Robinson v Commissioner for Police, NSW Police Force

Industrial Relations Commission (NSW)|2013-09-26

DECISION 1This is a Notice of Motion moved by the applicant seeking a determination pursuant to s.175 of the Industrial Relations Act 1996 ('the Act'). It is brought in the context of substantive proceedings which are an application to the Commission by the applicant for reinstatement in employment pursuant to s.242 of the Workers' Compensation Act 1987. ('the WC Act') 2The Motion seeks a determination that the respondent is estopped from leading evidence that the Applicant is not fit for pre-injury duties. 3The grounds on which that determination is sought are set out in Schedule A to the Notice of Motion. Time does not permit their being set out here in full. However, the essential pleading is that the respondent is estopped from denying that the Applicant is fit for pre-injury duties. This summation of the matter at issue was repeated by counsel for the applicant in oral submissions. 4The estoppel is expressly said to be an estoppel by convention. Such an estoppel requires a common assumption or agreement, as I address further below. The common assumption said to underpin the estoppel here is said to be an assumption that the applicant is fit for his pre-injury duties with the respondent, the NSW Police Force. 5That common assumption is said to be created by the conduct of the applicant and, on the respondent's part, the conduct of the respondent's workers' compensation insurer in relation to the applicant's workers' compensation claim, and in particular (without ignoring the other matters forming the fabric of the pleaded common assumption) that conduct of the insurer between 28 November 2012 and 22 March 2013.

The Commission's relevant powers 10I touch briefly on the Commission's relevant powers. 11The determination sought by the applicant is sought pursuant to s.175 of the Act. That section provides: 175 Powers of interpretation The Commission may, for the purpose of exercising its functions in connection with a matter before it, determine any question concerning the interpretation, application or operation of any relevant law or instrument (including the industrial relations legislation and any industrial instrument). 12It was conceded by the respondent that the Commission had the power to make the determination sought. That concession was properly made, as in my view, regardless of concession, it is clear that the Commission does have that power in the particular circumstances of this case, in which an estoppel by convention is argued. 13An estoppel by convention, it is now accepted, is a creature of common law: Moratic Pty Ltd v Gordon [2007] NSWSC 5 at [33]; Rebenta Pty Ltd v Wise [2009] NSWCA 212 at [65]. 14That being so, in my view the grant of power under s.175 to the Commission, to determine the operation of any law in relation to proceedings before it, grounds power to determine this application. 15That might not be so in relation to an equitable estoppel, but that need not be determined here. 16For convenience I here set out s.163 of the Act, as it was called in aid by the respondent, on a point to which I return below. Section 163 provides: 163 Rules of evidence and legal formality (1) The Commission: (a) is not bound to act in a formal manner, and (b) is not bound by the rules of evidence and may inform itself on any matter in any way that it considers to be just, and (c) is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms. (2) However, the rules of evidence and other formal procedures of a superior court of record apply to the Commission in Court Session.

Nature of estoppel by convention 17An estoppel by convention comes into existence when parties jointly make some fact, or matter of mixed fact and law, the basis of their transaction or relationship. 18If the parties' assumption as to the relevant matter is communicated and adopted by each of them, it will bind them, and each will be estopped from denying the assumed facts: GE Healthcare Australia v Medica Radiology and Nuclear Medicine Pty Ltd [2013] NSWSC 414 at [5]; Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Aust) Ltd (1986) 160 CLR 226 at 224. 19The effect of an estoppel by convention - which is relevant in understanding the proper nature and boundaries of the estoppel - is to give protection from the harm or detriment that would follow from a party having changed its position in relying on the assumption, if the assumption on which the party relied were abandoned: Grundt v Great Boulder Pty Gold Mines Ltd (1937) 59 CLR 641 at 674. 20In Ryledar v Euphoric (2009) 69 NSWLR 603 the court held (at [200] per Tobias AJ) that the following were the matters necessary to establish an estoppel by convention: (1) The plaintiff has adopted an assumption as to the terms of its legal relationship with the defendant; (2) the defendant has adopted the same assumption; (3) both parties have conducted their relationship on the basis of that mutual assumption; (4) each party knew or intended that the other act on that basis; and (5) departure from the assumption will occasion detriment to the plaintiff. 21In Grundt Dixon J held that the party calling the estoppel in aid must be able to show that 'if the assumption upon which he proceeded were shown to be wrong and an inconsistent state of affairs were accepted as the foundation of the rights and duties of himself and the opposite party, the consequence of would be to make his original act or failure to act a source of prejudice.' (Grundt v Great Boulder Pty Gold Mines Ltd loc cit at 674) 22An estoppel by convention is, as will be clear from what is set out above, to be distinguished from other forms of estoppel. It requires mutuality, and in that regard such an estoppel expressly differs from estoppels by representation or promissory estoppels: Rebenta loc cit at [67] 23To make the point clear, an estoppel by convention is not founded on the basis of a representation of fact made by a representor and acted on by a representee, but rather on an agreed or assumed state of facts: Con-Stan Industries loc cit at 244.

The basis on which the determination is sought 24The facts on which the estoppel by convention is asserted to lie are not essentially in contest. There was some brief cross-examination of the applicant on his affidavit sworn 15 August 2013, but the basic sequence of facts is set out in that affidavit, and in condensed form - without contest from the respondent in its later submissions - in the applicant's written submissions. I have further condensed them above. 25The applicant puts that the estoppel lies on this basis; both parties have adopted the assumption that the applicant is fit for pre-injury duties, and that assumption has formed the basis for their relationship. (Submissions, paragraph 30) 26That is, it is said, made clear from the fact that the respondent has accepted the understanding that the applicant is fit for pre injury duties in the context of his workers' compensation claim, and has ceased paying him workers' compensation benefits on the basis of that acceptance; therefore, in ceasing to pay him those benefits, exercising rights against the applicant that would only exist if the assumption were correct. 27Counsel for the applicant accepted that he was obliged to show detriment for the estoppel to lie. 28The detriment said to arise to he applicant if the respondent were permitted to deny the assumption that he is fit for pre-injury duties is that the respondent would thereby have the advantage of both denying the applicant workers' compensation payments on the basis that he is fit for work, and also the advantage of setting up a case to prevent the applicant returning to pre injury employment on the basis that he is not fit for work, the combination of these adding up to a detriment to the applicant. 29In oral submissions counsel for the applicant put it this way: that the applicant's detriment crystallised in his acquiescence in the closure of his workers' compensation file and the cessation of payments to him.

The basis on which the determination is resisted 30The respondent put its case on a number of bases. 31First, it was said, there is no estoppel by convention because there was no joint assumption or agreement. An assumption, it was submitted, involves a process whereby the parties jointly adopt a view that they believe to be the case, and act on it. That a party made a representation and the other acted on it does not mean that a joint agreement or assumption was arrived at. The representee has to do more than act on the basis of the representation; it has to indicate that it adopts that view for itself. 32Secondly, and relatedly, it said that there was no detriment. The payments under the WC Act must, it was said, be understood as an entitlement which arose under statute on a person being relevantly unfit; their cessation on that state of affairs coming to an end was not the exercise of any right by the respondent. Rather, that the insurer ceased paying workers' compensation benefits was simply the operation of the statute, an operation that necessarily followed once the applicant had provided the information that he was fit for pre-injury duties. 33Once had had stated he was fit, the applicant suffered no detriment by the cessation of payments because, having advised that fact, he had no statutory entitlement to any payments. 34The respondent then took the point that there was no proof of agency. An assumption that there was agency because the respondent was self insured was not enough to prove agency, it was said. I return to the matter of agency below. 35It was further asserted by the respondent, in the context of the estoppel itself, that even if there were an estoppel in the transaction concerning the workers' compensation payments, that did not extend to any part of the application under s.242 of the WC Act, as that was a discrete transaction. 36I interpose that against that, the Applicant submitted that in fact the WC Act provided a suite of rights and entitlements that were relevantly indivisible and constituted one transaction. If the estoppel lay, according to the applicant, it accordingly operated in respect of all those relevant rights and obligations, including s.242. The scope of the agency was accordingly irrelevant. 37Lastly it was put by the respondent that the Commission could not have any regard to any estoppel in this matter even if it lay, because that would be to fail to observe the terms of s.163 of the Act; that to allow an estoppel to lie would bind the Commission to accept a fictional state of affairs. Without addressing this argument in any more detail, I indicate at this point, as I did to both counsel in the course of argument, that I do not accept that submission nor that approach to the effect of s.163.

Consideration 38In my view no estoppel by convention lies in this matter. 39That is because there was simply no joint or mutual assumption or agreement on which the parties acted. 40That is apparent on a range of bases. 41First, and fundamentally, in my view what has occurred is that the applicant has represented a certain fact to the insurer of the respondent, that is, that he is medically fit for duty. So far as that bore on his receipt of payments under the WC Act, that fact led to the cessation of payments. The insurer for the respondent was entitled to accept as a matter of fact what the applicant told it. 42That does not mean in my view that the respondent joined with the applicant in assuming, or agreeing to, anything at all. It - or its insurer - simply acted on the basis of what the applicant told it was a medical fact. There is no evidence that the employer's insurer joined in any assumption. The correspondence from the insurer relied upon by the applicant and referred to above in my view does no more than repeat what the applicant has told the insurer. It does not indicate any agreement to proceed on the basis of any assumption. 43In my view what has happened is precisely what the High Court in Con-Stan supra held was not an estoppel by convention: that is, a party has made a representation of fact and it has been acted on by the representee. 44When one looks at the criteria set out in Ryledar v Euphoric supra, called in aid by the applicant, the position is in my view even clearer. 45Addressing those criteria in order, the applicant has himself not adopted an assumption as to the terms of his legal relationship with the respondent; rather he has provided its insurer with a representation of fact. The respondent's insurer, in turn, has not adopted any assumption, but rather acted on the representation of fact that was made to it. An assumption has as its plain meaning the act of taking something for granted, the acceptance of something without the necessity for proof. To act on the basis of a medical certificate stating that a person is fit for pre-injury duties is simply not an assumption. It is still less a mutual assumption. That would be enough to defeat the assertion that an estoppel lies. 46But further, It is clear on the evidence that, still addressing the criteria in Ryledar, both parties have not conducted themselves on the basis of any assumption, or indeed that representation, when what I say below about agency is taken into account. 47And fourthly, it is clear that on the evidence each party did not 'know that the other would act on' the basis of that representation, let alone any mutual assumption; quite the opposite, as I return to below. 48For want of any doubt, I make it clear that although I have used the phrase 'the respondent's insurer' in the above paragraphs as a reflection of the facts, the position would be precisely the same on this point about lack of mutual assumption if the representations by the applicant and the decision to cease making payments had been made to, and by, the respondent itself without any insurer being involved. 49I well understand that the applicant feels that there is an injustice in that the employer has on one hand ceased, or allowed its insurer to cease, paying him workers' compensation payments on the basis that he is fit for pre-injury duties, and on the other hand says it is not prepared to accept that he is fit for the purpose of s.242, conduct which counsel for the applicant characterised as 'approbation and reprobation'. However, that perception does not mean that an estoppel by convention lies. 50The applicant told the employer's insurer that he was fit. The insurer could not do other than act on that within the terms of the statute, and so the payments came to an end. The insurer was not obliged to test the applicant on that representation he made. It did not, in not putting the applicant to any test of his assertion that he was fit for that statutory purpose, forego any rights the employer might have to test that asserted fitness in the context of another application, even an application under the WC Act. 51It follows, and it further defeats the claim of an estoppel by convention, that the applicant suffered no detriment sufficient to ground such an estoppel. 52The proposition that he suffered a detriment in, as it was put, his acquiescence in his file being closed and his payments being stopped cannot hold good in my view when that was the inevitable and necessary statutory consequence of he himself advising the employer's insurer that he was fit for pre-injury duties. It cannot be suggested that it is a detriment unless it is said (which it is not) that the applicant had some choice in providing that advice, which clearly he did not; he was obliged to tell the insurer of that medical fact. 53I now turn to the question of agency. 54First, in my view the applicant as moving party has not made out that the respondent's insurer was the respondent's agent for the purposes of any s.242 application. On the face of the evidence, indeed, the insurer was in al of its relevant conduct said to be the agent for another party altogether, the Treasury Managed Fund No 2. The absence of evidence in my view would leave it unsafe to hold that the insurer was the respondent's agent. 55But even if it were said that as the employer was self-insured, one should make the assumption that the insurer was the employer's agent when it dealt with the applicant, two relevant matters are clear in my view. 56The first is that the insurer did not hold itself out to be the employer's agent in relation to any application under s.242. Indeed, in addressing the applicant's intention to make such an application the insurer in its correspondence clearly characterises and regards the NSW Police Force as a third party for that purpose: see the email of 20 February 2013 to which I refer below. 57That approach defeats, in my view, the proposition that the provisions of the WC Act should be relevantly regarded as a single transaction for the purpose of establishing that an estoppel lies here. The applicant and the insurer - even if the latter is the respondent's agent - did not so regard it. 58That does not go to the proper construction of the WC Act, as that may be gauged from for example the matters set out in the decision in Cansino v South Western Sydney Area Health Service (1999) 130 IR 1. The point is that for an estoppel to be made out, the parties have to have regarded themselves as acting in relation to a single transaction. They did not. 59Still in the context of agency and the context of the estoppel claimed, the second matter of importance arises from the correspondence between the applicant and the insurer. 60It is quite clear that the applicant did not regard the insurer as the respondent or as standing in the shoes of the respondent. He clearly regarded the respondent as another entity to the insurer. 61 His email of 22 November 2012 to the insurer makes that clear: There he says: 'I am looking at returning to the Police Force, have you heard from them recently?' There is no identity of the insurer with the police force, the respondent, in the applicant's mind. He is told by the insurer on 20 February 2013 'Unfortunately I have not heard anything from the NSW Police Force regarding your reinstatement. I can only assume that will make contact with you prior to contacting Employers Mutual.' 62The point is that it is clear that the applicant did not believe, or assume, that the insurer could bind the respondent as to the respondent's response to his application to be resinated in employment. Quite the opposite; he accepted and proceeded on the basis that the respondent would be acting independently to the insurer. That was also the insurer's view, and having been apprised of that view the applicant proceeded on that basis. 63That being so, an agreement between the applicant and the respondent to proceed on the basis of a joint assumption simply cannot be said to arise from the applicant's communications with and conduct towards the insurer, or its toward him. The absence of such an agreement is fatal to the estoppel claimed. 64.Even if I were wrong in holding that the insurer has not been shown to be an agent for the respondent in respect of its workers' compensation payments, the establishment of an estoppel requires more; it requires proof of an agreement to proceed on a joint assumption. In my view that cannot be made out, and certainly in my view the respondent cannot be held to be shown to have so agreed. 65In this context I observe that that the insurer accepted the applicant's long term goal as being to return to employment with the police, as is set out in the CMP Plan of 3 January 2013, does not mean that the NSW Police accepted that that was so.

Summary and conclusion 66In sum, I an unable to find that an estoppel by convention binding on the respondent exists. That is firstly and determinatively because the requisite elements of the estoppel are not made out, on a range of bases set out above, and secondly, so far as it is necessary to consider the point, because the insurer was not in my view in any event an agent of the respondent for the purposes of any application made in respect of the respondent pursuant to s.242 of the WC Act.

Orders 67It follows that the Orders I make in relation to the Notice of Motion are as follows: (1) The Notice of Motion is dismissed. PETER NEWALL Commissioner

Amendments 27 September 2013 - "2013" amended to now read as "2012" Amended paragraphs: 8 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 22 October 2013

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