Lawrence William Phillips v Wills Sales (Aust) Pty Limited [1996] ACTSC 33 (26 April 1996)

SUPREME COURT OF THE ACT

LAWRENCE WILLIAM PHILLIPS v. WILLS SALES (AUST) PTY. LIMITED
No. SCA 91 of 1995
Number of pages - 7
Workers' Compensation

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
MILES CJ

CATCHWORDS

Workers' Compensation - whether worker in receipt of double benefits - receipt of continuing weekly payments under ACT Workers' Compensation Act 1951 - later receipt of lump sum payments pursuant to award of Workers' Compensation Court - application by employer for award terminating weekly payments under ACT Act - whether lump sum payments under NSW award payments of compensation or in nature of compensation - whether receipt of such lump sum payments a bar to entitlement to receipt of payments under ACT Act - it is not - whether such payments to be taken into account in determining quantum of compensation - they may be.

Workers' Compensation - magistrate sitting as arbitrator - whether empowered to make a declaration - he/she is not.

ACT Workers' Compensation Act 1951, s.23
Workers' Compensation Act 1987 of New South Wales, s.66 and s.67

Flint v. Westpac Banking Corporation (unreported, Supreme Court of the ACT, 14 March 1995, Higgins J)

HEARING

CANBERRA, 15 April 1996
26:4:1996

Counsel for the appellant : Mr. R. Crowe

Solicitors for the appellant : Elrington Boardman Allport

Counsel for the respondent : Mr. M. Cranitch, SC

Solicitors for the respondent : Mallesons Stephen Jaques

ORDER

THE COURT ORDERS THAT:
1. The appeal be upheld.

DECISION

MILES CJ This appeal from a decision of a Magistrate raises the question of how far the receipt of entitlements under workers' compensation legislation outside the ACT affects an injured worker's rights to be paid compensation by the employer under the Workers' Compensation Act 1951 of the Territory (the ACT Act). Is it a complete bar or does it affect only the amount of compensation payable?

2. Both counsel agree that the question is one of statutory construction and that no matter of conflict of laws is raised. The principal statutory provision is s.23 of the ACT Act:

"Liability of the employer independently of this Act

23.(1) Except as provided by this section, a worker shall not
be entitled, in respect of personal injury arising out of or in
the course of his or her employment, to receive compensation or
any payment by way of compensation from his or her employer both
independently of and also under this Act.

(3) Where a worker is awarded damages against his or her
employer in respect of an injury independently of this Act -

(a) amounts received by him or her under this Act in respect of
that injury shall, to the extent that they do not exceed the
damages, be deemed to have been paid by the employer in or
towards satisfaction of the damages; and

(b) he or she shall be entitled to recover under this Act so
much (if any) of the amount which, but for this section, would
be payable under this Act as does not exceed any unsatisfied
balance of the damages."

3. Paragraph 2(b)(ii) of Schedule 1 is also relevant:

"2. Notwithstanding anything contained in clause 1 -

(a) .....

(b) where the worker is totally or partially incapacitated for
work by the injury -

(i) .....

(ii) subject to clause 2A regard shall be had to any payment,
allowance or benefit which the worker receives from his or
her employer during the period of the worker's incapacity
and the amount of the weekly payment otherwise payable under
paragraph 1(b) or (c) shall be reduced to such amount (if any)
as is just and proper; and

(iii) ....."

Facts
4. The essential facts are not in dispute. The respondent is a company which carries on business in the ACT. The appellant was employed by the respondent as a sales person pursuant to a contract made in the ACT. He received injury in the course of his employment in Wagga, New South Wales. Whether there was one or several distinct injuries is not clear and probably does not matter. There were three incidents occurring at weekly intervals on 5, 12 and 19 March 1990. In the first two incidents the appellant felt pain in his back when lifting cartons. He lost no time from work and sought no medical treatment. The third incident occurred when he was getting down from the cabin of a van. He landed heavily on his feet and felt immediate and intense pain in the back. He ceased work and received medical treatment. He made a claim on the respondent for weekly payments of compensation under the ACT Act. He received such payments of compensation and, as I understand it, continues to do so.

5. After the appellant commenced to receive weekly payments of compensation under the ACT Act, he made application to the Compensation Court of New South Wales for lump sum payments under s.66 and s.67 of the Workers' Compensation Act 1987 of New South Wales (the NSW Act). The application was determined on 2 June 1994 when Judge Truss made the following findings:

"1. On 5, 12 and 19 March 1990 the applicant suffered injury
in the course of his employment with the respondent; namely,
injury to his back.

2. As a result of the said injury, the applicant has suffered
permanent impairment of the back, equivalent to 25 percent of
a most extreme case of back impairment."

6. Judge Truss also entered an award for the appellant pursuant to s.66 of the NSW Act in respect of permanent impairment of the back in the sum of $13,582.50 and pursuant to s.67 of the NSW Act in the sum of $15,000.

7. On 9 February 1995 the respondent made an application to the ACT Magistrates Court for arbitration with respect to the review and termination of the weekly payments that it was making to the appellant pursuant to the ACT Act. The grounds for the application included a claim that the appellant, having received compensation under the NSW Act, was not entitled to compensation pursuant to the ACT Act. Other grounds were to the effect that the appellant had ceased to be incapacitated for work. It is not clear whether the respondent abandoned those other grounds when the matter came on for hearing before the Magistrate. The Magistrate made no findings on those other grounds.

The Magistrate's Decision
8. The Magistrate came to a view, after considering the facts and a previous decision of this Court, Flint v. Westpac Banking Corporation (unreported, 14 March 1995, Higgins J) that s.23 of the ACT Act precluded the respondent from actually receiving compensation both under the ACT legislation and under the NSW legislation. However, the Magistrate did not think it appropriate to make an award terminating the respondent's liability to make weekly payments of compensation to the appellant under the ACT Act. Instead the Magistrate disposed of the application for arbitration in the following terms:

"Based on the reasons I have given you, I declare that the
respondent worker has not been entitled to receive payment of
Workers Compensation pursuant to the ACT Workers Compensation
Act since the date he received compensation pursuant to Judge
Truss's award on 2 June 1994 in matter No. 7654 of 1993 in
respect of the back injury which was the basis for that award
and the payments which have been made under the ACT Workers
Compensation Act."

9. The Magistrate also stated that in taking this approach he bore in mind that the appellant would have been entitled to claim weekly payments under the NSW Act (in addition to lump sum payments under s.66 and s.67 of the NSW Act) instead of taking the course he had of making a claim for weekly payments and receiving such payments under the ACT Act.

10. No point was taken by the respondent in the appeal that the Magistrate's decision was not one from which an appeal might lie.

The Arguments
11. Both sides agree that the payments received by the appellant under s.66 and s.67 of the NSW Act are payments by way of compensation. There was no argument that s.67 gives rise to a statutory entitlement to damages of a restricted amount rather than to a right to compensation. In view of the agreement of counsel, it is not necessary to consider further at this stage the provisions of the New South Wales Act.

12. Mr. Crowe, for the appellant, submitted that some limitation had to be imposed upon the words used in s.23, otherwise the receipt of any payment of compensation or by way of compensation independently of the Act at any time and in any amount would impose a permanent and absolute bar to an injured worker's entitlement to receive compensation or payment by way of compensation under the ACT Act, unless the circumstances fell within the exceptions (if any) that are otherwise provided for in s.23.

13. Mr. Cranitch, for the respondent, on the other hand, submitted that there was no reason to so restrict the operation of the section and that the words in sub-s.23(1) must be taken to mean exactly what they say. It was submitted that the receipt by the appellant of payments of compensation or by way of compensation pursuant to the award of Judge Truss under the NSW Act did not come within any exception now provided for in s.23 and hence the receipt of those payments disentitled the appellant to receive compensation under the ACT Act. The respondent was entitled on this approach to an award that recognized that since the date of such receipt the respondent was under no liability to make payments of compensation or by way of compensation to the appellant under the ACT Act.

14. Both sides, however, accepted that s.23 was directed to avoiding double liability on the part of the employer and, conversely, double benefits on the part of the worker in respect of the same injury. In other words, s.23 is not intended to debar a worker who receives compensation independently of the ACT Act in respect of one injury from receiving compensation under the ACT Act in respect of a separate and distinct injury. The Magistrate appears to have recognized this in the terms of his decision.

Has the worker received compensation or payments in the nature of compensation independently of the ACT Act?
15. The submission on the part of Mr. Crowe is supported by the decision in Flint. In that case the injured worker contracted a disease (tenosynovitis) in the ACT. The condition was exacerbated in an incident which occurred whilst she was working for the same employer on a visit to Queensland. She became incapacitated for work as a result. A tribunal in Queensland found that the exacerbation constituted an injury within the workers' compensation legislation in that State and awarded a lump sum payment to the worker, who in fact received that lump sum. The worker had not previously applied for or received compensation either under the ACT Act or independently of it. The worker continued to remain incapacitated for work by reason of the disease although the exacerbation caused by the incident in Queensland had ceased by the time she returned to the ACT. She applied for an award of weekly compensation under the ACT Act. A Magistrate found that the receipt of compensation resulting from the proceedings in Queensland barred the worker's entitlement to claim compensation under the ACT Act. On appeal Higgins J reversed the decision of the Magistrate.

16. The facts in Flint may be distinguished from the present case on the basis that the injury in respect of which the worker received compensation under the Queensland Act was not the injury in respect of which she sought compensation under the ACT Act. In the present case the situation is not quite clear, but it appears that the "injury" in respect of which the appellant was awarded and received compensation in the proceedings in the Compensation Court of New South Wales (that is to say the injury received in the three incidents occurring on 5, 12 and 19 March 1990) is the same "injury" in respect of which he sought and received compensation from the respondent by making a claim pursuant to the ACT Act and in respect of which he received and has continued to receive weekly payments for incapacity without any formal proceedings being taken or any formal award made. The nature of the lump sum compensation received as a result of NSW proceedings may differ from the nature of the weekly payments of compensation he has received pursuant to the ACT Act. That is a matter which may require attention and to which I will return.

Is the worker disentitled to continue to receive compensation under the ACT Act?
17. In Flint, Higgins J held that although the compensation received by the worker pursuant to the Queensland legislation was a lump sum calculated in relation to a percentage of loss of the use of the upper limbs it was nevertheless compensation in the same sense as the weekly payments for incapacity for work which the worker sought under the ACT Act. However, the receipt of the lump sum was, in his Honour's opinion, no bar to the worker's right to claim weekly payments for incapacity under the ACT Act. What the ACT Act required in effect was, by virtue of para.2(b)(ii) of Schedule 1, the bringing into account of what the worker had received independently of the ACT Act so that ultimately the employer did not have to pay twice for the same injury. His Honour said at 15:

"There is no bar contained in the ACT Act against proceeding
both under the ACT Act and independently of it. Paragraph
2(b)(ii) of Schedule 1 gives effect to the terms of
sub-s.23(1) by forbidding, not recovery of such compensation
per se, but retention of both compensation under the ACT Act
and a sum payable independently of the Act by the employer.
The employer is not required to pay twice for the same injury
whatever may be the source of the concurrent liability to the
worker (save for the "make up" payments referred to in
paragraph 2(b)(ii) of Schedule 1 to the ACT Act).

Therefore, so far as the ACT Act is concerned, a Magistrate
hearing this claim is required to assess compensation payable
under the ACT Act allowing credit for any compensation paid
pursuant to the Queensland Act. This interpretation of the
ACT Act seems consistent with the approach taken by the High
Court in Manser v. Spry [1994] HCA 50; (1994) 68 ALJR 869."

18. With respect, I agree with his Honour's statement of the effect of s.23 and para.2(b)(ii) of Schedule 1, although I would prefer to use the term receipt rather than retention. Sub-section 23(1) plainly does forbid the receipt of double payments. But in a particular case where there has been receipt of double benefits in contravention of its provisions, it may have the effect that the worker will be required to bring the overpayment into account in relation to any further or continuing liability on the part of the employer; alternatively the employer may seek to recover the overpayment by way of action for money had and received. Para.2(b)(ii) of Schedule 1 may be seen to cater for the eventuality of over-payment by giving the arbitrator a discretion to reduce to "such amount (if any) as is just and proper" the quantum of any weekly payment otherwise payable after regard has been had to any payment, allowance or benefit which the worker receives from the employer during the period of incapacity. Higgins J regarded payment of compensation independently of the ACT Act as a payment, allowance or benefit under the Schedule and the parties in the present case have not asked me to dissent from that view. It should be noted, however, that I make no decision whether any difference in character between the lump sum payments received by the present appellant under s.66 and s.67 of the NSW Act and the lump sum compensation received by the worker in Flint affects the operation of para.2(b)(ii) of Schedule 1. The words "by way of compensation" in sub-s.23(1) are of very wide application and are, I would think, intended to encompass a range of payments made pursuant to legislation similar to the ACT Act.

19. It follows that I consider that the Magistrate was wrong in taking the view that by virtue of the receipt of payments under ss.66 and 67 of the NSW Act in respect of the injury received on 5, 12 and 19 March 1990, the appellant was barred from claiming or receiving compensation in respect of that injury from the respondent under the ACT Act. The appeal must succeed.

20. What is to be done is not immediately clear. The Magistrate did not make an award in the arbitration. He expressed himself ultimately in the terms of a declaration, but as I understand it, the ACT Act does not give an arbitrator power to make a declaration. On the face of it, the most appropriate course is simply to remit the matter to the Magistrates Court for further hearing in the arbitration and in accordance with these reasons for judgment. That would be the only appropriate course if the respondent is intent upon seeking an award terminating its liability to make weekly payments relying on one of the alternative grounds in the application for termination and in particular the allegation of fact that the appellant's incapacity for work has ceased. On the other hand, it may be that the only matter which the respondent wishes to raise in the light of the outcome of this appeal is the quantification of the appellant's right to compensation after application of para.2(b)(ii) of Schedule 1 and having regard to the receipt of payments under the NSW Act. If that is so, it may be more expeditious and less costly to the parties if the matter is finally determined in this Court after further argument and, if necessary, further evidence.

21. I shall hear the parties further as to what should be the precise outcome of the successful appeal.