[1993] TASSC 104
General information, not legal advice.
Supreme Court of Tasmania
1993-09-30
Crawford J
Original judgment source is linked above.
Workers' Compensation - Contracting out and discharge of claims - Agreement for lump sum in settlement of any claims for damages and in extinguishment of further claims to compensation - Agreement valid - Registration under s39 not required - Right to compensation extinguished.
Workers' Compensation - Alternative rights against employer for damages - Agreement for lump sum in settlement of any claims for damages and in extinguishment of further claims to compensation - Settlement effective and compensation rights extinguished. Workers Compensation Act 1988, ss39(1) (2) (6), 42(1), 133(2) (3). Lovell v Wolpers and Law Nominees Pty Ltd referred.
CRAWFORD J The appellant claims that she suffered a back injury arising out of and in the course of her employment by the respondent when on 2 September 1991 she stepped on a toy train at a child care centre. She claimed compensation under the Workers Compensation Act 1988. The respondent disputed its liability to pay compensation and referred the dispute to the Workers Compensation Commissioner, pursuant to s81(2)(b). That section was subsequently repealed and replaced by the Workers Compensation Amendment Act 1992 which commenced on 21 December 1992. On 21 October 1991 the Commissioner determined under s81(3)(b) that he considered that a genuine dispute existed and that s81(1) did not apply.
2. By a form of application dated 12 November 1991 the appellant applied to the Commissioner "to hear and determine ... my claim for compensation for an injury arising out of and in the course of my employment". By another form of application dated 22 November 1991 the appellant applied to the Commissioner in the following terms:
"1 To determine whether my employer the Burnie City
Council and its licenced insurer, MMI-CMI Insurance
Limited is liable to pay to or for or on my behalf as
compensation the reasonable expenses incurred by me, as a
result of my injuries sustained in the course of my
employment with the Burnie City Council namely travelling
expenses incurred by me in attending Mr Einoder
Orthopaedic Surgeon on the 3rd day of September, 1991, and
the 15th day of November, 1991 together with all
pharmaceutical expenses. I claim that the travelling
expenses incurred by me in attending Mr Einoder were
necessarily incurred and relate to an injury sustained by
me in the course of my employment. I claim that the
pharmaceutical expenses were related to my injuries.
2 To determine the genuine dispute between the parties
as to whether a claim for worker's compensation exists.
3 To determine what rehabilitation services should be
provided to me as a result of my injuries arising out of
and in the course of my employment."
3. Both forms of application stated that they were made pursuant to the provisions of s42.
4. Both applications came on for hearing before the Commissioner on 18 December 1991. The solicitor for the appellant informed the Commissioner that the application dated 12 November 1991 was "made" by a Mr Dodds, who was a union representative. He said that the application dated 22 November 1991 had been lodged by him on behalf of the appellant because he did not have notice of the first application. It appears from the transcript of the hearing on 18 December 1991 that it was common to all parties that the appellant had injured her back in about 1975 and that although she suffered an injury at work in September 1991 as claimed by her, its effects were claimed by the insurer of the respondent, and presumably by the respondent, to have ended and it was asserted against her that any disability currently suffered by her arose because of her pre-existing back injury, which was not work related. There was insufficient medical information to hand and the Commissioner adjourned the hearing indefinitely.
5. Negotiations then took place between the appellant and the respondent, or its insurer, and she agreed to accept $8,300 in settlement. On 17 January 1992 she signed an agreement, the parties to which were her, the respondent and its insurer. The agreement recited her claim that on 2 September 1991 she suffered injury by accident arising out of and in the course of her employment with the respondent in the form of a jarring injury to the spine when she stood on a toy train, that she claimed "continuing benefits" pursuant to the Act in respect of the injury and that without any admission of liability it had been agreed between the parties that the respondent and the insurer would pay her $8,300 "in full settlement of all claims which the Releasor or any person claiming through or under her now has or at any time hereafter but for the execution of this Deed might have had in respect of or in any way arising out of or connected with the said accident or the said injury, whether by way of damages, workers compensation or otherwise however (sic)". The agreement then stated:
"... that in consideration of the sum of eight thousand
three hundred dollars ($8,300) now paid to the Releasor by
the Employer and the Company (the receipt of which the
Releasor hereby acknowledges) the Releasor hereby accepts
same in full accord and satisfaction for any claims for
damages in respect of the said injury AND FURTHER the
Releasor agrees that all further claims for compensation
in respect of the injury are extinguished and the
Releasor hereby releases and forever discharges the
Employer and the Company and each of them from all claims,
demands, suits, actions, causes of action and other claims
of every description or nature which the Releasor or any
person claiming for or under her, whether pursuant to any
statute or otherwise whosever now or at any time hereafter
but for the execution of this Deed might have had or have
in the future pursuant to the provisions of the Workers
Compensation Act 1988 or otherwise in any way relating to
or arising out of the said accident or the said injury and
indemnifies and agrees at all times hereafter to keep
effectually indemnified each of them, the Employer and the
Company against all suits, actions, causes of action or
other claims either now or in the future in respect of all
and any matters related to or arising out of the said
accident or the said injury save and except, her own
superannuation entitlements and death and disability
insurance in the event of her being totally and
permanently disabled."
6. The agreement was not registered under s39 at any time. The section was in the following terms:
"39-(1) Subject to subsection (2), a claim for
compensation may be settled by agreement between the
parties.
(2) An agreement for the payment of a lump sum in
settlement of a claim for compensation is not valid unless
it has been registered, as prescribed in the regulations,
with the Secretary.
(3) An agreement referred to in subsection (2) shall be
forwarded to the Secretary within 14 days after the
agreement is signed by the parties to the agreement
together with such information as may be prescribed in
the regulations.
(4) On receipt of an agreement referred to in subsection
(2), the Secretary shall, subject to subsection (5),
register the agreement.
(5) If the Secretary is of the opinion that any provisions
of an agreement referred to in subsection (2) are
inequitable, he shall, as prescribed, refer the agreement
to the Commissioner for review.
(6) A worker, the employer of the worker, or the licensed
insurer of the employer may, as prescribed, either before
the agreement referred to in subsection (2) is registered
under that subsection or within 3 months after it is so
registered, refer the agreement to the Commissioner for
review."
7. The words "as prescribed" in subs (5) and (6) were omitted by the Workers Compensation Amendment Act 1992 which commenced on 21 December 1992.
8. It is appropriate at this stage to set out the provisions of s42(1) under which the appellant claimed compensation from the Commissioner.
"42-(1) A claim for compensation which has not been
settled by agreement between the parties may be referred
to the Commissioner by -
(a) an injured worker or a dependant of an injured worker;
(b) the employer of an injured worker;
(c) the licensed insurer of an employer; or
(d) the Secretary where the claim has been referred to him
under section 40."
9. The words "which has not been settled by agreement between the parties" were also omitted by the Workers Compensation Amendment Act 1992.
10. Notwithstanding the terms of the deed, the appellant pursued the two applications lodged on her behalf in November 1991. They came on for hearing before the Commissioner on 17 December 1992. Early in the hearing the Commissioner ordered "that the application be amended", without stating which application, by the addition of two paragraphs:
"1 I seek a review of a written agreement dated the 17th
day of January 1992, not being an agreement registered in
accordance with the Act, whereby it was agreed that my
employer, the City of Burnie (Burnie Council) and/or its
licensed insurer MMI/CMI Insurance, would pay to me a lump
sum of $8,300.000 in settlement of a claim for
compensation made by me in respect of injury to my back
which arose out of and in the course of my employment with
the Burnie Council on the 2nd of September 1991.
2 Alternatively, and/or further, I seek an order or
directions that the agreement referred to in paragraph 1
is not valid as it has not been registered in accordance
with the Act."
11. After evidence and submissions the Commissioner reserved his decision.
12. On 21 December 1992 the Workers Compensation Amendment Act 1992 commenced. On 23 December 1992 the Commissioner ordered "that the references be dismissed". Reasons for the decision were attached to the notice of the order.
13. It is provided by s39(1) that, subject to subs(2), a claim for compensation may be settled by agreement between the parties, and by subs(2) it is provided that an agreement for the payment of a lump sum in settlement of a claim for compensation is not valid unless it has been registered, as prescribed in the regulations, with the Secretary. Such an agreement is required by subs(3) to be forwarded to the Secretary within fourteen days after the agreement is signed by the parties to the agreement. The subsection does not impose that obligation on anyone in particular. There is no provision for an extension of time, nor has provision been made as to the effectiveness of an agreement if it is not forwarded to the Secretary within fourteen days. The Commissioner held that because the agreement had not been registered it was a nullity for the purposes of s39 and he was without jurisdiction to review it under the provisions of the section.
14. The Commissioner then considered whether he had jurisdiction to deal with the appellant's referral of her claim for compensation under s42. He held that although the agreement was a nullity for the purposes of s39, it was not a nullity for the purposes of s42. He said that upon the evidence the claim for compensation had been settled by agreement between the parties and he held that by virtue of the express wording of s42(1), the claim could not be referred to him and he was without jurisdiction. It appears likely that if the Commissioner had concluded that the amendment of s42 effected by the Workers Compensation Amendment Act 1992, which commences two days before the date of his order, applied to the case he would have found himself with jurisdiction under s42. However he made no mention of the amendment in his reasons.
15. The grounds of the appeal to this Court are as follows:
"1 That the Commissioner erred in law in determining and
ordering that the appellants reference be dismissed.
2 That the Commissioner erred in law ion determining that
the agreement entered into between the appellant, the
respondent, the respondent's insurer, MMI/CMI Insurance on
the 17th day of January 1992 ('the agreement') was a
nullity for the purposes of Section 39 of the Act.
3 That the Commissioner erred in law in finding and
determining that as the agreement was a nullity there was
nothing for him to review pursuant to the provisions of
Section 39(6) of the Workers' Compensation Act 1988 ('the
Act').
4 That the Commissioner erred in law in determining that
he had no jurisdiction to review the agreement between the
parties pursuant to the provisions of Section 39 of the
Act.
5 That the Commissioner erred in law in determining that
he had no jurisdiction pursuant to the provisions of
Section 42 of the Workers' Compensation Act and in
particular that he had no jurisdiction to review the
agreement.
6 That the Commissioner erred in law in determining that
he had no jurisdiction under Section 42 of the Act on the
basis that the claim for compensation by the appellant
against the respondent employer had been 'settled by
agreement'.
7 That the Commissioner erred in law in failing to
determine that the parties may only compromise or settle
a claim for compensation by agreement by following the
specific procedures set out in Section 39 of the Act.
8 That the Commissioner erred in law in failing to
determine that the agreement not having been forwarded to
the Secretary for Labour within fourteen days after it was
signed by the parties was therefore invalid and a nullity
and in the alternative the Commissioner should have
determined that the agreement was inequitable and was
therefore invalid and should be set aside.
9 That the Commissioner failed to take into account
amendments to the Workers Compensation Act 1988 made by
Act No 50/1992 (which came into effect in December 1992
prior to his Order) amending Section 42 of the Act which
amendments gave to the Commissioner jurisdiction to hear
and determine the appellants reference."
16. The Commissioner was clearly in error in concluding that because the agreement had not been registered it was a nullity and there was nothing for him to review under s39(6). It is plain from the provisions of subs(6) that an agreement may be referred to him for review before it has been registered and until 3 months thereafter. Unless the Commissioner had in mind the provisions of s133(3), he was also in error in concluding for the purposes of s42(1) that an agreement for the payment of a lump sum in settlement of a claim for compensation which is a "nullity" for the purposes of s39 can amount to a settlement by agreement of a claim for compensation. Section 39(2) declares such an agreement to be invalid until registration. The effect of that provision must be that until registration the claim for compensation which is purportedly settled by such an agreement is not in fact settled. Until registration of an agreement which is required to be registered by s39, the Commissioner has jurisdiction to deal with a claim for compensation which has been referred to him under s42 although he might be inclined to adjourn the hearing of the referral of the claim if it appeared that registration was pending.
17. These matters are clear to me. Not so clear are whether an agreement may be registered if it is not forwarded to the Secretary within fourteen days after it is signed by the parties and whether an agreement is registrable at all if it is oral or, in so far as it is in writing, if it is signed by only one of the parties to it, as in this case. Further, it would appear to be arguable, and strongly so, that an agreement purporting to settle a claim for compensation which provides for two or more separate payments in settlement of the claim will be valid without the requirement for registration in s39(2), for such an agreement would not provide "for payment of a lump sum settlement". None of these questions require determination by me in this case. Indeed the last mentioned matter could not arise on the facts, and I find it unnecessary to consider the other questions because I have concluded that s133(3) is determinative of the question whether the appellant has any right to seek payment of compensation in the events which have occurred. Section 133(2) and (3) provide:
"S133(2) The subsistence of a right of a worker or a
dependant of a deceased worker to damages in respect of an
injury, or the taking of proceedings to establish any such
right or for the recovery of any such damages, does not
prejudice or affect his right to compensation in respect
of that injury, but where a worker or a dependant of a
deceased worker has obtained judgment (whether against his
employer or any other person) for damages in respect of an
injury or has accepted any money paid into court in
satisfaction of a claim for damages, his right to any
payments by way of compensation that have not been
determined before the date of the judgment, or the date
of his acceptance of money paid into court, is
extinguished.
(3) The settlement by a worker or a dependant of a
deceased worker of a claim for damages in respect of an
injury, if by that settlement he agrees that all his
further claims to compensation in respect of that injury
are extinguished, has, for the purposes of subsection (2),
the like effect as a judgment obtained by that worker or
that dependant for those damages."
18. It is clear from subs(2) that if a worker commences an action and obtains a judgment for damages in respect of an injury, his right to any payments by way of compensation that have not been determined before the date of the judgment is extinguished, and if in that action he has accepted money paid into court in satisfaction of his claim for damages, his right to any payments by way of compensation that have not been determined before the date of his acceptance of the money paid into court is extinguished. By virtue of s132 "damages" means damages recoverable (whether by virtue of an enactment or otherwise) in respect of any civil liability in the employer, however arising.
19. It is my opinion that because the agreement reached by the appellant with her employer and its insurer provided that the consideration of $8,300 was paid in full accord and satisfaction for any claims for damages in respect of the injury and the appellant agreed that all further claims for compensation in respect of that injury were extinguished, the provisions of s133(3) were invoked and the settlement had the like effect as a judgment obtained by her for those damages, so that any right she may have had to payment of compensation which had not been determined by the date of the settlement was extinguished.
20. Neither counsel was able to find any relevant judicial authority on the point, although counsel for the appellant pointed out that in Brun v Comalco Aluminium (Bell Bay) Limited 71/1991, I proceeded under s39(6) to review an agreement which may well have constituted a settlement under s133(3). However, the application of s133 was not raised by the parties in that case and was not determined by me.
21. I mention Lovell v Wolpers and Law Nominees Pty Ltd (1981) 52 FLR 159 because it is the only reported case I have found in which the circumstances were fairly similar to those in this case although not identical, and the legislation was not identical. The case arose under the Workmen's Compensation Act 1949 (NT). The worker sued his employer for damages in respect of the injury and then entered into a deed of release which made no reference to the proceedings, damages or compensation, but on its fact it was an effective deed which released the employer "from any and all suits, actions, claims and demands in any way arising out of any such injury, incapacity ...". Muirhead J determined that under the legislation he was considering the agreement was not required to be recorded (the equivalent of registration in this State) and the worker was precluded from claiming compensation because of s23(4) of the Workmen's Compensation Act 1949 (NT) which precluded entitlement to compensation if the worker recovered damages from his employer in respect of the injury.
22. Counsel for the appellant said that prior to the settlement the appellant had not expressed a desire to claim damages. That is effectively what the appellant said in the course of her evidence before the Commissioner. However, I do not consider that the Commissioner, or this Court, should go behind the agreement to ascertain whether or not a claim for damages had been asserted by the appellant prior to the making of the settlement, or whether an action for damages would have had any chance of success if pursued. The agreement, which was signed by the appellant, must be taken as speaking for itself when it plainly states that the payment was accepted in full accord and satisfaction "for any claims for damages in respect of the said injury". If the circumstances under which the settlement was reached and the agreement was signed are to be challenged as fraudulent or improper, or it is thought that the agreement should be rectified for some reason, those issues must be raised and decided elsewhere. See Lovell v Wolpers and Law Nominees Pty Ltd (supra) at 164.
23. In my view the literal and plain meaning of s133(3) requires my determination that the appellant's claim for compensation is extinguished. It follows that she has no right to pursue a claim for compensation under s42. As the settlement had the like effect as a judgment it cannot be reviewed under s39.
24. The repealed legislation had similar provisions. Prior to the Workers' Compensation (Alternative Remedies) Act 1973 the Workers' Compensation Act 1927 provided in s9(2) that a worker was not entitled to compensation under the Act if he had obtained judgment against his employer independently of the Act. That provision was repealed by the Workers' Compensation (Alternative Remedies) Act 1973 and replaced with s8G(2) and (3) which respectively provided that where a worker had obtained judgment for damages in respect of his injury his right to any payments by way of compensation that had not been determined before the date of the judgment were extinguished and where the worker settled a claim for damages in respect of an injury, the settlement had the like effect as such a judgment if by it he agreed that all his further claims to compensation in respect of the injury were extinguished. Then by the Motor Accidents (Liabilities and Compensation) Amendment Act 1988, s8G(2) was amended to provide that upon acceptance by a worker of any money paid into court in satisfaction of a claim for damages in respect of an injury, his right to any payments by way of compensation that had not been determined before the date of such acceptance was extinguished. These provisions have essentially been carried forward into the Workers Compensation Act 1988. Although it is not determinative of the effect of s133(3) I note that until 1988 when I was in legal practice the majority of legal practitioners treated an agreement of the kind entered into by the appellant as extinguishing a right to workers compensation and as not requiring registration for validity.
25. It is unnecessary for me to consider the grounds of appeal further. For the reasons I have expressed the appellant has no further right to compensation under the Act, the settlement is not subject to review and the appeal should be dismissed.
Lorna Jean Dicker
City of Burnie [1993] TASSC 104
(1981) 52 FLR 159