Chapman v Dickinson

Analysis

1. Mr Chapman relied upon evidence to prove the following: 1. both defendants had made statements tending to indicate that Mr Chapman was not an employee of the business; 2. in a Reply filed in the Workers Compensation Commission, Ms Patrick had "submitted" that Mr Chapman was not a worker; 3. the Commission arbitrator had decided Mr Chapman was not a worker; 4. the Presidential decision allowed an appeal by the public liability insurer and set aside the orders on the basis that the Commission lacked jurisdiction due to the absence of a dispute between the respondents to the appeal, Mr Chapman and Ms Patrick; and 5. Ms Patrick's workers compensation insurer had knowledge of the current proceedings and expressly declined the opportunity to participate or be heard.

(a) Issue estoppel

1. The principle of issue estoppel was, respectfully, most clearly stated by Dixon J in Blair v Curran (1939) 62 CLR 464, at 531-532 as follows: "A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion, whether that conclusion is that a money sum be recovered or that the doing of an act be commanded or be restrained or that rights be declared… Nothing but what is legally indispensable to the conclusion is thus finally closed or precluded. In matters of fact the issue-estoppel is confined to those ultimate facts which form the ingredients in the cause of action, that is, the title to the right established…the judicial determination concludes, not merely as to the point actually decided, but as to a matter which it was necessary to decide and which was actually decided as the groundwork of the decision itself, though not then directly the point at issue."
2. When confronted with the circumstance that the arbitrator's decision was found to be beyond jurisdiction and thus not a judicial determination that could give rise to estoppels - and in particular could not create an estoppel that Mr Chapman was not a worker - Mr Chapman limited the estoppel argument to the ratio of the Presidential decision: that there was no dispute between Mr Chapman and the second defendant. Whilst described differently, this alleged estoppel is no different in substance, in circumstances where Mr Chapman maintains that he is not a worker. It seeks to preclude the respondents from proving that Mr Chapman is a worker, and does so without a valid judicial determination to that effect.
3. There are several other reasons why this finding of a lack of dispute does not establish a relevant estoppel by judgment in these proceedings.
4. First, the relevant finding, which I accept to be the ratio of the Presidential decision that there was a lack of jurisdiction, is that there was no dispute in the Commission. [2] That says nothing about whether there is a dispute in this Court.
5. Secondly, that finding that there was not a dispute was not a finding on the merits. All parties accepted that there was no dispute between Ms Patrick in the Workers Compensation Commission and Mr Chapman.
6. Thirdly, and related to the first reason, a finding that parties are not in dispute is necessarily a finding at a certain point in time. Estoppels arise from findings of historical fact or law applying to those facts, so as to prevent the fact or law being re-litigated in another proceeding. That certain parties were not in dispute at one time, in one jurisdiction, says nothing about and cannot prevent them from being in dispute in another jurisdiction at another time.
7. Fourthly, the Reply filed by Mr Chapman in these proceedings did not plead any issue estoppel, and in particular, no estoppel precluding the existence of a dispute. However, the absence of a pleaded estoppel was not a point taken by Ms Patrick.
8. Fifthly, the estoppel could not operate against Mr Dickinson who was not a party to the workers compensation proceedings. Mr Chapman faintly raised an argument that his liability could be no different from Ms Patrick. More properly, Mr Dickinson as the worker might not be a necessary party to these proceedings, but Mr Chapman has made no application to remove him as a party.
9. Two possible exceptions arise in relation to an issue estoppel. First, whether it is necessary that the Commission has jurisdiction to determine generally whether Mr Chapman is a worker, and secondly, whether "special circumstances" preclude an issue estoppel.
10. As to the first matter, where a subordinate tribunal must necessarily decide matters solely in order to exercise its jurisdiction, its decision does not conclusively determine those matters between the parties and no issue estoppel arises. This is because the tribunal has no general jurisdiction to determine those appendant incidental matters, but can only determine them in connection with the particular invested jurisdiction. [3] Unless the tribunal has jurisdiction to "decide the matter conclusively and for all purposes between the parties", no issue estoppel arises. [4]
11. Thus, a magistrate's decision about the existence of a criminal offence of digging on Crown land does not determine between the parties for all purposes whether the land was, or was not, Crown land, because that was beyond the magistrate general's jurisdiction. [5] "[N]o greater ambit of finality should be attributed to" decisions of subordinate bodies than the legislation provides. [6]
12. In this case, the Commission had no jurisdiction to determine the matter at all, because of the absence of a dispute. And, ironically perhaps, Mr Chapman is bound by this fundamental matter of the Presidential decision. And the Commission had no power to determine a claim under the Civil Liability Act 2002, and in particular, whether a dispute there existed. Such a decision "creates no estoppel". [7]
13. The second exception concerns "special circumstances". The House of Lords in Arnold v National Westminster Bank plc [8] determined that where a subsequent decision of a higher court found an earlier decision (not the subject of an appeal) to have been incorrectly decided, the earlier decision should not create an issue estoppel. Arnold referred to the "special circumstances" [9] in Henderson v Henderson, [10] and indicated that there may be special circumstances "where estoppel does not operate". The Arnold decision was referred to in Pollnow v Armstrong [11] and in Mulgrave Central Mill Co Ltd v Hagglunds Drives Pty Ltd [12] without criticism. In Commonwealth of Australia v Cockatoo Dockyard Pty Limited, [13] the High Court, in a special leave application, expressly refrained from expressing a view on the correctness of the "special circumstances" exception.
14. One special circumstance in this case is that Ms Patrick's defence in the Commission was conducted by an insurer, the insurer at risk in those proceedings, different from the insurer at risk in these proceedings. Another, perhaps, is that while Ms Patrick was a party, Mr Dickinson, the first defendant in these proceedings, was not. And there are the other matters I have earlier mentioned.
15. While these circumstances may enliven the special circumstances exception in Arnold, it is not necessary to give a final conclusion on that matter because of my findings in relation to the other matters.

(b) Anshun estoppel

1. Anshun estoppel arises where a party could have taken, but unreasonably failed to take, a point in earlier proceedings. In some circumstances, that may bar the party from later raising that point. Here the second defendant through her public liability insurer has maintained in her defence from the outset in these proceedings, which were the first commenced, that Mr Chapman was within the statutory definition of a worker.
2. Mr Chapman asserts that Ms Patrick could have maintained that position in the Commission. However, it would be peculiar for a claimant in the Commission to be alleging he was not a worker and the putative employer, in a defence conducted by the workers compensation insurer, alleging that he was. In both cases, the parties would be arguing against their interests in those proceedings. It is doubtful whether Mr Chapman can properly be regarded as a claimant in the workers compensation proceedings if he denies that he is a worker. In any event, because of the novel approach of Mr Chapman to assert in the Commission that he was not a worker, I do not see any unreasonableness in the different approaches taken by Ms Patrick in the two proceedings, when her defence is maintained by two different insurers with different interests.
3. Further, as with the issue estoppel point, there is no relevant finding to which an estoppel can attach. The result of the workers compensation proceedings is that it had no jurisdiction to make a finding about whether Mr Chapman was a worker, so there is no valid finding that can preclude a further contest in this Court.

(c) Admissions

1. I turn to the assertion that part of the defence should be struck out by reason of admissions by the defendants.
2. There were no formal admissions by the defendants, either by an admission on pleadings in this case, or by a formal acknowledgment in correspondence of an admission in the proceedings. Rather, the evidence showed that the defendants had given statements about matters that were relevant to, and pointed against, Mr Chapman being a worker. That is not enough to constitute an admission requiring withdrawal. Indeed, no application to "withdraw" these admissions, if such they were, was made by the defendants. That evidence of the defendants may serve to assist Mr Chapman to prove he is not a worker, but it is not determinative of that issue.
3. But in a Reply document in the Workers Compensation Commission, the second defendant made a submission against Mr Chapman being a worker. However, a submission in one proceeding does not of itself, absent an estoppel that may result therefrom, bar a contrary submission in another proceeding. I am unaware of any principle that requires a party to withdraw a contrary submission in one court before a defence can be maintained in another and Mr Chapman pointed me to no authority to that effect. Subject to estoppels, parties are, for reasons including efficiency of the judicial process, free to concede points in proceedings without these concessions prejudicing them in other proceedings.
4. Mr Chapman referred to authorities that concerned withdrawing admissions, but they were concerned with admissions made in the instant proceedings. Admissions made in other proceedings may be relevant to proof, but do not create an inconsistency and thereby bar a contrary assertion in the present proceedings. As Mr Chapman acknowledged, where: "admissions are found to be entirely informal, those admissions still have work to do and stand as part of the evidence and will be determinative unless the admitting party can, by admissible evidence, prove that the admission was influenced by mistake, misunderstanding or ignorance, or that it is otherwise inaccurate or unreliable." [14]
5. Mr Chapman referred to the change in position and hardship that has resulted in and from the Presidential decision. But that is at least as much a consequence of Mr Chapman's conduct in making a claim in the Commission alleging that he was not a worker and thus not a proper claimant, [15] which was one of the matters that led the Commission to determine that it did not have jurisdiction.
6. For these reasons, I reject Mr Chapman's application for strike out of part of the defence based on admissions. Whether any admission might be evidence to justify a finding in the trial is another matter, but that must be determined at a trial on all the evidence.

(d) Abuse of process

1. That leaves remaining the abuse of process claim which appeared to be the primary ground advanced by Mr Chapman.
2. Mr Chapman asserted that the public liability insurer was obliged either to deny indemnity or accept the position advocated by Ms Patrick in the workers compensation proceedings. [16] The obligation to deny indemnity was not developed, and seems to be an issue between the parties to the contract of insurance, and not a matter Mr Chapman can compel. The circumstance that an insurer is defending a claim does not disentitle an insured to indemnity, even if the defence is successful. The costs of the defence ordinarily would remain within the ambit of the indemnity.
3. Mr Chapman asserted [17] that the action of an insured can bind an insurer, a proposition which can hardly be disputed. But the question remains whether it was unreasonable of Ms Patrick to submit that Mr Chapman was not a worker in proceedings where Mr Chapman is alleging as a claimant that he was not a worker, proceedings that were found to be without jurisdiction.
4. Mr Chapman referred to Tomlinson v Ramsey Food Processing, [18] where in a judgment of the majority of the High Court said: "it has been recognised that making a claim or raising an issue which was made or raised and determined in an earlier proceeding, or which ought reasonably to have been made or raised for determination in that earlier proceeding, can constitute an abuse of process even where the earlier proceeding might not have given rise to an estoppel. Similarly, it has been recognised that making such a claim or raising such an issue can constitute an abuse of process where the party seeking to make the claim or to raise the issue in the later proceeding was neither a party to that earlier proceeding, nor the privy of a party to that earlier proceeding, and therefore could not be precluded by an estoppel."
5. As the passage makes plain, the focus must be on the conduct of Ms Patrick in this proceeding, and what is done in the other proceeding may cause conduct in this proceeding to be an abuse of process. But three factors here seem significant.
6. First, proceedings were first commenced in this Court, and the defendants at all times maintained in the pleadings a defence based on Mr Chapman being a worker. This raises a question of whether Ms Patrick's actions in the Commission were an abuse, being arguably inconsistent with the pleaded position in this Court. But Mr Chapman took no issue about Ms Patrick's position in the Commission where she maintained that Mr Chapman was not a worker, presumably because it suited his forensic and other interests. The circumstance that Ms Patrick first pleaded that Mr Chapman was not a worker militates against that defence, as distinct from inconsistent conduct in the Commission, being an abuse of process.
7. Secondly, the proceedings in the Commission were maintained by a claimant who claimed not to be a worker. The circumstance that Mr Chapman was effectively attempting to lose his workers compensation proceedings renders more reasonable any conduct that deprives those proceedings of force. The adversarial system of justice depends upon the contrary party seeking to advance their interests, not opposing them for some collateral advantage.
8. Thirdly, the influence and involvement of insurers with contrary interests cannot be ignored.
9. The parties took the Court carefully through much of the extensive evidentiary material prepared for trial. It is apparent that the question of whether Mr Chapman was a worker for the purpose of the Workers Compensation Act 1987 and the Workplace Injury Management and Workers Compensation Act 1998 is an open question. Mr Chapman expressly refrained from submitting that the defence was so lacking in evidence as to be unarguable. Rather, the submission was that by her conduct in the Commission, Ms Patrick could never raise, and thus never have determined since it has not been determined elsewhere by a binding decision, the employment status of Mr Chapman.
10. It may be that Ms Patrick thinks that Mr Chapman was not a worker. But she is a lay person, and her opinion on that mixed question of fact and law, if it is relevant, is not determinative of the matter. The matter is arguable either way, if not finely balanced. And Ms Patrick's evidence about matters that militate against Mr Chapman being in a worker relationship does not preclude her insurer from defending the proceedings on the basis that the statutory definitions of a worker relevantly embrace Mr Chapman.
11. In my view, nothing has been done by Ms Patrick or her insurer to constitute an abuse of process, less still to bar her from maintaining a defence in this Court that has been pleaded from the outset. It would be odd that success by her insurer in the workers compensation proceedings could cause her conduct in these proceedings to be an abuse of process, and I do not think it does. I do not think her defence in these proceedings should fairly be trammelled by the point taken by her insurer in those other proceedings in the circumstances.
12. The issue of whether Mr Chapman is a worker may turn on whether evidence of the events and dealings between Mr Chapman and Ms Patrick are sufficient to establish an intention to create legal relations, and a contract of which the fundamental terms are certain. This is because it appears that one essential integer of being a worker under the Act is that there be a relevant contract. But whatever be the ultimate issues in the trial, the conduct of the parties in the Commission do not warrant some bar on the pleaded issue being determined. Section 56 of the Civil Procedure Act 2005 directs this Court to the overriding purpose of expeditiously dealing with the real issues in the dispute. The employment status of Mr Chapman is the real issue in the dispute and it should proceed to trial.
13. Another way of stating the real issue is which of the two insurers should be liable to Mr Chapman in the event that a breach of a duty of care is established. That issue depends on whether Mr Chapman is a worker or not. If I find that he is, these proceedings must fail and Mr Chapman will be left with any remedies that might be available in the Workers Compensation Commission. If he is not a worker, he will succeed here if he establishes a breach of duty of care. So the issue of whether Mr Chapman is a worker or not is crucial to this dispute, and needs to be determined by a court with jurisdiction.
14. Initially, both parties accepted that, at least in relation to this dispute, this Court is seized of jurisdiction. That also indicates that a defence that raises the issue is not an abuse of process.
15. However, during the course of the motion, Mr Chapman submitted that by reason of s 105(1) of the Workplace Injury Management and Workers Compensation Act 1998, this Court did not have jurisdiction to determine if Mr Chapman was a worker. This also was not a matter pleaded. It is, as Mr Chapman initially frankly admitted, somewhat inconsistent with the decisions of the Court of Appeal in The Star Pty Ltd v Mitchison [2017] NSWCA 149 and Tran v Vo [2017] NSWCA 134 where the Court of Appeal upheld the decisions of this Court finding that a plaintiff was not a worker. By the conclusion of submissions, Mr Chapman retreated from this initial position, submitting that because the issue of the jurisdiction of this Court to make a determination of a worker was not expressly raised in those Court of Appeal decisions there is no ratio to that effect that binds this Court.
16. I am inclined to the view that there is substance in this submission of Mr Chapman. But even if correct the submission does not mean that this Court lacks jurisdiction, only that the Court might not be bound to find that it is seized of jurisdiction. However, the matter was not raised in the motion, and, in any event, a finding of jurisdiction is not properly an interlocutory decision but a final one. No separate trial on this question was sought. While Ms Patrick raised no point about the late notice, questions about the jurisdiction of this Court, especially where decisions have been made by the Court of Appeal that must presuppose jurisdiction, are not to be made lightly, and they may depend on facts and evidence that have not been ventilated on the motion. They are a matter to be decided at trial
17. In these circumstances, I do not propose to deal with the claim of an absence of jurisdiction. The reservation of this issue should not be taken to indicate that the lack of jurisdiction argument based on the conferral of exclusive jurisdiction on the Commission in s 105(1) of the Workplace Injury Management and Workers Compensation Act 1998, and notwithstanding s 105(2) of that Act, has any substance.
18. Finally, I note that this application was made on the first day of trial. Mr Chapman's counsel frankly acknowledged that the same point, about Mr Chapman not being a worker, would be maintained at the trial proper if the contrary was not precluded by the relevant parts of the defence being struck out. The repetition of the same point at trial is another factor that militates against the matter being dealt with at this stage, in view of the overriding purpose in s 56 of the Civil Procedure Act 2005 being to determine cheaply, justly and quickly the real issues in the dispute. Ms Patrick submitted that if it was to be decided in advance of the trial, an application should have been made earlier in the many months after the Presidential decision, and not on the eve of the trial. There is substance in this submission.
19. The status of whether Mr Chapman is a worker, the real question in these proceedings, is more efficiently dealt with once in the trial, rather than potentially twice, as here, first by a strike out application relying on only part of the evidence that will be advanced in the trial.
20. For all these reasons, I dismiss the application to strike out those parts of the defendants' defence that raise the worker status of Mr Chapman.

Costs

1. The parties have asked that I reserve the question of costs.

Mediation

1. The matter must now be set down with a new date for hearing. There has yet been no mediation in the matter, and the parties did not oppose an order for a mediation so long as the workers compensation insurer was also to be present. It is not necessary, at least at this stage, to consider whether orders for joinder of the workers compensation insurer under r 6.24 of the Uniform Civil Procedure Rules 2005 should be made. But there seems to be real utility in a mediation involving the plaintiff and both insurers.

Orders

1. The orders of the Court are: 1. Plaintiff's motion dated 20 May 2020 to strike out paragraphs of the defence is dismissed. 2. Costs of the motion reserved. 3. Leave to the defendants to file the proposed amended defence. 4. Parties to arrange a formal mediation to be conducted by 1 July 2020. 5. The second defendant's workers compensation insurer is given leave to participate in the mediation. 6. Liberty to apply in the event that a mediation with both insurers attending cannot be arranged by 1 July 2020. 7. List for mention on Friday, 3 July 2020 at 10am before P Taylor SC DCJ.

Endnotes

1. Chapman v Dickinson [2018] NSWDC 359.
2. National Transport Insurance Limited v Chapman and Patrick [2019] NSWWCCPD 54 at [83], [84].
3. Cachia v Isaacs (1985) 3 NSWLR 366 per McHugh JA at 387.
4. Amalgamated Engineering Union (Aust Section), Ex parte; Re Jackson (1937) 38 SR (NSW) 13; (1937) 55 WN (NSW) 7.
5. Attorney General For Trinidad and Tobago v Eriché [1893] AC 518, 523.
6. Maurice Blackburn Cashman v Brown [2011] HCA 22; (2011) 242 CLR 647, 662 [40]; Trustees for the Roman Catholic Church for the Diocese of Bathurst v Hine [2016] NSWCA 213 at [24]-[38].
7. Amalgamated Engineering Union at 20.
8. [1991] 2 AC 93.
9. Arnold at 107C.
10. (1843) 3 Hare 100.
11. [2000] NSWCA 245.
12. [2001] QSC 040.
13. [2007] HCATrans 150.
14. Plaintiff's outline of submissions, 26/5/20 ("POS") at [26], see Nominal Defendant v Gabriel (2007) 71 NSWLR 150; [2007] NSWCA 52 at [113], [144] per Campbell JA.
15. National Transport Insurance Limited v Chapman and Patrick [2019] NSWWCCPD 54 at [74]-[75], [83]-[84].
16. POS at [8]-[9].
17. POS at [10].
18. [2015] HCA 28 at [24]. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 03 June 2020