John Bradley and Others Trading As Gallens v Pamela Burton; Adrienne O'Connor; Ian Johnson; Robert Crowe Trading As Pamela Coward & Associates Sca [1989] ACTSC 32 (7 July 1989)

SUPREME COURT OF THE ACT

JOHN BRADLEY AND OTHERS trading as GALLENS v. PAMELA BURTON; ADRIENNE
O'CONNOR; IAN JOHNSON; ROBERT CROWE trading as PAMELA COWARD & ASSOCIATES
S.C.A. No. 25 of 1988
Workers' Compensation - Appeal

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Gallop J.(1)

CATCHWORDS

Workers' Compensation - lump sum redemption - claim for contribution from previous employer - whether lump sum paid is compensation under the Workmen's Compensation Ordinance 1951

Appeal - sufficiency of evidence to support apportionment of responsibility for incapacity

Workmen's Compensation Ordinance 1951, ss.9, 24, cl. 9, 10, 113.

Workers' Compensation Act 1926 (NSW), ss.7(4), 15

Gosper v. Christopherson and Another (1986) 65 ALR 472

John While & Sons P/L v. Changleng (1985) 2 NSWLR 163

Citra Constructions Limited v. John Costello (unreported, 110 January 1986)

Campisi v. General Motors-Holden's Limited (1957) SR(NSW) 477

Stevenson v. Buchanan & Brock Pty Ltd (1971) VR 503

Petrovic v. Taara Formwork (Canberra) Pty Ltd [1982] FCA 208; (1982) 62 FLR 451

Squire v. Rogers [1979] FCA 48; (1979) 39 FLR 106

McInnis v. The Queen [1979] HCA 65; (1979) 143 CLR 575

Bloch v. Bloch (1981) 55 ALJR 701

HEARING

CANBERRA
7:7:1989

DECISION

This is an appeal instituted by Notice of Appeal dated 22 April 1988 against an award of compensation made by the Magistrates Court, Canberra, in respect of a claim that the appellant pay contribution to the respondent of 20 percent of the sum of $33,151.01 paid by the respondent to a workman under the Workmen's Compensation Ordinance 1951.

2. The facts giving rise to the appeal are that the workman was employed by the appellant as a legal secretary from September 1982 to December 1983 and then by the respondent as a legal secretary from 19 December 1983 to 4 May 1984 and as a receptionist from that date until 29 May 1984. She was totally incapacitated for work due to a disease of tenosynovitis from 30 May 1984 to 1 June 1985 and partially incapacitated thereafter. She returned to employment as a receptionist in November 1985.

3. The respondent paid weekly compensation to the workman in the total sum of $14,860.05, and on her behalf medical expenses of $1,135.96 and hospital expenses of $505. Pursuant to an agreement registered by the filing of the relevant forms dated 8 October 1985, the respondent redeemed its liability to pay further compensation to the workman by payment of the sum of $16,000 together with $650 costs. By application dated 17 June 1987 the respondent applied to the Magistrates Court, Canberra, for an order for contribution from the appellant.

4. By way of answer to that application, the appellant denied that its employment of the workman caused or contributed to any tenosynovitis suffered by her; denied that the respondent had been under a liability to pay compensation to the workman; and, most significantly from the point of view of this appeal, denied that the appellant was liable to make contribution to the respondent in respect of any amount paid by the respondent to the workman in respect of the agreement or for costs.

5. The application for contribution was heard in the Magistrates Court on 5 April 1988. The learned Magistrate found that the appellant was liable to make contribution to the respondent in respect of all the weekly payments of compensation, medical expenses, hospital expenses and the agreed amount of $16,000 and costs of $650. The rate of the contribution was fixed at 20 percent.

6. The appellant has appealed to this court against the award on the grounds that:
(1) the Magistrate erred in holding that the appellant

was liable to pay contribution for any amounts
paid by the respondent pursuant to the registered
agreement;
(2) the Magistrate erred in finding the
appellant was liable to pay contribution of 20
percent in respect of any amounts of compensation
paid by the respondent, there being no sufficient
evidence available to the Magistrate to support
such a finding; and
(3) the Magistrate erred in failing to stay the
proceedings on the ground of unfairness to the
appellant.

7. I turn to the relevant provisions of the Workmen's Compensation Ordinance 1951. "Compensation" is defined to mean an amount payable under the Ordinance in respect of an injury to, or the death of, a person. "Disease" includes any physical or mental ailment, disorder, defect or morbid condition, whether of sudden or gradual development, and also includes the aggravation, acceleration or recurrence of a pre-existing disease.

8. The right to claim contribution is set out in s.9, which is in the following terms:

"9. (1) Where -
(a) a workman contracts a disease or suffers an
aggravation, acceleration or recurrence of a
disease; and
(b) any employment of the workman by his employer was
a contributing factor to the contraction of the
disease or the aggravation, acceeleration or
recurrence, as the case may be, wheher or not the
disease was contracted or the aggravation,
acceleration or recurrence was suffered in the
course of that employment,
the succeeding provisions of this section have effect.
(2) If -
(a) the death of the workman; or
(b) the total or partial incapacity for work of the
workman,
results from the disease, or the workman obtained
medical treatment in relation to the disease, then, for
the purposes of this Ordinance, unless the contrary
intention appears -
(c) the contraction of the disease, or the
aggravation, acceleration or recurrence, as the
case may be, shall be deemed to be a personal
injury to the workman arising out of the
employment of the workman by his employer; and
(d) the date of the death, the date of the
commencement of the incapacity or the date on P/N
which the medical treatment was first obtained,
whichever is the earlier, shall be deemed to be
the date of the injury.
(3) Where a liability of an employer in respect
of a disease of a workman arises by virtue of this
section, any other employer who, prior to that
liability so arising, employed the workman in any
employment that caused or contributed to the disease
shall, subject to sub-section (4), be liable to pay to
the employer from whom compensation is recoverable such
contribution as is, in default of agreement, settled by
arbitration.
(4) An employer shall not be liable under
sub-section (2) or (3) in respect of a disease if the
workman, at the time of entering the employment of the
employer, made a wilful and false representation that
he did not suffer, or had not previously suffered, from
that disease.
(5) A claimant for compensation under this
section shall, if so required, furnish the employer who
is liable to pay compensation to him with such
information as to the names and addresses of his other
employers as he possesses."

9. Section 24 provides that all matters and questions arising under the Ordinance or under the First or Second Schedules to the Ordinance shall, where no other provision is made in the Ordinance or those Schedules, in the absence of agreement, be settled by arbitration in accordance with the provisions of the Fourth Schedule to the Ordinance.

10. The redemption provision is set out in clause 13 of the First Schedule in the following terms:

"13. Where, in any case other than one of total
and permanent incapacity, any weekly payment (other
than a weekly payment referred to in clause (i) of
sub-paragraph (a) of paragraph 1 of this Schedule) has
been continued for not less than six months, the
liability therefor may be redeemed by the payment of a
lump sum of such amount as may be settled by agreement
(subject to paragraph 10 of the Fourth Schedule to this
Ordinance) or, upon application by or on behalf of the
employer with the consent of the workman, by
arbitration under this Ordinance, and the lump sum may
be ordered by the Court to be invested or otherwise
applied for the benefit of the person entitled thereto."

11. Clauses 9 and 10 provide for the registration of agreements for payment of a lump sum by way of compromise and satisfaction of all claims. They also provide for situations where the amount of compensation under the Ordinance has been ascertained or any weekly payment or other matter decided under the Ordinance, either by a committee or by agreement. A committee as referred to in the Ordinance and the Fourth Schedule thereto is a different entity to the court in its role as arbitrator (see clauses 1 and 2 of the Fourth Schedule). Upon registration of the memorandum under clause 9 in those situations, the memorandum is for all purposes enforceable as a judgment of the court.

12. In relation to the first ground of appeal that the Magistrate erred in holding that the appellant was liable to pay contribution for any amounts paid by the respondent pursuant to the registered agreement, counsel for the appellant submitted that an amount paid by the respondent pursuant to the registered agreement is not an amount to which s.9(3) applies. The argument was that it is not an amount which the appellant was liable to pay to the respondent as an employer from whom compensation was recoverable. Counsel relied upon the High Court authority of Gosper v. Christopherson and Another (1986) 65 ALR 472, a decision upon the analogous provisions in the Workers' Compensation Act 1926 (NSW).

13. The contrary submission on behalf of the respondent was that the High Court decision turns upon different legislation which is not analogous to the provisions of the Workmen's Compensation Ordinance 1951.

14. The facts of that case, taken from the headnote, are that the Workers' Compensation Commission made an award of weekly compensation to a worker who was found to have contracted a disease by a gradual process. That award was merely a formal foundation for a compromise of the proceedings on the basis of a lump sum of $40,000 to be paid under s.15 of the Workers' Compensation Act 1926 in redemption of the liability for compensation. The employers sought contribution under s.7(4) of that Act to the lump sum from other employers who had employed the worker within the 12 months preceeding his incapacity. The appellants, who were amongst those employers, did not agree to contribute.

15. The High Court held that there was a relevant distinction between a statutory liability of an employer to pay compensation (whether by way of weekly payments or lump sum) and a statutory option to pay or to refrain from paying a lump sum determined by the court for the purposes of redeeming the liability to pay compensation. The High Court held further that a redemption of a lump sum under s.15(1) of the Act, for which a liability in respect of weekly compensation might be redeemed, was an award of compensation and accordingly no liability to pay a contribution was attracted under s.7(4) of the Act.

16. The first paragraph of s.7(4) of the Act read as follows:

"Where the injury is a disease which is of such a nature
as to be contracted by a gradual process compensation
shall be payable by the employer in whose employment
the worker is or who last employed the worker."

17. By consent the Compensation Court had made an award in favour of the worker at the rate of $2 per week from 10 January 1981 and continuing. That liability, formal though it was, was redeemed on terms that a lump sum of $40,000 be paid pursuant to s.15 of the Act. That section provided, inter alia,

"(1) Subject to this Act, the liability in respect
of any weekly payment may, with the consent of the
worker, be redeemed either in whole or in part by the
payment of a lump sum, determined by the Commission,
having regard to any dispute as to liability to pay
compensation under this Act and the injury, age, and
occupation of the worker at the time of the occurrence
of the injury, as well as to his diminished ability to
compete in an open labour market."

18. In the joint judgment of the Court (Mason, Wilson, Brennan, Deane and Dawson JJ) the Court said:

"Although the power to make an order for
contribution under the second paragraph of s 7(4) may
be exercised in respect of weekly payments of
compensation for which the last employer is liable, it
does not necessarily follow that the power may be
exercised in respect of a lump sum which that employer
pays a worker in redemption of his liability to make
weekly payments of compensation. The lump sum amount
for which a liability in respect of weekly payments may
be redeemed is not to be equated with the weekly
payments which the employer whose liability is redeemed
would otherwise be liable to pay. The relevant
distinction does not arise from the difference between
a lump sum and weekly payments, but from the difference
in nature between a statutory liability of an employer
to pay compensation (whether by way of weekly payments
or lump sum) and a statutory option to pay or to
refrain from paying a lump sum determined by the court
for the purpose of redeeming the liability to pay
compensation.
There can be no doubt that a contribution order
under s 7(4) can be made with respect to both
compensation by way of lump sums and compensation by
way of weekly payments. Lump sum payments are payable
under ss 8, 10, 10A, 10B and 16 and each of those
payments is properly to be described as
'compensation'. Indeed, s 6(1) defines 'compensation'
to include 'medical and death benefits prescribed by
this Act', those benefits being payable under ss 8, 10
and 10A. A liability is imposed on an employer to make
the payments of the several classes of compensation
provided for in the Act see ss 7(1), (1A), 8(1),
10(1), 10A(1), 10B(1), 16. An order for the payment of
compensation under any of those sections is an order
enforcing the statutory liability. By contrast, a
determination pursuant to s 15(1) of the amount of a
lump sum which may be paid in redemption of a liability
to pay compensation enforces no liability.
An employer is not obliged to make a lump sum
payment by way of redemption in the amount determined
by the court, though the court has a jurisdiction to
determine with the worker's consent an amount which, if
paid, redeems the liability. In John While & Sons P/L
v. Changleng (1985) 2 NSWLR 163, Mahoney JA commented
(at pp 166-7) that on the true construction of s 15(1)
'... the provision contemplates the redemption of the
liability in question by the payment of a lump sum, ie,
it contemplates that the liability is redeemed and so
extinguished by the act of the employer in paying to
the worker, with the worker's consent, a sum determined
by the Commission. The function of the Commission in
that process is, and is only, to determine the sum
payment of which may cause the process of redemption to
operate. On this view, the section does not authorize
the Commission to order redemption and, consequently,
to force an unwilling employer to redeem.'
We respectfully agree. Section 15(1) makes it
clear that before the liability for compensation is
redeemed, there must be both the consent of the worker
and the actual making of the payment, the latter being
at the option of the employer. Redemption can occur
only with the concurrence of employer and employee and
a determination by the court. As there is no liability
to pay a lump sum determined pursuant to s 15(1), that
sum is not 'compensation' which is payable under the
first paragraph of s 7(4) of the Act.
It was submitted, however, that an order for
contribution may be made under the second paragraph of
s 7(4) whether or not the lump sum is 'compensation'
the second paragraph of s 7(4) speaks only of 'such
contributions, in default of agreement (as) may be
determined by the Court'. However, the second
paragraph must be construed in its context. The first
paragraph of s 7(4) imposes a liability to pay
compensation on the last employer; the second paragraph
then confers on 'the employer by whom compensation is
payable' a right to seek contribution from previous
employers. The second paragraph is complementary to
the first, so that the liability imposed by the first
paragraph on the last employer may be shared by the
previous employers. But as a lump sum determined
pursuant to s 15(1) is not compensation payable by the
last employer - there being no liability to pay it - no
order for contribution towards a lump sum can be made
under s 7(4)."

19. It was urged on behalf of the respondent that under s.15(1) of the New South Wales Act the Commission is to determine the amount of the lump sum, whereas under clause 13 of the First Schedule to the Workmen's Compensation Ordinance 1951 the Court does not determine the amount of the lump sum to be paid in redemption of the liability to make weekly payments.

20. In my view the New South Wales provisions are entirely analogous to those under the Ordinance and accordingly I am bound to follow the High Court authority.

21. Under clause 13 the liability of an employer may be redeemed by payment of a lump sum where:

(1) it is not a case of total and permanent
incapacity;
(2) a weekly payment (not being payment in respect of
a child under the age of 16 years dependent upon a
deceased workman) has continued for 6 months; and
(3) the lump sum has been settled by agreement or
settled by arbitration on the application of the
employer and with the consent of the workman.

22. The observations of Mahoney JA in John While & Sons P/L v. Changleng (1985) 2 NSWLR 163, approved by the High Court, on the true construction of s.15 of the New South Wales Act are, in my view, directly applicable to the provisions of the Ordinance. Clause 13 contemplates the redemption of the liability in question by the payment of a lump sum, ie it contemplates that the liability is redeemed and so extinguished by the act of the employer in paying to the worker, with the worker's consent, a sum determined by the Commission, If the court has a function at all under clause 13, which would only arise in the absence of settlement by arbitration, it is to determine the sum, payment of which may cause the process of redemption to operate. Clause 13 does not authorise the court to order redemption and consequently to force an unwilling employer to redeem. As in the case of the New South Wales provision and as stated by the High Court, before the liability for compensation is redeemed there must be both the consent of the worker and the actual making of the payment, the latter being at the option of the employer. In that sense a lump sum by way of redemption is not "an amount payble under this Ordinance" within the meaning of the definition of "compensation". It is an amount paid to redeem weekly amounts payable under the Ordinance and, in that sense, is extraneous to the rights and liabilities created by the Ordinance.

23. I am firmly of the view, independently of the High Court authority, that s.9(3) casts no liability on an earlier employer of the workman. If that had been the intention of the legislature, it would have been a simple drafting exercise to render that employer liable to pay to the employer from whom compensation is recoverable, or from whom a payment by way of a lump sum in redemption of liability to pay compensation is recoverable, such contribution as is, in default of agreement, settled by arbitration.

24. Accordingly, I uphold the first ground of appeal.

25. The second ground of appeal is that the Magistrate erred in finding that the appellant was liable to pay contribution of 20 percent in respect of any amounts of compensation paid by the respondent, there being no sufficient evidence available to the Magistrate to support such a finding.

26. It is necessary to review the sufficiency of the evidence to support the apportionment of 20%. It consisted of the evidence of the workman, reports of Dr Arnold Mann, consultant surgeon, dated 28 May 1984 and 9 February 1987 and the evidence of Dr Mann.

27. The workman gave evidence of her work experience prior to commencing employment with the legal firm of Gallens on 19 February 1982. She gave details of her hours of employment and the nature of that employment up to December 1983 when she left Gallens and joined the present appellant, Pamela Coward and Associates. She was asked whether she had noticed anything physically wrong with her upper limbs at that time. She said:

"Not markedly. I would say probably for a few months
prior to my leaving Gallens I had, but not asociated
with my work. I did not think it was work related.
What did you notice?---When I was carrying shopping.
After carrying the shopping bag I would experience pain
in my right elbow. - And after carrying the shopping
bag it felt as if this portion of my arm was going to
be removed from the top."

And she then indicated the outer aspect of the top area of the right elbow extending down the forearm into the wrist. She said it would go away after 10 or 15 minutes and she would be able to continue. She had not sought any medical treatment in respect of the problem with her arm before she started work with the appellant. She then gave details of the nature of her employment with the appellant and was asked to compare the amount of typing she was doing with the appellant with the amount at Gallens. She said it would be less typing with the appellant by virtue of the fact that she was not involved in lengthy documents, just contracts for sale and schedules, letters and things, though she had to work longer hours. While working with the appellant she was still suffering pain in the elbow and was still not connecting it with her employment.

28. She consulted Dr Moorhead and he referred her to Dr Stubbs. She was referred to Dr Mann by the appellant. She ceased work with the appellant in May 1984 and went on holidays. When she returned she was put on duties other than typing and then ceased work until November 1985, receiving weekly compensation payments during the period. In November 1985 she commenced employment at Amdahl Computers. During the period she had been off work her symptoms gradually got better although she was still having some difficulty at Amdahl. She moved to Perth and commenced work at another legal firm. It is unnecessary to deal with the cross-examination.

29. In his first report of 28 May 1984 Dr Mann set out details of the history received, his examination of the workman and his opinion, which was that she had developed "extensor tendinitis of a very mild kind as the result of the nature of her work over a period of some years". In that report Dr Mann did not attempt to apportion the onset of the disease or its severity between her employers.

30. By letter dated 5 February 1987 the solicitors for the appellant asked Dr Mann a number of specific questions which he answered by letter dated 9 February 1987. The questions and the respective answers are as follows:

Q.Is it likely on the balance of probabilities that
the pain suffered in October/November 1983 is
connected to the symptoms present in 1984?
A.Yes. Q.Is it likely that the symptoms of October/November
1983 arose from her employment as a legal
secretary?
A.Yes. Q.Is it likely that the symptoms of October/November
1983 had their origins prior to that date as a
result of her employment, and if so is it possible
to estimate the length of time over which the
symptoms would have developed?
A.Yes. Whatever employment she was undertaking of a
secretarial kind would be a contributing factor.
It is difficult to separate precisely how much
caused what however. The judgment would have to
be Solomonic.
I do not think that I can help you further in
illustrating how much each employer contributed to
the disability.
Perhaps the simple way of determining the issue
would be to divide it up on the basis of length of
employment by each employer, assuming that the
nature of the work was similar in both locations.

31. When Dr Mann gave evidence, he was asked in examination in chief to assume the facts given in evidence by the workman and the differences between the work she was performing at Gallens and the work she was performing with the appellant. He was then asked whether there was anything in the assumed facts which would cause him to change the view expressed in his last report concerning the way in which the responsibility for the payment of compensation should be made. He answered:

"I really think it is extremely difficult unless one has
the opportunity of actually seeing the person working
in both locations because a simple job description is
extremely difficult because everything has to do with
the way the person does it. See, my secretaries are
taught that they type a screenful and then they put
their hands down, actually put them down while they are
correcting. Now, another person could be doing exactly
the same work and not putting their hands down and get
into trouble. So, I would be very, very hesitant to
make any forthright comments about it. The question is
how much were the hands elevated, not precisely what
they did."

He went on to say that from the description of both types of work and assuming that the person was honest, both types of work would be contributing to her condition.

32. In cross-examination he said that without additional factual knowledge "you have got to rely on mainly the length of service and the number of hours". He said any greater apportionment would be "crystal ball stuff".

33. The learned Magistrate delivered his decision ex tempore. He referred to Dr Mann's observation in his second report about King Solomon and observed that King Solomon would be better suited to hear the matter than he himself. Notwithstanding the difficulties, he was persuaded that the workman had established on the balance of probabilities that the condition for which she was incapacitated after working for 4 months with the respondent was partly caused by the employment for some 15 months previously with the appellant. He concluded that the principal cause of the problem was whilst working with the respondent and he assessed contribution from the previous employment with the appellant at 20 percent.

34. It was urged on behalf of the appellant in support of the second ground of appeal that the insufficiency of evidence upon which to make that finding is similar to what arose in Citra Constructions Limited v. John Costello, unreported decision of 10 January 1989. In that case the workman had brought an application against three separate employers in respect of employment by them between 1961 and 1986. His claim was for hearing loss sustained to varying degrees during the respective periods of employment with the three employers. I referred in that case to the principle now well established that the loss which is a compensible injury against an employer is the difference between the hearing (or vision) prior to the injury and the hearing (or vision) afterward (Campisi v. General Motors-Holden's Limited (1957) SR(NSW) 477 and Stevenson v. Buchanan & Brock Pty Ltd (1971) VR 503. I held that the evidence was insufficient for the Magistrates Court to establish the causal connection between the conditions of employment with each appellant and the proportionate loss of hearing during each period of employment.

35. That is not the factual position here. The evidence of the workman and Dr Mann establish on a prima facie basis the causal connection between the respective conditions of employment with the appellant and the respondent, and the evidence of Dr Mann, tentative though it may be, establishes some basis for apportioning the cause of the tenosynovitis, which ultimately became incapacitating for a period.

36. In my view the situation is quite different in the present case. The issue in Citra Constructions Limited v. Costello was the quantification of a compensible loss of hearing in respect of each employer. The issue in this case is the degree of contribution of the respective employments to a condition which became incapacitating. There was some evidence to support the Magistrate's findings and his apportionment should not be disturbed.

37. In the circumstances it is unnecessary to consider the third ground of appeal, but in any event it would have to be a very strong case indeed for this court to inferfere with the exercise of the discretion of a Magistrate in determining an application for adjournment (see for example Petrovic v. Taara Formwork (Canberra) Pty Ltd [1982] FCA 208; (1982) 62 FLR 451 at 460; Squire v. Rogers [1979] FCA 48; (1979) 39 FLR 106; McInnis v. The Queen [1979] HCA 65; (1979) 143 CLR 575 and Bloch v. Bloch (1981) 55 ALJR 701).

38. In the result the appeal will be allowed to the extent that the order that the appellant pay contribution to the respondent of 20 percent of the sum of $33,151.01 is set aside. In substitution therefor it is ordered that the appellant pay to the respondent contribution of 20 percent of the difference between $33,151.01 and the lump sum of $16,000 plus any costs associated with that lump sum.

39. It is not clear to me and there was no submission on the matter, whether the costs component of $650 in the sum of $33,151.01 was wholly attributable to the lump sum. I invite the parties to bring in short minutes of orders to give effect to the determination of the appeal having regard to the conclusions expressed.