Day v Tuggerah Ventures Pty Ltd

1730/08 - DAY v TUGGERAH VENTURES PTY LTD JUDGMENT 1 HIS HONOUR: The plaintiff claims that she was injured when in the employment of the defendant. The defendant is now in liquidation, but leave has been given on the usual terms under the Corporations Act 2001 (Cth) for these proceedings to be tried. The defendant was insured against its liabilities under the Workers Compensation Act 1987 and the insurer can simply be described as CGU. 2 The plaintiff's summons claims a declaration that there was a concluded agreement between herself and CGU as to the settlement of her claim under s 66 of the Workers Compensation Act and seeks an order that the insurer pay her $20,000 in respect of a 15 per cent whole person impairment. 3 The basal facts are set out in the correspondence which is annexed to the affidavit of Stuart Brendan Barnett of 27 February 2008 and supplemented by the affidavit of Stephen Chares Harris of 2 April 2008. 4 There is no need to go into the circumstances of the events which caused the plaintiff's injury, however, it is necessary to note that a work injury gives rise to a liability to make various payments under the Workers Compensation Act. 5 First, under s 66, a worker who receives an injury that results in permanent impairment is entitled to receive compensation under that section. The amount that the worker will receive is prescribed by the section and depends on the degree of permanent impairment. If the degree of permanent impairment is 15 per cent then the prescribed compensation is $20,000. 6 Secondly, under s 67 of the Workers Compensation Act a worker who receives an injury that results in a degree of permanent impairment of 10 per cent or more is entitled to receive from the worker's employer compensation for an amount not exceeding $50,000. 7 Thirdly, under certain circumstances, the worker is also entitled to seek work injury damages which is separate and apart from compensation under ss 66 and 67. However, under s 280A of the Workplace Injury Management and Workers Compensation Act 1998, a claim for work injury damages in respect of an injury cannot be made unless a claim for lump sum compensation in respect of the injuries is made before or at the same time as the claim for work injury damages. However, the authorities are clear that a claim for work injury damages is a separate matter from a claim for compensation. 8 The plaintiff's solicitors on 27 June 2007 wrote to CGU and the first paragraph of their facsimile is as follows: "We refer to today's telephone conversation with you and confirm that on 3 April 2007 we served a claim under sections 66 and 67 together with a claim for work injury damages including particulars, financial documents, medical evidence, an assessment of damages and an offer of settlement. We have not heard from you and more than two months has now elapsed since the service of the documents." 9 There was a follow-up letter to the same effect on 22 August 2007. On 3 September 2007, CGU replied: "We refer to your client's claim for permanent impairment for the neck and right rotator cuff injury, under section 66 of the Workers Compensation Act 1987. We have reviewed the case and we would like to offer your client the following entitlement in line with section 66 and 67 of the Workers Compensation Act 1987. $20,000 for 15% Whole Person Impairment $0.00 for pain and suffering. TOTAL: $20,000. The above offer is made based on the following reports: Dr Noel Langley's report dated 26/10/2006 ... Please obtain your client's instruction and contact me within twenty one days. If your client wishes to accept our offer, please complete the 'Complying Agreement under s 66A.' If this offer is not accepted, you may refer this matter to the Workers Compensation Commission ...". 10 The penultimate paragraph of the letter says: "In line with section 342(2) of the Workplace Injury Management and Compensation Act 1998, if the offer contained in this letter is not accepted and your client does not achieve a more favourable result at the completion of the claim, CGU ... will be seeking an order that ... the applicant not be entitled to costs from the date of this letter." 11 The plaintiff's solicitor replied on 5 September 2007 that: "We are instructed to accept your offer in respect of a 15% whole person impairment in the sum of $20,000. We are preparing a complying agreement and will forward it to you shortly. We are instructed to reject your offer of $0 in respect of pain and suffering pursuant to section 67. Given the agreement relating to the whole person impairment we invite you to reconsider your position. Are you prepared to make an offer for pain and suffering? In the absence of an offer and settlement of the section 67 component we propose to file an application to resolve the dispute in the Commission in relation to pain and suffering." 12 On 21 September 2007 the plaintiff's solicitor forwarded to CGU a Complying Agreement and Medicare Notice of Settlement. This indicated at the end the amount of compensation in respect of s 66 of $20,000, s 67 to be agreed or assessed, costs to be agreed or assessed, total amount of compensation $20,000 plus costs. 13 On 11 October 2007, CGU sent to the plaintiff's solicitor a further letter in exactly the same form as the letter of 3 September 2007 save and except that a figure of $7,500 was inserted for pain and suffering. On 18 October 2007 the plaintiff's solicitor replied noting that the s 66 component was agreed at $20,000 and asking for a cheque and adding: "In the meantime our client instructs us that the offer of $7,500 for pain and suffering is inadequate. We are instructed to place a counter-offer in the sum of $17,500 in respect of the section 67 component." 14 At that stage the insurance company reassessed its situation, a further medical examination was held and it became convinced in its own mind that 15 per cent was too much and has declined to do anything further. 15 Accordingly, the plaintiff has filed this summons in order to enforce the $20,000 alleged agreement in respect of s 66 compensation which summons was filed on 5 March 2008. 16 Questions of construction may impress themselves differently on different minds, however, my job is to endeavour to work out objectively what the parties meant by their correspondence. The critical question is whether the letters of 3 September 2007 and 11 October 2007 make one indivisible offer of compensation under ss 66 and 67 of the Workers Compensation Act or whether they make two distinct offers. If they make only one indivisible offer, then the plaintiff can either accept or reject that offer. The plaintiff cannot accept part. Although there is very little authority which actually says that in black and white, Mr Benson for the plaintiff properly accepts it is so and it follows from decisions such as that of Barrett J in Thomson v Allianz Australia Workers' Compensation (NSW) Ltd [2005] NSWSC 885 and other authorities. 17 Mr Braham for CGU says that one just looks at the wording of the offer document and the accompanying correspondence and it is clear from that that there was only one offer. The offer is said to be in the singular throughout the documents. Furthermore, one must read the offer document in the light of the plaintiff's solicitor's letter of 27 June 2007 which says that there is a claim, not claims under ss 66 and 67 and this is made more stark by then saying, "together with a claim for work injury damages", which indicates that there are two claims, not three. 18 On the other hand, Mr Benson says that, in accordance with authority, one must read the correspondence in the commercial background that was common to both parties. The plaintiff, he says, was represented by experienced workers compensation lawyers. The defendant was an experienced workers compensation insurance company. They spoke the language of workers compensation lawyers and they knew what were the consequences of ss 66, 67 and work injury claims, or at least they thought they did before the decision of the Court of Appeal in JC Equipment Hire Pty Ltd v The Registrar of the Workers Compensation Commission of NSW [2008] NSWCA 43, a judgment delivered on 31 March 2008 after the correspondence in this case and which seems to have altered the standard view held in the industry. 19 Mr Benson says that at that time, that is, September/October 2007, both parties by their representatives knew the significance of the 15 per cent. They probably both thought that that had some relevance to the more substantial claim for work injury damages that would come in due course (a view which appears to have been shattered by the JC Equipment Hire case) and that they both knew that Dr Noel Langley, the defendant's doctor, had assessed the impairment as 15 per cent and they were agreed on that matter. 20 Accordingly, Mr Benson says cases such as Thomson are distinguishable because that was not a matter where there was an agreement on this vital matter and, furthermore, it could not be a matter of compromise because both parties had accepted at that stage that there was a 15 per cent whole person impairment. Accordingly, he says that when one looks at the factual matrix and the background circumstances known to both parties and the way the Workers Compensation Act and the WIM Act operate one can see that there were two separate matters, ss 66 and 67, and, as there were two separate matters, s 66 could have been accepted and was accepted and, accordingly, there was a binding contract. 21 As I say, it is a question of construction, however, I must confess that I cannot see any great distinction between this case and the case decided by Barrett J in Thomson. I do not consider that there is a vital distinction that the 15 per cent at that stage was accepted. Although the factual matrix is important, the words that the parties used are also important and, indeed, they have the greatest significance, especially when the words denoting a singular claim commenced with the plaintiff's own solicitor. 22 In my view, the defendant or CGU made one offer including both elements and it was not open for the plaintiff to accept one and not the other. 23 In reply Mr Benson said that it is not possible to make a global offer under ss 66 and 67 of the Workers Compensation Act. He says that that is contrary to the guidelines in the workers compensation legislation and both parties would have known it. 24 Unfortunately that matter was not pursued, however, it would appear that it is not illegal to make a global offer. It might be irregular, but that in itself, assuming that the guidelines do support what Mr Benson said, would not to my mind be sufficient to weaken the impression one gets from the text of the correspondence that there was one global offer. 25 It follows that the proceedings must be dismissed with costs.

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