Plaintiff v Defendant

1 In July 1999 the plaintiff commenced employment with the defendant as an office worker. On 5 July 2001 she stopped performing work, but she remained on the books of the defendant as an employee for approximately a further year. She has not engaged in paid work since. She says that she has lost her capacity to work. She attributes this to a psychological condition which in turn she attributes to alleged undue stress and pressure in the course of her employment with the defendant. In 2005 she commenced in this Court a common law action for damages alleging negligence on the part of the defendant as her employer.[1]

2 As presently pleaded, her claim is that she was subjected to excessive pressure and stress in relation to her duties in the course of her employment "[d]uring the period at least subsequent to June 2000" and, in addition, that on 5 July 2001 the defendant negligently required her to attend a meeting at which accusations were made against her and her employment was threatened.

"On or about 5 July 2001 the plaintiff suffered a breakdown, and thereafter has and continues to suffer from:

• severe anxiety;
• depression;
• adjustment disorder;
• mixed anxiety and depressed mood swings;
• suicidal ideology;
• agoraphobia;
• reliance upon medication ('the injuries')."

4 The proceeding came on for trial by jury on 21 February 2008. Both parties were represented by senior and junior counsel. On that day, before any jury could be empanelled, the plaintiff applied for leave to amend her statement of claim in two respects. The defendant opposed the application in both respects, and it became common ground that the matters raised were such as to require the vacation of the trial dates. Subsequently, in accordance with the Court's directions, the plaintiff filed an affidavit in support of the application together with detailed written submissions. The defendant filed submissions in response and the plaintiff filed a reply.[2]

5 The defendant no longer opposes one aspect of the application, namely the inclusion of a claim (in the alternative) that the plaintiff's alleged psychological condition and losses result from alleged breaches of contract relating mainly to the defendant's internal health and safety policies.

6 The parties remain in dispute about whether the plaintiff should be permitted to amend so as to include an allegation of negligence referable to the sending of certain letters by the defendant to the plaintiff, making requests or demands of her in relation to the accusations against her and in relation to her continued employment generally, shortly after she stopped working and whilst her absence was covered by medical certificates. The letters were sent between 20 July and 7 August 2001.

7 Principally, the defendant asserts that the allegation falls outside the plaintiff's authorisation to bring a common law proceeding for "serious injury" under the Accident Compensation Act 1985 ("the Act"). That assertion in turn is based on the proposition that the plaintiff is seeking to introduce a new or separate injury that has not been the subject of the requisite assessment procedures and other procedures under the Act. In addition, the defendant asserts that the proposed amendment would prejudice it because of the rigid costs provisions of the Act.

8 However I consider that the proposed amendments raise an arguable claim, and that in all the circumstances they should be allowed.

9 It seems to me that the first issue is whether the present dispute between the parties should be regarded as a pleading dispute only or whether, rather, the defendant's claim that the plaintiff is precluded from relying in this proceeding on the sending of the letters as negligence should now be determined finally (as a preliminary question). For reasons I will explain, I consider that the dispute should be regarded as a pleading dispute only.

10 It follows, in my view, that the next issue is whether it is arguable that the plaintiff is not precluded from relying in this proceeding on the sending of the letters, or, in other words, whether there is a triable issue of fact or law in that regard. As I will explain, I am very comfortably satisfied that it is arguable that the plaintiff is not so precluded.

11 The third issue, then, is whether the proposed amendment should be disallowed because of the alleged potential prejudice to the defendant in connection with the ultimate costs orders in the proceeding.

12 In form, the (oral) application before me is an application for leave to amend the statement of claim. Leave is of course necessary because the pleadings are closed.[3] Although the application was made on the day the proceeding came on for trial, the trial has now been adjourned indefinitely and I will not necessarily be the trial judge. Hence the application now falls to be considered as a pre-trial interlocutory application.

13 In The Commonwealth v Verwayen[4], Dawson J said:

"In granting leave to amend, a court is concerned with the raising of issues and not with their merits. Of course, an amendment which is futile because it is obviously bad in law will not be allowed. But it is no ground for refusing an amendment that it raises a claim or defence which ought not to succeed. That will be an issue upon trial."

14 Nevertheless the submissions of the parties, both oral and written, and the affidavit filed on behalf of the plaintiff (which included lengthy exhibits) went into the legal and factual merits of the matter in some depth and might therefore be understood as implicitly inviting me to decide finally whether, having regard to the events which have happened and the provisions of the Act governing common law claims, it is open to the plaintiff in this proceeding to rely on the sending of the letters as allegedly negligent behaviour causative of injury. However any such invitation was not made clear. To the contrary perhaps, senior counsel for the defendant submitted orally at one stage that it was "simply not arguable"[5] that the plaintiff was not endeavouring to rely on a separate injury or injuries. In any event, it seems to me that I should not purport to decide the matter finally, for the following reasons. The question whether or not I should do so has not been the subject of express attention by the parties. No order under r 47.04 for the trial of a preliminary question has been made.[6] The authorities indicate that extreme caution should be exercised before any question is isolated for preliminary determination, a fortiori where the question is one of fact or mixed fact and law.[7] As will become apparent, I consider that the present question is one of mixed fact and law. To the extent that the question involves issues of fact, it may in any event be inappropriate for a judge to decide those issues, because the proceeding remains fixed for trial by jury.[8] On the other hand, some or all of the factual issues involved may not be able to be referred to a jury, because s 134AB(23) of the Act provides that a jury must not be informed that any injury in respect of which the proceeding has been brought has been deemed, found or required to be found, to be a serious injury. Then again, because I will not necessarily be the trial judge, and because there has been no express agreement as to the relevant facts or even as to the relevant evidence, and because the evidence at trial on the same or closely related topics might be different or more comprehensive, there would be risks of undesirable uncertainty, fragmentation and inconsistency if I were to purport to decide the issues finally now, or at least without further input from the parties.

15 Nevertheless, in deference to the detailed submissions made by the parties and because the questions raised are of considerable difficulty and may arise in other cases, I will deal with the matter at greater length than might have been necessary merely to explain why I think the plaintiff's position is arguable.[9]

The defendant's principal contention: that the proposed amendment is, at present, statute-barred

16 The defendant submits that the plaintiff is seeking to add a claim for damages for a new or further injury which has not been the subject of the "gateway" processes set out in s 104B and s 134AB of the Act.[10] It claims that because the plaintiff has not been granted leave to bring proceedings for this "new" or "further" injury, the proposed amendment is barred by s 134AB(3) of the Act. Consideration of these submissions calls for close attention to the statutory scheme and to the facts.

17 However the statutory scheme has been much amended over the relevant period. With a view to identifying and considering the applicable provisions, a brief chronological summary of the facts is in order at this stage.

18 As best as I can discern, neither party submits that it was any later than 2001 when any relevant (mental) injury to the plaintiff was sustained. The plaintiff claimed weekly payments under s 93 of the Act on 16 July 2001 and the claim was granted. She claimed impairment benefits under s 98C of the Act in November 2002. Liability in relation to that claim was accepted on 19 November 2002. The plaintiff was examined as to the degree of her impairment by an independent medical examiner under s 104B(4) in November 2003 and was assessed at 20%. She disputed that assessment in January 2004. Medical questions as to the degree of her impairment were referred to a Medical Panel under s 104B(9) of the Act in February 2004. The Panel gave its opinion, to the effect that the degree of the plaintiff's impairment was 35%, together with its reasons, on 13 April 2004. Ipso facto, the injury as a result of which the degree of impairment of the plaintiff was so assessed was deemed, by s 134AB(15), to be a serious injury within the meaning of s 134AB. The plaintiff commenced the documentation/statutory offer/conference process under s 134AB(4) and (5) in May 2005. The matter was not resolved by that process, and the plaintiff commenced this proceeding in August 2005.

19 The nature and timing of this sequence of events corresponds sufficiently with the nature and timing of some of the events the subject of Ansett Australia Pty Ltd v Taylor[11] to make the description of the relevant statutory scheme contained in that case pertinent for present purposes. Indeed, as will become apparent, I regard Ansett as an important case for present purposes generally.[12]

The statutory scheme: section 134AB

20 Section 134AB was enacted in 2000. It is a lengthy provision, with many sub-sections. It has been amended in various ways since its enactment. It interacts with numerous other provisions of the Act. However its general effect is to bring about a limited restoration of common law rights for injured workers. Such rights had previously been abolished entirely in relation to injuries referable to employment on or after 12 November 1997. So far as applicable to the plaintiff, s 134AB(1) has at all relevant times provided that a worker who is entitled to compensation[13] 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 shall not, in proceedings in respect of the injury, recover any damages except as permitted by and in accordance with s 134AB. Sub-section 134AB(2) now[14] provides:

"(2) A worker may recover damages in respect of an injury arising out of, or in the course of, or due to the nature of, employment if the injury is a serious injury and arose on or after 20 October 1999."

21 At all times since 21 December 2004, sub-section 134AB(3) has provided[15]:

"(3) A worker may not bring proceedings in accordance with this section unless -

(a) determinations of the degree of impairment of the worker have been made under section 104B and the worker has made an application under subsection (4); or

(b) subject to any directions issued under section 134AF, the worker elects to make an application under subsection (4) on the ground that the worker has a serious injury within the meaning of this section."

22 Paragraph (b) of s 134AB(3) has no application because the plaintiff did not make an election of the kind provided for therein.

23 At the time (May 2005) when the plaintiff made her "application"[16] under s 134AB(4), that sub-section provided[17]:

(a) if subsection (3)(a) applies, after the worker -

(i) has advised the Authority or self insurer under section 104B(6) or 104B(7B) that he or she accepts the determinations of degree of impairment; or

(ii) has received the advice of the Authority or self-insurer under section 104B(10); ... ."

In the present case, the plaintiff did not accept the determination based on the independent medical practitioner's assessment (at 20%) of her degree of impairment. Instead, after the referral to the Medical Panel and the making of its assessment (at 35%), she apparently received the advice of the Authority under s 104B(10) accordingly. Therefore sub-para (ii), rather than sub-para (i), of s 134AB(4)(a) became applicable.

24 Sub-section 134AB(5) has at all relevant times provided:

(a) must be in a form approved by the Authority; and

existing when the application is made and of which the worker or his or her legal representative is aware and on which the worker intends to rely, or the substance of which the worker intends to adduce in evidence, in proceedings in accordance with this section or in any related proceedings."

25 By virtue of s 134AB(7), the Authority was required, within 120 days of the receipt of an application by a worker under sub-sections 134AB(4) and (5), to advise the worker in writing:

"(a) that the worker is deemed to have a serious injury[18]; or

(b) if the worker is not deemed to have a serious injury, whether or not the Authority or self insurer will issue a certificate under sub-section (16)(a)."

26 Sub-section 134AB(8) has at all relevant times required the Authority to deliver, together with the advice under subsection (7), copies of all medical reports and an affidavit as to all other evidentiary material in its possession on which it intends to rely in any future common law proceedings brought by the worker. Subsection (10) imposes a corresponding obligation on the worker in relation to rebuttal evidence.

27 At all times, s 134AB(11) has provided:

"(11) In proceedings in accordance with this section, a medical report or other material is inadmissible in evidence -

(a) on behalf of the Authority or self-insurer if -

(i) it was in existence, and the employer, Authority or self-insurer, or the legal representative or any of them, was aware of it, before the date by which the advice of the Authority or self-insurer is required to be given under subsections (7) and (8); and

(ii) it had not been disclosed to the worker in accordance with subsections (7) and (8); or

(i) it was in existence, and the worker or the worker's legal representative was aware of it, before the expiration of 28 days after receiving the advice under subsections (7) and (8); and

(ii) it had not been disclosed to the other party in accordance with subsection (5) or (10)."

28 Sub-sections (12), (13) and (14) of s 134AB set up a mandatory pre-issue protocol requiring a conference, a "statutory offer" and a "statutory counter-offer".

29 For the purposes of this case, s 134AB(15) is the pivotal provision. At the relevant time[19], subsection 134AB(15) provided:

"(15) If the assessment under section 104B made before an application under subsection (4) is made of the degree of impairment of the worker as a result of the injury is 30 per centum or more, the injury is deemed to be a serious injury within the meaning of this section."

30 By s 134AB(28), certain costs consequences are prescribed by reference to comparisons between the amounts of the statutory offer and counter-offer, on the one hand, and the outcome (by judgment or settlement) of the subsequently issued common law proceedings, on the other.[20]

31 It is useful to note that in the absence of a "deemed" serious injury or the grant by the Authority of a "serious injury certificate" under s 134AB(16)(a), a worker who wishes to sue for common law damages in respect of a compensable injury must make an application to a court under s 134AB(16)(b) for leave to bring the proceedings. So far, most of the judicial consideration of s 134AB has arisen in the context of applications under s 134AB(16)(b), which are generally known as "serious injury applications". In such applications, the court must be persuaded that the relevant injury is a serious injury within the so-called "narrative test" set out in ss 134AB(37) and (38).[21]

The statutory scheme: other relevant provisions

32 For the purposes of this case, the definition of "injury" as contained in s 5(1) of the Act as it stood in 2001 (being the time of the plaintiff's injury) is applicable[22], to wit:

"injury" means any physical or mental injury and without limiting the generality of the foregoing includes -

(b) a disease contracted by a worker in the course of the worker's employment whether at or away from the place of employment and to which the employment was a significant contributing factor; and

(c) the recurrence, aggravation, acceleration, exacerbation or deterioration of any pre-existing injury or disease where the worker's employment was a significant contributing factor to that recurrence, aggravation, acceleration, exacerbation or deterioration;"

33 General entitlement to compensation under the Act is governed by s 82 of the Act which, once again, is to be applied as it stood in 2001[23]. Sub-sections (1), (2A) and (6), in particular are worth noting:

"(1) If there is caused to a worker an injury arising out of or in the course of any employment and if the worker's employment was a significant contributing factor the worker shall be entitled to compensation in accordance with this Act.

(2A) Compensation is not payable in respect of an injury consisting of an illness or disorder of the mind caused by stress unless the stress did not arise wholly or predominantly from -

(a) a reasonable action taken in a reasonable manner by the employer to transfer, demote, discipline, redeploy, retrench or dismiss the worker; or

(b) a decision of the employer, on reasonable grounds, not to award or to provide promotion, reclassification or transfer of, or leave of absence or benefit in connection with the employment, to the worker; or

(c) an expectation of the taking of such action or making of such a decision.

(6) Where a worker suffers an injury which occurs by way of a gradual process over time and which is due to the nature of employment in which the worker was employed and if employment of that nature was a significant contributing factor at any time before notice of the injury was given, the worker or the worker's dependants shall be entitled to compensation under this Act as if the injury were an injury arising out of or in the course of employment."

34 Section 91, another much-amended section, regulates the making of assessments of the degree of impairment of persons. The defendant has drawn attention, in particular, to sub-sections (7) and (7A) of s 91. It is sufficient to set out those subsections as they were at the time of the Medical Panel's decision in April 2004[24], as follows:

"(7) For the purposes of section 98C -

(a) impairments other than psychiatric impairments resulting from injuries which arose out of the same incident or occurred on the same date are to be assessed together using the combination tables in the A.M.A Guides;

(b) if a worker presents for assessment in relation to injuries which occurred on different dates, the impairments are to be assessed chronologically by date of injury;

(c) impairments from unrelated injuries or causes are to be disregarded in making an assessment;

(d) assessments are to specify the whole person values for each chapter of the A.M.A Guides used in the assessment.

Paragraph (d) only applies in respect of assessments for injuries that occur on or after the date of commencement of section 8 of the Accident Compensation and Transport Accident Acts (Amendment) Act 2003 - see section 264(2).

(7A) For the purposes of Subdivision 1 of Division 3A and of section 134AB -

(a) if a worker presents for assessment in relation to injuries which occurred on different dates, the impairments are to be assessed chronologically by date of injury; and

(b) impairments from unrelated injuries or causes are to be disregarded in making an assessment."

35 Section 93 provides for the making of weekly payments in respect of incapacity resulting from a compensable injury.

36 Section 98C makes provision for compensation for non-economic loss in respect of a compensable injury resulting in permanent impairment as assessed in accordance with section 91.

37 Section 103 deals with forms and procedures in relation to claims for compensation generally.

38 Section 104B, yet another much-amended section, makes further, detailed provision in relation to the processing and determination of claims for compensation under s 98C. At the relevant time (between November 2002 and April 2004 during which period the relevant processes under s 104B were undertaken in the plaintiff's case), sub-sections (1), (2), (4), (5), (5A), (5B), (9) and (10) thereof provided:

"(1) In addition to the requirements under section 103, this section applies to a claim for compensation under section 98C.

(2) The Authority or self-insurer must within 90 days of receiving the claim -

(a) accept or reject liability in relation to the claim; and

(a) the Authority or self-insurer accepts liability in relation to the claim; or

(b) the Magistrates' Court or the County Court determines in the proceedings relating to the claim that the Authority or self-insurer has liability in relation to the claim -

the Authority or self-insurer must request the worker to attend an independent examination by a medical practitioner referred to in section 91(1)(b).

(5) The purpose of the independent examination is to obtain -

(a) assessments in accordance with section 91 as to the degree of permanent impairment, if any, of the worker resulting from the injury to the worker -

(i) for the purposes of determining the entitlement of the worker, if any, to compensation under section 98C; and

(ii) for the purposes of sections 134AB(3) and 134AB(15); and

(iii) for the purposes of Subdivision 1 of Division 3A; and

(b) a determination as to whether the worker has an injury which is a total loss mentioned in the Table to section 98E(1).

(5A) Unless sub-section (5B) applies, an assessment under this section can only be made in respect of one injury of a worker.

(5B) If a worker has more than one injury arising out of the same event or circumstance, all of those injuries must be included in the one assessment.

(9) The Authority or self-insurer must within 14 days of being advised by the worker that the worker disputes either of the assessments refer the medical questions as to the degree of permanent impairment resulting from the injury to the worker for the relevant purposes specified in sub-section (5)(a) and whether the worker has an injury which is a total loss mentioned in the Table to section 98E(1) to a Medical Panel for its opinion under section 67.

(10) The Authority or self-insurer must within 60 days of obtaining the opinion of the Medical Panel under section 67 advise the worker of the opinion and the entitlement of the worker, if any, under section 98C or section 98E and of the consequences as specified in sub-section (11A) of confirming in writing that he or she wishes to receive any compensation to which he or she is entitled."

Identifying the parties' positions and separating the issues

39 Both parties made reasonably extensive oral submissions at the hearing, but in large part those submissions were superseded by the subsequently filed written submissions. I propose to refer principally to the written submissions to explain the parties' respective positions. I will deal first with the parties' submissions as to whether the amendment is statute-barred; then indicate my views on that issue; and then deal separately with the objection based on alleged prejudice in connection with the statutory costs provisions.

40 The plaintiff's first covering submission is expressed as follows:

"A. The plaintiff's compensable psychiatric injury, however caused, was on 13 April 2004 deemed to be a serious injury as a result of the Medical Panel Opinion of that date."

41 The plaintiff points out that the deeming effect of s 134AB(15) necessarily takes place in advance of, and independently of, the making of any application under s 134AB(4) and (5). It follows, she submits, that the contents of the affidavit and draft statement of claim prepared in connection with that application must be irrelevant to the question of what injury is deemed to be a serious injury. It further follows, she submits, that "the deemed serious injury is not confined to any particular wrongful cause on the part of the defendant".[25]

42 The plaintiff asserts that "the injuries"[26] as assessed by the medical panel on 13 April 2004 are not said now to be any different from what they have ever been said to be. Rather, she says, she now wants to assign an additional cause to "them"[27] beyond that which is already contained in the statement of claim.

43 The plaintiff says that there is no aggravation to be looked at.[28] Reverting to the singular, she submits that she suffered the "one" psychiatric injury, allegedly caused in three different ways[29] -

(a) in the manner referred to in paragraphs 5 and 6 of the statement of claim, namely requiring her to perform work that was unreasonable and subjected her to undue pressure and stresses;

(b) in the manner referred to in paragraphs 7 and 8 of the statement of claim, namely from the pressure and distress caused by the meeting of 5 July 2001; and

(c) in the manner referred to in paragraphs 8A and 8B of the proposed amended statement of claim, namely by the receipt by the plaintiff of the defendant's letters sent in July and August 2001.

44 The plaintiff's second covering submission is expressed[30] as follows:

"B. The receipt by the plaintiff of the defendant's letters ... referred to in paragraph 8A of the proposed Amended Statement of Claim forms part of the circumstances whereby the plaintiff sustained psychiatric injury."

45 She points out that on page 3 of its reasons, the Medical Panel states:

"In the panel's opinion the worker has a psychiatric impairment of 35% and concluded that the whole of this impairment arises directly from the circumstances of the injury."

She links this with the history given to the Medical Panel as indicated on page 2 of its reasons, as follows:

"She said that she felt threatened over some weeks, leading up to her stopping work and finally said that "I was suspended for not taking directions to do extra duties", her resignation was demanded and she went home traumatised. The worker said that over the ensuing months she was being treated by her GP for depression and anxiety, and during this time continued to receive threatening communications from her employer. She said that she felt depressed, anxious, angry and unable to go out or manage day to day matters."

Thus, according to the plaintiff, the receipt of the letters must be taken to be included in the expression "the circumstances of the injury" used by the Medical Panel.

46 Noting that it is stated in the Medical Panel's opinion that:

"In the Panel's opinion the worker has a whole person impairment of 35% resulting from the accepted psychological injury when assessed in accordance with s 91 of the Act for the purposes of ss 98C and 134AB(3) and (15) of the Act",

the plaintiff submits that the expression "accepted psychological injury" refers to the psychological injury accepted by the defendant by letter dated 19 November 2002 from its agent Allianz, as confirmed by Allianz's further letter dated 12 January 2004 (see further below). The plaintiff says that that in turn was an acceptance of liability for the claim for impairment benefits lodged by the plaintiff in her claim form dated 14 November 2002, which contained the following questions and answers (emphasis added by the plaintiff):

"5 Date injury sustained or date you first became aware of the condition.

Repeated harassment and bullying in the course of employment - long hours, stress etc."

47 So, according to the plaintiff, from the start the claimed psychiatric injury has been put forward by her as being one which occurred through a course of conduct over time in the course of her employment ("repeated harassment and bullying in the course of employment"), not confined to any one particular period of employment, much less to any particular day, and not confined to the period up to 5 July 2001. Therefore, she says, there is no basis to require some separation by the Medical Panel or by the court or by herself as between the extent to which she had suffered injury up to 5 July 2001, on the one hand, and the extent to which she suffered injury after that date, on the other.

48 The plaintiff adverts to Ronchi v Alcoa Portland Aluminium Pty Ltd[31] and Brambles Limited v Wail,[32] being two cases to which I had invited the parties' attention, but she does not seek to derive any assistance from either of them. Indeed she seeks to distinguish them on the ground that each related to an application to a judge for leave to proceed, rather than a "deemed serious injury" matter, with the result that in those two cases, unlike this, regard could be had to the judge's reasons, the material before the judge and the transcript of the leave application.

49 Next, the plaintiff cites Papercorp Pty Ltd v Nicolaou[33] for the proposition that once a worker is though the "gateway" the worker is entitled to bring a common law action in which the worker may seek and recover damages for all the consequences of a compensable injury.

50 The plaintiff then turns to her application of May 2005 under s 134AB(4) and (5) and to the content of the documents comprising it. She submits that the subject matter was general, namely psychiatric injury suffered by her in the course of her employment by reason of the negligence of the defendant, and she submits that reliance on the receipt of the letters was included. She points out that all of the letters are referred to in paragraphs 45 and 46 of her affidavit of 2 February 2005. In particular, the plaintiff says that paragraph 46 of her affidavit demonstrates that she put forward the letter referred to in that paragraph as one that gave rise to a cause for complaint. Paragraph 46 reads:

"The last letter of Shield[34] stated that if I did not return TD Williamson would consider my employment abandoned. This was despite the fact that I had lodged medical certificates for WorkCover and was being paid on those certificates."

51 Although not specifically mentioned in the plaintiff's written submissions[35], paragraphs 47-49 of the plaintiff's affidavit are also worth noting:

"47. I have not been able to return to my work at T D Williamson or any other position since 5 July 2001. I have had to have ongoing treatment from my general practitioner, Dr Beitner.

1. In October 2001 the pressure got too much for me and I attempted to take my own life by medication and self mutilation. As a result of this I was admitted to the Melbourne Clinic under the supervision of Dr Ashok Mishra. I have been seeing Dr Mishra ever since, and at present see him on a regular basis once each week for treatment and counselling. He monitors my condition and medication, and on occasions has referred me for additional therapy.
2. I have, since ceasing work at T D Williamson, suffered and I am still suffering from extreme depression and anxiety. I have panic attacks and fear going out of my house. I am unable to sleep properly and I have difficulty getting to sleep. I often have nightmares and strange dreams, and wake sweating and shaking. I have become very lethargic and lack energy or motivation. I cannot concentrate and I worry about even the most trivial of things."

52 As to the draft statement of claim, the plaintiff makes the following submission[36]:

"Further, the draft Statement of Claim included with the Form A application relies on work required of the plaintiff 'during the period at least subsequent to June 2000.' Thus there is no temporal limiting of the time during which the wrongful acts of the defendant could be included in the claim by the plaintiff. Whilst there is no express reference to the meeting of 5 July 2001 nor to the subsequent receipt of the defendant's letters, it is submitted that the demands in the defendant's letters that the plaintiff return to the workplace to discuss 'discrepancies in [her] employee activities' (from the letter of the defendant of 31 July 2001 (part of exhibit PFTW-15)) are so closely connected with those duties that they should not be regarded as being separate from them. That is, requiring the plaintiff to attend for discussion about those discrepancies should be seen as being within the pleading in paragraph 5 of the draft Statement of Claim, namely that she was 'required to undertake duties for which she was not trained, and which placed undue and unreasonable physical and mental stress upon her.' It is put that the requirement to attend the meeting referred to in the letters was just another means whereby there was undue and unreasonable mental pressure and stress placed upon the plaintiff as a result of her being required to perform duties for which she was not trained."

53 In addition, reliance is placed by the plaintiff on the report of Dr M Epstein, psychiatrist, dated 28 June 2004 which was included with the application. The history taken by Dr Epstein included the following (emphasis added by the plaintiff):

"She saw Dr Beitner on 6 July 2001 who placed her on sick leave and monitored her condition regularly.

After leaving the company she received a number of threatening letters accusing her of abandoning her employment and threatening her with loss of the job. She believed firmly that Deak Harris and Jimmy Tan attacked her and upset her hoping she would resign while she was emotionally distressed. She felt bullied and unfairly accused of actions unrelated to any activities she had undertaken ...

Dr Beitner continued to treat her for anxiety, severe sleep disturbance and prescribed Amitriptyline, an anti-depressant medication. She continued to suffer anxiety and depression and remained off work ... ."

54 As to the part of Dr Epstein's report that contains his opinion, the plaintiff relies on the following passages from p 8 (again, with emphasis added by the plaintiff):

"The breakdown appears to have occurred in the context of the meeting which took place on 5 July 2001 and since that time her capacity for coping has been very limited. She had continued to have treatment for her symptoms but her psychiatric state worsened and she attempted suicide and was subsequently referred for psychiatric treatment ...

She gives a convincing history of overwork and harassment during the course of her employment."

55 The plaintiff submits that the history and opinion of Dr Epstein reflects matters that had been put forward in the plaintiff's claim for impairment, namely that her injury/condition occurred by "repeated harassment and bullying in the course of employment."

56 The plaintiff proceeds to submit that the wording of a certain letter from the defendant's former solicitors to her solicitors of 3 June 2005 should itself be taken to determine this issue in the plaintiff's favour, in that it stated:

"Your client is deemed to have a serious injury in relation to the psychological/psychiatric injury sustained by her alleged to have occurred in the course of her employment."

The plaintiff maintains that in using the expression "alleged" rather than "as alleged" in that letter, the defendant was accepting that the "deemed" serious injury arose from the course of her employment generally, and not only from the particular matters alleged in the draft statement of claim. On the other hand, a "serious injury certificate" which had been prepared and signed in error and which was referred to in the letter as being enclosed, but which was not in fact enclosed and which only emerged at the hearing before me, did use the phrase "as alleged", in a corresponding context. However both parties seem to submit that I should ignore the certificate. The plaintiff submits in the alternative that the expression "as alleged" in the certificate can be interpreted as a reference to what was alleged by the plaintiff in her answer to question 6 in the impairment benefits claim form, namely "repeated harassment and bullying in the course of employment." The plaintiff's submissions in this regard appear to proceed on the assumption that what she said in the claim form was as widely expressed or more widely expressed than anything later put forward by her or on her behalf. The defendant seems to read the claim form differently, as will appear.

57 The defendant's written submissions examine the statutory scheme and the factual history in considerably more detail than the plaintiff's submissions do. I believe that I have already covered all of the statutory provisions relied upon by the defendant. I will in due course turn to the defendant's detailed legal submissions as to the effect and operation of the provisions in question. However it is convenient first to reproduce the substance of the factual history as set out in the defendant's written submissions. In a considerable number of instances (some very important), the defendant's statement of the facts is plainly erroneous or highly debatable, as I will indicate.[37]

58 I note that the defendant's manner of recitation of the factual history is apparently designed to establish, principally, that neither the plaintiff nor any representative of the defendant nor any other relevant person at any relevant time attributed any injury of the plaintiff to the sending by the defendant of the letters. As I will explain, I do not agree that that proposition has been established at all.

(a) that the plaintiff performed duties at the defendant's premises until 5 July 2001 and was "subjected to considerable work pressures"; and that by her statement of claim[39] she makes allegations about those work pressures generally and particularly as to the meeting on 5 July 2001;

(b) that on 6 July 2001 the plaintiff attended Premier Care Medical Clinic where she was diagnosed with reactive depression related to stress at work;

(c) that on or about that date a medical certificate "in respect of that diagnosis" was provided to the defendant[40];

(d) that on 16 July 2001 the plaintiff made a claim for compensation [ie weekly payments] alleging depression over a period of 6-8 months leading to the cessation of work on 5 July 2001; that a medical certificate accompanied the claim; that the claim for compensation was accepted; and that weekly payments of compensation have been paid since then;

(e) that the letters in question were sent to her by the defendant between 20 July 2001 and 7 August 2001;

(f) that the plaintiff was referred for specialist treatment by Dr Mishra, beginning on 21 November 2001; and that in the history taken by Dr Mishra and recorded in her various medical reports, the letters in question were not referred to;

(g) that on 14 November 2002 the plaintiff made a claim for impairment benefits under s 98C in respect of "Psychological upset. Post traumatic stress disorder. Anxiety/Depression. Panic attacks"; that in the claim she stated that she had already made a claim for "this injury"[41] in claim no 0901000 9583/51 (the weekly payments claim for "the injury suffered by 5 July 2001"); and that the letter forwarding the claim also referred specifically to the earlier accepted claim in respect of the injury[42];

(h) that liability "in respect of that alleged injury"[43] was accepted by Allianz (the agent for the Victorian Work Cover Authority) on 19 November 2002 pursuant to s 104B of the Act;

(i) that, in accordance with s 104B(5) of the Act, Allianz arranged an assessment by Dr P Kornan; and that Dr Kornan "was not given a history relating to the [letters] or [their] impact on the plaintiff";

(j) that the plaintiff disputed Dr Kornan's assessment of impairment[44] and a referral was made to a medical panel pursuant to s 104B(9);

(k) that the medical panel "purported" to assess the impairment resulting from the "accepted injury"[45] at 35%; and that the panel "clearly assessed the totality of the plaintiff's impairment from psychological condition as at the time of its assessment in 2004"[46];

(l) that the panel "had no medical material before it which suggested further injury after 5 July 2001"[47]; that the panel's reasons show it accepted a designated date of injury as 1 July 2001[48]; and that the panel was told of correspondence received after the plaintiff had gone home traumatized [on 5 July 2001] but was not told that the letters in question had any impact on her medical condition[49];

(m) that Allianz notified the plaintiff by letter that she had a 35% impairment as assessed[50]; and that that letter referred to injury on 1 July 2001 as the accepted injury[51];

(n) that on 17 May 2005[52] the plaintiff made application in accordance with s134AB(5) "for leave to bring proceedings",[53] relying on the deemed serious injury; and that the application was supported by an affidavit sworn by the plaintiff on 2 February 2005;

(o) that the plaintiff's affidavit referred to the letters in question but "did not allege further injury as a result"[54]; that, in fact, the letters were referred to only in the context of the worker giving a history in her affidavit of her Workcover claim and her claim for wrongful dismissal lodged with the Australian Industrial Relations Commission on 16 July 2001[55];

(p) that the draft statement of claim forming part of the application under s 134AB referred to injury on or about 5 July 2001 resulting from stress before that date;

(q) that the plaintiff obtained a medico-legal report from Dr Epstein, psychiatrist, on 26 June 2004 which was submitted as part of the application; that although there was reference in the history to "threatening letters" being received by the plaintiff following the 5 July 2001 meeting, no history of any effect on the plaintiff's psychiatric state was recounted to Dr Epstein[56]; and that Dr Epstein expressed the opinion that the plaintiff's breakdown occurred "in the context of" the meeting on 5 July 2001[57];

(r) that on 3 June 2005, by the abovementioned letter, the solicitors for QBE Mercantile Mutual Workers Compensation (Vic) Pty Ltd, the agent of the Authority, notified the plaintiff pursuant to s 134AB(7)(a) that she was deemed to have a serious injury[58];

(s) that in the circumstances a serious injury certificate was not required under the legislation and was not in fact sent to the worker; that a "draft"[59] certificate prepared in this case, but never sent to the worker, was called for and therefore produced to the Court on 21 February 2008[60]; and that its terms are irrelevant to the Court's consideration of the question before it.

60 In connection with the matters just referred to, the defendant submits as follows[61]:

"It is submitted that all of the material supplied by the plaintiff in accordance with s134AB(5), was for the purposes of making an application in respect of 'an injury' which must, by definition, have been the same injury as that in relation to which (in this case) the Medical Panel Opinion was obtained.[62] It is in respect of that injury and that injury alone that the Authority may 'deem' the worker to have a serious injury under s134AB(7)(a).[63]"

61 The defendant submits[64] that s 104B of the Act is concerned with the assessment of impairment resulting from "identified injuries", being compensable injuries as defined in s 5(1), because it is only where there is an entitlement to compensation in respect of an injury that the restrictions of s 134AB(1) apply. Barwon Spinners Pty Ltd v Podolak[65] is cited.

62 The defendant further submits[66] that when a claim is made for compensation under s 98C of the Act, that claim must identify the injuries to be assessed and that within a maximum period after the claim the Authority (by its agents) must accept or reject liability "for each injury included in the claim", citing s 104B(2).[67]

63 The importance of the identification of the injury to be assessed is highlighted, the defendant says, by the provisions of s 91 of the Act - the section governing assessments of impairment for the purposes of s 98C and s 134AB. As I have already mentioned, the defendant draws attention in particular to ss 91(7) and (7A), which are set out above. It submits[68] that where a Medical Panel's opinion must be obtained under s 104B(9), the opinion is sought in respect of "the injury", namely, "that injury claimed on the s 98C claim form".

64 The defendant submits that in Barwon Spinners[69] the Court of Appeal made it clear that "in the context of physical injury at least",[70] the need to identify the pathological nature of the injury actually sustained is clear. Further, it says that the date on which an injury occurred is "frequently" important.[71]

65 According to the defendant, the importance of identifying relevant injury and recognising cumulative insults as "possibly"[72] showing separate injuries can be seen from the discussion in Grech v Orica Australia Pty Ltd[73]. The defendant submits that when physical injury is the subject of investigation, the enquiring body will be seeking to identify the "physiological change in a body part"; that a worker "seeking leave to sue" [sic] must first establish that the injury in its consequences meets the statutory definition of "serious"[74]; that in Grech, Ashley JA discussed the concept of injury where there were many insults over time to the same body part; and that his Honour recognised that that "could" constitute at least two injuries, each of which resulted in symptoms.[75] The defendant submits that the same analytical process applies in respect of mental injuries.[76]

66 The defendant refers[77] to the discussion of mental injury in Federal Broom Co Pty Ltd v Semlitch[78]. The defendant does not draw any particular proposition from that case, but proceeds to contend that it is "clear" that the Act recognises that the "aggravation" of an injury (including a mental condition) which arises as a result of "particular" work related circumstances constitutes a further compensable injury.

67 Next[79], the defendant seeks to distinguish Ronchi v Alcoa Portland Aluminium Pty Ltd[80] and Brambles Ltd v Wail[81], the cases which (as mentioned above) I had invited the parties to consider. The defendant submits that each of those cases was concerned with a single injury ("albeit arising or continuing in the course of the worker's employment" [sic]) arising from defects in the employer's system of work, rather than "two distinct and identifiable injuries, where separate causes are alleged to have given rise to each injury". According to the defendant, the latter description should be applied to the present case because, it says, "the first cause of injury is an alleged defect comprised by the employer's system of work, and the alleged cause of the second and subsequent injury is comprised by the employer's particular behaviour in sending [the letters] to the plaintiff".

68 The defendant then[82] refers to Papercorp Pty Ltd v Nicolaou[83], the decision which had been cited by the plaintiff for the proposition that once a worker is through the "gateway" the worker is entitled to bring a common law action in which the worker may seek and recover damages for all the consequences of a compensable injury. The defendant does not take issue with that proposition, but says that the present case is different. The defendant says that, in Nicolaou, in referring to "all the consequences of compensable injury", Ashley JA (who gave the leading judgment) was referring to consequences which flow from the injury in respect of which the application for leave to proceed was made, such as later ensuing loss of earnings or loss of earning capacity. The defendant goes on to quote the following passage from Nicolaou[84], adding its own emphasis where indicated:

"[32] It is certain, given the context which I have described, that there can only ever be one determination favourable to a worker under s 135A in respect of compensable injury attributable to an employer's particular negligent conduct. Once such a determination is made, a worker may then sue for all the consequences of that injury, regardless of whether a particular consequence had ensued at the time of the determination."

69 The defendant says that the key difference between Nicolaou and this case is "that the plaintiff now seeks to allege that she suffered further mental injury as a result of [the letters] sent after 5 July 2001. This involves the allegation of further injury and a new cause of action which is not available to her in respect of injury suffered before and on 5 July 2001".

70 In support of that proposition, the defendant invites me to assume that the plaintiff will ultimately be unable to establish any breach of duty or contract before 5 July 2001. On that assumption, the defendant says, the plaintiff "would then fail in the proceedings for damages for her serious mental injury. She might establish a breach of duty causing injury in the correspondence written in late July and early August. Her damages then would necessarily depend on identification of the injury caused by the correspondence and the problems it caused for her that she would not otherwise have suffered".

71 Finally, on this part of the case, the defendant submits that the amendments proposed by the plaintiff attempt to bypass the prohibitions and limits of s 134AB. It says that if the plaintiff wishes to rely on the "further injury alleged" and the "further facts causing it", she should make application to have the "further injury" assessed under the s 134AB regime to determine whether it is a serious injury for which she can recover damages.

72 So far as presently relevant, the plaintiff's reply may be summarised as follows.

73 She apprehends that the thrust of the defendant's arguments is that the Medical Panel has somehow assessed the plaintiff's condition only in part and that there is another "new" or "further" part of the plaintiff's psychiatric condition that arose after 5 July 2001, which has not been assessed and which the plaintiff should now make application to have assessed under the s 134AB regime, whereas, she submits, it is apparent from the Medical Panel's opinion that there was no such limiting of the injury assessed by them on 13 April 2004.

74 She observes that the Medical Panel's reasons commence in the following way:

"The panel notes that it is accepted that the worker suffered a psychological condition during the course of her employment[85] whilst working as a financial assistant/office administrator, with the designated date of injury of 1st July 2001."

It is clear, she submits, that the Medical Panel did not limit in any way what they referred to as "the course of her employment". She notes that the date of 5 July 2001 was not even mentioned.

75 The Panel's reference to 1 July 2001 as the "designated" date of injury indicates, she submits, that that date is not to be regarded as being, in the eyes of the Panel, the real date of injury. That, she says, is apparent from the rest of the Panel's reasons. She says that the date was "designated" by the insurer Allianz, the defendant's agent, and that the affidavit of the plaintiff's solicitor, Ms Toop, explains that, for the purpose of calculating the quantum of a s 98C payment in relation to gradual injuries, insurers have a practice of haphazardly "designating" a date of injury, which may bear little or no resemblance to the true time of injury. It would be ridiculous, the plaintiff says, to confine her common law claim to injury which occurred on 1 July 2001, and even the defendant does not suggest that.

76 As to the defendant's submission that "the panel had no medical material before it which suggested further injury after 5 July 2001", she repeats that there is no reference at all in the Medical Panel's opinion and reasons to the date of 5 July 2001. She says that there was no issue before the Panel as to any particular date; that, rather, as the Panel noted, it had been accepted by the defendant that the plaintiff suffered her psychological condition "during the course of her employment", without limitation; and, indeed, that her s 98C claim form had referred to injury "in the course of employment", without limitation.

77 In relation to the defendant's submission that "The medical panel was told of correspondence received after the plaintiff had gone home traumatised but was not told that the correspondence had any impact on her medical condition", the plaintiff submits that such a reading of the relevant part of the Panel's reasons is unfair and, indeed, not open.

78 In response to the defendant's frequent references to a "further injury", the plaintiff submits that there is no injury alleged further to that which was assessed by the Medical Panel because, as the defendant itself correctly puts it[86]:

"The panel clearly assessed the totality of the plaintiff's impairment from psychological condition as at the time of its assessment in 2004."

There was, she says, no "before or after 5 July 2001" division made by the Medical Panel.

79 The plaintiff continues to rely on her submission based on the defendant's solicitor's letter of 3 June 2005 which, she says, is unanswered in the defendant's submissions.

80 In connection with the defendant's submission as to Ronchi and Brambles v Wail, the plaintiff denies that the case she wishes to bring is a case of "two distinct and identifiable injuries where separate causes are alleged to have given rise to each injury". Rather, she says, she wishes to argue that each or all of three different aspects of the employer's behaviour were a cause of a single psychological injury suffered by her.

81 As to the defendant's reliance on the discussion in Grech v Orica Australia Pty Ltd[87], the plaintiff says that much of it referred to "physiological change in a body part", relating to physical injury. She notes the defendant's submission that the same analytical process applies in respect of mental injuries, and the defendant's reference to paragraph 80 of the judgment in that regard. However, she says, what is clear from paragraph 80 of Grech is the importance in that case of considering whether or not an injury had occurred before or after 20 October 1999, whereas there is no suggestion that Ms O'Neill's psychological injury had arisen before 20 October 1999. For that reason, she says, there is no need in the present case to engage in an analysis of the kind described in Grech.

82 In conclusion, the plaintiff submits that on the basis of the Medical Panel's opinion she is able to bring an action in negligence against the defendant in respect of its behaviour (the sending of the letters) which she alleges to be a cause of the psychological injury which she suffered in the course of her employment with the defendant.

Consideration of the submissions as to whether the amendment is statute-barred

83 I am comfortably satisfied by the plaintiff's submissions and by my own research and reflection that it is at the very least arguable that the plaintiff's proposed further claim against the defendant is not precluded by s 134AB of the Act.

84 Reduced to its essentials, the defendant's argument can be summarised as follows:

Neither in fact nor in law did the sending of the letters or any effect thereof form any part of the basis of -

(ii) the insurer's acceptance of liability in relation to the claim for weekly payments;

(iii) the plaintiff's claim for impairment benefits;

(iv) the insurer's acceptance of liability in relation to the claim for impaired benefits;

(vii) the plaintiff's application under s 134AB(4) and (5) of the Act.

85 The defendant submits clearly enough that a finding in its favour on point (vi) would be fatal to the plaintiff's ability to rely on the sending of the letters. However it does not distinctly submit that a finding in its favour on any of the other six points would necessarily be fatal. Nevertheless, because it is just possible to interpret the defendant's submissions in that way in relation to all or most of the points and because the points are interconnected and because of certain observations made in Ansett Australia Pty Ltd v Taylor[88], to which I will come, I will deal with all of the points, in the order indicated. Before doing so, I reiterate that, in my view, I need only be satisfied that the claim the subject of the plaintiff's proposed amendment is arguable, in the sense that it raises a triable issue or issues of fact or law, in order for the plaintiff to overcome the presently relevant aspects of the defendant's opposition to the amendments.

86 It can be readily accepted that neither the sending of the letters nor any effect thereof formed any part of the basis of the plaintiff's claim for weekly payments. That is obvious, because the claim for weekly payments was lodged on 16 July 2001, before the first of the letters was sent. The evidence does not disclose the date on which the claim was accepted. Presumably, further medical certificates or medical reports were supplied to the Authority from time to time in support of continued payments, but they are not identified in the evidence. The evidence does include various early medical reports, including several reports of the treating psychiatrist, Dr Mishra; and the defendant is correct in pointing out that no reference is made in any of Dr Mishra's reports to the letters in question. On the other hand, Dr Balvin's report of 28 May 2003 may be thought to refer to the letters indirectly in that it refers to the plaintiff having been suspended "pending investigations" and in that it suggests (strongly) that the plaintiff's condition deteriorated significantly and became entrenched after the suspension (which occurred on 5 July 2001). It is not known what, if any, medical reports were submitted to the insurer in connection with the weekly payments claim, although it is known that Dr Balvin's report and some of Dr Mishra's reports were later provided to the Medical Panel.

87 In any event, there is no relevant reference in s 91, s 98C, s 104B or s 134AB to the fact or the content of any claim a worker may have made for weekly payments. The defendant itself appears to refer to the plaintiff's weekly payments claim only for the purpose of attempting to characterise the subject matter of the plaintiff's subsequent claim for impairment benefits, and then only on the basis of cross-references in the latter to the former. In my view, the defendant would not be entitled, for present purposes, to make any greater use than that of the content of the plaintiff's claim for weekly payments. I say so notwithstanding that in Ansett Australia Ltd v Taylor[89] Ashley JA, with whom Maxwell P and Bongiorno AJA agreed, was prepared to have regard to the respondent worker's description of injury in his weekly payments claim in forming the view, and commenting, that it should be open to the respondent, on the proposed remittal to the County Court of his application under s 134AB(16)(b) in that case, to seek to establish compensable injury in the circumstances described in his weekly payments claim, even though the worker's intervening impairment benefits claim omitted to refer to those particular circumstances. I would not read his Honour's comment as implying the reverse, ie that a worker is limited, in any process under s 104B or s 134AB or in a consequent common law proceeding, by the terms or scope of any weekly payments claim the worker may have previously submitted.

88 There is little or no evidence about the circumstances in which or the language in which liability for the plaintiff's weekly payments claim was accepted. However, there is nothing to indicate that the subject matter or the language of the insurer's acceptance of liability was any narrower than the subject matter or the language of the claim itself. In any event, the defendant has neither specifically argued, nor referred me to any authority that might suggest, that the scope of an acceptance of liability in respect of a claim for weekly payments can, of itself, limit the legitimate scope of a subsequent claim for impairment benefits, or legitimately affect the characterisation of such a claim. There is nothing in the abovementioned comment by Ashley JA in Ansett, or otherwise contained in that case, to support any such contention.

89 I turn to the plaintiff's claim for impairment benefits. I acknowledge that there is a basis for saying that the scope and terms of a worker's claim under s 98C for impairment benefits can limit the legitimate subject matter for a subsequent assessment by an independent medical practitioner or by a Medical Panel under s 104B of the Act for the purposes of s 135AB(15) of the Act, although I take leave to doubt that in making a claim in the requisite form for no fault statutory benefits, a worker must be fully alert to cover every possible way in which he or she might wish thereafter to allege negligence against the employer.[90]

90 In Ansett, the question arose whether, in relation to an application by a worker to the County Court under s 134AB(16)(b), the prior acceptance by the Authority[91] (by itself or through an agent), under s 104B(2), of a worker's claim for non-economic loss "in respect of an injury resulting in permanent impairment" - in cases in which the accepted s 98C injury had allegedly been sustained in whole or in part after 20 October 1999 - establishes conclusively that the worker had sustained compensable injury on or after that date. The Court answered that question 'no', but proceeded to hold that, ordinarily, such an acceptance should stand as a very significant evidentiary admission by the Authority, speaking for the employer, that such an injury had been sustained. In the course of reasoning towards his conclusion on the central question, Ashley JA compared the position under s 134AB(16)(b) with the position under s 134AB(15). As to the latter his Honour said:

"[37] In the context of s 134AB, sub-section (15) could have had no sensible operation unless "the injury" there referred to was compensable injury occurring on or after 20 October 1999; and whether the s 104B assessment related to such an injury depended in turn on the s 98C claim, which must have been made in respect of a specified compensable injury allegedly resulting in permanent impairment.

[38] It follows from what I have said that, for the purposes of s 134AB(15), a s 104B(5) assessment of degree of impairment - which could only be made if the worker's s 98C claim was accepted, or if a court determined that the Authority or self-insurer had liability in relation to the claim, was decisive of -

• The occurrence of compensable injury on or after 20 October 1999.
• The persistence of consequences of compensable injury - necessarily being specified as affecting a particular part of the body - which met the initial gateway test of serious injury."

91 However, Ansett does not necessarily assist the defendant greatly insofar as the defendant would seek to confine the plaintiff strictly to the words she inserted in the s 98C impairment benefits claim form in November 2002. Ashley JA spoke of "the s 98C claim", not the s 98C claim form. I note that s 103(1)(a) has at all relevant times provided that a claim for compensation must be in a form approved by the Authority in respect of that type or class of claim. Presumably, the impairment benefits claim form which, as completed by the plaintiff in November 2002, is in evidence, was in the then approved form. It appears to comprise 2 A4 pages, with 2 columns per page. Under "Injury details" it asks (as item 3) a question in very loose and broad terms, as follows:

"3. For what injury/condition(s) and body parts are you claiming impairment benefits? (eg broken arm, back strain, hearing loss.) Attach details if insufficient space."

There is a box at item 5 for "Date injury sustained or date you first became aware of the condition". Item 6 asks: "How did your injury/condition(s) occur?" and a single column, four-line box is provided, with no counterpart of the request in item 3 to "attach details if insufficient space". Moreover, the form requires the worker to sign an irrevocable authorisation in favour of the Authority, the employer, the employer's WorkCover agent and a WorkCover conciliation officer to obtain medical information relating to the injury to which the claim relates from any treating medical service provider. The form also provides for the employer to insert comments about the claim.

92 Under s 104B(2) as it stood at the relevant time[92], the Authority had 90 days[93] after receiving a claim to "accept or reject liability in relation to the claim". In effect, additional time to make inquiries and seek information would have been available to the Authority, because most workers would previously have given a notice of injury and/or made a claim for weekly payments, which itself would have included an authority to obtain medical information. Further, the liability decision does not extend to any question as to the level of impairment. Ashley JA noticed these matters in Ansett in coming to his Honour's conclusions in that case. Further, as I have already mentioned, Ashley JA contemplated that in an application to the County Court under s 134AB(16)(b) for leave to proceed, a worker could rely on causal circumstances not mentioned "in connection with" the worker's s 98C claim, at least where those circumstances had been referred to in the weekly payments claim.[94]

93 Where, under the legislative provisions in force at the relevant time, the Authority, before making a decision on liability, became aware of and took into account additional information about the circumstances in which a worker became injured, or about the nature of the injury, and then admitted liability, I doubt very much that the Authority could later be heard to confine its admission strictly to the matters set out in the claim form, or that it could later be heard to read down a consequent impairment assessment on that basis.

94 In the present case, the evidence does not reveal what information the Authority or the claims agent might have had, in addition to the plaintiff's two claim forms, at the time when it admitted liability for the s 98C claim. In any event, as the plaintiff submits, the information given by the plaintiff in the s 98C claim form is itself expressed broadly. The "medical" description of injury/condition(s) is amply sufficient to cover the injuries as presently described in the statement of claim. The defendant has never suggested the contrary, and the plaintiff does not seek leave to amend the particulars of injuries currently contained in the statement of claim.[95] The answer to the question "How did your injury/condition(s) occur"? is likewise broadly expressed. If one puts aside (as I think one should - see further below) any gloss said to be derivable from previous events (such as the plaintiff's claim for weekly payments) or subsequent events (such as the plaintiff's application under ss 134AB(4) and (5)), the answer given - "Repeated harassment + Bullying in the course of employment/long hours, stress etc" - seems wide enough, at least very arguably, to cover the conduct (the sending of the letters) now sought to be included in the statement of claim.

95 In my view it is hardly fair or appropriate to read down the plaintiff's s 98C claim by reference to her prior (accepted) weekly payments claim in the way that the defendant seeks to do. As already mentioned, the s 98C form invites the worker to give the claim number where the worker has "already lodged a claim for this injury/condition(s)". The weekly payments claim number is duly given (and the covering letter refers to that number also). But surely this is done mainly for administrative convenience. It is not proper to infer that the plaintiff, by supplying the requested information, was intending to convey that she wished her claim for impairment benefits to be read as excluding so much of the "Psychological upset. Post traumatic stress disorder. Anxiety/Depression. Panic attacks" as she was then suffering as might be referable to anything that had happened after 16 July 2001, being the date on which she signed the weekly benefits claim, or, for that matter, after 5 July 2001, or, indeed that it should be read as intending to exclude any aspect or part of her "injury/condition(s)" as at November 2002 at all.

96 Similarly, I regard it as inappropriate to read down the plaintiff's s 98C claim by reference to what she may have said or done in connection with her s 134AB(4) and (5) application. There is no proper basis for doing so. The Court's present task is to ascertain what was claimed, or apparently claimed, at the relevant time, not what the true facts were. So for present purposes it is not appropriate to seek to use later statements made by or on behalf of the plaintiff as "admissions" that she was not in fact harmed by the letters. And in any event, once again, I am strongly inclined to agree with the plaintiff that, in her affidavit in support of her s 134AB(4) and (5) application (read together with the accompanying medical report of Dr Epstein), if not in her draft statement of claim, the plaintiff did partly attribute her overall psychological condition, as it stood at all times after the sending and receipt of the letters, to the sending and receipt of the letters.

97 The insurer's acceptance of liability for the s 98C claim was initially conveyed by the letter of 19 November 2002. The letter said that Allianz had accepted liability "in respect of injury psychiatric condition, which occurred on 01.01.01".[96] Putting aside the date, that description of the nature of the injury could not relevantly be broader. The "date of injury" of 1 January 2001 seems merely to reflect the date specified by the plaintiff in item 5 of the claim form as the "date injury sustained or date you first became aware of the condition". In the circumstances, it appears that the plaintiff may well have been referring in the claim form to the first time at which she experienced what she regarded as undue pressure, as distinct from the time at which she suffered any injury or any injury that could be called a serious injury. The defendant itself does not suggest that 1 January 2001 is the real "date of injury". Ms Toop's explanation in her affidavit about insurers' practices as to designated dates of injury is not contradicted by the defendant. For present purposes I should accept it. Hence, in what I have considered so far, there would appear to be nothing about the terms of the insurer's acceptance of liability that would relevantly restrict the plaintiff, beyond any restrictions inherent in the claim itself. However I will return to the insurer's acceptance of liability when I come to deal with the Medical Panel's assessment.

98 It does seem that the plaintiff may not have mentioned the letters to Dr Kornan, but, from his report, it appears that he may never have asked her any question that might have been expected to elicit a reference to the letters. In any event, her s 98C claim had already been made and liability had already been accepted prior to the interview with Dr Kornan. So, on the defendant's own approach, it is hard to see how the plaintiff's claim or the defendant's acceptance of liability on it could be read down by reference to the interview or to Dr Kornan's report. The plaintiff did not and does not rely on the impairment assessment by Dr Kornan. Indeed she disputed it. So I cannot see how it matters, for present purposes, that she may not have mentioned the letters to Dr Kornan, except to say that if, in law, the interview with Dr Kornan presented the plaintiff with an opportunity to confirm or clarify that her claim included the effect of the receipt of the letters, or to expand her claim (were that necessary) to include that matter, then it seems that she may not have taken advantage of the opportunity.

99 I turn to the Medical Panel's assessment. At no stage has the defendant suggested that the Panel went beyond its powers or jurisdiction, or made any error at all. The Panel's reasons show beyond doubt that during the interview the plaintiff complained about the receipt of "threatening communications"[97] from her employer as being part of what had made her feel "depressed, anxious, angry and unable to go out or manage day to day matters".[98] Contrary to the defendant's submissions, there is every reason to believe that the Panel took this complaint into account in determining that the plaintiff had a psychiatric impairment of 35% and in concluding that the whole of that impairment arose "directly from the circumstances of the injury".[99]

100 In its formal opinion, the Medical Panel said that the plaintiff had a whole person impairment of 35% resulting from "the accepted psychological injury". Each party says that this reference supports their case. In my view it takes the matter no further than I have already indicated. I have already dealt with the terms of Allianz's letter of 19 November 2002 accepting liability for the plaintiff's "psychiatric injury". However, after Dr Kornan's assessment, Allianz sent the further letter, dated 12 January 2004[100], to which both parties refer in their submissions.[101] That letter referred to the "Accepted Injury/Injuries" as "Psychiatric impairment": again, a loose, broad description. It referred to a "Date of Injury" of 1 July 2001. The plaintiff's submission that that date, too, is irrelevant must be accepted. I note in passing that it is somewhat ironic that the defendant now places such great store on the precise identification of the "injury" when, by its own agent, it has previously taken such a cavalier attitude to the task of describing it.

101 Even if, contrary to my view, the plaintiff's complaint to the Medical Panel about the letters should be regarded as being, at that stage, wholly new and outside anything she had previously asserted in connection with her s 98C claim, still it could be argued, perhaps, that it was not too late for her to raise it and rely on it as part of the ongoing putting forward of her s 98C "claim". On the other hand I acknowledge that Ansett seems to indicate that where the Authority has accepted liability in relation to a s 98C claim the scope of the claim cannot be expanded after the decision of the Authority has been made (unless, perhaps, the Authority makes a further decision accepting broader or additional liability in relation to the claim).

102 However that may be, it is plainly arguable that the plaintiff's s 98C claim, in the state in which it stood in November 2002 at the time of the Authority's acceptance of liability (and as it has at all times stood), extended to cover the plaintiff's psychological or psychiatric condition to the full extent to which her condition was allegedly caused or contributed to by (any type of) "repeated harassment and bullying in the course of her employment", to use the words inserted in the claim form. And it is plainly arguable that an allegation of the kind now sought to be pleaded is an allegation of that description.

103 As I have already indicated, to the extent that the scope of the decision of the Medical Panel itself falls to be examined, the defendant cannot improve its position, in my view, by pointing to any subsequent omission of the plaintiff to rely on the sending of the letters, such as the omissions to do so in the draft statement of claim and in the actual statement of claim. There is no relevant connection between the two, as the plaintiff rightly submits. And in any event, as already mentioned, those omissions are counteracted by the clear references in the plaintiff's affidavit of 2 February 2005 and in Dr Epstein's report to the letters and their allegedly harmful effects.

104 Insofar as the defendant relies directly on the state of the plaintiff's application under s 134AB(4) and (5), I need do little more than repeat what I have just said - that there are clear references to the letters and to their alleged ill-effects in the plaintiff's affidavit of 2 February 2005 and in Dr Epstein's report. So, the omission from the draft statement of claim of any such references does not establish that the proposed amendments would raise a "new" injury, in the sense of a wholly unforeshadowed allegation of injury.

105 Understandably, the defendant does not argue that the Act precludes a plaintiff from including in his or her statement of claim anything at all that was not included in the draft statement of claim delivered with the s 134AB(4) and (5) application.[102] There is nothing in the Act or in the Ministerial Directions under s 134AF that would justify such an argument. Reference was made in oral argument to the above mentioned provisions requiring the parties to exchange evidentiary material on which they intend to rely, but those provisions contain their own sanction, namely the rendering inadmissible of evidence that should have been disclosed. It would be another thing altogether to say that the plaintiff's pleadings may not differ from the draft statement of claim, whether in the first instance or by amendment. The defendant acknowledged, I think, that any amendment that would ordinarily be proper was permissible as long as it did not raise an alleged injury or an alleged cause of injury that fell outside the legitimate subject matter (or, alternatively, the actual subject matter) of the assessment referred to in s 134AB(15). For the reasons I have given, I am by no means satisfied (to the requisite extent) that the allegations now sought to be raised fall outside the legitimate subject matter (much less the actual subject matter) of the assessment carried out by the Medical Panel on 13 April 2004.

106 In these circumstances it is not necessary to engage in a detailed discussion about the concept of "injury" under the Act. But I note that the present case involves an allegation of pure psychological injury alleged to be due to prolonged employment stress. There is much to be said for the plaintiff's submission that care is required in seeking to apply in the present context judicial observations relating to physical injuries.[103] Almost by definition, it will not be possible to identify a single event or even a single series of events as the cause of the relevant injury or injuries. Even in relation to physical injuries caused by repeated or gradual processes, caution is required. In Barwon Spinners Pty Ltd v Podolak[104] Phillips JA warned against an over-fine analysis of cases in which a worker is injured in the same body part in successive and similar incidents, close in time and while working at the same job and with the same employer. His Honour said:

"It might be unfortunate for the worker if, despite the final consequences, each separate incident was ruled not to amount to serious injury, or, even if the last was ruled to be serious injury because of the final consequences, the worker was not permitted to sue at common law for the earlier incidents which had perhaps brought him or her to a parlous state in the first place. The need to analyse the plaintiff's condition both before and after each incident causing injury was certainly recognised in Petkovski, Dalton and Lu but, on further analysis, it might perhaps be that special considerations required such an approach to be taken in those cases. For example, in Petkovski the proposed defendant was the other driver in a motor vehicle accident, who obviously could be responsible only for the injury wrought in the accident. Perhaps much will ultimately be seen to turn on the precise nature and extent of the common law proceeding which the applicant for leave is proposing to bring if leave is granted. But we say no more about it because it does not matter in this case."

In oral submissions, the defendant submitted that any injurious consequence of the sending of the letters was necessarily an aggravation of the plaintiff's psychological condition as existing immediately beforehand or as it was at the end of 5 July 2001; and that it was therefore necessarily a new or separate injury. But, as mentioned above, the point was put much more tentatively in the defendant's written submissions, where it was said, by reference to Grech v Orica Australia Pty Ltd[105], that cumulative insults may "possibly" involve separate injuries; and that the "aggravation" of an injury that arises as a result of "particular" work related circumstances must constitute a further compensable injury. For present purposes, the first of those points is answered by its own tentativeness. The second does not help the defendant because it is merely conclusory. It assumes that this was truly a case of an (unassessed) "aggravation", due to "particular" (severable) circumstances, of a pre-existing (assessed) injury. However, as Windeyer J said in Federal Broom Co Pty Ltd v Semlitch:[106]

"The question whether there has been an aggravation, acceleration, exacerbation or deterioration of a mental disorder is, I think, essentially one of fact."

107 As the plaintiff points out, the particular difficulties that can arise where an alleged injury or injuries may straddle a statutorily significant date do not arise, as such, in the present case.[107] I need not stay to consider whether s 82(6) might have any relevance in the present case[108], because cases of progressive injuries - physical and mental - are otherwise legion; and neither in workers compensation cases nor in common law cases do the courts necessarily insist on separate identification of every individual insult to the body[109] or the mind[110], even where a "serious injury" authorisation is required. Ronchi v Alcoa Portland Aluminium Pty Ltd[111] itself is an example of a physical (back) injury case where this Court held[112] that it was appropriate to treat the County Court's finding of "serious injury" as extending to the results of "repetitive trauma" suffered over an entire year, not merely over a single month as the defendant had argued, much less in a single incident. I do not regard the defendant's attempt to distinguish Ronchi as convincing. As just mentioned, Ronchi was not a case of a "single injury", in the sense of a physical damage attributable to a single incident. Nor is it persuasive to say that the alleged imposition of particularly heavy work pressure on the plaintiff and the alleged making of accusations against her at the meeting of 5 July 2001 together represented an alleged defect comprised by the defendant's "system of work", whereas the sending of the letters comprised other "particular behaviour". Otherwise the defendant's submission on Ronchi does no more than to, once again, impermissibly assume the truth of the proposition which the defendant needs to establish in the present case, namely that the plaintiff's proposed amendment must necessarily raise a separate, unassessed alleged injury. I think that Ronchi supports the plaintiff's case insofar as it shows that the effects of related, repetitive insults to a particular body part can in effect be "aggregated" for serious injury purposes, at least in some cases.[113] Brambles Ltd v Wail[114] at least shows that one should not be too pedantic in identifying the subject matter of a finding of serious injury in cases under s 134AB(16)(b), and arguably Brambles can be taken to carry a similar message for cases under s 134AB(15).[115] As for psychological injuries, in O'Leary v Oolong Aboriginal Corporation Inc[116] McColl JA said:

"This Court has held that employees may recover for psychiatric injury caused by the accumulation of occupational stress over time without the need to establish exposure to isolated trauma sustained in the workplace."

Her Honour then referred to two previous New South Wales cases[117] and three English cases to that effect. Many more could be cited[118]. Of course, the (Victorian) Act itself recognises workplace stress claims: see, eg, s 82(2A), set out above. In the present case, once it is seen that neither the s 98C claim, nor the insurer's acceptance of liability, nor the Medical Panel's assessment necessarily distinguished between the position before and after 5 July 2001, the mere fact that the statement of claim or the draft statement of claim may have implicitly done so (by omission), does not make it mandatory to regard any alleged effects of the letters as an alleged aggravation, or otherwise as a new or separate alleged injury. At least, I consider that proposition to be plainly arguable. And I see nothing in paragraph [80] of Grech, to which the defendant made particular reference, that would necessitate a different approach.

108 The defendant does not make clear exactly what point it seeks to make by reference to subsections 91(7) and (7A). I note that s 91(7) was recently considered by Kyrou J in Vegco Pty Ltd v Gibbons[119], in which his Honour said:

"In Millane v MJ Millane Pty Ltd, Balmford J held that impairment caused by an injury that preceded the injury that was the subject of a compensation claim was an impairment from unrelated injuries or causes for the purposes of s 91(7)(c) of the AC Act and therefore had to be disregarded by a medical panel in assessing the degree of impairment.[120] Her Honour distinguished Del Borgo v Nisselle[121] on two bases, one of which was that the claim in that case was for industrial deafness, 'which has its own special characteristics'.[122] I agree with her Honour on that point."

Kyrou J considered that the medical panel had erred in Vegco by failing to disregard impairment to Mr Gibbs from an aggravation of a work-related injury when the aggravation was considered by his Honour to be due to Mr Gibb's employment with a subsequent employer in a different State.

109 Each case must be looked at on its own merits. In the present case the defendant did not distinctly submit that any particular provision of s 91(7) or of s 91(7A) was applicable. The present case arises under s 134AB, not s 98C. So, presumably, s 91(7) is irrelevant, but s 91(7A) might be relevant. Reconciling the operation of either of those sub-sections with that of s 104B(5A) and (5B) (as they stood at the relevant time) may not always be easy.[123] In any event it would remain a real issue whether it could properly be said that, on her own case (as now sought to be advanced), the plaintiff suffered "injuries which occurred on different dates" within the meaning of s 91(7A)(a); and it would remain a real issue whether it could properly be said that, on her own case, the plaintiff had "impairments from unrelated injuries or causes" within the meaning of s 91(7A)(b). Provisionally, it would seem to me to be somewhat artificial to say that, on her own case, the plaintiff suffered "injuries which occurred on different dates", and indeed wrong to say that, on her own case, she had impairments from unrelated injuries or causes. All of the alleged causes of which she seeks to complain appear to be related to each other, in that they allegedly arise out of an inter-connected course of conduct of the employer relating to its demands and concerns about the plaintiff's performance in the workplace.[124] In any event, once again, I note that the defendant has not suggested that the Medical Panel misapplied s 91(7) or (7A) or, for that matter, s 104B(5A) or (5B), or otherwise erred in any way, in considering the matter in the way it did in the present case.

110 I do not see that the defendant's position is advanced by contemplating the scenario that the plaintiff fails to establish a breach of duty or contract at the trial except in relation to the sending of the letters. The scenario is based on an unspoken assumption that the Medical Panel's assessment of the plaintiff's impairment as a result of her accepted injury or injuries was based wholly or substantially on the alleged effects of alleged events occurring up to 5 July 2001 and took no account of any alleged injury or injuries of which the sending of the letters was an alleged cause. But, for the reasons I have already given, I consider that assumption to be at least arguably false. If the sending of the letters is duly found to have been included within the Panel's assessment as an alleged cause of the injury or injuries, then the plaintiff will be free to try to establish that that conduct was in fact a breach of duty or contract and that it was in fact causative of some harm to her. Indeed, under the abovementioned reasoning in Ansett[125], she may at that stage have the benefit of a conclusive determination or an issue estoppel, arising from the Panel's assessment, in relation to the medical nature of the relevant injury or injuries, the persistence of its or their consequences and the manner or circumstances in which it or they occurred.[126] But, putting estoppel and the like aside, I cannot see how, at that stage, she could be precluded from trying to establish a case based on the sending of the letters merely because the trial court might ultimately find (among several other possibilities) that any harm she suffered was completely caused by prior or other events not giving rise to liability.

111 It is unnecessary to express any views on any of the other matters canvassed by the parties in their submissions on this part of the case, although I would observe that I agree with the defendant that the plaintiff's position is not advanced by anything said in Nicolaou nor by anything contained in the letter from the defendant's solicitors of 3 June 2005 or in the unserved "serious injury certificate".

112 For these reasons, I am satisfied that the proposed amendments would raise arguable or triable matters. So I do not uphold the defendant's principal objection to the proposed amendments.

The objection based on prejudice arising from the statutory offer and counter-offer scheme

113 The statutory conference, offer and counter-offer scheme is principally embodied in s 134AB(12). As the defendant says, participation in the scheme is a necessary precursor to a worker commencing proceedings permitted by s 134AB. The defendant submits, and the plaintiff does not deny, that the scheme has inflexible costs consequences for the parties. The "rules" are set out in s 134AB(28). However, as was observed by the Court of Appeal in Raeburn v Tenix Defence Systems Pty Ltd[127]:

"In our view, the pressures [to resolve disputes without litigation] imposed by the operation of subsections (12) and (28) seem much the greater upon the worker than upon the Authority. The worst that the Authority can do, in the end result, is to be ordered to pay the successful plaintiff's costs.[128] But for the plaintiff to get a favourable costs order, he or she, having been obliged to make a counter offer in response to the Authority's offer or deemed offer - the former of which may be for a nominal sum, and the latter of which is deemed to be zero - must then obtain judgement not simply for more than the Authority's offer or deemed offer but for more than 90% of the statutorily obliged counter offer after making allowance for all compensation received up to judgement."

114 The defendant acknowledges the plaintiff's point that because of the timing of the statutory conference and offer scheme, many of the matters which may be relevant to the ensuing litigation cannot be known at that time in any event. There will not have been an exchange of pleadings, nor discovery, interrogatories, notices to admit or the like. However, the defendant submits that it is "clear" that by the time of the statutory offers "the particular injury relied upon and the facts which are said to give rise to that injury have been disclosed to the defendant."

115 Even as a general proposition, that submission may be doubted. Often enough, one would think, a worker may not be aware at the time of the statutory offers of the full facts that gave rise to his or her injury or injuries, bearing in mind that the worker will not have had the benefit of discovery or interrogatories at that stage.

116 However, in the present case, the defendant submits that the plaintiff seeks to plead "a new set of facts giving rise to a new injury - one of which the defendant was not and could not have been aware at the time it participated in the statutory scheme of offer and counter-offer. To that extent," the defendant submits "the defendant is prejudiced by the plaintiff's amendments to paragraph 8A, 8B and 9 of the statement of claim."

117 Essentially for the reasons set out above in connection with the defendant's principal objection, I do not accept the defendant's characterisation of the effect of the proposed amendments. The plaintiff's claim for impairment benefits in November 2002 was broadly expressed. She made explicit complaint about the letters and, I think, about their alleged effect, to the Medical Panel in early 2004. The Panel's report was available to the Authority in April 2004. Mr Epstein's report, containing a further complaint about the letters and their effect, was available to the Authority by no later than the time of the statutory conference and offers. It is true that the matter was not referred to in the draft statement of claim, but had it been said by the plaintiff's representatives at a statutory conference in mid-2005 that in fact she did then, or would in future, rely on the sending of the letters as causative of injury and (in the face of the medical certificates) as negligent,[129] this could hardly have come as a great surprise to the defendant, although I would accept that, at face value, the tone of the letters themselves does not seem particularly strong or intimidating.

118 As indicated above, I do not understand the defendant to suggest that the existence of the statutory conference and offer scheme, of itself, would absolutely preclude the proposed amendment. The present objection is expressed in terms of "prejudice", and I understand that the defendant does no more than invite the Court to exercise its discretion against allowing the amendment. The defendant does not suggest that it cannot now meet the proposed claim forensically, or that it is otherwise prejudiced by the proposal in any way other than in relation to the statutory costs provisions.

119 In Howarth v Adey[130] Winneke P said:

"The fundamental principle which, I think, should guide a trial judge upon an application by a party to amend his pleadings so as to plead a new or alternative claim or defence is that such an application should ordinarily be allowed provided that any injustice to the other party from so doing can be compensated by the imposition of terms."

120 In some cases an amendment may disadvantage or prejudice the other party in a way that cannot be wholly compensated by the imposition of terms. For example, the amending party may be impecunious and unable to meet any order for the payment of costs thrown away. That was apparently the situation in Howarth v Adey itself.[131] But nevertheless leave to amend may be appropriate. Injustice, not merely incompensable disadvantage or prejudice, is the touchstone. The competing considerations must be weighed up. In Hamersley Iron Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union of Workers - Western Australian Branch[132], Parker J said:

"The discussion in [TWT Ltd v Moore[133]] confirms that the onus is on the applicant to show that a proposed amendment is necessary and if that is done the amendment will usually be allowed if the applicant is also able to show that there will be no injustice to the defendants which would outweigh the considerations favouring the amendment."

121 On one view, assuming that any costs thrown away can be justly dealt with, and assuming that I am correct in holding that the plaintiff has a right to try to show that she is free to make a claim based on the letters, it might be said that the allowing of the amendment will do no more than enable her to try to claim something against the defendant to which she may prove to be legally entitled, and that the defendant cannot be heard to say that it will suffer any prejudice at all by the allowing of such an amendment. As a result of the amendment, the defendant may simply have to pay to the plaintiff a sum in damages and costs for which, by hypothesis, it is already potentially liable. To refuse the amendment, on this view, would not save the defendant from any future loss or expense about which it could legitimately complain. It would merely punish the plaintiff for the lateness of her application and serve as a warning to others.

122 On the other hand, it may be said that, even if no regard can be had to the prospect of employers having to pay proper damages, the allowing of amendments in situations like the present will tend to undermine the policy intent of the relevant provisions in relation to costs. Still, at worst, the present defendant may, as a result of the granting of the amendment, ultimately have to pay the plaintiff some costs it might not otherwise have had to pay her. But even that assumes that had the plaintiff included the matter in question in her draft statement of claim, the defendant would have made a higher offer (than whatever offer it made or was deemed to have made) whereby the case might have settled without the incurring of further costs, or at least the defendant might have gained some additional protection in costs that it cannot now achieve.

123 It seems to me that any prejudice to the defendant of which it can legitimately complain is speculative and may not be of great magnitude. On balance, in my view, any such prejudice is considerably outweighed by the obvious prejudice that would be done to the plaintiff by shutting her out from endeavouring to make out what, on my findings, is an arguably maintainable claim.

124 Accordingly, I will grant the plaintiff leave to amend as sought in accordance with the draft amended statement of claim being exhibit "PFWT - 13" to the affidavit of Patricia Toop of 27 February 2008. I will hear counsel as to any appropriate consequential orders and as to costs.

[1] Compare Koehler v Cerebos (Australia) Limited (2005) 222 CLR 44.

[2] The plaintiff's written submissions were signed by her counsel. The defendant's written submissions were made over the name of (and signed by) its solicitors, not counsel.

[3] Supreme Court (General Civil Procedure) Rules 2005 r.36.03.

[4] (1990) 170 CLR 394 at 456. Applied in Rambaldi v Dallbrook Pty Ltd [2003] VSC 163 (Hansen J) at [32].

[6] Compare Ronchi v Alcoa Portland Aluminium [2007] VSC 340 (Osborn J) at [9].

[7] Bass v Permanent Trustee Co Ltd [1999] HCA 9; (1999) 198 CLR 334 at 355-358 [45]- [53]; Verwayen v The Commonwealth [1988] VicRp 29; (1988) VR 203 at 206; Utiger v Brown and Venteb Pty Ltd [2002] VSC 306 (Gillard J) at [12]-[24]; Fluor Australia Pty Ltd v ASC Engineering Pty Ltd [2005] VSC 423 (Habersberger J) at [47]-[54]; Wickstead v Browne (1992) 30 NSWLR 1 at 5-6 per Kirby J; Travel Compensation Fund v Blair [2003] NSWSC 720 at [162]- [164]; compare Wenkart v Panzer [2003] FCAFC 210; (2003) 132 FCR 204 at 206 [4], 208 [12]; AWB Ltd v Cole (No 2) [2006] FCA 913; (2006) 233 ALR 453 at [26]- [40]; cf Simplot Australia Pty Ltd v PSL Industries and Others (2001) VSC 419 (Ashley J) at [15]-[17]; affirmed [2003] VSCA 7; (2003) 7 VR 106.

[8] See Verwayen v The Commonwealth [1988] VicRp 29; (1988) VR 203; Utiger v Brown and Venteb Pty Ltd [2002] VSC 306; but compare The Commonwealth v Verwayen (1990) 170 CLR 394 at 402-403 per Mason CJ; Ronchi v Alcoa Portland Aluminium [2007] VSC 340 (Osborn J) at [9].

[9] Compare Hall v National and General Insurance Co Ltd [1967] VicRp 41; [1967] VR 355 at 368; McKenzie v Commonwealth [2001] VSC 361 (Gillard J) at [126].

[10] See Dwyer v Calco Timbers Pty Ltd [2008] HCA 13 at [3] - [8].

[11] [2006] VSCA 171.

[12] Unfortunately, neither party referred to it in submissions.

[13] That is, statutory compensation under the Act itself.

[14] It appears to be common ground that the current version of s 134AB(2) applies, notwithstanding that at the time of the plaintiff's injury or injuries (which I will treat as having occurred no later than the end of 2001) s 134AB(2) contained additional words after the word "if", namely "employment of that nature was a significant contributing factor, and". Those words were omitted by s 3(8) of the Accident Compensation and Transport Accident (Amendment) Act 2003. That Act contained special transitional provisions confining the application of certain of the amendments made by it to the case of injuries occurring after the commencement of the relevant amending provision (see now Part IX, Division 3 of the Act). However no such special transitional provision was expressed to apply to this particular amendment. Arguably, this does reveal an intention that the new version of s 134AB(2) should apply in relation to injuries whenever occurring. Otherwise the standard transitional provisions in the Interpretation of Legislation Act 1984 would apply. In any event, it has not been suggested that the result in this case might be different if the original version of s 134AB(2) were applicable. In that regard, see and compare Hegedis v Carlton & United Breweries Ltd [2000] VSC 380; (2000) 4 VR 296; Zlateska v Consolidated Cleaning Services Pty Ltd [2006] VSCA 141 at [5].

[15] This sub-section was substituted by s 6(1) of Act no 102 of 2004 as from 21 December 2004. By virtue of the special transitional provisions contained in the amending Act (see now s 281(1) of the Act), the new sub-section (3) applies "in respect of an application made under section 134AB(4) on or after [21 December 2004]". Since the plaintiff's application under sub-section (4) was made in May 2005, sub-section (3) in its current form appears to be applicable. However, see the next two footnotes. In any event the date of injury appears to be irrelevant to the applicability of s 134AB(3) in its current form.

[16] In a case like the present, where the worker is relying on a 'deemed' serious injury, there is actually nothing left for the worker to "apply" for. However various statutory steps must still be gone through, and it will be convenient to continue to use the expression "application" in that respect, as the Act does.

[17] It is hard to know how s 134AB(4)(a)(i) could sensibly operate in a case like the present, because prior to 21 December 2004, one of the sub-sections referred to in it, namely s 104B(6), was completely different in form and the other, s 104B(7B), did not exist at all, and so the plaintiff had had no opportunity to advise the Authority under either of them. Fortunately s 134AB(4)(a)(i) is inapplicable in any event, because, as mentioned in the text, the plaintiff did not accept but rather disputed the decision of the independent medical practitioner and so advised the Authority, and the matter was then referred to a Medical Panel in accordance with s 104B(9). Once again, the date of injury is presumably irrelevant to the application of s 134AB(4)(a).

[18] This is a reference to the operation of s 134AB(15), the terms of which are set out below.

[19] The words "made before an application under sub-section (4) is made" in sub-section (15) were inserted by s 6(2) of the Act no 102 of 2004, and are therefore applicable to the present case: see s 281(1) of the Act.

[20] See Raeburn v Tenix Defence Systems Pty Ltd [2007] VSCA 90; (2007) 16 VR 290.

[21] See Dwyer v Calco Timbers Pty Ltd [2008] HCA 13 and cases there cited; Jayatilake v Toyota Motor Corporation Australia Ltd [2008] VSCA 167 and cases there cited.

[22] See now and compare s 259 of the Act.

[23] See now and compare s 262 of the Act.

[24] The sub-sections have not been relevantly amended since. Paragraph (d) of s 91(7) was inserted by s 8(3)(b) of Act no 95 of 2003. Accordingly, s 264(3) of the Act would appear to have the effect that s 91(7)(d) applies to assessments made on or after 1 February 2004, regardless of the date of injury. On that basis para (d) would have been inapplicable to the independent medical assessment conducted in November 2003 but, if relevant, would have been applicable to the medical panel's assessment in April 2004. The note at the foot of s 91(7)(d) appears to be erroneous. In any event, s 91(7)(d) appears not to have had any relevance in the present case.

[25] Plaintiff's submissions dated 27 February 2008, para [6].

[30] On page 3 of her initial written submissions.

[31] [2007] VSC 340.

[32] [2002] VSCA 150.

[33] [2005] VSCA 143 at [31]- [32]. Nicolaou dealt with s 135A of the Act, a section which is similar in some ways to s 134AB, though it applies to injuries occurring during an earlier period and does not operate by reference to s 104B: see Ansett Australia Ltd v Taylor [2006] VSCA 171 at [35].

[34] Mr Shield was a manager employed by the defendant. He signed each of the letters in question.

[35] The plaintiff's counsel did rely on these passages during oral argument: transcript p 69-70, 79.

[36] Paragraph [22] of her initial written submissions.

[37] Principally, at least in the first instance, by footnotes.

[38] The source of the relevant evidence in most cases is stated to be the affidavit of the plaintiff's solicitor, Patricia Toop, sworn 27 February 2008 and the exhibits thereto.

[39] She also makes allegations along the same lines, in greater detail, in her affidavit of 2 February 2005 which was submitted with her application under s 134AB(4) and (5).

[40] More precisely, the certificate referred to "acute stress/depression - work related".

[41] The form merely requested that if she had already lodged a claim for "this injury/condition(s)" for weekly payments or medical costs, she give the claim number, which she did.

[42] Merely by quoting the relevant reference number, presumably for administrative purposes. See the discussion of these points below.

[43] See the two previous footnotes, and see also the plaintiff's submissions on this aspect, referred to above.

[45] Underlining in the original (para 25 of the defendant's submissions).

[47] There was certainly medical material before the Panel, in the form of a report dated 28 May 2003 from Dr Balvin, that referred to the plaintiff having been suspended "pending investigations". The report suggested strongly that after the suspension (which happened on 5 July 2001), the plaintiff's condition deteriorated significantly (to the point where she reportedly attempted suicide in November 2001), and became entrenched.

[48] But see the discussion below as to designated dates of injury.

[49] I consider this assertion to be erroneous. See my discussion below of the competing submissions.

[50] The defendant refers here in a footnote to a letter (being exhibit "PFWT6" to Ms Toop's affidavit) that is not as described in the submission, but rather is a letter dated 12 January 2004 notifying the plaintiff of the situation obtaining as a result of Dr Kornan's assessment. No letter as described in the submission is in evidence. See further below.

[52] The evidence is that the application was lodged on or about 7 May 2005.

[53] It is inaccurate to describe the application in that way. Because of the prior assessment of the medical panel, the plaintiff did not require, and did not seek, leave to bring proceedings. She was merely required to go through the documentation/compulsory conference/statutory offer steps prescribed by s 134AB before issuing any proceedings.

[54] This is a highly debatable assertion. See my discussion below of the competing submissions.

[57] This is an incomplete and misleading account of Dr Epstein's opinion (as expressed on page 8 of his report). See the plaintiff's submission on this point, above, and see further below.

[58] The plaintiff had apparently been notified of this previously, pursuant to s 104B(10).

[60] It was called for partly because the letter of 3 June 2005 referred to it and purported to enclose it.

[61] Para 34 of its written submissions.

[62] This sentence seems to overlook the possibility that a worker might, accidentally or otherwise, frame his or her application less broadly than he or she is entitled to do.

[63] Contrary to this sentence, no deeming is done by the Authority under s 134AB(15). The sub-section takes effect automatically when the conditions to which it refers are satisfied.

[64] Paragraph 10 of its written submissions.

[65] [2005] VSCA 33; (2005) 14 VR 622 at [13] and [14].

[67] Insofar as the quoted words are concerned, this submission erroneously reflects a later, inapplicable version of s 104B(2). See further below.

[69] (2006) 14 VR 602 at [61] and [62].

[71] Citing Barwon Spinners at [136]-[139].

[73] (2006) 14 VR 602, in particular at [34], [39], [40] and [46].

[74] [2006] 14 VR 602 at [54]. But note that the plaintiff is relying on a "deemed" serious injury.

[78] [1964] HCA 34; (1964) 110 CLR 626.

[80] [2007] VSC 340 (Osborn J).

[81] [2002] VSCA 150 at [18]- [20].

[83] [2005] VSCA 143 at [31]- [32].

[84] [2005] VSCA 143 at [32].

[86] In paragraph 25 of the defendant's written submissions.

[87] (2006) 14 VR 602 at [34], [39], [40] and [46].

[88] [2006] VSCA 171.

[89] [2006] VSCA 171 at [62].

[90] Compare Pope v WS Walker and Sons Pty Ltd [2006] VSCA 227; (2006) 14 VR 435 at 443 [32]- [33] per Eames JA with whom Neave JA and Bell AJA agreed.

[92] As mentioned above, the defendant's submission that s 104B(2) required the Authority to "accept or reject liability for each injury included in the claim" is not correct as of the relevant time. The sub-section did not assume that form until 21 December 2004.

[93] The corresponding period has now been extended to 120 days.

[94] [2006] VSCA 171 at [62].

[95] However I must say that the current structuring of the particulars by reference to the events of 5 July 2001 will remain somewhat distracting if the particulars are not hereafter amended. Incidentally, there is also an obvious error in paragraph 12 of the current statement of claim (paragraph 14 of the proposed amended statement of claim) in that it refers to s 135A of the Act instead of s 134AB.

[100] Exhibit "PFWT6" to Ms Toop's affidavit.

[101] The reference in the defendant's submissions is erroneous: see above.

[102] In this regard the defendant does rely on alleged prejudice arising from the statutory provisions as to costs, but, as I understand the submission, only as giving rise to a discretion to refuse an amendment. I will deal with that shortly.

[103] Compare Tane v New South Wales [2002] HCA 35; (2002) 211 CLR 317 at 420 [308] per Callinan J; Koehler v Cerebos (2005) 222 CLR 44 at 64 - 65 [55] per Callinan J.

[104] [2005] VSCA 33; (2005) 14 VR 622 at 657 [89].

[106] [1964] HCA 34; (1964) 110 CLR 626 at 637

[107] Compare Alcoa of Australia Ltd v McKenna [2003] VSCA 182; (2003) 8 VR 452 at 471 - 472 [59]; Wills v AC Nielsen Pty Ltd [2007] VSCA 159; (2007) 17 VR 53 and cases there cited; Rough v Lockwood Australia Pty Ltd [2001] QSC 100 at [24]- [28].

[108] Compare O'Flaherty v CIC Workers Compensation (Vic) Ltd (1997) VACR 73-432 and cases there referred to, including Connair v Frederiksen [1979] HCA 25; (1979) 142 CLR 485 and Accident Compensation Commission v Botezatu [1993] VicRp 22; [1993] 1 VR 304.

[109] See, eg, Hawkins v Commonwealth [1966] HCA 66; (1966) 116 CLR 159 at 164-165; Accident Compensation Commission v Tilley [1992] VicRp 82; (1992) 2 VR 499 at 503; cf Angeletos v Museum of Victoria [1999] VSCA 129; [1999] 3 VR 157 at 163 [17], 167-168[23].

[111] [2007] VSC 340.

[113] See also Humphries v Poljak [1992] VicRp 58; [1992] 2 VR 129 at 138 (proposition/conclusion 6); RJ Gilbertsons Pty Ltd v Skorsis [2000] VSCA 51 at [27] (first sentence) per Buchanan JA; Alcoa of Australia Ltd v McKenna [2003] VSCA 182; (2003) 8 VR 452 at 472 [62] per Ashley AJA; compare Lu v Mediterranean Shoes Pty Ltd [2000] VSCA 65; (2000) 1 VR 511; Altona Bus Lines v Lococo [2002] VSCA 159 at [7]; Barwon Spinners Pty Ltd v Podolak [2005] VSCA 33; (2005) 14 VR 622 at 657 [89] per Phillips JA (passage quoted above); Grech v Orica Pty Ltd (2006) 14 VR 602 at 615 [48, [56], [64], [80].

[114] [2002] VSCA 150 at [18]- [20].

[115] See also Mugavin-Brown v St John of God Hospital [2001] VSC 166 which is to the same effect in relation to a "serious injury certificate" issued by the Authority under s 134AB(16)(a).

[116] [2004] NSWCA 7. The judgment of McColl JA was a dissenting one, but that does not affect the validity of the particular point made by her Honour in the passage quoted.

[117] Of these, note, in particular, New South Wales v Seedsman [2000] NSWCA 119; (2000) 217 ALR 583 at 600-601 [93], 613 [175].

[118] In this Court, the path was cleared initially in Sinnott v FJ Trousers Pty Ltd [2000] VSC 124 (Gillard J). While Koehler v Cerebos (Australia) Limited (2005) 222 CLR 44 may now somewhat restrict the potential for workplace stress claims to succeed in tort in Australia, that case does not suggest that there is any need to establish exposure to isolated trauma in the workplace. See, generally, J. Elvin "The Legal Response to Occupational Stress Claims" (2008) 16(1) Tort L Rev 23.

[119] [2008] VSC 363.

[120] [2003] VSC 72 at [11].

[121] [2002] VSC 368; subsequently affirmed in Victorian WorkCover Authority v Del Borgo [2004] VSCA 108; (2004) 9 VR 470 (Victorian Court of Appeal).

[122] [2003] VSC 72 at [12].

[123] Compare Linfox Transport (Aust) Pty Ltd v Toohey [2004] VSCA 233 at [8].

[124] Compare Stojcevski v Nisselle [2003] VSC 466 at [35].

[125] [2006] VSCA 171 at [36]- [37].

[126] Compare s 134AB(19)(c) in relation to findings of "serious injury" under s 134AB(16)(b), as to which see Dwyer v Calco Timbers Pty Ltd [2008] HCA 13 at [11], [35], [48].

[127] [2007] VSCA 90; (2007) 16 VR 290 at 295 [20].

[128] As to which see subsection (29) of s 134AB. That subsection provides that for the purpose of the taxing of costs in proceedings to which the section applies, any applicable scale of costs has effect as if amounts in the scale were reduced by 20 percent.

[129] Koehler v Cerebos (Australia) Ltd (2005) 222 CLR 44, which highlighted the importance of signs of vulnerability on the part of the employee, was decided on 6 April 2005.

[130] [1996] VICSC 4; [1996] 2 VR 535 at 542. Callaway JA agreed with Winneke P. See also Queensland v JL Holdings [1997] HCA 1; (1997) 189 CLR 146.

[131] [1996] 2 VR at 555-556 per Brooking JA.

[132] [2000] WASC 66 at [7]. My emphasis. Compare McKenzie v Commonwealth [2001] VSC 361 (Gillard J) at [26]-[34]; Burk v Commonwealth [2004] VSC 210 (Whelan J) at [11]-[13].