Andrikis v Nominal Defendant [2004] ACTSC 43 (11 June 2004)

Last Updated: 23 June 2004

CASSANDRA ANN ANDRIKIS v NOMINAL DEFENDANT

[2004] ACTSC 43 (11 June 2004)

PROCEDURE - judgment - accidental slip or omission - slip rule - correction of error of law

DAMAGES - personal injury - rehabilitation expenses paid by workers' compensation insurer - whether recoverable by plaintiff

WORKERS COMPENSATION - remedy against employer and stranger - rehabilitation expenses - whether payment to worker under Act - whether recoverable by employer from tortfeasor or worker

Supreme Court Rules (ACT), O 32 r 14

Workers Compensation Act 1951, s 15C, s 22, s 109, s 183

L Shaddock and Associates Pty Ltd v Parramatta City Council [1982] HCA 59; (1983) 151 CLR 590

No SC 526 of 2001

Coram: Master Harper

Supreme Court of the ACT

Date: 11 June 2004

IN THE SUPREME COURT OF THE )

) No SC 526 of 2001

AUSTRALIAN CAPITAL TERRITORY )

BETWEEN: CASSANDRA ANN ANDRIKIS

Plaintiff

AND: NOMINAL DEFENDANT

Defendant

ORDER

Coram: Master Harper

Date: 11 June 2004

Place: Canberra

THE COURT ORDERS THAT:

1. The application be dismissed.

2. The plaintiff pay the defendant's costs of the application.

1. On 10 February 2004, I delivered judgment in this action, assessing the plaintiff's damages at $100,378.63. The plaintiff applies under the slip rule (O 32 r 14) for the correction of an error. The plaintiff's submission is that I incorrectly failed to include in the plaintiff's damages an amount of $10,271.14, being an amount paid by the workers' compensation insurer of the plaintiff's employer to CRS Australia, a rehabilitation provider.

2. I referred at paragraph 12 of the judgment to professional assistance provided by CRS Australia to the employer and the insurer in making arrangements for the plaintiff to make a graduated return to work over a period of time commencing in June 2000 and continuing during 2001. I made a finding that the employer formally terminated the plaintiff's employment early in 2002, and that she did not work thereafter.

3. I set out in paragraph 28 of the judgment a list of treatment and other out-of-pocket expenses paid by the workers' compensation insurer, which included the amount of $10,271.14 paid to CRS Australia.

4. At paragraph 29, I noted that counsel for the defendant conceded that the listed amounts related to the plaintiff and had been paid by the insurer, and that the amounts involved were fair and reasonable. I found that the plaintiff had recovered from the effects of her injuries by 30 June 2002, and that she was entitled to recover expenses incurred up to that date, but not thereafter.

5. The passage where it is submitted that I fell into error is found at paragraph 30 of the reasons for judgment and is as follows:

It does not seem to me that the CRS Australia expenditure should be recoverable by the insurer from the plaintiff, or allowed as part of her damages. This was not expense incurred in relation to the plaintiff's treatment, but rather expense incurred by the insurer in assessing the extent of its liability and endeavouring to get the plaintiff back to work, thereby reducing its continuing expenditure in relation to the claim. It should be borne by the insurer as part of its expenses of administering the claim.

6. Counsel for the plaintiff on the hearing of the application has drawn to my attention Part II A of the Workers Compensation Act 1951, as in force prior to the 2003 amendments to that Act. (The amended Act applies only to injuries after its commencement: s 235 of the Act as since amended). Part II A included the former s 15C, which provided as follows:

(1) Where a worker claims compensation for an injury, the employer shall provide the worker with occupational rehabilitation at the employer's expense unless the employer is of the opinion, based on reasonable grounds, that the worker is not entitled to compensation.

Penalty:

(a) if the offender is a natural person - 50 penalty units

(b) if the offender is a body corporate - 250 penalty units

(2) The provision of occupational rehabilitation to a worker shall not be taken to be an admission of liability in relation to the worker's claim for compensation.

Counsel for the plaintiff submits that the CRS Australia expenditure was incurred by the employer in fulfilling a statutory obligation under that section, rather than because of the motives I had imputed in paragraph 30 of my reasons.

7. Counsel for the plaintiff submits that notwithstanding the view I expressed in paragraph 30, the insurer in the name of the employer has a legal entitlement to recover the whole of its expenditure, including the CRS amount, under the former s 22 of the Workers Compensation Act. The relevant provisions of that section are:

(1) If an injury in relation to which compensation is payable under this Act is caused under circumstances that appear to create a legal liability in some person other than the employer to pay damages in relation to the injury -

(a) the worker may take proceedings against that person to recover damages and may also make a claim against the employer under this Act;

(b) if the worker receives both amounts under this Act and damages from that other person he or she shall repay to the employer so much of those amounts as does not exceed the amount of the damages received from that person;

(c) on notice to that person, the employer shall have a first charge on money payable by that person to the worker to the extent of any amounts that the employer has paid to the worker under this Act;

(d) if the worker has received amounts under this Act, but no damages or less than the full amount of the damages to which he or she is entitled, the person liable to pay the damages shall indemnify the employer against so much of the amounts paid to the worker as does not exceed the damages for which that person is liable; and

(e) payment of money by that person to the employer under either of the last two proceeding paragraphs shall, to the extent of the amount paid, be a satisfaction of the liability of that person to the worker.

8. Counsel for the plaintiff submits that the CRS amount is an amount received by the worker under the Act in relation to the injury giving rise to the cause of action for the purposes of s 22. If this is accepted it follows that the defendant is obliged to include the CRS amount in the amount which it must repay to the insurer in right of the employer out of the plaintiff's damages: if the defendant were to fail to comply with this obligation, the amount would be recoverable by the insurer from the plaintiff.

9. Counsel for the defendant makes a number of submissions in relation to the application. I shall deal first with the submission that the correction sought by the plaintiff, assuming that it arose from an error, is not amenable to the slip rule, set out in Order 32 rule 14. The rule provides as follows:

The Court may at any time, on application by a party or on its own initiative, correct a clerical mistake in a judgment or order or an error in a judgment or order arising from an accidental slip or omission.

The submission is that the asserted error would go beyond an accidental slip or omission and could not be corrected pursuant to the slip rule: it would be an error of a kind which could be corrected only on appeal.

10. Since I delivered my reasons for judgment on 10 February, the judgment has been formally entered, and cannot be recalled, reconsidered or reviewed except pursuant to the slip rule. In earlier times it was thought that the slip rule did not extend to errors of law, but it has been applied much more widely in recent years: for an example of an exercise of the power by the High Court of Australia see L Shaddock and Associates Pty Ltd v Parramatta City Council [1982] HCA 59; (1983) 151 CLR 590. Where an error of law is identified promptly, it is highly desirable in the interests of minimising expense and conserving court resources that the error be corrected by the Court at first instance under the slip rule, rather than that the parties be put to the expense and delay of an appeal. I am satisfied that O 32 r 14 empowers me to grant the application if I am satisfied that it is appropriate to do so.

11. Counsel for the defendant next submits that the evidence does not enable me to find that the whole of the CRS amount relates to the period prior to 30 June 2002. I am satisfied that I can and should come to that conclusion. The plaintiff gave oral evidence of participation in rehabilitation (at T 15 and 16) and of the termination of her employment in January 2002 (at T 17 and 18). This is consistent with the history given by the plaintiff to the various medical practitioners who treated her and examined her on behalf of both the insurer and the defendant. There were also in evidence (as exhibit G) a number of documents emanating from CRS Australia, described as return to work programmes, a workplace assessment report, a vocational assessment report and a final rehabilitation report. The last of these was dated 4 January 2002. There was no evidence of any involvement by CRS Australia after that date, and this is consistent with the fact that the plaintiff's employment was terminated shortly afterwards, so that there was no employer with whom CRS could have continued to work in its attempts at rehabilitation of the plaintiff. I am accordingly satisfied that the whole of the CRS expenditure was incurred prior to 30 June 2002. This being so, I would have allowed it as part of the plaintiff's out-of-pocket expenses had it not been for the conclusion which I explained in paragraph 30 of my reasons.

12. The final submission on behalf of the defendant is that the sum in dispute was not an amount `that the employer has paid to the worker under this Act', nor an amount received by the worker under the Act.

13. Subsection 21A(3) of the Act as it stood at the time of the plaintiff's injury provided as follows:

(3) Where compensation is paid or payable to a person for the benefit of another person, a reference in this Part to a person to whom compensation is paid or payable, as the case may be, shall be read as a reference to the person for whose benefit the compensation is paid or payable.

14. Part IV refers in a number of places, though using different wording, to the concept of payment of compensation to a worker. The effect of subsection 21A(3), as I read it, is to include, for the purposes of s 22, payments of compensation made for the worker's benefit to someone other than the worker within the concept of amounts paid to the worker under the Act, or received by the worker under the Act - for example, expenses for medical treatment.

15. The entitlement of a worker to compensation is dealt with in Part II of the Act as in force at the time. The compensation which an employer is liable to pay to a worker includes incapacity payments calculated by reference to schedule 1 to the Act (s 7); lump sums for specified injuries calculated by reference to schedule 2 (s 10); and compensation for medical treatment (s 11). By contrast, occupational rehabilitation under Part IIA is not treated as something in respect of which a worker is entitled to compensation. Rather, Part IIA establishes a penal regime obliging an employer to adopt and implement an occupational rehabilitation policy for the benefit of its employees generally, and to provide occupational rehabilitation to a worker claiming compensation for an injury. The rehabilitation is to be provided at the employer's expense: subsection 15C(1), set out above.

16. Although it is clear that the workers compensation insurer paid the rehabilitation expenses in relation to the plaintiff, it is not immediately apparent that the insurer was obliged to do so. The Act, as I have said, requires the employer to provide an injured worker with occupational rehabilitation at the employer's expense. Part IIA, dealing with occupational rehabilitation, was introduced in 1994. There were no related amendments to the provisions of the Act dealing with insurance, or to the wording of the statutory policy of insurance set out in schedule 3 to the Act. The operative provision of the policy provides that in consideration of payment of a premium, if, during the period of insurance:

. . . the Employer shall be liable to pay compensation under the Act to or in respect of any person who is or is deemed by the Act to be a worker of such Employer or to pay any other amount in respect of the Employer's liability independently of the Act for any injury to any such person, then and in every such case, the Insurer will indemnify the Employer against all such sums for which the Employer shall be so liable; the Insurer will also pay all costs and expenses incurred with the written consent of the Insurer in connection with the defence of any legal proceedings in which such liability is alleged.

17. The policy, then, indemnifies the employer against liability to a worker for `compensation under the Act' and for `any other amount in respect of the employer's liability independently of the Act for any injury to' the worker. The policy does not on its face indemnify the employer in respect of the cost of occupational rehabilitation under s 15C.

18. Whether or not the insurer was obliged to indemnify the employer in respect of its expenditure in complying with s 15C, it does not appear to me that such expenditure can be categorised as an amount received by the plaintiff under the Act, or an amount paid to the plaintiff for the purposes of s 22; nor does it come within the expression `compensation . . . paid or payable to a person for the benefit of' the plaintiff so as to trigger the operation of subsection 21A(3).

19. It follows that the defendant is under no obligation to include the CRS amount in the amount which it will be required to repay to the workers' compensation insurer in right of the employer out of the plaintiff's damages; nor will the plaintiff be under any obligation to pay the amount to the insurer.

20. I am not persuaded that the judgment of 10 February 2004 contained an error of law as submitted on behalf of the plaintiff. The application will be dismissed. There was an exchange of correspondence between the solicitors foreshadowing that the party which was successful on this application would seek indemnity costs. I am not satisfied that the plaintiff's conduct in making this application has been such as to justify a punitive costs order. The application was arguable and raises an issue which, as far as I have been able to ascertain, has not previously arisen for determination. The appropriate order is that the defendant's costs of the application be paid by the plaintiff.

I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Decision herein of Master Harper.

Associate:

Date: 11 June 2004

Counsel for the plaintiff Mr C P McKeown

Solicitor for the plaintiff Bradley Allen

Counsel for the defendant Mr D M Wilson

Solicitor for the defendant Phillips Fox

Date of hearing 2 March 2004

Completion of written submissions 2 June 2004

Date of decision 11 June 2004