Laratae v Dean's Pty Ltd [2016] VSCA 71

ACCIDENT COMPENATION - Finding in application under s 134AB(16)(b) of Accident Compensation Act 1985 that injury was employment related - Whether respondent estopped from contesting causation finding in subsequent proceedings claiming statutory benefits - Trial judge held no issue estoppel - No error in trial judge's conclusion - Application for leave to appeal refused.

1 This case concerns the question of whether a finding by a judge in a serious injury application, brought pursuant to s 134AB(16)(b) of the Accident Compensation Act 1985 ('the Act'), that a worker has suffered an injury arising out of, or in the course of, or due to the nature of, employment, estops the worker's employer from later denying that fact in subsequent proceedings where the worker claims an entitlement to compensation under the Act in respect of the same injury.

2 In the present case, a magistrate, in proceedings brought by a worker (the applicant in this Court) for compensation in respect of a neck injury, held that the finding of a County Court judge that the applicant had sustained a neck injury in compensable circumstances, estopped her employer (the respondent in this Court) from contesting this issue in the Magistrates' Court proceeding.

3 The respondent then sought judicial review of the magistrate's decision. In the judicial review proceeding, a judge of the Trial Division held that the finding by the County Court judge of compensable injury, in the serious injury application, did not give rise to any issue estoppel. The trial judge held that there was no issue estoppel because the County Court judge's decision in the serious injury application was not a final decision.

4 The applicant now seeks leave to appeal (and if leave is granted, to appeal) from the trial judge's decision. The applicant's proposed grounds of appeal (which largely overlap with one another) are as follows:

1. The trial judge ought to have held that the decision of her Honour Judge Bourke given on 17 July 2015 in Case Number CI-10-04979 in the County Court of Victoria and the findings in her Honour's reasons for decision, that the applicant had suffered the neck injury alleged in the proceeding and that it was compensable, gave rise to an issue estoppel which precluded the respondent from contesting, in a proceeding by the applicant against it for compensation under the Accident Compensation Act 1985 in respect of the injury, that the applicant had suffered the injury and that it was compensable.
2. The trial judge was wrong in deciding that the finding of her Honour Judge Bourke as to the causation of the applicant's neck injury did not give rise to any issue estoppel against the respondent.
3. The trial judge was wrong in holding that the County Court had jurisdiction to determine the matter of the causation of the applicant's neck injury only incidentally and for a limited purpose under the relevant legislative provisions.
4. The trial judge was wrong in deciding that the decision of her Honour Judge Bourke in the proceeding, or her finding on the matter of the causation of the appellant's neck injury, was not a final and conclusive determination on the merits.

5 Between October 2005 and December 2008, the applicant was employed by the respondent as a purchasing officer. In February 2008, the applicant lodged a claim seeking compensation pursuant to the provisions of the Act, alleging injury in the course of her employment to her right wrist, forearm and left shoulder. This claim was ultimately accepted and compensation, by way of weekly payments and medical and like expenses, was paid.

6 The applicant subsequently sought compensation in respect of an injury to her neck. Liability in respect of the claimed neck injury was rejected on behalf of the respondent by notice from CGU Workers Compensation (Vic) Limited ('CGU') dated 2 December 2010.

7 By notice dated 2 June 2011, CGU on behalf of the respondent terminated the applicant's weekly payments of compensation, as from 3 September 2011, on the grounds that the applicant had been paid a total of 130 weeks weekly payments of compensation and that she had a current work capacity; alternatively, if she did not have a current work capacity, this was not likely to continue indefinitely.

8 On 15 June 2010, the applicant lodged an application pursuant to s 134AB(5)(a) of the Act claiming that she had a 'serious injury' to her right upper limb, left upper limb, cervical spine and a psychiatric/psychological injury arising out of or in the course of her employment. This application was rejected, and the applicant subsequently commenced a proceeding by way of Originating Motion in the County Court seeking leave pursuant to s 134AB(16)(b) to commence a common law proceeding.

9 The applicant's serious injury application was heard before her Honour Judge K L Bourke over four days in November 2013. The applicant relied upon four affidavits, and gave viva voce evidence. Mr Brownbill (a neurosurgeon upon whose reports the applicant relied) was required by the respondent to attend for cross-examination. The respondent relied upon the affidavits of a number of the applicant's former co-workers. In addition, both parties relied upon medical reports and other material that was tendered in evidence.

10 On 18 February 2014, her Honour granted the applicant leave to commence a proceeding against the respondent in respect of pain and suffering damages only for injury suffered during 2008 in the course of the applicant's employment with the respondent, and also gave written reasons for her judgment.[1]

11 One of the issues in the serious injury application was whether the applicant had suffered injury to her neck within the meaning of the Act. This issue was determined in the applicant's favour by the County Court judge.[2] Having analysed the evidence, her Honour said that she was satisfied that the applicant's work duties 'were a cause of her present neck condition'.[3]

12 The applicant commenced, and has on foot, a proceeding in the Magistrates' Court seeking, inter alia, acceptance of liability for a cervical spine injury as an injury within the meaning of the Act. In the Magistrates' Court proceeding, the applicant asserts that the respondent is estopped from disputing that the applicant has suffered a compensable injury to her cervical spine. The estoppel contended for by the respondent is alleged to arise from the finding made by the County Court judge that the applicant suffered a compensable injury to her neck. In its defence, the respondent denies that any such estoppel exists.

13 In the Magistrates' Court proceeding, the applicant gave notice of an intention to refer medical questions to a medical panel pursuant to s 45(l)(b) of the Act. There was an issue between the parties as to whether the medical panel should be asked a question in the form 'Was employment in fact, or could it possibly have been, a significant contributing factor to the said cervical spine injury?'. On 8 October 2014, the issue of whether this question could or should be referred to a medical panel was argued before Ginnane M. The issue was whether, as a result of the order and the finding of the County Court judge regarding the applicant's neck injury in her serious injury application, the respondent was estopped from contesting the compensability of the neck injury in the Magistrates' Court proceeding.

14 On the hearing of the preliminary question in the Magistrates' Court proceeding, the proposed questions for the medical panel, the reasons of the County Court judge, and the pleadings were tendered. No other material was tendered before the magistrate.

15 On 17 October 2014, the magistrate ruled that the respondent was estopped from denying that the applicant's neck injury was caused in compensable circumstances. His Honour said, 'In this case, for the reasons I have expressed I am satisfied that the [respondent] is estopped from contesting the cervical injury and so question 2 is not a proper question to be sent to a Medical Panel.'[4]

16 The Magistrates' Court proceeding was otherwise adjourned to a mention on 31 October 2014, at which time the magistrate made an order referring medical questions to a medical panel (such medical questions not including the question of the compensability of the applicant's neck injury). The magistrate then stayed that order pending further order.

Section 134AB of the Act

17 Section 134AB of the Act governs the recoverability of common law damages by a worker who suffers an employment related injury between 20 October 1999 and 30 June 2014.[5] At the time of the applicant's s 134AB application, s 134AB(1) relevantly provided:

A worker who is ... or may be, entitled to compensation in respect of an injury arising out of or in the course of, or due to the nature of, employment on or after 20 October 1999 -

(a) shall not, in proceedings in respect of the injury, recover any damages for non-pecuniary loss except -

...

(iii) ... as permitted by and in accordance with this section; and

(b) shall not, in proceedings in respect of the injury recover any damages for pecuniary loss except -

...

(ii) ... as permitted by and in accordance with this section.

18 In order to succeed in an application under s 134AB, a worker is required to prove on the balance of probabilities that the injury propounded as a serious injury arose out of or in the course of, or due to the nature of, the worker's employment. This requirement necessitates proof by the worker of a causal link between the worker's employment and the claimed injury.[6]

19 As originally enacted, s 134AB contained sub-s (19). Subsection (19) relevantly provided:

For the purposes of subsection (16)(b) - ...

(c) no finding (other than a finding that the injury is a serious injury) made on an application for leave to bring proceedings shall give rise to an issue estoppel.

20 Section 134AB(19) was the subject of analysis in Norris v Brumar (Vic) Pty Ltd.[7] In Norris, the trial judge ruled that s 134AB(19)(c) of the Act gave rise to an estoppel in the common law damages proceeding that was brought after a decision favourable to the worker in the worker's s 134AB(16)(b) application. Specifically, the trial judge held that the employer was precluded from arguing in a common law damages claim that, as at the date of the hearing of the serious injury application in the County Court, the worker did not suffer from a serious injury; the serious injury in that case being a permanent severe mental or permanent severe behavioural disturbance or disorder. The trial judge's ruling in Norris was delivered on 1 June 2009.

21 On 23 March 2010, the Accident Compensation Amendment Act 2010 ('the 2010 Act') was assented to. By ss 57(2) and (3) of the 2010 Act, (which sections came into force on 10 December 2009), s 134AB(19)(c) was repealed and sub-s (19A) was enacted. Subsection (19A) provides:

Any finding made on an application for leave to bring proceedings in respect of the injury does not give rise to an issue estoppel in any proceedings for the recovery of damages brought in accordance with this section which is heard and determined on and from the commencement of section 57(3) of the Accident Compensation Amendment Act 2010.

22 On 25 August 2010 (after the enactment of the 2010 Act), this Court heard an appeal in Norris and a related case stated proceeding of Brown v Maurice Blackburn Cashman.[8] In Brumar, this Court held, by reference to s 134AB(19)(c), as applicable in

22 the circumstances of the case, that the trial judge in Norris did not err in ruling that there was an estoppel created in favour of the worker on the issue of serious injury.

23 While the decision in Norris was not the subject of any further appeal, the employer in Brown v Maurice Blackburn Cashman obtained special leave to appeal, and appealed, to the High Court. In Maurice Blackburn Cashman v Brown,[9] the High Court considered the operation of s 134AB(19)(c) and said:

The introductory words of sub-s (19), '[f]or the purposes of sub-section (16)(b)', do not sit easily with para (c) of sub-s (19). Paragraph (c) of sub-s (19) was evidently intended to look forward from the proceedings (seeking leave) with which sub-s (16)(b) dealt. Paragraph (c) of sub-s (19) 'looked forward' in the sense that it was concerned with what estoppels (necessarily in proceedings other than the leave proceeding) could arise from findings made in a leave proceeding. To speak of these provisions being made for the purposes of the provision governing the leave proceeding would be apposite only if some meaning were to be given to the phrase 'for the purposes of' wider than it might normally have.

It is not necessary to decide in this case whether that should be done. In this case, no application for leave to commence proceedings was made or was necessary. The plaintiff was deemed by operation of s 134AB(15) to have a serious injury. It is important to notice, however, that if s 134AB(19)(c) were to be construed as speaking to proceedings other than leave proceedings brought under s 134AB(16)(b), the only estoppel that could arise from the determination of an application for leave would preclude debate about whether there was a finding that the injury in question was a serious injury.[10] That is, the preclusion provided by s 134AB(19)(c) would prevent a defendant in the common law proceeding from disputing that a plaintiff had met the first of the two conditions prescribed by s 134AB(2). That preclusion would not prevent the defendant from disputing whatever may have been the factual bases upon which a conclusion had been reached that the plaintiff had suffered a serious injury.[11]

24 In his reasons for decision, the magistrate set out and analysed the relevant authorities that have dealt with issue estoppel. Relying upon the House of Lords' decision in Carl Zeiss Stiftung v Rayner & Keeler Ltd (No 2),[12] the magistrate identified the following three requirements in order for an issue estoppel to exist:

(1) that the same question has been decided;

(2) that the judicial decision which is said to create the estoppel was final; and

(3) that the parties to the judicial decision or their privies were the same persons as the parties to the proceeding in which the estoppel is raised or their privies.[13]

25 The issue before the magistrate was whether the County Court's s 134AB decision was final. The magistrate rejected the respondent's submissions that the decision was not final. His Honour said:

I do not accept the defendant's submission that the decision by her Honour Judge Bourke is not a final decision within the purport of the ordinary meaning of that expression because of the existence of s 134AB(19A) of the Act. Her Honour made an express finding of fact that it is not proper to contest.

It strikes me to be highly artificial to treat the clear factual finding made by her Honour as not constituting a final decision because the found fact relied upon occurred in the course of the determination of a serious injury application. In my view the litigation before her Honour may be classified as falling within that class of case described by Lord Diplock in Thoday v Thoday.[14]

26 In her reasons for judgment, the trial judge analysed the authorities dealing with issue estoppel, the history of s 134AB and the authorities dealing with that section. The trial judge disagreed with the magistrate, concluding that the magistrate's reasoning constituted an error of law.[15] Her Honour concluded that the finding by Judge Bourke on the s 134AB application as to the causation of the applicant's injuries did not give rise to any issue estoppel for two reasons:

First, I do not consider that her Honour had jurisdiction to determine this matter other than incidentally and for a limited purpose under the relevant legislative provisions. Secondly, as a result of s 134AB(19A), this finding is able to be re-litigated in a subsequent proceeding for damages and, as a result, is not a final and conclusive determination on the merits.[16]

27 Her Honour granted the respondent's application for orders in the nature of certiorari and remitted the proceeding to the Magistrates' Court 'for the referral of all the medical questions to the medical panel under [the Act]'.[17]

28 The issue in the present case is whether or not the s 134AB decision made in the County Court was a final decision for the purposes of the doctrine of issue estoppel. It has been well settled since this Court's decision in Dodoro v Knighting[18] that an order granting leave, or refusing to grant leave, to bring a proceeding in an application made under s 93 of the Transport Accident Act 1986 (a relevantly identical statutory provision to s 134AB of the Act),[19] is an interlocutory order.[20]

29 However, the question of whether a particular determination is made in the course of interlocutory proceedings is not necessarily conclusive as to whether or not the determination gives rise to an issue estoppel.[21] As Holmes JA[22] said in Castillon:

Decisions made for the purpose of determining whether an order is final rather than interlocutory so as to give a right of appeal are not, as Handley JA, writing extra-curially has pointed out, necessarily of assistance. As much can be seen from the rationale given in Carr v Finance Corporation of Australia Ltd [No 1] for the approach taken in that context. Gibbs CJ observed that the test in Licul v Corney, of whether the judgment or order appealed from finally determined the rights of the parties, required the court to have regard to the legal, as opposed to the practical, effect of the judgment. Otherwise uncertainty would result, and in some instances the court would have to investigate the facts and the course of the proceeding in order to determine the practical effect of the order;

an inquiry quite inappropriate when the only issue is whether a right of appeal exists.

Mason J similarly regarded the disadvantage of having to undertake

an examination of the grounds on which the application to set aside was made, the grounds on which it was refused and the formation of a judgment as to the impact of the grounds of refusal on the prospects of bringing a second application

as militating against such an approach to classification in determining whether an appeal lay as of right. But such an exercise is, in contrast, appropriate in determining whether an issue estoppel exists; then, it is necessary to consider precisely what was decided and its actual effect in binding the parties.[23]

30 While the fact that, in order to succeed in an application under s 134AB of the Act, a worker must establish that his or her claimed injury is employment related, it is plain from sub-s (19A) that the legislature has not invested the court hearing that application with jurisdiction to finally determine that question of causation.[24] If leave is granted under s 134AB, the question of whether the worker's claimed injury is employment related remains one to be determined by the court that hears the worker's claim for damages.

31 The applicant submitted that the history surrounding the repeal of

sub-s (19)(c) and the enactment of sub-s (19A) was important. At the time when sub-s (19)(c) was in force, Brumar held that there was an estoppel in relation to serious injury findings made in applications under s 134AB(16)(b). The applicant submitted that in repealing sub-s (19)(c) and enacting what was said to be the more limited sub-s (19A), the Parliament did not preclude estoppels arising for the purposes of proceedings in which relief other than common law damages was sought. It was submitted that one cannot read sub-s (19A) so as to provide for the abolition of issue estoppels in a wider group of proceedings than those specifically referred to in sub-s (19A). So much may be accepted. However, it is not a reading of sub-s (19A) so as to give that sub-section operation beyond the terms of its text that tells against the existence of the estoppel claimed by the applicant in this case. Rather, it is the fact that when one construes s 134AB (including, as it does, sub-s (19A)), one comes to the conclusion that Parliament did not intend that findings made along the way to the determination of a serious injury application would be finally determined so as to preclude them being re-litigated subsequently. It is to be remembered that serious injury applications are trials on affidavit where witnesses are ordinarily not able to give viva voce evidence unless the party not calling the relevant witness has given a notice requiring that witness to attend for cross-examination. Further, as the practice notices that have existed in respect of these applications show, these applications have traditionally been conducted in a way that limits the ability of parties to engage in fully contested hearings in the sense that there is a significant reliance upon affidavits, medical reports and other documents, while the times for adducing oral evidence or cross-examining witnesses are held under tight control by the judges who hear these applications.[25]

32 Further, as was submitted by the respondent, the acceptance of the applicant's submissions would result in the potential for the creation of two conflicting and mutually exclusive issue estoppels. If the applicant was to pursue a common law claim for damages, pursuant to the leave granted by the County Court judge, to a final conclusion, the court hearing the common law claim for damages might determine that the applicant's claimed injury was not employment related (s 134AB(19A) preventing the applicant in her common law claim from relying upon any issue estoppel said to have been created by the judgment in the serious injury application). The finding on the applicant's damages trial would then give rise to an issue estoppel that is to the opposite effect of that for which the applicant now contends. By its very nature there cannot be the possibility of conflicting issue estoppels arising out of the one court between the same parties in related litigation.

33 In the course of oral argument, the applicant submitted that to hold that there was no issue estoppel in relation to a causation finding made in a serious injury application would work unfairness upon workers and advantage the respondents to such applications. There is no substance in this submission. If the estoppel for which the applicant contends is one that is capable of arising in a serious injury application then, in a case where the judge hearing the application finds against the worker on causation, an estoppel would arise to the worker's detriment - resulting in the worker not only losing his or her serious injury application but also any entitlement to compensation payments pursuant to the provisions of the Act.

34 For these reasons, there is no substance in the applicant's contention that the County Court judge's finding on causation in the s 134AB application gave rise to an issue estoppel. The applicant's proposed appeal has not been shown to have any real prospect of success. Accordingly, the application for leave to appeal must be refused.[26]

[1] Laratae v Deans Pty Ltd [2014] VCC 103 ('County Court Reasons'). The County Court judgment records the respondent's name as 'Deans Pty Ltd', whereas in the Magistrates' Court, the Trial Division and this Court, the respondent's name contains an apostrophe.

[4] Laratae v Dean's Pty Ltd (Unreported, Magistrates' Court of Victoria, Ginnane M, 17 October 2014) ('Magistrates' Court Reasons') [35].

[5] The recoverability of common law damages in respect of employment related injuries suffered on or after 1 July 2014 is governed by Division 2 of Part 7 of the Workplace Injury Rehabilitation and Compensation Act 2013.

[6] Borazio v State of Victoria [2015] VSCA 131 [63] (Tate, Osborn and McLeish JJA).

[7] [2009] VSC 214 ('Norris').

[8] Brumar (Vic) Pty Ltd v Norris; Brown v Maurice Blackburn Cashman (2010) 28 VR 665 ('Brumar').

[9] [2011] HCA 22; (2011) 242 CLR 647 ('Maurice Blackburn').

[10] Dwyer v Calco Timbers Pty Ltd [2008] HCA 13; (2008) 234 CLR 124, 130 [11].

[11] Maurice Blackburn [2011] HCA 22; (2011) 242 CLR 647, 657 [25]-[26] (citation in original).

[12] [1967] AC 853 ('Carl Zeiss').

[13] Magistrates' Court Reasons [17].

[14] Ibid [33]-[34]. The Magistrate's reference to what was said by Lord Diplock in Thoday v Thoday was a reference to a passage in that case at [1964] P 181, 196.

[15] Dean's Pty Ltd v Laratae [2015] VSC 341 [76] ('Reasons').

[18] [2004] VSCA 217; (2004) 10 VR 277 (Winneke P, Charles, Callaway, Buchanan and Eames JJA) ('Dodoro').

[19] But cf s 134AC of the Act that provides that, for the purposes of an appeal to this Court, a decision granting or refusing leave under s 134AB(16)(b) is taken not to be an order or judgment in an interlocutory application.

[20] Dodoro [2004] VSCA 217; (2004) 10 VR 277, 279 [3] (Winneke P), 279 [6] (Charles JA), 281-4 [16]-[24] (Callaway JA), 285 [32] (Buchanan JA), 287 [43] (Eames JA).

[21] Castillon v P & O Ports Ltd (No 2) [2007] QCA 364; [2008] 2 Qd R 219, 235-8 [49]-[58] (Holmes JA) ('Castillon').

[23] Castillon [2007] QCA 364; [2008] 2 Qd R 219, 238 [58] (citations omitted).

[24] See Ex parte The Amalgamated Engineering Union (Australian Section); Re Jackson [1937] NSWStRp 53; (1937) 38 SR (NSW) 13, 19-20 (Jordan CJ); Torrisi v Oliver [1951] VicLawRp 54; [1951] VLR 380, 383 (Coppel AJ).

[25] We note that the current County Court practice note governing serious injury applications (PNCLD 1-2016) provides, at paragraph 85, that 'No witness, other than the plaintiff, will be permitted to be cross-examined, save for the leave of the trial judge'.

[26] Supreme Court Act 1986 s 14C.