Luxford v NSW Self Insurance Corporation

Background 7The plaintiff received weekly payments of workers' compensation for slightly over eight years up to 7 September 2013. He received the payments in respect of a psychiatric injury incurred while working for his then employer, the NSW Department of Education and Training. 8The evidence is silent as to when negotiations started for the commutation of the plaintiff's weekly payment entitlement into a lump sum. It appears that there was a number of offers and counter-offers. On 29 February 2012 the solicitors for the defendant, Sparke Helmore Lawyers, sent a letter to the solicitors for the plaintiff, Federation Law, rejecting the plaintiff's previous offer and making a "final counteroffer". That offer was broadly stated as: "$180,000 by way of commutation." 9On 1 March 2012 Federation Law replied to Sparke Helmore and referred to Sparke Helmore's letter of 29 February 2012. Federation Law said: "We have instructions from our client to accept your offer of $180,000 by way of commutation. We look forward to hearing from you as soon as possible." 10On 26 March 2012 Sparke Helmore wrote to Federation Law informing them that they had arranged for the plaintiff to attend a medical appointment with a Dr Vickery, a psychiatrist. The purpose of the appointment was for Dr Vickery to assess the plaintiff's whole person impairment. 11On 21 May 2012 Federation Law wrote to Sparke Helmore inquiring as to the outcome of that appointment. On 24 May 2012 Sparke Helmore replied, stating that Dr Vickery had assessed the plaintiff as having only one per cent whole person impairment which was well under the threshold for commutation purposes. However, Sparke Helmore indicated that their client had instructed them that it still wished to proceed with commutation and that Federation Law should arrange and appointment with a different doctor "in an attempt to reach the threshold". 12Section 87EA(1)(a) provides that a liability in respect of an injury may not be commuted to a lump sum under Div 9 of Pt 3 unless the Authority is satisfied, and certifies, that the injury has resulted in a degree of impairment that is at least 15 per cent as assessed in the way provided by Pt 7 of Ch 7 of the Workplace Injury Management and Workers Compensation Act 1998. 13On 20 June 2012 Federation Law wrote to Sparke Helmore informing them that the plaintiff had been assessed by a Dr Canaris who had assessed him as having 15 per cent whole purpose impairment. 14On 2 July 2012 Sparke Helmore replied, stating that they would need to obtain further instructions from their client. 15Meanwhile, on 19 June 2012 the Workers Compensation Legislation Amendment Act 2012 ("the amending Act") was introduced into the NSW Legislative Assembly and passed by that House the same day. It was read in the Legislative Council the following day and passed on 21 June 2012. The amending Act received assent on 27 June 2012. 16On 6 August 2012 Sparke Helmore wrote to Federation Law stating that they had received instructions from the defendant that the defendant: "... considers Mr Luxford's claim will be captured by the new amendments and accordingly, the current Commutation amount is no longer relevant. We therefore have received instructions to make the following offer of settlement. 1. $20,000 by way of Commutation." 17On 25 October 2012 Federation Law replied, stating: "The parties have agreed to a commutation of $180,000. Your client now says that it considers our client's 'claim' will be captured by the new amendments. There is no claim. There is an agreement. The parties are bound by it. The fact that an independent body's approval is required before it takes effect as a commutation does not make it any less binding." 18On 31 October 2012 Sparke Helmore replied and expressed the view that prior to registration of the agreement, "... either party is at liberty to withdraw from the agreement." They referred to s 87F(6) in support of that view. On 22 February 2013 Federation Law replied, indicating that they were of the view that the agreement was binding despite the lack of registration. 19On 26 August 2013 the plaintiff filed a summons seeking a declaration that there was a valid and enforceable agreement between the parties, a declaration that the agreement should be specifically performed, and an order that the defendant do whatever might reasonably be required of it to seek the commutation of the weekly payment liability.

Jurisdiction 20Section 105 of the Workplace Injury Management and Workers Compensation Act 1998 relevantly provides: "105 Jurisdiction of Commission and Compensation Court (1) Subject to this Act, the Commission has exclusive jurisdiction to examine, hear and determine all matters arising under this Act and the 1987 Act. ..." 21The reference to the "1987 Act" is to the Workers Compensation Act. Early in the course of the hearing I raised with counsel the issue of whether this Court had jurisdiction to hear this case as a result of s 105. The plaintiff submitted that the Court did have jurisdiction and the defendant did not have anything to say against the existence of jurisdiction. The plaintiff referred to Tran v JR Manufacturing Industries Pty Ltd [1998] NSWCC 56; (1998) 17 NSWCCR 225 where Burke J said (at [39]): "What the claimants in these matters seek is effectively an order for specific performance of an agreement - that I order the respective respondents to initiate a commutation application as is alleged to have been agreed. That, to me, does not constitute a 'matter arising under this Act'. That is a matter that arises under the general law of contract and not under any particular or general provision of the Act and, as such, it is beyond the statutory powers of the Court to make the orders sought." 22In Gerace v Art Coating [1999] NSWSC 837 Macready M (as his Honour then was) said (at [13]): "It seems reasonably clear that any application to a court to enforce the agreement which the parties have reached is one which depends upon the general law of contract. In that circumstance it is appropriate that the application be in this court rather than the Workers Compensation Court. This is because a suit for specific performance of an agreement is not 'a matter arising under this Act' as that expression is used in s105 of the Workplace Injury Management and Workers Compensation Act 1998. See the decision of Waddell J in West v Barker & Ors unreported 27 February 1981 dealing with the predecessor of s51 on this aspect and the carefully reasoned judgment of Judge Burke in Tran v JR Manufacturing Industries Pty Ltd 10 November 1998." 23An appeal was taken from the orders of Macready M to the Court of Appeal. The appeal was substantially unsuccessful (Art Coating Pty Ltd v Gerace [2000] NSWCA 169). The Court of Appeal did not address the question of jurisdiction. It must have been satisfied that the Supreme Court had jurisdiction to make the orders it did. 24The present application rests on a similar footing. It is also an application for specific performance of an alleged contract where the rights underlying that contract arise from the provisions of the Workers Compensation Act. Uninstructed by authority I may have been of the view that the "matter", being the controversy as to whether the defendant is required to take reasonable and proper steps to seek to have the plaintiff's entitlement to workers' compensation entitlements commuted for a sum of $180,000, was one that arose under the provisions of the Workers Compensation Act. However, no issue was raised about jurisdiction by either of the parties and as the question is covered by authority, including the implicit authority of the Court of Appeal, I proceed on the basis that I have jurisdiction. I take it that the Court of Appeal was satisfied that a claim for specific performance of an agreement to commute a liability to make regular payments of workers' compensation was not a matter arising under the Workers Compensation Act.

Legislative scheme 25The legislative scheme for commuting a worker's entitlement to workers' compensation payments is contained in Div 9 of Pt 3 of the Workers Compensation Act. Sections 87D, 87E, 87EA, 87F, 87H and 87J provide: "Division 9 Commutation of compensation 87D Definition In this Division: commutation agreement means an agreement to commute a liability to a lump sum, as provided by section 87F. 87E Compensation that may be commuted (1) A liability in respect of any of the following kinds of compensation under this Act or the former Act may be commuted to a lump sum as provided by this Division (and not otherwise): (a) weekly payments of compensation, (b) compensation under Division 3 (Compensation for medical, hospital and rehabilitation expenses etc) of Part 3 of this Act or section 10 of the former Act. (2) Such a liability cannot be commuted to a lump sum by an order or award of the Commission (but this subsection does not affect the operation of section 87G). 87EA Preconditions to commutation (1) A liability in respect of an injury may not be commuted to a lump sum under this Division unless the Authority is satisfied that, and certifies that it is satisfied that: (a) the injury has resulted in a degree of permanent impairment of the injured worker that is at least 15% (assessed as provided by Part 7 of Chapter 7 of the 1998 Act), and (b) permanent impairment compensation to which the injured worker is entitled in respect of the injury has been paid, and (c) a period of at least 2 years has elapsed since the worker's first claim for weekly payments of compensation in respect of the injury was made, and (d) all opportunities for injury management and return to work for the injured worker have been fully exhausted, and (e) the worker has received weekly payments of compensation in respect of the injury regularly and periodically throughout the preceding 6 months, and (f) the worker has an existing and continuing entitlement to weekly payments of compensation in respect of the injury (whether the incapacity concerned is partial or total), and (g) the injured worker has not had weekly payments of compensation terminated under section 48A of the 1998 Act. (2) The Authority may give directions as to the circumstances in which it will be considered that all opportunities for injury management and return to work for an injured worker have or have not been fully exhausted. (3) For the purposes of determining the degree of permanent impairment of an injured worker, the Authority may refer the matter for assessment under Part 7 of Chapter 7 of the 1998 Act. That Part applies in respect of such an assessment as if the matter referred for assessment were a dispute. (4) The Authority may delegate to an insurer any of the Authority's functions under this section in respect of an injury that is an injury for which the insurer is liable to pay compensation. (5) This section does not apply to the commutation of a liability in respect of compensation under the former Act. 87F Commutation by agreement (1) A liability may be commuted to a lump sum with the agreement of the worker. (2) A commutation agreement must not be entered into unless (before the agreement is entered into): (a) a legal practitioner instructed independently of the insurer and the employer has certified in writing that the legal practitioner has advised the worker: (i) on the full legal implications of the agreement, including implications with respect to any entitlement of the worker to compensation under this Act or to benefits under any other law (including a law of the Commonwealth), and (ii) on the desirability of the worker obtaining independent financial advice, before the worker enters into the agreement, as to the financial consequences of the agreement, and (b) the worker has confirmed in writing that the worker has been given and understands the advice referred to in paragraph (a). (3) A commutation agreement (including an agreement purporting to be a commutation agreement) is not subject to review or challenge in proceedings before the Commission or a court. (4) The worker has 14 days after entering into a commutation agreement in which to withdraw from the agreement by giving notice in writing to the insurer. Withdrawal from the agreement by the worker makes the agreement a nullity. (5) A liability cannot be commuted under this section if the worker is legally incapacitated because of the worker's age or mental capacity. Note. Section 87G provides for the commutation of a liability when the worker is legally incapacitated. (6) A commutation agreement is of no effect unless and until it is registered as provided by this Part. Registration of the agreement removes the liability to which the agreement relates. (7) The amount payable under an agreement is payable within 7 days after the agreement is registered or within such longer period as the agreement may provide. Interest calculated at the rate prescribed by the regulations is payable on any amount due and unpaid. The amount payable under a commutation agreement and any interest payable on that amount is recoverable as a debt in a court of competent jurisdiction. (8) As part of a commutation agreement, a worker may agree that payment of a lump sum removes any liability to make a payment under Division 4 of Part 3 (or section 16 of the former Act) in respect of the injury concerned. This Division applies to the agreement for payment of that lump sum as if it were an agreement to commute the liability to pay that compensation to a lump sum. Payment of the lump sum removes any liability to which the agreement of the worker relates. ... 87H Registration of commutation agreements (1) A party to a commutation agreement may apply to the Registrar for registration of the agreement by the Registrar. Note. Section 87F (6) provides that a commutation agreement is of no effect unless and until it is registered. (2) The Registrar must refuse to register a commutation agreement unless satisfied that the requirements of section 87F (2) have been complied with in respect of the agreement. (3) Before registering a commutation agreement, the Registrar may (on the application of a party to the agreement or of the Registrar's own motion) refer the agreement for review by the Commission. The Registrar is not to register the agreement if the Commission recommends that the agreement not be registered. (4) The Commission reviewing a commutation agreement may recommend to the Registrar that the agreement not be registered if the Commission considers that the agreement is inaccurate or that the lump sum to which a liability has been commuted by the agreement is inadequate. (5) In reviewing a commutation agreement, the Commission may have regard to the following matters: (a) any dispute as to liability to pay compensation under the Workers Compensation Acts, (b) the injury, the age of the worker, the general health of the worker, and the occupation of the worker at the time of the occurrence of the injury, (c) the worker's diminished ability to compete in an open labour market, (d) other benefits that the worker may be entitled to from any other source. (6) The registration of a commutation agreement may not be cancelled except within such period after the agreement is registered, and in such manner, as may be authorised by the regulations. (7) This section has effect despite section 234 of the 1998 Act (No contracting out). (8) This section does not prevent a commutation agreement containing provision as to the payment of costs. ... 87J Other commutation agreements invalid (1) Neither agreement as to the commutation of a payment to a lump sum nor payment of the sum payable under the agreement exempts the person by whom the payment is payable from any liability under this Act, except as provided by this Division. (2) This section does not affect the operation of section 51 in respect of a liability commuted under that section before the commencement of this section. (3) This section does not affect the operation of section 66A."

Legally enforceable commutation agreement 26Commutation eliminates an existing workers' compensation liability and entitlement and replaces it with a liability to pay a lump sum to the worker and an entitlement for the worker to receive the lump sum. There are several stages to the process of commutation. Other than in the case of a worker who is legally incapacitated (to which s 87G applies) the first step in a commutation is for a commutation agreement to be entered into in accordance with s 87F. Such an agreement is a "commutation agreement" for the purposes of Div 9 (s 87D). 27Entering into an agreement to commute a liability does not of itself commute the liability. Section 87F(6) quoted above provides that a commutation agreement is of no effect unless and until it is registered. The same subsection goes on to provide that registration of the agreement removes the liability to which the agreement relates. In my view, this provision does not mean that an agreement to commute a liability to a lump sum has no legal consequences prior to registration. Rather, it means that until the agreement is registered it is of no effect in commuting the liability to which it relates. Subsection 87F(4) gives a worker the right to withdraw from a commutation agreement within 14 days after entering into the agreement. The subsection provides that the withdrawal from the agreement by the worker makes the agreement a nullity. It necessarily follows from this provision that the agreement is otherwise not a nullity. Because the worker has only 14 days in which to withdraw after entering into a commutation agreement, and as no such right is conferred on the other party to the agreement, be it an employer or an employer's insurer, it is clear that a commutation agreement can be binding, notwithstanding the terms of subs 87F(6). 28The defendant argued that the commutation agreement reflected in the correspondence set out above did not create a binding contract because there was no intention to create legal relations. The reason this was so, according to the defendant's submission, was that the entering into of a commutation agreement was only the first stage in the process of commutation. The later steps in that process were obtaining certification from the Authority of its satisfaction as to the matters in s 87EA(1), applying to the Registrar of the Workers' Compensation Commission for registration of the agreement, and possibly, having the agreement referred to the Commission for its consideration pursuant to s 87H(3), and finally having the commutation agreement registered, thereby commuting the liability into a lump sum. The defendant argued that where the parties were dealing with each other in light of this staged process, the parties could not have intended to create binding legal relations, but only to reach an agreement as the first stage of the process of obtaining commutation if the other stages were successfully completed. 29I think the fundamental basis for this argument was the proposition that because of the first sentence of s 87F(6), reaching a commutation agreement as the first stage of a process of commutation did not itself have any legal effect. For the reasons above I do not accept that argument. 30The parties dealt in the plain terms of offer and acceptance. Their language implies that they intended to make a contract. The fact that the implementation of their agreement required the approval of two governmental authorities does not imply that they did not intend to be bound until such approval was given. To the contrary, in such a case an agreement would generally be understood to include an implied obligation on the parties to do all things reasonable and proper to achieve the end agreed upon, including all things reasonable and proper to obtain the authorities' approval (Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600 at 606). As Dixon CJ, Williams, Webb and Kitto JJ said in Butts v O'Dwyer (1952) 87 CLR 267 at 283: "... [the defendants] are bound by an obligation implied in the transaction ... to do all such acts and execute all such documents as may be reasonable and proper on their part to enable the plaintiff to apply to the Minister for his consent to the transfer by way of lease and to support such application and that there should be a decree that the defendants appellants do perform and carry out such obligation." 31Such an obligation is implied in this case. The fact that the parties' negotiations occurred against the background of a specific legislative scheme for commutation that required the approval of governmental authorities does not mean that the parties had no intention to create legal relations. Rather, being aware of that scheme, the parties agreed to attempt to reach a particular end, namely, commutation of the plaintiff's entitlements for the agreed lump sum. That agreement implied an obligation on both parties to do all things reasonable and proper to achieve that end. When the agreement is understood not as a promise to commute, but a promise to do all things reasonable and proper to achieve commutation, the defendant's argument that the parties did not intend to enter into legal relations falls away. 32The defendant submits that nonetheless an order for specific performance of the agreement should be refused on the ground that performance would be in vain because of the amending Act the Authority could not be satisfied and therefore could not certify that it was satisfied that the plaintiff has an existing and continuing entitlement to weekly payments of compensation in respect of his psychiatric injury (s 87EA(1)(f)). Equity will not order specific performance where the order would be in vain or futile (Hercy v Birch (1804) 9 Ves 357; 32 ER 640; Marks v CCH Australia [1993] 3 VR 513). 33The premise of the defendant's argument is that the amending Act applies to the commutation agreement in this case. The plaintiff says that the amendments do not apply. It is only if the amendments apply that the question whether specific performance should be refused on the ground of futility needs to be addressed.

The effect of the amending Act 34Because s 87EA(1) prevents commutation unless the Authority has certified its satisfaction of the matters in the subsection, it is necessarily implied that the Registrar of the Commission cannot register the agreement pursuant to s 87F(6) unless the Authority has given its certificate. 35The amending Act alters the method for calculating a worker's entitlement to weekly payments of compensation. The defendant submits that the effect of the amending Act is to reduce the plaintiff's entitlement to weekly payments of compensation to zero. If that is so, the Authority could not certify its satisfaction as to the requirement in s 87EA(1)(f) and so the commutation agreement could not be registered. 36After the amendments, ss 35 and 38 of the Act relevantly provide as follows: "35 Factors to determine rate of weekly payments (1) For the purposes of the provisions of this Subdivision used to determine the rate of weekly payments payable to an injured worker in respect of a week: AWE means the worker's pre-injury average weekly earnings. D (or a deductible amount) means the sum of the value of each non-pecuniary benefit (if any) that is provided by the employer to a worker in respect of that week (whether or not received by the worker during the relevant period), being a non-pecuniary benefit provided by the employer for the benefit of the worker or a member of the family of the worker. E means the amount to be taken into account as the worker's earnings after the injury, calculated as whichever of the following is the greater amount: (a) the amount the worker is able to earn in suitable employment, (b) the workers [sic] current weekly earnings. MAX means the maximum weekly compensation amount. (2) If the determination of an amount for the purpose of determining the rate of weekly payments payable to an injured worker results in an amount that is less than zero, the amount is to be treated as zero. ... 38 Special requirements for continuation of weekly payments after second entitlement period (after week 130) (1) A worker's entitlement to compensation in the form of weekly payments under this Part ceases on the expiry of the second entitlement period unless the worker is entitled to compensation after the second entitlement period under this section. ... (3) A worker who is assessed by the insurer as having current work capacity is entitled to compensation after the second entitlement period only if: (a) the worker has applied to the insurer in writing (in the form approved by the Authority) no earlier than 52 weeks before the end of the second entitlement period for continuation of weekly payments after the second entitlement period, and (b) the worker has returned to work (whether in self-employment or other employment) for a period of not less than 15 hours per week and is in receipt of current weekly earnings (or current weekly earnings together with a deductible amount) of at least $155 per week, and (c) the worker is assessed by the insurer as being, and as likely to continue indefinitely to be, incapable of undertaking further additional employment or work that would increase the worker's current weekly earnings. ... (7) The weekly payment of compensation to which an injured worker who has current work capacity is entitled under this section after the second entitlement period is to be at the rate of: (a) (AWE × 80%) − (E + D), or (b) MAX − (E + D), whichever is the lesser." 37Schedule 6 to the Workers Compensation Act, which is given effect by s 282 of the Act, includes in Pt 19H the following clauses: "1 Definitions In this Part: 2012 amending Act means the Workers Compensation Legislation Amendment Act 2012. ... existing recipient of weekly payments means an injured worker who is in receipt of weekly payments of compensation immediately before the commencement of the weekly payments amendments. ... introduction date means the date of introduction into Parliament of the Bill for the 2012 amending Act. ... transitional amount has the meaning given by clause 2. weekly payments amendments means the amendments made by the 2012 amending Act to Division 2 (Weekly compensation by way of income support) of Part 3 of the 1987 Act, other than the amendment made to section 52 (Termination of weekly payments on retiring age) of the 1987 Act. 2 Transitional amount (1) The transitional amount is $906.25. Note. The transitional amount is used as the deemed amount of the pre-injury average weekly earnings of an injured worker for the purpose of determining the weekly payments of compensation payable to existing recipients of weekly payments after they become subject to the weekly payments amendments. ... 8 Work capacity assessment of existing recipients of weekly payments ... (2) The insurer who is liable to make weekly payments of compensation to an existing recipient of weekly payments must conduct a work capacity assessment of the worker no later than 12 months (or such longer period as may be prescribed by the regulations) after the commencement of the weekly payments amendments. 9 Weekly payments amendments to apply after work capacity assessment (1) On the expiration of a period of 3 months after an insurer first conducts a work capacity assessment of an existing recipient of weekly payments (as required under this Division or otherwise), the weekly payments amendments apply to the compensation payable under Division 2 of Part 3 of the 1987 Act to the worker in respect of any period of incapacity after the expiration of that period. ... (3) For the purposes of the application under this clause of the weekly payments amendments to a worker, the worker's pre-injury average weekly earnings are deemed to be equal to the transitional amount. Note. The transitional amount is initially $906.25 and is indexed annually." 38The effect of clauses 2 and 9(3) is that notwithstanding that s 35 defines "AWE" to mean the worker's pre-injury average weekly earnings, an amount of $906.25 is to be taken to be the worker's pre-injury average weekly earnings for the purpose of determining weekly payments of compensation after the amendments. The effect of cll 8 and 9 is that the amendments will apply to the worker three months after an insurer first conducts a work capacity assessment of the worker, which assessment must be made within 12 months (or such longer period as may be prescribed by the Regulations) where the worker is in receipt of weekly payments. 39On or about 7 June 2013 Allianz Australia Insurance Limited, which is the defendant's agent, wrote to the plaintiff informing him that he was no longer entitled to weekly compensation payments as a result of the changes made by the amending Act. Allianz Australia Insurance Limited asserted that the plaintiff was earning a gross sum per week which was in excess of 80 per cent of the transitional amount of $906.25 per week. If this is so, and if the amendments apply to the Authority's determination as to whether it should be satisfied of the matter in s 87EA(1)(f), and if that position continues to obtain up to the time the Authority is required to certify as to its satisfaction, then the agreement for commutation could not be carried into effect. 40The question then is whether the amendments apply to the Authority's consideration of the matters in s 87EA in relation to the commutation agreement in this case that was entered into before the amending Act was passed. 41Clause 3 in Sch 6 Pt 19H provides: "3 Application of amendments generally (1) Except as provided by this Part or the regulations, an amendment made by the 2012 amending Act extends to: (a) an injury received before the commencement of the amendment, and (b) a claim for compensation made before the commencement of the amendment, and (c) proceedings pending in the Commission or a court immediately before the commencement of the amendment. (2) An amendment made by the 2012 amending Act does not apply to compensation paid or payable in respect of any period before the commencement of the amendment, except as otherwise provided by this Part." 42The plaintiff conceded that prima facie the effect of cl 3 the amendments apply to his compensation entitlements. 43Clause 6 provides: "6 Application of weekly payments amendments to existing claimants An existing recipient of weekly payments remains entitled to compensation under Division 2 of Part 3 of the 1987 Act as if the weekly payments amendments had not been made, but only until the weekly payments amendments apply to the compensation payable to the person as provided by this Division." This means that the plaintiff was entitled to receive his weekly payment of compensation until the weekly payment amendments come into effect in respect of his compensation entitlement. That was on the expiration of three months after the insurer conducted a work capacity assessment of his weekly payments. That period expired on 7 September 2013. 44The question then is how the Authority is to have regard to these changes to the plaintiff's entitlement when assessing its satisfaction of the matters in s 87EA. Clause 22 deals specifically with the effect of the amending Act on commutation agreements. It provides: "22 Commutation (1) The Authority may defer consideration of an application for registration of a commutation agreement under Division 9 of Part 3 of the 1987 Act that is made on or after the introduction date (a transitional commutation agreement) until 3 months after a work capacity assessment of the injured worker is conducted. (2) If the amount of compensation payable to an existing recipient of weekly payments of compensation changes as a result of an amendment made by the 2012 amending Act, the change applies for the purposes of the commutation of a liability for that compensation under Division 9 of Part 3 pursuant to a transitional commutation agreement." 45The "introduction date" was the date of introduction into Parliament of the Bill for the 2012 amending Act, that is, 19 June 2012. The commutation agreement was entered into on 1 March 2012, but by 19 June 2012 no application had been made to the Authority for it to certify its satisfaction as to the matters in s 87EA(1), nor to the Registrar of the Commission to register the agreement. 46The plaintiff submitted that as cl 22(2) expressly stated that the changes effected by the amending Act were operative for the purposes of the commutation of a "transitional commutation agreement", it was necessarily implied that the changes made by the amending Act did not apply to the determination of whether compensation entitlements could be commuted under a commutation agreement that was not a "transitional commutation agreement". I agree with that submission. 47The question then is whether the agreement in this case is a transitional commutation agreement. That depends on the meaning of cl 22(1). The first difficulty in construing the clause is that it proceeds on a misconception as to the operation of Div 9 of Pt 3 of the Act. An application for registration of a commutation agreement is not made to the Authority. It is made to the Registrar of the Commission. The Authority and the Commission are separate bodies. The Authority is constituted by s 14 of the Workplace Injury Management and Workers Compensation Act 1998. The Registrar is the Registrar of the Commission appointed pursuant to s 368 of that Act. There are two possible ways of resolving the conundrum presented by this misconception. The first is to read cl 22(1) as if it means that the Authority may defer an application for certification of its satisfaction as to the matters in s 87EA. The alternative course is to read cl 22(1) as if it means that the Registrar of the Commission may defer consideration of an application for registration of a commutation agreement. 48Whichever construction is adopted, it will not avail the plaintiff, unless the words "... that is made on or after the introduction date" refer to the making of a commutation agreement rather than the making of an application (either for certification of the Authority's satisfaction or for registration). If the words "made on or after the introduction date" qualify "a commutation agreement", then the agreement in this case is not a transitional commutation agreement and the implication from cl 22(2) is that the Authority is not to apply the amending Act in determining its satisfaction of the matters in s 87EA. On the other hand, if those words qualify "an application for registration of a commutation agreement", or "an application for certification of the Authority's satisfaction as to the matters in s 87EA", then the present commutation agreement which will be the subject of such an application would be a transitional commutation agreement. The Authority would be required to have regard to the amendments in determining its satisfaction of the matters in s 87EA. 49Both constructions are plausible. The parties can make a commutation agreement just as they can make an application for registration or certification of the Authority's satisfaction. However, the language of cl 22(1) appeared to me on first reading, and still appears to me, to define a "transitional commutation agreement" as one that is the subject of an application for registration made on or after the introduction date. 50The language in s 87F(2) and (4) is that a commutation agreement is "entered into" rather than "made". By using the verb "made" rather than the expression "entered into" it seems to me that the draftsman is referring to the making of an application rather than the making of a commutation agreement. 51I also think that this is more consonant with the other provisions. 52I have accepted the plaintiff's argument that cl 22(2) of Sch 6, by implication, has the effect that the Authority is not to apply the effect of the amending Act when considering its satisfaction of the matters in s 87EA in relation to a commutation agreement that is not a transitional commutation agreement. Nonetheless, it is clear from the amending Act that Parliament intended its provisions to apply to workers in receipt of weekly compensation payments. If the intention were to exclude the effects of the amending Act in relation to a commutation agreement that had been entered into before the assent to the amending Act, even though the process of commutation had not been completed, that could have simply been provided for by saying that the amendments did not apply to an application for registration of a commutation agreement entered into before the amending Act. Instead, cl 22(1) combined two matters. One was a definition of a transitional commutation agreement. But that definition was only made in the context of empowering the Authority to defer consideration of an application for registration of a commutation agreement until three months after a work capacity assessment of the injured worker was conducted. The fact that the Authority was empowered to defer such consideration indicates it was Parliament's intention that the effect of the amending Act on the worker's compensation entitlements was to be taken into account in the Authority's consideration of an application for registration. Although it is not the Authority that considers an application for registration, but the Registrar, and it is the Authority that has to determine the preconditions to registration, nonetheless, the context in which the definition of transitional commutation agreement appears indicates that Parliament intended that the amending Act would apply to the Authority's or the Registrar's decision. 53In my view, the better construction of cl 22 is that the amendment made by the amending Act applies for the purposes of the commutation of the liability for compensation under Div 9 of Pt 3 unless the application to the Authority in respect of a proposed application for registration of a commutation agreement was made before the introduction date, or, possibly, unless the application to the Registrar for registration of a commutation agreement, was made before the introduction date. In my view, in this case, the Authority would be required to have regard to the effects of the amending Act in determining and certifying as to its satisfaction of the matter in s 87EA(1)(f) in relation to the plaintiff.

Futility 54The question then is whether an order for specific performance should be refused on the ground of futility. I do not think it should. That is for two reasons. First, I do not consider that the letter from Allianz Australia Insurance Limited is satisfactory proof of the facts asserted in the letter. The letter was admitted without objection and no limitation was sought pursuant to s 136 of the Evidence Act 1995 as to the use to which it could be put. However, no issue was raised in the affidavits read on the application that the plaintiff had ceased to be entitled to workers' compensation payments. The plaintiff did not have the opportunity to put on evidence in relation to the issue of his current earnings. 55Secondly, even if the facts asserted in the letter are correct, it does not follow that the same position will necessarily obtain when the Authority is required to determine its satisfaction and certify as to its satisfaction of the matter in s 87EA(1)(f). At that time the plaintiff's weekly earnings may have been substantially reduced. 56For these reasons, although I have accepted the defendant's argument that the amending Act applies, I do not think that that is sufficient to show that an order for specific performance will necessarily be futile. 57For these reasons I make the following orders and declarations:

1. Declare that on or about 1 March 2012 the plaintiff and the defendant entered into a valid and binding agreement for the commutation of the plaintiff's entitlement to workers' compensation payments for a lump sum of $180,000.
2. Declare that it was an implied term of the said agreement that the parties do what was reasonable and proper on their part to achieve registration of the said commutation agreement.
3. Order that if the plaintiff so requests the defendant take all reasonable and proper steps as may be necessary on its part to seek: (a) certification by the WorkCover Authority of NSW ("the Authority") as to its satisfaction of the matters in s 87EA(1) of the Workers Compensation Act 1987 ("the Act") in relation to the plaintiff; and (b) registration of the said commutation agreement pursuant to s 87H of the Act.
4. Declare that in deciding whether it is satisfied as to the matter in s 87EA(1)(f) of the Act in relation to the plaintiff and whether it should certify as to its satisfaction thereof the Authority will be bound to apply the provisions of the Workers Compensation Legislation Amendment Act 2012 in deciding whether at the time of the Authority's determination the plaintiff has an existing and continuing entitlement to weekly payments of compensation. 58I will hear the parties on costs. 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: 17 December 2013