Ilija Batar v D F Formwork Pty Ltd [1994] ACTSC 72 (15 July 1994)

SUPREME COURT OF THE ACT

ILIJA BATAR v D F FORMWORK PTY LTD
No. SCA101 of 1993
Number of pages - 11
Workers' Compensation

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
HIGGINS J

CATCHWORDS

Workers' Compensation - compromise agreed - whether sum agreed inadequate - hearing by Magistrate - decision that applicant failed to show compromise inadequate - appeal as of right - whether Magistrate failed to give sufficient reasons - whether Magistrate erred in failing to find compromise inadequate - whether irrelevant or improper consideration taken into account - whether conclusion of Magistrate vitiated thereby - report of doctor - subsequent to compromise agreement - whether report improperly rejected by Magistrate - whether erroneous conclusion reached.

Workers' Compensation Act 1951 (ACT), Schedule 4, s.26

Workers' Compensation Rules, sub-r.44(3)
Magistrates Court (Civil Jurisdiction) Act 1982, s.282C and G

Commonwealth of Australia v Blackwell [1987] HCA 44; (1987) 163 CLR 428
Pettitt v Dunkley (1971) 1 NSWLR 376
Dennis Willcox Pty Ltd v Federal Commissioner of Taxation (1988) 79 ALR 267
Dornan v Riordan (1990) 95 ALR 451
Doyle v Ranse [1991] ACTSC 46; (1991) 103 FLR 419
Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247
Australian Life Tables 1975/77
Commonwealth Accommodation and Catering Services Pty Ltd v Dobrinka Boceska

(ACTSC, 11/10/91, Gallop, unreported)

HEARING

CANBERRA, 20 June 1994
15:7:1994

Counsel for the Appellant: Mr G Stretton

Instructing solicitors: Snedden Hall and Gallop

Counsel for the Respondent: Mr G Parker

Instructing solicitors: Macphillamy Cummins and Gibson

ORDER

THE COURT ORDERS THAT:

The appeal be dismissed.

DECISION

HIGGINS J By an application dated 21 December 1990, the appellant worker sought compensation in respect of an injury sustained in the course of his employment with the respondent in June 1989.

2. He ceased work in May 1990 as a result of continuing and worsening neck and arm pain. After two or three months his arms improved. It was his case that he was totally incapacitated for work up until that time and thereafter indefinitely has remained partially incapacitated.

3. The application came before Mr W K Nicholl, Magistrate, on 14 September 1992. It was referred to the Magistrates Court for determination pursuant to Schedule 4 of the Workers' Compensation Act 1951 (ACT) (the Act).

4. Both sides presented their case. The hearing concluded on 15 September 1992, when the learned Magistrate reserved his decision. The only matter which seems to have been put in issue on behalf of the employer at the hearing was the extent of the worker's residual incapacity for paid employment.

5. There was no challenge to the worker's account of the way in which he was injured. As Mr Crowe, counsel for the worker at that time, opened to the learned Magistrate,

...the worker in this case is now a 39 year old man who was born in
Yugoslavia and has effectively always worked as a form work carpenter.
In June 1989 he was working for the (employer) at the refurbishment at
Kingston Oval and in the course of his work he was required to climb in
a very confined space where he had to tighten some nuts on to threads
... In the course of doing that ... he strained his neck.

6. The medical evidence agreed that the worker was no longer fit for work as a formwork carpenter. His work capacity was reduced. Dr Cassar, a consultant physician, felt the worker could do two to four hours per day of light carpentry work, with ongoing treatment. Dr Corry, a rehabilitation specialist, felt the worker was fit for light duties but with some chance of building up to full-time work if his tolerance for activity improved, depending on the required activity.

7. Dr Corry agreed that the worker was fit to perform light carpentry or cleaning work for up to four hours per day. None of the other medical evidence disputed this.

8. Mr Trevor Zeltner, a trade union official, gave evidence that employment to perform light carpentry work was unavailable in the building and construction industry.

9. On 17 September 1992, the parties re-appeared before the learned Magistrate. Counsel for the employer informed his Worship that "the worker (has) agreed to redeem his rights in the sum of $75,000 with a common law release and forms 27 and 28".

10. Mr Crowe, for the worker, agreed that such an agreement had indeed been reached but stated that "the worker's instructions have now changed". It was intended, he said, to dispute the adequacy of the agreed compromise pursuant to paragraph 9(d) of Schedule 4 of the Act.

11. The employer then applied to this Court by a summons dated 16 October 1992 seeking specific performance of the compromise agreement. That application was heard by me on 20 November 1992. I gave judgment on 27 January 1993. I held that the correct course was for the worker to apply to the Registrar for a reference to the Magistrates Court to have the question as to adequacy determined. The application for specific performance was, in my view, premature.

12. In the course of that decision I set out the relevant provisions of the Act, including Schedule 4, and the Rules made under the Act.

13. The Registrar, pursuant to r.9(d), Schedule 4 of the Act, referred the matter to the Magistrates Court to determine whether the compromise agreed to was "inadequate".

14. The terms of r.9(d), so far as they are relevant for present purposes, are as follows:

(d) Where it appears to the Registrar of the Court, on any
information which the Clerk (sic) considers sufficient, that an
agreement made before ascertainment of compensation between a worker and
the worker's employer for payment of a lump sum by way of compromise in
satisfaction of all claims ... ought not to be registered by reason of
the inadequacy of the sum ..., the Clerk (sic) may refuse to record the
memorandum of the agreement sent to him or her for registration, and
refer the matter to the Court, which shall, in accordance with Rules of
Court, make such order (including an order as to any sum already paid
under the agreement) as under the circumstances it thinks just;

15. If, pursuant to r.9, a memorandum of agreement is registered, the same becomes enforceable as a judgment of the Magistrates Court.

16. The forms 27 and 28 referred to by counsel for the employer were, respectively, a "memorandum of agreement" and "particulars of information supplied". They are prescribed so as to enable the Registrar to register the agreement. The forms presented to the Registrar were signed only by the solicitors for the employer.

17. The Rules of Court made under the Act provide in sub-rule 44(3) that, if the Registrar considers that the memorandum ought not to be recorded,

... for any reason mentioned in proviso (d) to clause 9 of Schedule
4 to the Act, she or he shall report, in writing, to the Court
stating the information she or he has obtained, and the grounds on
which it appears to her or him that the memorandum ought not to be
recorded.

18. Magistrates Court may then hold an enquiry into the question whether the memorandum of agreement should be recorded.

19. Rule 44(7), made under the Act, provides that,

At the enquiry witnesses may be orally examined in the same manner
as on the hearing of a claim under the Magistrates Court (Civil
Jurisdiction) Act 1982.

20. The relevant enquiry was held on 2 September 1993 by Magistrate Nicholl. This would seem to have been the first such enquiry ever conducted in this Territory.

21. Mr Stretton, for the worker, conceded that the onus was on the worker to persuade his Worship that the settlement was "inadequate". He conceded that the worker's prospects for success were relevant to that issue but noted the lack of substantive factual contest in the compensation proceedings.

22. The transcript of the previous hearing, forms 27 and 28 and relevant correspondence were tendered to his Worship.

23. Counsel for the employer conceded that, in considering the adequacy of the compromise, the approach endorsed by the High Court of Australia in Commonwealth of Australia v Blackwell [1987] HCA 44; (1987) 163 CLR 428 was appropriate.

24. Mr Stretton tendered a report from Dr Cassar purporting to address the question of the "permanency", as counsel put it, of the worker's "state of incapacity". Mr Parker, counsel for the employer, objected to it. His Worship expressed the view that,

...it is not a document I should receive, Mr Stretton. I take the
view that the question of adequacy should be dealt with on the
material that was available as at the time the agreement was
reached.

25. However, his Worship made it clear that he was open to persuasion to the contrary.

26. Also tendered was a list of the medical expenses included within the agreed compromise figure. The total thereof was $7,769.50. The quantum of such expenses had not been in dispute in the compensation proceedings.

27. It was stated on behalf of the employer that $7,000.00 had been allowed by the employer for the worker's legal costs within the compromise figure. The actual costs charged by the worker's solicitors was $10,887.76. It was not contended that this figure was unreasonable.

28. Mr Stretton's submission to his Worship was, in essence, that once account was taken of the sum which would have been awarded to the worker up to the date of settlement and of the costs and legal expenses, whether as estimated by the employer's legal advisers or as charged by the worker's solicitors, the result was the allowance of a sum for future economic loss of $25,000 to $29,000.

29. This sum, Mr Stretton contended, was "inadequate" even if viewed against future compensation entitlements under the Act and not future loss of earnings which might have been allowed in the event of full damages being awarded at common law. It was not disputed that the worker would have earned $471.20 gross per week as at the date of the hearing if he had continued to have been employed as a formwork carpenter. Had he been employed in an occupation for which he was actually fit at that time he would then have been paid $232.55 gross per week. The difference, being the compensation payable in respect of the worker's partial incapacity, would equate with or exceed the maximum sum payable for weekly payments prescribed under the Act from time to time.

30. Mr Parker, on the other hand, contended that there were a number of "imponderables" which prevented a positive finding of "inadequacy". It might have been found that the level of work-related incapacity was merely "coincidental" in that there might have been found to be a level of non-work related incapacity. There may have been recovery from work-related incapacity. In essence, his argument was that it had not been proved that the sum agreed was "inadequate".

31. A decision was delivered on 10 September 1993. His Worship set out the history of the matter. He then, having set out in full the letter sent by the worker's solicitors to the Registrar, continued,

There was conflict in the medical evidence given on behalf of the
parties. It was thought that at that point of time he could probably
work up to about 20 hours a week, that is back at the time when the
matter was before me in September of last year, and it was likely to
improve with time. The compromise of course would result in him
receiving a lump sum now, money that was capable of being invested. The
lawyers representing the parties at the time obviously considered it a
proper settlement. That, of course, does not determine the issue for
me. I have to look to see, whether in the light of the evidence and the
submissions, I can be satisfied as to its adequacy.

It is agreed that the onus of proof is upon the applicant to establish
in this present application before me, that the amount of the compromise
is inadequate. That, in my opinion, is a difficult task for the
applicant to do. In the reported case of The Commonwealth v Blackwell,
the situation was different. There, there was a clear entitlement to a
particular rate, subject to increase in accordance with changes
according to law. Here, the compromise is reached before any finding is
made and the evidence before me does not allow me, in my view, to find
that it is more likely than not that the applicant would continue to be
partially incapacitated.

There are so many factors that simply cannot be determined, and in my
view, the applicant has failed to show on the evidence before me, in the
matters that I was able to take into account, that the compromise was an
inadequate one bearing in mind all of the factors, including liability,
that are involved. There was a report of Dr Cassar that was marked for
identification 1 that the applicant sought to tender before me in these
proceedings. The view that I formed at the time was that I should
restrict myself to the evidence that was before me in September.

However, in case I am wrong in that view, I have looked at the report of
Dr Cassar in which he expresses a view about the likely future
incapacity of Mr Batar, the applicant, and I simply say that even if
that evidence was before me it would not alter the view that I have
reached, that I am not persuaded that the applicant has satisfied the
onus which is upon him to establish on the probabilities that the
compromise is inadequate.

32. It is from this decision that the worker appeals to this Court. The notice of appeal is dated 28 October 1993.

33. Whilst ten grounds of appeal are relied on, they seem to me to come down to four. Grounds 1-7 complain that the learned Magistrate failed to give sufficient reasons for his decision. Ground 8 complains that the learned Magistrate took account of a matter not in evidence or relevant, namely, that lawyers then representing the worker considered the settlement to be a "proper" one. Ground 9 complains that the report of Dr Cassar of 14 July 1993, tendered at the enquiry on 2 September 1993, should not have been rejected. Ground 10 complains that the learned Magistrate was in error in failing to find that the compromise was inadequate.

34. The appeal is brought pursuant to s.26 of the Act. Sub-section 26(2) equates such an appeal with an appeal brought pursuant to sub-s.282C(2) of the Magistrates Court (Civil Jurisdiction) Act 1982 (the Civil Jurisdiction Act).

35. That implies not only that this appeal is as of right but also that s.282G of the Civil Jurisdiction Act applies. That section provides that this Court,

... shall have regard to the evidence given in the proceedings out
of which the appeal arose, and has power to draw inferences of fact
and, in its discretion, to receive further evidence.

36. Insofar as inferences are concerned, his Worship expressly disavowed any recollection of the hearing on 14 and 15 September 1992. It follows that, the hearing on 2 September 1993 having proceeded in the absence of any oral evidence, there is no advantage which the learned Magistrate enjoyed by reason of having heard or seen witnesses in the matter at the original compensation hearing.

Inadequacy of Reasons - Grounds 1-7
37. A failure to give reasons for a decision where such reasons are required to enable a party to decide whether to appeal, or even to understand why the decision was made as it was, is an error of law: Pettitt v Dunkley (1971) 1 NSWLR 376. It is such an error if the decision leaves it unclear whether submissions worthy of serious consideration have been considered: Dennis Willcox Pty Ltd v Federal Commissioner of Taxation (1988) 79 ALR 267. The duty to state reasons applies both to administrative appeals tribunal decisions and to summary hearings in the Magistrates' Court: Dornan v Riordan (1990) 95 ALR 451; Doyle v Ranse [1991] ACTSC 46; (1991) 103 FLR 419.

38. However, as Mahoney JA pointed out in Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247, not every reason for a decision needs to be expressly set out in the stated reasons for that decision. Factual findings would not need to be stated if the facts in question had not been raised as matters in issue. In the case of some procedural rulings, reasons would be unnecessary. In the case of discretionary judgments, it would frequently not be possible to state all relevant factors or the precise weight given to each factor which is referred to or is implicitly noticed. A factor or consideration that is trite, for example, the onus and standard of proof in a civil case, would not require express statement. It is sufficient if it can be understood, in context, why the decision was made.

39. In this case, the primary evidence before the learned Magistrate was virtually unchallenged. There was conflict in the medical evidence, not so much as to the worker's medical condition but as to the extent to which it had by then or in the future, affected his work capacity. The question his Worship needed to address did not involve any challenge to the credibility of any witness. No express finding therefore was required to that effect on the hearing as to inadequacy.

40. So far as the conflict in the medical evidence was concerned, all that was relevant to the question before his Worship in the matter now under appeal, was the nature and extent of that conflict. The worker's counsel conceded that the substantive character of the dispute was relevant to the "inadequacy" of the compromise. If there had been no dispute, or no substantive dispute, as to the worker's fitness or prospects for fitness for work then little, if any, discount would be appropriate as against, at least, the present day value of the worker's right to compensation.

41. His Worship obviously drew the conclusion from the medical evidence that the worker's earning capacity, compared with September 1992, was expected to improve with time. The extent of that improvement was not something about which his Worship could form a concluded view.

42. It cannot be required that a Court faced with conflicting evidence must resolve that conflict. To do so, would be artificial, if not to say unjust. A court will, of course, come to a concluded view resolving such conflict if it can. The law resolves such a conflict where a concluded view cannot be formed one way or the other, if it is necessary to do so, by rejecting as unproved the contention of the party on whom the onus of persuasion lies.

43. The learned Magistrate expressed himself in terms which necessarily implied that, as he was not able to prefer the more pessimistic prognosis offered by some of the medical evidence, he was not persuaded that the degree of proved future incapacity rendered the sum of $25,000.00 to $29,000.00 inadequate. That is, to my mind, a sufficient statement of reasons. It is not enough to say, in such a case as the present, that the learned Magistrate could have come to a different view: Soulemezis (supra). It was possible for his Worship to have been persuaded otherwise, but he was not. He resolved the issue against the party on whom the onus of persuasion lay.

44. The fact that not all factors leading to his Worship's conclusion are explained does not vitiate the finding of non-satisfaction. It is surely difficult to explain why a prognosis, obvious to Doctor A, is not obvious to Doctor B and why the totality of conflicting opinions fails to persuade a tribunal of fact to a clear conclusion one way or the other.

45. His Worship's reasons were also assailed upon the ground that he did not explain the "imponderables" to which he made reference.

46. That word is used in the context of the submissions put by the parties. Common law liability was an "imponderable". The evidence at the compensation hearing did not enable any conclusion to be drawn adverse to the employer on that issue. It was not a matter in issue in those proceedings. The extent of the worker's future disability and earnings was, for reasons his Worship adverted to, attended by "imponderables" arising from the conflicting medical opinions expressed by various medical practitioners.

47. The worker's counsel virtually conceded that the issue as to common law liability was imponderable. He put the worker's case on the basis that $75,000.00 was, on any view of the common law prospects of the worker, "inadequate".

48. In my opinion, the reasons for decision of his Worship, though brief, sufficiently explain the reasons for that decision.

49. Grounds 1-7 are rejected.

That the worker's lawyers considered the statement a proper one - Ground 8
50. There was no evidence that the worker's lawyers had endorsed the adequacy of the compromise. Mr Crowe, for the worker, had not represented that the amount of the compromise was, in his opinion, a proper figure. It was not necessarily his place to do so. He did not represent that any of the worker's legal advisers had formed or expressed any such opinion.

51. His Worship would not have been entitled to enquire whether the $75,000.00 figure was recommended to the worker by his legal advisers. It could not be inferred from the worker's agreement to the compromise that his legal advisers considered it to be "proper".

52. It was, accordingly, an error for his Worship to express the conclusion which he did.

53. However, the question is not whether his Worship erred, but whether that error vitiates his conclusion.

54. His Worship expressly rejected the satisfaction of the worker's lawyers as being determinative of the "inadequacy" or otherwise of the compromise. His Worship did not affirmatively find the settlement sum to have been adequate. Furthermore, he was not satisfied that the compromise was inadequate. In failing to be so satisfied, it does not appear that his Worship relied in any way on the erroneously assumed satisfaction of the worker's legal advisers.

55. Indeed, his Worship expressly rejected any reliance on that assumption. I cannot conclude that his Worship has, nevertheless, given weight to it.

56. I reject this ground of appeal.

The further report of Dr Cassar was rejected - Ground 9
57. The question for his Worship to determine in September 1992 was the level of the worker's then incapacity. If he was satisfied that he was capable, then, only of 20 hours productive work in an occupation reasonably available to him, he would have made an award accordingly on the basis of that level of partial incapacity.

58. If, after that award had been made, the employer considered that the incapacity had ceased or lessened, it could have applied for the termination or variation of the award.

59. The enquiry being made by his Worship as to the "inadequacy" of the compromise agreement required a view to be formed as to all matters relevant to the adequacy of that compromise. Those matters included not only the extent and duration of whatever incapacity for work may have existed as at September 1992 but also the real worth of the common law rights to be released in consequence of the settlement insofar as they possessed apparent value. The nature and extent of any dispute as to facts or law, and the degree of likelihood of such a dispute being resolved in favour of the worker or the employer, would also be relevant.

60. The relevant considerations are, to my mind, not essentially different from those relating to approval of a compromise of an action for damages for personal injury brought on behalf of a person under a legal disability.

61. It follows that the opinion of Dr Cassar as to the future course of the worker's disability was relevant, even though it was expressed subsequently to the compromise agreement. The question is not whether, when made, the compromise appeared adequate, but whether it was in fact adequate as at the time it was made the subject of enquiry.

62. For example, if a worker was advised that his incapacity would improve and on that advice agreed to a settlement, it would seem to me open to her or him to seek enquiry into the adequacy of the compromise if, before registration of the agreement, facts emerged to challenge the correctness of that advice and to render the compromise, in the light of those further facts, inadequate.

63. It follows that his Worship erred in rejecting Dr Cassar's further report of 14 July 1993.

64. However, his Worship in fact considered the contents of that report. He determined it did not assist to resolve the matter under enquiry.

65. In that report, Dr Cassar stated,

Essentially, I continue to hold the opinions expressed in my
report of September 11th 1992 to your client's former solicitors ...

66. It is not as if the medical evidence presented in September 1992 did not address the worker's future level and likely duration of incapacity. His Worship was correct to conclude that Dr Cassar's further report added nothing to the information before him. It did not amend or qualify any previous opinion.

67. It follows, in my view, that his Worship's error has not been shown to have led him to any erroneous conclusion.

68. This ground of appeal is also rejected.

Was his Worship's conclusion manifestly wrong - was the compromise inadequate? - Ground 10
69. The essential part of the submission was that the sum of $25,000.00 to $29,000.00 for future loss of income was manifestly inadequate. It assumes that such a figure does represent the amount allowed therefore in the compromise agreement.

70. If the worker's loss had been assessed at $230.00 per week gross and if it was going to continue to age 65, the capital value of that loss in 1992, without discount for the vicissitudes of life or taxation could be as much as $203,090.00 (Australian Life Tables 1975/7 3.0 per cent). However, making those allowances would reduce the capital value of that loss to a sum a little above $100,000.00.

71. The compromise figure, after deducting the full amount of the assumed pre-compromise entitlements and legal costs and out-of-pocket expenses, represents a loss of income of $230.00 (less tax) over more than three years, if paid out continuously at that rate. The period would be greater if the incapacity lessened so as to reduce the gross compensation entitlement to less than $230.00 per week. If, or when, and, if so, to what extent that might happen was "imponderable". The effect of taxation, interest rates and the vicissitudes of life was also "imponderable". The chances of these "imponderables" being decided for or against the worker would be relevant to the adequacy or otherwise of the compromise.

72. It should be noted also that the sum of $75,000.00 was not expressly apportioned between lost earnings, lost capacity to earn or any other head of damage.

73. It seems to me that the learned Magistrate correctly appreciated and applied the decision of the High Court in Blackwell. He correctly recognised that there was a need to discount the raw figures which, it was submitted, could be derived from the

74. compromise sum by reference to the "imponderables" to which he referred. It is not suggested by his Worship that the "imponderables" in question left the question of inadequacy totally at large.

75. The learned Magistrate, in this case, was simply not persuaded that the sum agreed upon by way of compromise was "inadequate", that is, outside the range permitted by the variables affecting the worker's future incapacity for work. On the material before him, I am not able to conclude that his Worship was wrong so to conclude.

76. The case is quite different from that of Commonwealth Accommodation and Catering Services Pty Ltd v Dobrinka Boceska (ACTSC, 11/10/91, Gallop J, unreported). In that case, the learned Magistrate had not given reasons for being unpersuaded that incapacity had ceased. It was, on the facts, a medical issue. There was no dispute as to the basic facts relevant to that issue. His Honour was able to conclude on the evidence so presented to him on appeal, that the learned Magistrate should have been persuaded that incapacity had ceased. That followed a finding that, given the persuasive character of the medical evidence presented, cogent reasons would need to be stated to justify its rejection.

77. In this case, it was only necessary to conclude that the proposed compromise was "not inadequate" when viewed against the prospects for success of the employer's contentions in the compensation proceedings, there being no evidence that there was any realistic prospect for common law liability being established.

78. I reject this ground of appeal also.

79. It follows that the appeal is dismissed. I will hear the parties as to costs.