Linke v WorkCover Corporation

The worker's case in support of the application and consequential finding

1. In his oral evidence the worker confirmed that his understanding that the Medical Panel's opinion was binding, was as a result of advice given to him by his solicitor, Mr Field.
2. Mr Field, in his affidavit dated 1 November 2011[1], recited the following:

"Upon receiving a copy of the Opinion of the Medical Panel I corresponded with the worker advising him that a challenge of the Medical Panel's decision could only be mounted in the Supreme Court of South Australia with respect to a question of law.

I provided this advice on the understanding that the current law with respect to the binding finality of the decisions of Medical Panels SA was settled (pursuant to Section 98H(4) of the Act) and that the Panel's decision was final and conclusive. As a consequence of this, the worker accepted my advice and he consented to the Orders of the Workers Compensation Tribunal of 30 March 2010, confirming the decision of the Compensating Authority dated 7 January 2010. ...

Execution of the Orders occurred subject to the following chronology; draft consent Orders were sent by Minter Ellison Lawyers to me on 22 March 2010. I signed the Orders on 24 March 2010. I then forwarded the Orders to Minter Ellison Lawyers whose representative signed on 29 March 2010. The orders were signed and sealed by the Workers Compensation Tribunal's presiding Conciliation Officer on 30 March 2010."

"1. The decision of the compensating authority dated 7 January 2010 made pursuant to Section 43 is confirmed.

1. The worker is entitled to costs of the proceedings (fixed at $1,500.00) and reasonable disbursements."
2. Mr Field in his affidavit then said:

"An application to set aside the Consent Orders is sought as a consequence of the decision of the Full Bench of the Supreme Court of South Australia handed down on 27 June 2011 in the matter of Yaghoubi and Campbell[2].

The worker contends that the Medical Panel's assessment of his whole person impairment should not be binding and that the opinion of Dr Blight should not be discounted.

We therefore seek an Order pursuant to Section 88H(1)(c) of the Workers Rehabilitation and Compensation Act 1986 setting aside the Orders of the Tribunal in the interests of justice and on the basis that the worker would otherwise be substantially and irreversibly prejudiced."

1. Mr Field, in cross-examination, said that his view about the binding nature of the Medical Panel opinion was based on his interpretation of the legislation, his conversations with his colleagues and following general discussions with counsel. He did not formally seek counsel's opinion on the matter because of the cost involved. He recalled attending a "Both Sides of the Fence" conference in late 2009 and in a general sense recalled that an interstate barrister gave a paper on challenges to Medical Panels' decisions.
2. During the evidence of Mr Field the following exchanges occurred:

MR DURKIN: When you had that understanding, you're providing that advice to your client, do you know that you have an opinion of Dr Blight that there is a six percent WPI, and why have you formed this opinion, given this advice to your client, in the face of the medical panel's opinion of a four per cent WPI?

1. My understanding of the law at the time, my understanding generally of the law at that stage, was that the opinions of the panel were binding upon the worker, upon the compensating authority and upon the tribunal, and that the only element of challenge that could be brought against an opinion of the panel was on a question of law. As such, I considered that because the opinion of the panel did not, on its face, demonstrate an abuse of process in terms of the panel's approach to the matter, that there was no real means of taking the matter further or challenging it through the Supreme Court and, as such, the panel opinion was binding on us.

MR DURKIN: And vis a vis Dr Blight's and the medical panel's opinion, you said that your view of the law was that the medical panel's opinion was final, and that view of yours was based on the text of the act?

JENNINGS P: Do you agree that there was no case law, at that time, which supported that view?

1. Well, your Honour, I agree that there wasn't a case law but under the strict reading of the legislation at the time the panel's opinions were binding on the parties.

JENNINGS P: Were you aware at that time there were other solicitors who were agitating a different view?

1. Of course, your Honour, but looking at matters pertaining to our clients' situations and weighing the potential costs associated with challenging a decision through the Supreme Court, the costs associated with such a task were weighing heavily on me in terms of the advice that I was providing to my clients. ...

JENNINGS P: If you're aware that other solicitors were agitating a contrary view, might it have not been more prudent to have deferred signing consent orders pending the outcome of any other challenges, or potential challenges?

1. At that time, in the very early stages of these referrals to the panel, I wasn't fully aware that there were other firms challenging the binding nature of the opinions. My understanding was that there were firms challenging it to the Supreme Court through the mechanism of the legislation, not so much shall we say on hardship grounds or abuse of process, and that they were going through the avenues available, which were the Supreme Court, to challenge the decisions. The clients that I had at the time in similar situations and Mr Linke, the costs of pursuing that process, and our understanding was that the worker had to bear those costs.

JENNINGS P: I understand that point of view, but the question was wouldn't it have been prudent to have awaited the outcome of some of those other challenges, rather than signing consent orders?

1. In hindsight it's hard to say, your Honour. Perhaps it would have been but the issue that was in our minds, and in the minds of my colleagues, was that some of these matters may well be years in reaching conclusion, and that it may well not benefit the clients that we had at the time to defer finalising matters in the best way that we could at that time. So we were trying to make the best of a, shall we say, bad situation, your Honour."

1. Mr Durkin, counsel for the worker said the wording and literal interpretation of s 98H(4) of the Act lent itself to virtually no other conclusion to that reached by Mr Field at the time. In support thereof he referred to the evidence of Ms Palios, solicitor for the Compensating Authority, who also was of the view based on her reading of the legislation at the relevant time that the Medical Panel opinion was binding. He said there was a "meeting of the minds" of both parties which turned out to be a mistake "not because a later court overruled a previous court, but because the Supreme Court said that the plain face of the words in s 98H(4) are not to lead to conclusions, which on their clear face, they suggest they ought to"[3]. He described the Supreme Court decision as "most curious".
2. As to my suggestion to Mr Field that it might have been prudent to await the outcome of any legal challenge, he submitted there was no registry that could be consulted to check on cases that had been referred to higher courts. He said that once the Supreme Court decision in Yaghoubi was handed down Mr Field acted promptly in filing this application. He relied in support of his application on the following passage of Judge Hannon in Holliday v Unisure Pty Ltd[4]:

"The power is expressed widely and without limitation and may be exercised when the interests of justice require; [secondly,] the notion of the 'interests of justice' involves flexibility and a consideration of the dictates of the individual case and of the participants in each case; [and thirdly,] the power is discretionary and given the desirability of finality and of an end to litigation, it should be exercised sparingly, cautiously and only with 'good cause'."

1. He submitted that the worker may have lost an opportunity to be properly compensated under s 43 of the Act "as the Parliament had intended because of the exceptional circumstances of the confluence of the events and the subsequent decision of the Supreme Court"[5].
2. According to Mr Durkin, if Dr Blight's s 43 expense was accepted it would mean an assessment or compensation of a sum in the order of $10,000 to $11,000 in his favour.
3. Mr Black, counsel for the Compensating Authority, opposed the application: he submitted that his client would be prejudiced if it were granted. He asserted that the Medical Panel opinion was manifestly correct and Dr Blight's opinion was wrong, such that even if this application was granted the worker would fail on any merits hearing and the Compensating Authority's determination would stand.
4. Mr Black also submitted that it was Mr Field and not Ms Palios who took the view that the Medical Panel's opinion was binding and he acted on it.
5. Mr Black submitted that there is no suggestion here that the Compensating Authority in any way acted improperly in recording the consent orders. Mr Black pointed out that the consent orders were entered into on the instructions of Mr Field based on his interpretation of s 98H(4) of the Act.
6. This is the worker's application. The focus of the Tribunal on whether it is in the interests of justice to set aside the order must be based upon the respective positions of the parties.
7. The only significance of Mr Field's conduct is that he presented as a competent solicitor who gave very conservative advice about the Medical Panel when others might have advised to at least await the outcome of Yaghoubi. The worker acted upon that advice in giving instructions to consent to the confirmation of WorkCover's determination.
8. As with the exercise of any discretion there is no encyclopaedic list of relevant factors (Santos Limited v Workers Rehabilitation and Compensation Corporation[6]). However the Full Bench of the Tribunal in Bunney v Department for Education and Children's Services[7] and State of South Australia (Primary Industries & Resources SA) v Wenham[8] has stressed that there is a significant personal and public interest in there being finality to litigation.
9. The Full Bench in Wenham said:

"The statutory framework in which the respondent brought her s 88H application is important. The Act encourages parties to resolve disputes concerning compensation entitlements by compromise. For this purpose the calling of a conciliation conference is compulsory (s 92B). Full and frank participation is encouraged by limits upon the disclosure of things said and done at conciliation in subsequent proceedings (ss 92C(3) and (4)). A party is entitled to representation by counsel or another representative at a conciliation conference, and if such representative agrees to a settlement at such a conference that settlement is binding on that party (s 92C(5)). The Conciliator is authorised to make a determination or order to give effect to a settlement and that order becomes a determination or order of the Tribunal (ss 92C(6) and (7)).

A consent order made in such circumstances provides finality of the particular Notice of Dispute lodged by the claimant. Contrary to the position adopted by the learned Deputy President, by which he sought to distinguish this compensation scheme from the finality required in civil litigation, the finality of a particular Notice of Dispute is no less significant in an Act which envisages a claimant making multiple or successive claims for a variety of entitlements provided by the Act. Each filed Notice of Dispute must be resolved either by agreement which is then embodied in a consent order, or by adjudication by the Tribunal embodied in its order.

In the normal course of events a consent order of the Tribunal, following settlement of a Notice of Dispute achieved between the parties at conciliation, complies with the well settled rule referred to by Barwick CJ in Bailey v Marinoff [1971] HCA 49; (1971) 125 CLR 529 at 530:-

'Once an order disposing of a proceeding has been perfected by being drawn up as the record of a court, that proceeding apart from any specific and relevant statutory provision is at an end in that court ...'.

This rule accords with the public interest requirement that litigation should not proceed interminably. In the context of this Act it also allows a claimant's various entitlements to be determined on a firm and certain footing. By way of example an order of the Tribunal which resolves a dispute about the setting of notional weekly earnings will then underpin the claimant's further entitlements to weekly payments after one year of incapacity (s 35) for economic adjustments (s 39), and on a two year review (s 38). If, as part of the Tribunal's order in relation to a particular entitlement, the relevant disability is identified as compensable pursuant to s 30 of the Act, the claimant will not usually be required to re-establish compensability for other entitlements related to that disability. The finality and certainty of the Tribunal's orders are essential for the integrity of the compensation scheme erected by the Act and the effectiveness of the dispute resolution process.

Another important aspect of the conciliation process specified in the Act is the statutory acknowledgement of the binding nature of a settlement agreed by a party's counsel or representative. Although it is well settled that a party's legal representative has ostensible authority as between that representative and the client's opponent to compromise the proceedings (Halsbury's Laws of Australia Vol 16 par 250 - 480), s 92C ensures that a non-legal representative can similarly participate in conciliation and conclude an effective binding settlement. A compromise made by counsel or other representative at conciliation underpins a subsequent consent order.

'A consent judgment or order is meant to be the formal result and expression of an agreement already arrived at between the parties to proceedings embodied in an order of the Court' (Wilding v Sanderson (1897) 2 Ch 534 at 543 per Byrne J).

Whilst in the normal course of events the consent order once made cannot be set aside, s 88H provides the Tribunal with a residual discretion to do so if the interests of justice require it. That test might involve a number of considerations of the kind referred to by the learned Deputy President in his judgment, by the decision of the single Member in Bunney (supra), and the Full Bench on appeal in that case (supra). These might include whether there is an arguable case at stake, the timeliness of the application, the prejudice to the respective parties if the order is set aside or is not set aside, and the public interest requirement of finality.

However, the first consideration will be the nature and quality of the agreement reached between the parties because irregularity in that agreement might be a predominant indicator warranting the setting aside of the consent order.

Albeit in different circumstances (there was no general discretion to set aside a consent order), the High Court in Harvey v Phillips [1956] HCA 27; (1956) 95 CLR 235 at 243 - 4 said:-

'The question whether the compromise is to be set aside depends upon the existence of a ground which would suffice to render a simple contract void or voidable or to entitle the party to equitable relief against it, grounds for example such as illegality, misrepresentation, nondisclosure of a material fact where disclosure is required, duress, mistake, undue influence, abuse of confidence or the like.'

In acknowledgement of this principle, we think the correct position pursuant to s 88H is that if that underlying agreement could itself be rescinded, then the interests of justice may require the setting aside of the consent orders. However, absent a ground for rescission, there would need to be other exceptional circumstances before the Tribunal would exercise its discretion to set aside or amend the consent order. This is consistent with the approach taken by McCusker DPJ in his reasons for judgment in the Full Bench decision of Kowalski v Mitsubishi Motors Australia Ltd [2002] SAWCT 76, in which he relied upon Paino v Hofbauer (1988) 13 NSWLR 193 as authority for the requirement of exceptional circumstances. It is to be noted that the other Members of the Full Bench in Kowalski (supra), in separate judgments, also dismissed the appeal and did not disagree with the approach referred to by McCusker DPJ.

Such an approach is also consistent with the Full Bench decision in Bunney (supra) in which the majority (Jennings PJ and McCouaig DP) upheld the decision at first instance that there was no error in the exercise of the discretion in circumstances where the employer did not act improperly in the negotiation of the compromise, there was no misunderstanding between the parties in their compromise, and the only misunderstanding was between the appellant in that case and his representative. The effect of the judgment of the majority was to highlight the regularity of the agreement reached and the absence of exceptional circumstances justifying the setting aside of the consequential order. Hannon DPJ, who was in the minority in that case, decided it on a different issue namely, that there was no agreement between the parties on an important aspect of the consent order.

In this instance the findings of the learned Deputy President do not identify any aspect of the agreement which would justify it being set aside on contractual or equitable principles. The appellant did not act inappropriately or in breach of its statutory obligations in the conduct of the negotiations (judgment par 78). It was bargaining in good faith."

1. In other words if there is give and take the law seems settled that absent exceptional circumstances the parties will be held to the bargain that they have struck.
2. Although it might be said that what might distinguish this case from other cases is the fact that there does not appear to have been bargaining or compromise, I do not think the facts bear that out.
3. It is true that the worker simply abandoned his s 43 claim. But there was also an issue about costs.
4. The letter of advice that Mr Field gave to his client talked about costs and an attempt to maximise recovery. That seems to suggest that there was an expectation of a solicitor/client cost component.
5. Mr Field claimed $1,500 by way of costs. WorkCover agreed that amount without any apparent argument and the effect of what Mr Linke said in his evidence is that this resulted in all of his costs being covered.
6. I think the irresistible inference to draw, and I would find as a fact, that there was give and take. WorkCover agreed the costs as claimed as part of the bargain to see its decision confirmed.
7. The true status of a Medical Panel opinion is yet to be resolved. The best that can be said for the worker is that he now has been advised that the position regarding the Medical Panel's opinion might not be as clear cut as it appeared. There is however no reason to think that it must be wrong. All that can be said is that it is conceivable that the setting aside of the order and listing this matter for a full hearing possibly could produce a different outcome.
8. In the words of Wenham the worker's counsel does not identify any aspect of the agreement which would justify it being set aside on contractual or equitable principles. WorkCover did not act inappropriately or in breach of its statutory obligations in the conduct of the negotiations. It bargained in good faith.
9. In my view nothing that has been put would justify the conclusion that it is in the interests of justice to set aside the consent order.

Parties are advised that if a party wishes to appeal against any part of this decision which is appealable pursuant to s 86(1) of the Act such appeal must be filed with the Registrar in accordance with the form titled Notice of Appeal within 14 days of the delivery of this decision and must be served on all parties.

It is the practice of this Tribunal to publish its reasons for decision in full on the Internet. If any party or person contends that these reasons for decision should not be published in full the party or person must make an application within seven days of the delivery of these reasons. The application shall be by an Application for Directions with a supporting affidavit and should be addressed to the presiding member(s). If no such application is lodged within the time specified these reasons will be published in accordance with the Tribunal's usual practice.

[2] Campbell v M & I Samaras Pty Ltd & Employers Mutual Ltd; Yaghoubi v BDS People Pty Ltd & Employers Mutual Ltd [2011] SASCFC 58

[4] [2007] SAWCT 65

[6] (1998) 199 LSJS 83

[7] [2004] SAWCT 77

[8] [2006] SAWCT 28 paras 42-52