Ag & Sa Chapman Pty Limited v Cameron Dirk Fraser [1997] ACTSC 81 (10 October 1997)

SUPREME COURT OF THE ACT

AG & SA CHAPMAN PTY LIMITED v CAMERON DIRK FRASER
No. SCA 66 of
1996
Number of pages - 11
Workers' Compensation

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

MILES CJ

CATCHWORDS

Workers' Compensation - agreement to compromise worker's claim by lump sum under cl.9 of Schedule 4 distinguished from redemption under cl.13 of Schedule 1 - agreement registered by Registrar under cl.9 of Schedule 4 - worker alleges agreement obtained by improper means - power of Magistrates Court - whether six months limitation period under proviso (e) to cl.9 of Schedule 4 applies where Magistrates Court considers agreement improperly recorded - it does - whether power to rectify register includes power to set aside agreement - it does not - whether Magistrates Court has power to set aside agreement obtained by improper means - it does not.

Workers' Compensation Act 1951

Workers' Compensation Rules

Schofield v. W.C. Clough & Co. (1913) 2 KB 103

HEARING

CANBERRA, 7 May 1997 (hearing), 10 October 1997 (decision)

10:10:1997

Appearances

Counsel for the appellant: Mr. R. Williams, QC

Solicitors for the appellant: Hunt & Hunt

Counsel for the respondent: Mr. R.L. Crowe

Solicitors for the respondent: Gary Robb & Associates

ORDER

THE COURT ORDERS THAT:

1. The appeal be upheld.

2. The orders of the Magistrate made on 17 September 1996 be set aside and the notice of motion dated 19 April 1996 filed in the Magistrates Court be dismissed.

DECISION

MILES CJ

This is an appeal by the worker from a decision of the ACT Magistrates Court made under the Workers' Compensation Act 1951 (the Act).

The Magistrate had before him a notice of motion filed on behalf of the employer dated 19 April 1996 seeking certain orders including the following:

"1. That the Memorandum of Agreement recorded on 29 September 1994, be set aside.

2. That the applicant be granted leave to prosecute his Application for Arbitration in matter number WC 582 of 1995.

3. That the respondent pay the applicant's costs of and incidental to this application."

On 17 September 1996 the Magistrate made orders in the following terms:

"(i) The agreement registered on 29/9/94 is hereby set aside;

(ii) Leave is granted for the worker to proceed with his application dated 25/5/95."

The Magistrate stated that he would hear the parties on costs, but I was not informed whether he did so or whether any order for costs was made. The following history of events was found by the Magistrate to have preceded the filing of the notice of motion:

15 June 1994: According to the worker's claim, he suffered injury arising out of or in the

course of his employment with the employer.

25 July 1994: The worker went to the office of the employer's insurer and signed

documents in the terms of Forms 27 and 28 prescribed by the Rules made

under the Act. Form 27 purports to constitute a Form of Memorandum

(under cl.9 of Schedule 4 to the Act) of an agreement between the

employer and the worker whereby the worker agrees to accept

$5,314.44 in full satisfaction of any claims which he might have against

the employer arising out of any injury sustained by him on 15 June 1994.

He received a cheque for that amount. The worker says that he is an

alcoholic, illiterate, and did not know what he was signing. The

documents were not explained to him, nor did he seek an explanation.

Form 28 purports to set out particulars required when a memorandum of

agreement is presented for registration.

1 September 1994: The worker received the following notice from the Deputy Registrar of

the Magistrates Court:

"TAKE NOTICE that a memorandum, copy of which is hereto annexed,

has been sent to me for registration.

Such memorandum appears to affect you.

I have therefore to request you to inform me within seven days from this

date whether you admit the genuineness of the memorandum or whether

you dispute its genuineness, and if so, on what grounds.

If you do not inform me in due course that you dispute the genuineness

of the memorandum it may be recorded without further enquiry, and will

be enforceable accordingly.

If you dispute its genuineness, it will not be recorded, except with your

consent in writing, or by order of this Court.

Dated this 30 August 1994.

(Signed)

DEPUTY REGISTRAR of the MAGISTRATES COURT

I admit the genuineness of the within agreement and I am satisfied.

.......................................

TO: CAMERON DIRK FRASER

5/103 CANBERRA AVE

GRIFFITH ACT 2603"

It may be noted that the worker is not required by cl.9 of Schedule 4 to admit or dispute the genuineness of the memorandum within seven days or any other specified period of time. Nor does cl.9 provide that the worker forfeits rights if the worker does not dispute the genuineness of the memorandum "in due course".

5-7 Sept. 1994: The worker consulted a solicitor. The solicitor wrote to the Registrar

and advised that he would "in due course" advise whether the worker

consented or did not consent to the agreement being registered. The

Magistrate commented that "due course" had already expired (an

apparent reference to these words as used in the notice of 30 August

1994) and that the Court "held further action for the time being".

8 September 1994: The worker's solicitor wrote to the Registrar advising that:

* The worker "did not know the significance of what he was signing, i.e. the Form 27";

* The worker "was rushed into" signing the Form 27;

* The letter also stated that further instructions were being sought.

13 September 1994: A Registry officer telephoned the solicitor and advised that "he had to

file a Form 30 and we would send back Form 31".

22 September 1994: A notice of ceasing to act was filed by the solicitor after the worker

was unable to accede to the solicitor's request to be put in funds. The

solicitor took no further part in the matter.

29 September 1994: The memorandum constituted by Form 27 was registered by the

Deputy Registrar and notice of registration sent to the worker to his

above home address and to a firm of solicitors apparently acting for the

employer.

25 May 1995: Another firm of solicitors, experienced in workers' compensation

claims, filed an application dated 19 May 1995 for arbitration, claiming

amongst other things that the applicant has been totally incapacitated

for work from 15 June 1994 to date and continuing, and claiming

further weekly payments of compensation for total incapacity from 27

July 1994 to date and continuing.

19 June 1995: The employer filed an answer pleading as a bar to proceedings for

further compensation under the Act the recording of the agreement

constituted by Forms 27 and 28.

In an affidavit sworn 9 May 1996 in support of the notice of motion, the worker stated that he was told at the time of receiving the cheque "unless you sign these forms, you will not get the cheque". He further stated that he believed that he was signing some sort of receipt. He further said that if it had been explained to him that the signing of the documents could constitute a full and final settlement of his claim, then he would not have signed. As I understand it, he said in oral evidence before the Magistrate that he stated before signing that he could not read.

Before considering the Magistrate's decision, it is as well to set out the relevant statutory provisions.

"Compensation for personal injury 7. (1) Where a worker suffers personal injury arising out of or in the course of the worker's employment, the employer is liable to pay compensation in accordance with Schedule 1.

Contracting out 13.(2) A provision in an agreement or other document whereby -

(a) a right conferred on a worker by this Act is excluded or limited in any way; or

(b) the liability imposed on an employer by this Act is excluded or limited in any way,

is void.

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.

Arbitration 24. All matters and questions (other than prosecutions for offences) arising under this Act shall, where no other provision is made in this Act, in the absence of agreement, be settled by arbitration in accordance with Schedule 4.

SCHEDULE 1 13. Where, in any case other than one of total and permanent incapacity, any weekly payment (other than a weekly payment referred to in subparagraph (1)(a)(i)) has been continued for not less than 6 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 clause 10 of Schedule 4) or, upon application by or on behalf of the employer with the consent of the worker, by arbitration under this Act, and the lump sum may be ordered by the Court to be invested or otherwise applied for the benefit of the person entitled thereto.

SCHEDULE 4 9. Where an agreement has been made before ascertainment of compensation between a worker and his or her employer for payment of a lump sum by way of compromise and satisfaction of all claims, or the amount of compensation has been ascertained, or any weekly payment varied or terminated, or any other matter decided, under this Act, either by a committee or by agreement, a memorandum thereof may be sent, in the manner (if any) prescribed by Rules of Court, by the committee, or by any party interested, to the Registrar of the Court, who shall, subject to those Rules, on being satisfied as to its genuineness, record the memorandum in a special register without fee, and thereupon the memorandum shall for all purposes by enforceable as a judgment of the Court:

Provided that -

(a) no such memorandum shall be recorded before 7 days after the despatch by the Registrar of notice to the parties interested;

(b) where a worker seeks to record a memorandum of agreement made with his or her employer for the payment of compensation, and the employer, in accordance with Rules of Court, proves that the worker has in fact returned to work and is earning the same wages as he or she did before the injury, and objects to the recording of the memorandum, the memorandum shall only be recorded, if at all, on such terms as the Court, under the circumstances, thinks just;

(c) the Court may at any time rectify its register;

(d) where it appears to the Registrar of the Court, on any information which the Clerk 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 or an agreement as to the redemption of a weekly payment by a lump sum, or an agreement as to the amount of compensation payable to a person under any legal disability, or to dependants, ought not to be registered by reason of the inadequacy of the sum or amount, or by reason of the agreement having been obtained by fraud or undue influence, or other improper means, the Clerk 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; and

(e) the Court may, within six months after a memorandum of an agreement as to compromise of claims or the redemption of a weekly payment by a lump sum or of an agreement as to the amount of compensation payable to a person under any legal disability, or to dependants, has been recorded in the register, order that the record be removed from the register on proof to its satisfaction that the agreement was obtained by fraud or undue influence or other improper means, and may make such order (including an order as to any sum already paid under the agreement) as under the circumstances it thinks just.

10. An agreement as to the redemption of a weekly payment by a lump sum, if not registered in accordance with this Act, shall not, nor shall the payment of the sum payable under the agreement, exempt the person by whom the weekly payment is payable from liability to continue to make that weekly payment, and an agreement as to the amount of compensation to be paid to a person under a legal disability or to dependants, if not so registered, shall not, nor shall the payment of the sum payable under the agreement, exempt the person by whom the compensation is payable from liability to pay compensation, unless, in either case, the person proves that the failure to register was not due to any neglect or default on the person's part."

Among the relevant Workers' Compensation Rules are the following:

"Where applicant is illiterate etc.

16. Where any party to any proceeding is illiterate or unable to fill up any form required to be used, it shall be filled up by the Registrar.

Recording of memorandum of agreement etc.

35. (1) The memorandum as to any matter decided by a committee or by an arbitrator or by agreement, which is by clause 9 of Schedule 4 to the Act required to be sent to the Registrar, shall be in accordance with Form 27, and shall be left at the office of the Registrar, or sent by post by registered letter addressed to the Registrar at his or her office, as soon as may be after the matter has been decided.

Notice to parties interested of memorandum having been received

37. On the receipt of the memorandum and copies, the Registrar shall send one of the copies to every party interested, with a notice in accordance with Form 29, requesting such party to inform him or her within seven days from the date of the notice whether the memorandum is genuine, or whether he or she disputes its genuineness, and, if so, on what grounds.

Recording of memorandum if genuineness not disputed

38. If all the parties interested admit the genuineness of the memorandum, or if none of such parties within such period of seven days disputes its genuineness pursuant to Rule 39, and the employer does not object to its being recorded pursuant to that Rule, the Registrar shall, subject to proviso (d) to clause 9 of Schedule 4 to the Act, and to Rules 42 and 44, record the memorandum without further proof.

Where genuineness disputed or objection made to memorandum being recorded

39. If any party interested disputes the genuineness of the memorandum by alleging, in particular, in the case of a memorandum of an agreement that no such agreement has in fact been entered into, or that the terms of the agreement are not correctly stated in the memorandum, or that the agreement is no longer subsisting or enforceable, or that it is not enforceable by reason of its having been entered into under a mutual mistake, or obtained by fraud or undue influence or other improper means, or if, in any case where a worker seeks to record a memorandum of an agreement between his or her employer and himself or herself, the employer alleges that the worker has in fact returned to work and is earning the same wages as he or she did before the injury, and objects to the recording of the memorandum, the party so disputing or the employer so objecting shall within seven days from the date of the notice mentioned in Rule 37 file with the Registrar a notice in accordance with Form 30, stating the grounds on which he or she disputes the genuineness of the memorandum or objects to its being recorded, and shall with the notice file a copy thereof for each of the other parties interested.

Notice of dispute or objection

40. On the receipt of any notice referred to in the last preceding Rule, the Registrar shall send a copy thereof to each of the other parties interested, together with a notice in accordance with Form 31, informing such party that the memorandum will not be recorded except with the consent in writing of the party disputing the genuineness thereof, or the employer objecting to the recording thereof, or by order of the Court.

Reference to Court of agreements

44. (3) Where notice disputing the genuineness of the memorandum is not filed pursuant to Rule 39, but it appears to the Registrar, on any information which he or she considers sufficient, that the memorandum ought not to be recorded for any reason mentioned in proviso (d) to clause 9 of Schedule 4 to the Act, he or she shall report, in writing, to the Court stating the information he or she has obtained, and the grounds on which it appears to him or her that the memorandum ought not to be recorded.

Forms in the Schedule or like forms to be used

88. (1) The forms in the First Schedule to these Rules, where applicable, and, where they are not applicable, forms of the like character, with such variations as the circumstances may require, shall be used in proceedings under the Act."

The Magistrate's reasons for decision proceeded along the following lines:

1. The effect of proviso (e) to cl.9 of Schedule 4 is that the limit of six months in which the Court may order that the record be removed from the register applies only where the agreement is "properly registered".

2. The memorandum was not properly registered because the Registrar should not have registered it in circumstances where the Registrar was aware, or ought to have been aware, that there never had been any agreement, or if there was agreement, the worker had "reneged". By the latter, it appears that the Magistrate considered that the Registrar should have taken the view that the agreement was "no longer subsisting". Alternatively, or in addition, the Magistrate considered that the Registrar should have taken the view that the agreement had been obtained by fraud, undue influence or other improper means.

3. The letter from the solicitor dated 8 September 1994 addressed to the Registrar should have been treated as a notice of objection under r.39, made upon the grounds that the agreement was no longer subsisting or had been obtained by mistake, undue influence or other improper means.

4. The power conferred on the Court by proviso (c) to cl.9 of Schedule 4 to rectify the register includes the power to set aside an agreement not "properly registered".

At the commencement of the Magistrate's reasons, he stated that he rejected a submission on behalf of the worker that the only effective way in which an employer could redeem its liability to pay weekly compensation under the Act, in any case other than one of total and permanent incapacity, was in accordance with cl.13 of Schedule 1.

The payment of weekly compensation necessary for the application under cl.13 of Schedule 1 can, it seems, be payment following an award or payment made without any award being made. There are some difficulties involved in the phrase "in any case other than one of total and permanent incapacity". For instance, does it apply where the worker has received weekly payments paid for partial incapacity for a period of six months, after which the worker claims and the employer denies that total and permanent incapacity has supervened? However, such difficulties do not need to be addressed in the present case. In my view, the Magistrate was correct in holding that cl.9 of Schedule 4 provides for a method of redemption of the employer's liability, which is in the alternative to that provided by cl.13 of Schedule 1, so long as the agreement has been made "before ascertainment of compensation". (It appears that there may be a period, after an award of compensation but before weekly payments have continued for not less than six months, during which neither redemption under cl.13 of Schedule 1 nor compromise and satisfaction under cl.9 of Schedule 4 are possible, but again these problems do not have to be addressed in the present case.)

There are several grounds of appeal. Most of them are concerned with natural justice. I do not think that it is necessary to deal with those particular grounds and, as I understood Mr. Williams for the employer on the appeal, he did not rely on them. The substantial grounds are those which relate to the powers of the Magistrates Court under the Act. I will deal with these questions as restated under the following headings.

Does proviso (d) to cl.9 of Schedule 4 take effect only when the memorandum of the agreement is "properly registered"?

In my view, there is no justification for reading down the provisions of proviso (d) to cl.9 of Schedule 4 in the way in which the Magistrate approached this question. Of course there is no power in the Registrar to record the memorandum unless the conditions of recording are met, and cl.9 of Schedule 4 is drafted in such a way that the provisos need to be considered in this respect. For instance, having regard to proviso (a), there is no power to register a memorandum before the expiry of seven days after the dispatch of notice to the parties interested or, where the Registrar, having formed the view or come to the conclusion that the memorandum ought not be recorded by reason of the matters referred to in proviso (d), nevertheless proceeds to record the memorandum.

However, absence of power in the Registrar does not confer like power on the Magistrates Court. There is no power conferred by cl.9 of Schedule 4 or by any other provision of the Act or Rules to set aside the recording of the agreement because the Magistrates Court differs from the Registrar on its view whether the memorandum ought or ought not to be registered by reason of one of the matters referred to in proviso (d). More specifically, with regard to the Magistrate's reasons, there is no power to set aside the recording of the agreement because the Magistrates Court considers that the recording was "improper" and, presumably ineffective. The approach of the Magistrate in the present case would simply substitute the view of the Court for that of the Registrar, who clearly has a wide discretion in the matter. If the information which the Registrar considers sufficient is such that the discretion can be exercised only by referring the matter to the Magistrates Court under r.44, then it may follow as a matter of law that the Registrar must refuse to record the memorandum, but the limited powers of the Magistrates Court in this regard must be recognized.

Did the Magistrates Court have power to set aside an agreement which was no longer subsisting at the time of registration or which was obtained by improper means?

Proviso (e) to cl.9 of Schedule 4 empowers the Magistrates Court, notwithstanding the recording of the memorandum, to order that the record be removed from the register on proof to the satisfaction of the Magistrates Court that the agreement was obtained by fraud or undue influence or other improper means, and to make other appropriate orders. However, a time limit of six months is imposed from the date of recording in the register and power to make the order must be exercised within that period. If the order is not made within the time fixed, the record remains and cannot be affected by proviso (e). Moreover, the power to remove the agreement from the register is not a power to set aside the agreement. An unregistered agreement is still an agreement.

Was the letter of 8 September 1994 a notice of objection under r. 39?

I do not think that the time limit of six months can be avoided or disregarded by the Magistrates Court adopting the approach of finding that there was information before the Registrar which should have put the Registrar on notice that the worker disputed the genuineness of the memorandum on one or any of the several grounds specified in r.39, or objected to the recording of the memorandum. (The drafting of r.39 is curious: it begins by referring to a party interested who disputes the genuineness of the memorandum and objects to its recording, but concludes by reference to the grounds on which the party disputes the genuineness or objects to it being recorded.)

By a comparison of r.39 and proviso (c) to cl.9 of Schedule 4, it is apparent that the grounds for a party disputing the genuineness or objecting to the recording of the memorandum prior to registration include, but are wider than, the grounds on which the Magistrates Court may order that the record be removed from the register under proviso (e). The latter grounds are restricted to fraud or undue influence or other improper means. The former grounds extend to lack of agreement at all, incorrect expression of the terms of the agreement, cessation of subsistence or enforceability and mutual mistake.

The Registrar gave consideration to whether proviso (d) to Schedule 4 cl.9 applied. That is made clear by the telephone call inviting the worker's solicitor to file a notice in accordance with Form 30. In a case where there is no notice filed disputing the genuineness of the memorandum filed under r.39, the Registrar may nevertheless be bound under sub-r.44(3) to report the information to the Court and, it seems, to withhold registration. But that duty arises only if the Registrar considers that the memorandum ought not be recorded for any one of the various reasons mentioned in proviso (d) to cl.9 of Schedule 4.

Clearly, the Registrar did not form a view by which the duty under sub-r.44(3) was activated. Furthermore, the circumstances were not such that the Registrar was bound to conclude that the agreement ought not be registered (assuming that such circumstances were sufficient). On the contrary it was open to the Registrar, in the absence of a Form 30 notice confirming what the solicitor had said were his instructions to infer that the worker abandoned his claim that the worker "did not know the significance of what he was signing" and that he was "rushed into" signing it. The allegations may have been suggestive of undue influence or improper means, but they were vague and lacking in particularity, and, at that stage, unsupported by reference to facts and events.

The Magistrate also expressed the view that the Registrar should have referred the matter to the Court on other grounds specified in r.39. One was that the worker alleged that no agreement had in fact been entered into (non est factum). That view appears to be based on the premise that a person who cannot read cannot be a party to a written agreement. That premise may not be correct although equity will be astute to ensure that undue influence is not brought to bear on a person disadvantaged in contractual negotiations for whatever reason, including illiteracy. The Magistrate did not have a general jurisdiction to strike down an agreement which he considered to have been affected by undue influence brought to bear on one of the parties, nor to set the registration aside for such reason. I leave aside the question whether a court of competent jurisdiction might, despite registration under Schedule 4 cl.9, declare an agreement unenforceable by the application of general equitable principles, but it was not open to the Magistrates Court to do so.

Does the power to rectify the register include the power to set aside an agreement?

In my view, it was not open to the Magistrates Court to rely on the power to rectify the court's register under proviso (c) to cl.9 of Schedule 4 in order to set aside the agreement contained in the memorandum recorded on the register. Although the power to rectify the register that may be exercised at any time, it may not be exercised to defeat the provisions of proviso (e), which impose a time limit of six months for ordering that the record be removed from the register on the grounds of fraud, undue influence or improper means. Rectifying the register means rectifying a document which comprises, or is contained in the register and is to be distinguished from removal for which specific provision is made in proviso (e). The situation is analogous to that in Schofield v. W.C. Clough & Co. (1913) 2 KB 103 (a case of registration of an agreement containing a mistake as to the rate of compensation payable) in which Cozens-Hardy MR said at 107-8:

"The only thing alleged in this case is mistake. That may be a ground for getting the agreement set aside under the general jurisdiction of the [High] Court, but we are here dealing with a special and peculiar jurisdiction conferred by statute on the judge of the county court, and there is no presumption that he is to have any general jurisdiction in the matter, or any powers beyond those to be found in the Act. It is impossible to read par.9 without seeing that rectification and removal from the record are two distinct things, and if we were to say that there was power at any time under proviso (c) to rectify the register by removing an agreement from it we should be rendering proviso (e) unnecessary and absurd. The result is that the county court judge had no jurisdiction in this case to make an order for removal of the memorandum of agreement from the Registrar, and the appeal must be allowed."

The result is the same in the present appeal.

For the foregoing reasons the appeal is upheld, the orders of the Magistrate made on 17 September 1996 are set aside and the notice of motion dated 19 April 1996 filed in the Magistrates Court is dismissed. There appears to be no reason to remit the case to the Magistrates Court. I propose to make no orders in respect of the costs of the appeal or the costs of the proceedings in the Magistrates Court. However, if the parties wish to be heard on costs or on any other appropriate order, I shall hear them.