekly benefits in an amount of almost $300,000, medical and like expenses from the time of his injury amounting to some $430,000 and a lump sum benefit for maims of $161,390.
The letter dated 24 October 2008 produced by Ms Steele in which the RAF’s solicitors set out the basis on which the RAF’s settlement offer was made shows the South African settlement sum to have been made up of the following:
(a) an amount for past medical expenses which exactly matches the amount paid by the Authority for past medical expenses;
(b) an amount for past loss of earnings which is very slightly higher than the amount that was paid by the Authority to Mr Sharma as weekly payments;
(c) an amount for general damages in the amount of R600,000; and
(d) an amount for future loss of earnings of A$59,009.30.
The amounts in (a) and (b) reflect the amounts paid by the Authority for the same thing. Moreover, Mr Sharma has recovered an amount from each of the RAF and the Authority in respect of pain and suffering. The only significant difference relates to future loss of earnings, for which the South African settlement gave Mr Sharma an amount of almost $60,000, whereas by October 2008, Mr Sharma had no further entitlement to weekly payments under the Act.
The South African settlement sum does not, apparently, include an amount for the incidental costs to Mr Sharma of obtaining the settlement. However, Ms Steele gave evidence that Mr Sharma’s legal costs were paid directly to his solicitors by the RAF.
Mr Sharma claims that as a result of the South African proceedings, he suffered a net loss of $23,850.00. The costs that he says he incurred are made up of legal fees of $107,350, caregiver costs of $260,000 and costs incurred by Sharma Bros in managing his affairs during his period of incapacity of $270,000.
These costs have not been substantiated in any way. When asked why he had not kept records of his expenses, he said he was a traumatised man who was not able to keep records. I find this surprising, as Mr Sharma was aware that an issue was brewing in relation to the Authority’s right to recover amounts awarded or paid in the South Africa proceedings from at least 2004. The chronology of the negotiations that took place on this question between Mr Yap and Mr Sharma (and/or his solicitors) shows the Authority to have clearly signalled that it would seek to recover compensation paid to Mr Sharma (or on his behalf) if Mr Sharma succeeded in obtaining damages in South Africa. So far as I can tell, Mr Sharma was legally represented throughout the period of these negotiations. Moreover, he was sufficiently astute to negotiate with the Authority as to the amounts in question and made a number of discrete offers to the Authority using both percentages and dollar figures. I therefore find implausible his evidence that he was incapable of keeping records of the expenses involved in bringing and prosecuting the South African proceedings.
In the absence of any evidence, the Court could not conclude that Mr Sharma was out of pocket as a result of bringing the South African proceedings.
It is the Authority’s submission that, in any event, s 85(6) does not distinguish between heads of damage and that it is entitled to the South African settlement sum because it is the ‘lesser amount’ for the purposes of s 85(6) whether or not the settlement sum includes amounts under heads of damage for which Mr Sharma has not been compensated under the Act, and whether or not recovery of the South African settlement sum came at a financial cost to Mr Sharma.
Section 85(1) provides that s 85 applies where an injury is cause to or suffered by a worker that gives the worker a right of action under the law of any place outside Victoria[12] ‘in circumstances that would otherwise have entitled the worker … to compensation under this Act’. The circumstances entitling Mr Sharma to compensation under the Act were that he suffered his injuries in the course of his employment with a Victorian employer.
[12]As discussed, the words ‘(whether within or outside Australia)’ were inserted by the 2003 amendments.
By its terms, s 85(6) simply confers an entitlement on the Authority to recover the lesser of the two amounts mentioned in the section, in this case the South African settlement sum. The section does not attempt to limit recovery by the Authority to amounts ‘double paid’ to the injured worker by reference to heads of damage, or categories of expenses or losses for which the Act itself provides. Moreover, the word ‘obtained’ in s 85(6) refers to the damages or award of damages or payment, and the amount ‘obtained’ for the purposes of s 85(6) is therefore not necessarily the sum of money that is ultimately paid into the injured person’s bank account.
The general nature of the ‘amount’ that the Authority is entitled to recover under s 85(6) most likely reflects the fact that s 85(6) is intended to apply to amounts in the nature of damages that may be awarded or paid in a variety of different legal systems, and it would be impossible to draft a more specific provision. The fact that only ‘the lesser amount’ may be recovered by the Authority provides some protection to the injured worker in that, if they are awarded or paid a greater amount in the interstate or overseas jurisdiction, they are entitled to retain the difference.
If Mr Sharma did incur significant costs in prosecuting the South African proceedings that he was unable to recover from the RAF, this would demonstrate the wisdom of the parties entering into an agreement which more truly reflected the costs and benefits of the overseas proceedings. However, Mr Sharma did not take advantage of the Authority’s willingness to enter into an agreement with him.
As the legislation stands, the Authority is entitled to recover either the compensation that it has paid to Mr Sharma, or the amount paid to Mr Sharma by the RAF in settlement of the South African proceedings, whichever is the lesser. There is no provision for an adjustment to be made to take into account Mr Sharma’s costs of obtaining the settlement. Nor is there provision for an adjustment to be made to reflect the fact that Mr Sharma received an amount in the South African settlement for future earnings when he was no longer entitled to weekly payments under the Act.
I find, therefore, that s 85(6) is not limited in the manner contended for by Mr Sharma.
Is the Authority estopped from relying on s 85(6) by reason of any agreement entered into with Mr Sharma?
I am satisfied on the basis of the evidence given by Mr Yap, little if any of which was challenged or disputed by Mr Sharma, that the parties did not enter into an agreement in the form of the draft deed of agreement that was forwarded to Mr Sharma by Mr Yap in 2004. Although Mr Sharma purported to execute the deed in 2008 and returned it to the Authority claiming that the agreement between them was thereby sealed, he was not, in my view, able to accept the offer at that time. Much water had flowed under the bridge since the draft deed was sent to Mr Sharma for his consideration in January 2005, including a number of counter offers made by Mr Sharma to the Authority.
As a result, the memorandum of understanding and draft deed of agreement cannot form the basis for the agreement alleged that the provisions of s 85 of the Act would not apply to Mr Sharma.
Mr Sharma also alleges that there were conversations between him and Mr Yap to the effect that Mr Sharma and the Authority had a memorandum of understanding and agreement in place whereby the Authority agreed that if Mr Sharma recovered compensation, the provisions of s 85 of the Act would not apply. Again, it is quite clear from the evidence of Mr Yap, which I accept, that there was no such agreement based upon the memorandum of understanding and the draft deed of agreement. The existence of an oral agreement of the type alleged cannot be implied from the description of the conversations given by Mr Yap or from the correspondence between Mr Sharma and Mr Yap.
Insofar as there was a proposed agreement that s 85(6) would not apply to Mr Sharma, the proposed agreement depended on Mr Sharma making the payments to the Authority reflected in the proposed agreement. However, as I have said, that agreement was never finalised and it was no longer capable of acceptance by Mr Sharma three years after it had been forwarded to him for consideration and following the various proposals put by him to the Authority in the meantime.
Is the Authority’s claim statute barred?
The Authority’s claim is not statute barred. Mr Sharma settled his proceedings in South Africa in October 2008 and his solicitors received payment on his behalf in December 2008. The Authority’s entitlement to recover that amount crystallised upon Mr Sharma obtaining that payment. The proceeding was therefore brought well within the limitation period prescribed by s 5(1)(d) of the Limitation of Actions Act.
Analysis of the Authority’s claim
Section 85(6) of the Act provides:
(6) If a person –
(a)receives compensation under the Act in respect of any injury; and
(b)subsequently obtains damages or an award of damages, accepts a payment into court or settles or compromises a claim in respect of the injury under the law of any place outside Victoria (whether within or outside Australia) –
the Authority, employer or a self-insurer shall be entitled to recover from that person the amount of compensation paid under this Act or an amount equal to the damages or payment obtained or made, settled or compromised whichever is the lesser amount.
Mr Sharma has received compensation under the Act for his injuries. According to the certificate under s 239A of the Act tendered in evidence, payments have been made to him or on his behalf totalling $868,166.32 (excluding tax). Paragraph (a) has been satisfied.
Mr Sharma has also obtained damages and/or settled a claim in respect of his injuries under the laws of the Republic of South Africa. According to the evidence given by Ms Steele of the RAF, the offer made by the RAF to compromise his claim was accepted by Mr Sharma in late October 2008 and an amount of approximately R4.5 million was transferred to Mr Sharma’s solicitors. Extracts from the RAF’s electronic payment system were tendered showing that an amount of precisely R4,584,398.84 was paid to Mr Sharma’s South African attorneys at that time. Paragraph (b) has been satisfied.
I am therefore satisfied that Mr Sharma compromised or settled a claim in respect of his injuries under the law of a place outside Victoria.
This means that the Authority is entitled to recover from Mr Sharma the lesser of the amount paid under the Act and the amount paid in settlement of his South African claim. The relevant amount is ‘an amount equal to’ the payment made in settlement of his South African claim. That amount, on the evidence of Ms Steele, was the amount of R4,584,398.84.
Ms Steele gave evidence about the applicable exchange rate at the date the payment was made to Mr Sharma’s attorneys by the RAF. Her evidence was that the exchange rate at the time was that one Australian dollar was worth R6.73999. This meant that Mr Sharma was paid A$680,178.84.
There was evidence before the Court that Mr Sharma’s attorneys transferred the amount of A$615,028.62 to his bank account in Australia. No explanation has been given for the discrepancy between the amount paid to the attorneys and the amount paid by them into Mr Sharma’s Australian bank account. The legal costs of the South African proceeding were met separately by the RAF. It may be that there were additional legal or other costs, but no evidence has been adduced in relation to additional costs. Mr Sharma has not provided an explanation for the discrepancy and the documents tendered at trial do not shed any light upon this matter.
In the circumstances, the Court must determine the question on the basis of the evidence. The evidence of Ms Steele is that Mr Sharma was paid A$680,178.84 in settlement of the South African proceedings.
As a result, the Authority is entitled to recover A$680,178.84 from Mr Sharma pursuant to s 85(6) of the Act.
Counterclaim
By amended counterclaim filed on 12 April 2011, Mr Sharma alleges that he was underpaid weekly benefits and that the Authority unlawfully ceased to pay his medical and like expenses. Mr Sharma claims to have been underpaid weekly benefits for a period of 338 weeks totalling $397,460.96. In respect of medical and like expenses, Mr Sharma claims to be entitled to $1,521 per week for the period 23 September 2009 and continuing.
The Authority says in its defence to counterclaim that it made weekly payments of compensation in accordance with ss 93A and 93B of the Act based on the authorised insurer’s determination of Mr Sharma’s ‘pre-accident average weekly earnings’ pursuant to s 5A of the Act until Mr Sharma turned 65. It says further that it was entitled to cease paying medical and like expenses when it did by reason of s 85(3)(a) and/or s 85(3)(e) of the Act.
The counterclaim therefore concerns the calculation of weekly benefits, and the validity of the Authority’s decision to cease paying medical and like expenses in reliance on s 85(3)(a) and/or (e) of the Act.
Mr Sharma also alleges that payments of compensation were unlawfully suspended at different times.
There is a preliminary question as to whether the Court can entertain that part of the counterclaim relating to the underpayment of weekly benefits. Mr Sharma says that his average weekly pre-accident earnings were reasonably estimated in the sum of $2,877.68. Based on the appropriate calculations, he ought to have received weekly compensation at the rate of $1,925.92.
However, s 39 of the Act confers on the County Court of Victoria exclusive jurisdiction to inquire into, hear and determine any question or matter under the Act arising out of ‘any decision of the Authority, employer or a self-insurer’. Decisions made under the Act as to the injured person’s pre-injury average weekly earnings fall into this category. In my view, therefore, the Court has no jurisdiction to hear and determine a dispute about the level of Mr Sharma’s pre-injury average earnings.
Moreover, as the Authority points out, Mr Sharma ceased to be eligible for weekly benefits in 2004 when he turned 65. Mr Sharma’s action to recover monies payable as weekly benefits pursuant to the Act is therefore statute-barred by reason of the six year limitation period in s 5(1)(d) of the Limitation of Actions Act.
I observe further that Mr Sharma’s counterclaim in respect of weekly benefits does not appear to take into account the statutory maximum payable pursuant to ss 93A and 93B[13] of the Act, as applicable from time to time as and from 27 October 1997. At no time could Mr Sharma’s weekly benefits have approached the rate of $1,925.92 that he claims, given the statutory maximums in force from time to time.
[13]And/or 93CA, 93CB, 93CC and/or 93CD of the Act.
As to medical expenses, Mr Sharma alleges that the Authority unlawfully ceased to pay him his medical and like expenses from February 2008, but recommenced paying those expenses on 26 May 2008. There were therefore 14 weeks of non-payment of medical and like expenses. Mr Sharma says further that the Authority is under a legal obligation to pay his medical and like expenses for the period from 23 September 2009 to the present.
I have carefully reviewed the certificate made under s 239A of the Act setting out all the payments made to or on behalf of Mr Sharma by the Authority. The s 239A certificate shows that four payments of a medical nature were made during the period Mr Sharma claims the Authority unlawfully ceased to pay his medical expenses. Payments were made on 29 February (chemist), 4 March (doctor), 11 March (doctor) and 24 April (doctor).
The counterclaim makes no mention of any medical or like services received, or expenses incurred, that were not paid by the Authority during the relevant period. Rather, it asserts that ‘it was accepted and agreed’ by the Authority that Mr Sharma’s average weekly medical and like expenses amounted to $1,521 per week and that the non-payment of these expenses for a period of 14 weeks therefore amounted to $21,294. Section 99 of the Act requires the Authority[14] to pay the ‘reasonable costs’ of medical, hospital, nursing and other services received because of the injury. The payments are made in respect of ‘services received’, not on the basis of average expenses. Mr Sharma is not, in my view, entitled to make a claim for ‘average weekly medical and like expenses’ under the Act.
[14]Or a self-insurer and the employer in respect of particular liability.
As to the Authority’s alleged obligation to pay Mr Sharma’s medical and like expenses for the period from 23 September 2009 to the present, s 85(3) of the Act provides:
A person who has a right of action in respect of an injury under the law of any place outside Victoria (whether within or outside Australia) shall not be entitled to claim compensation in respect of the injury under this Act if in respect of the injury under the law of any place outside Victoria –
(a) the person has been paid or recovered any amount of damages;
(b)judgment for damages has been given or entered;
(c)any payment into court has been accepted;
(d)there has been a settlement or compromise of any claim; or
(e)any action for damages is pending.
Mr Sharma had a right of action in respect of his injuries under the laws of South Africa. As at 23 September 2009, he had settled his claim for damages and had received a payment of A$680,178.84. He had also received an indemnity from the RAF in respect of 80% of his future medical costs. In my view, s 85(3) was applicable, and Mr Sharma ceased to be entitled to compensation under the Act as a result.
In further submissions, Mr Sharma referred the Court to s 99(13) and (14) of the Act in support of the proposition that if he was seriously injured, his medicals would continue ‘no matter what’. Section 99(13) provides that if a worker receives a settlement or award of pecuniary loss damages within the meaning of ss 134AB or 135A of the Act or s 93 of the Transport Accident Act 1986 (Vic), or accepts a voluntary settlement of weekly payments under Division 3A of the Act in respect of an injury, the worker will continue to receive compensation under s 99. Mr Sharma referred in particular to the words ‘within the meaning of’ in the Transport Accident Act and suggested that the effect of the section was that persons who had suffered injury in a transport accident who had received a settlement or award would continue to be eligible to be compensated for medical expenses under s 99 ‘no matter what’.
Mr Sharma did not receive an award of pecuniary loss or damages within the meaning of s 93 of the Transport Accident Act. In any event, any entitlement in s 99(13) is conferred ‘subject to this Act’. The Act contains s 85(3) which, for the reasons given, disentitled Mr Sharma from receiving compensation under the Act (at the latest) when he received the South African settlement sum. I note again that the settlement of the South African proceedings occurred on the basis that the RAF would indemnify Mr Sharma in respect of 80% of his future medical expenses. So far as I am aware, Mr Sharma continues to enjoy that indemnity.
The counter-claim must be dismissed.
Conclusion
Orders will be made that Mr Sharma pay the Authority A$680,178.84 pursuant to s 85(6) of the Act, plus interest. The counterclaim will be dismissed.
I will hear from the parties on the question of costs.
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