Mirkovic v Davids Holdings Pty Ltd; Davids Holdings Pty Ltd v Mirkovic [1995] NSWCC 19; (1995) 11 NSWCCR 656 (28 July 1995)

[1995] NSWCC 19; (1995) 11 NSWCCR 656 (Matter No. 7704/94)

MIRKOVIC v. DAVIDS HOLDINGS PTY LTD

DAVIDS HOLDINGS PTY LTD v. MIRKOVIC

Compensation Court of New South Wales: Neilson J

10, 12 October 1994 (H)

28 July 1995 (J)

For what injuries compensation is payable - Diseases - Aggravation etc. of pre-existing disease or condition - Frank injury causing pathological condition - Subsequent injury consisting of aggravation etc. of condition - Incapacity resulting from cumulative effect of both injuries - Liability for compensation arose on and flowed from last injury - Injury deemed to have occurred at time of incapacity - Workers Compensation Act 1987, section 16

Assessment and amount of compensation - Redemption of weekly payments - Frank injury causing pathological condition - Subsequent injury consisting of aggravation etc. of condition - Incapacity resulting from cumulative effect of both injuries - Award for continuing weekly payments - Redemption of liability - Legal effect of redemption - Aggravation etc. ceases - Whether worker has remaining rights in relation to frank injury - Workers Compensation Act 1926, section 15(1) - Workers Compensation Act 1987, Schedule 6, Part 4, clause 6

Assessment and amount of compensation - Amount of compensation during incapacity - Partial incapacity - Re-employment of partially incapacitated workers - Failure to provide employment - Incapacity resulting from cumulative effect of frank injury and subsequent aggravation etc. of disease - Award for continuing weekly payments - Redemption of liability - Aggravation etc. ceases - Partial incapacity resulting from frank injury only remaining - Whether worker entitled to weekly payments for incapacity deemed total - Workers Compensation Act 1926, section 11(2)

Proceedings to obtain compensation - Appeals - Review of commissioner's interlocutory decisions - Need to take out formal orders prior to seeking review

Inferior Courts - Compensation Court of NSW - Whether Court had power to make declarations

Words, phrases and maxims - "nature and conditions of employment"

J.W. Castanos, for the worker

P.M. Hall QC and I.A. MacFarlane, for the employer

Cur adv vult

NEILSON J: Each of Marijan Mirkovic ("the worker") and Davids Holdings Pty Ltd ("the employer") seeks to review a decision of Wright C made on 13 May 1994 in Matter No. 12413 of 1992. To understand the nature of the relief which each party claims and the arguments advanced in support of such claims, it is necessary to consider the history of previous litigation between the parties.

The original proceedings

These proceedings (Matter No. CR 4833 of 1988) were heard by Wright C, then a workers compensation commissioner, and determined by him on 13 April 1989. The worker alleged injuries:

(a) on 15 January 1980 whilst unloading cartons;

(b) on 11 December 1986; and

(c) work performed in the course of his employment prior to 26 January 1987, which placed strain and exertion upon his back, neck and shoulders.

The nature of the injuries alleged were unspecified injuries to the back, neck and shoulders. Weekly payments of compensation were claimed from 23 June 1988. The employer had been insured between 1978 and 30 June 1985 by National Employers' Mutual General Insurance Associated Ltd ("NEM") and thereafter until the cessation of the worker's duties in 1987 by Manufacturers Mutual Insurance Ltd ("MMI"). At the hearing, Wright C gave leave to these two insurers to be separately represented.

After reviewing the evidence of the worker and the medical evidence tendered to him, Wright C said this in his reasons for decision:

"I accept that the applicant has a disc lesion of the cervical spine and that this condition is the source of his present partial incapacity for work.

On the evidence before me, and bearing in mind that radiological studies and their interpretation do not have the highest reliability, I consider that it is more probable than not that the applicant sustained disc damage in his cervical spine in the course of his employment on 15 January 1980. This is supported by the reported symptoms after this date. Further it is more probable than not that the applicant sustained a further injury to his cervical spine, namely an aggravation and exacerbation of his physical condition due to the nature and conditions of his employment with the respondent between 15 January 1980 and 26 January, 1987. In reaching these conclusions, I have preferred the medical evidence from Drs Dan, Millons and Spigelman to that from Drs Matheson, Eagleton and Skapinker. I note that there was no medical report from Dr Bannister.

I consider that the applicant had a significant injury from the 1980 incident which left the applicant with a continuing physical incapacity. There is ample medical support for this view. I also consider that the applicant suffered an aggravation and exacerbation of this work-related condition due the nature and conditions of his employment after 11 December 1986 which resulted in incapacity for work. Having regard to the decisions and the reasoning in Commonwealth v. Butler [1958] HCA 56; (1985) 102 CLR 465 (particularly the discussion by Windeyer J at 478-481), Bushby v. Morris [1980] 1 NSWLR 81 and Pickersgill v. Freightbases Pty Ltd [1983] 3 NSWLR 117, I consider that the applicant's incapacity for work after 23 June 1988 results from both the 1980 injury and the nature and conditions of his employment since that date. I find that the injury of 1986 did not give rise to a bodily condition which merely predisposed the worker or made him more vulnerable to later injury, but was itself a significant injury upon which was superimposed the successive strains to the neck and shoulders up until January 1987 when the applicant ceased work. The first injury is not merely causally related to the incapacity but is an integral element in the incapacity. I find that the applicant's neck condition was not aggravated, exacerbated, accelerated or deteriorated during his self-employment as a truck driver."

The application to the Commissioner alleged continuing total incapacity from 26 January 1987, although it was common ground between the parties that the worker had commenced working with Industrial Rollformers Pty Ltd in 1988, after weekly payments of compensation ceased to be paid to him on 22 June 1988. The Commissioner determined that the worker had a continuing partial incapacity since that date. He made the following award under section 11(1) of the former Act:

"1. $135 per week from 23 June 1988 to 30 September 1988; and

2. $71 per week from 1 October 1988 to date [13 April 1989] and continuing."

The employer was also ordered to pay the worker's expenses under section 10 of the former Act and his costs.

No appeal was made from this decision to this Court. Notwithstanding the Commissioner's finding that the worker's incapacity resulted from both the 1980 injury and the "nature and conditions" of the worker's employment between that date and 26 January 1987 and his reference to Bushby v. Morris [1980] 1 NSWLR 81, it is common ground between the parties that the award was paid solely by MMI.

The termination proceedings

In the original proceedings, MMI was represented by Messrs Dexter Healey & Co, solicitors. On 27 May 1991, that firm commenced proceedings in the name of the employer (Matter No. 5535 of 1991) in this Court. The only insurer of the employer nominated in the application for determination was MMI. The application sought a termination of the original award of 13 April 1989 as from 19 November 1990 on the ground that the "Applicant (i.e. the worker) is currently earning $113 more per week than he would have earned had he remained in the respondent's (i.e. the employer's) employ and uninjured". The worker's answer denied the employer's allegation. The matter came on for hearing before Wright C on 21 February 1992 when a consent order was made suspending the award from that date until further order.

The redemption proceedings

On 22 July 1992, Messrs Dexter Healy & Co filed an application for redemption in the sum of $60,000 (Matter No. 8455 of 1992). The application was in the name of the employer but solely nominated MMI as the insurer of the employer. Paragraph 4 of that application nominates as the "date and nature of the injury" the following:

"In December 1986. Nature and conditions of employment between 30 June 1985 and 30 June 1987. Neck, back, both arms and both shoulders."

Paragraph 15 of the application recites the two earlier proceedings in answer to the request for "Particulars of all prior proceedings in respect of the injury". That application was listed for hearing before Cross C two days later. The relevant parts of the award made on 24 July 1992 are:

"Having duly considered the matters submitted, the Court, by and with the consent of the parties hereto:

1. Hereby orders and awards:

(1) That the liability of the applicant employer to make weekly compensation payments to the respondent worker in respect of incapacity for work resulting from injury/ies suffered after 30 June 1985, the subject of the award dated 13 April 1989 in Matter No. CR 4833 of 1988, including any weekly payments to be made pursuant to the said award, arising from injuries

suffered after 30 June 1985, may be redeemed in whole as from 21 February 1992 by payment to the respondent worker a lump sum of $60,000 as determined by the Court pursuant to the provisions of Schedule 6 and in addition to any payments made.

(2) That the applicant employer pay the respondent worker's costs forthwith after they have been agreed or taxed.

2. Notes:

(1) The respondent worker agrees that the said lump sum redeems liability under section 60 and Part 6 of Schedule 6.

(2) The respondent worker agrees to execute a common law release if called upon to do so by the applicant worker.

(3) The respondent worker agreed that the applicant employer's liability is only redeemed in respect of injuries sustained after 30 June 1985, and it is expressly provided and agreed that the respondent worker does not give up any rights in respect of any injuries sustained prior to 30 June 1985 and nothing shall be taken to imply that the respondent worker has given up any such rights."

It is agreed between the parties that the sum of $60,000 was paid to the worker, pursuant to the determination made by this Court on 24 July 1992.

The Supreme Court proceedings

There was tendered before me an amended statement of claim filed in the Supreme Court on 5 May 1992. The worker is the plaintiff and the employer is the defendant. The amended statement of claim bears the Plaint No. S19077 of 1987. This pleading makes the following allegations of negligence:

"5. On and from about April 1986 to about January 1987, the plaintiff was required in the course of his said employment to undertake tasks involving rapid and repetitive lifting of heavy cartons which, on occasion, would be stuck together, those tasks thereby placing great strain on the plaintiff's spine, including his neck and upon his shoulders.

6. Further or alternatively, on or about 11 December 1986 whilst unpacking a pallet in the course of his said employment, the plaintiff suffered serious injury when attempting to lift heavy cartons which had become stuck to adjacent cartons on the pallet."

Paragraph 4 contains this allegation:

"At all [material] times the defendant was aware that the plaintiff had suffered prior injuries or disabilities in and about the performance of his work and in particular had suffered injuries to the spine, including the neck and to the shoulders."

The cause of action alleged is negligence and amongst the numerous particulars of negligence are the following:

"(p) Failing to have any or any adequate regard to the prior injuries and disabilities sustained by the plaintiff and his pre-disposition to further injury in the circumstances.

(q) Failing to modify or adjust the plaintiff's work tasks and work practices in light of his prior injuries and disabilities."

Towards the conclusion of the hearing before me it was agreed between the parties that the sum of $60,000 paid to the worker by the employer was part of a larger "common law" settlement and that terms of settlement had been filed in the Supreme Court proceedings and judgment entered accordingly.

The proceedings under review

On 19 October 1992, the worker's solicitors filed an application for determination (Form 1) nominating the employer as respondent (Matter No. 12413 of 1992). The only insurer of the respondent nominated was NEM. The following injuries were alleged:

"(a) 15 January 1980;

(b) 24 September 1980;

(c) August 1983;

(d) 1984; and

(e) nature and conditions of employment up to 30 June 1985."

The relief claimed was section 60 expenses particular in relation to physiotherapy.

A proposed amended application for determination (Form 1) was filed on 21 June 1993. This is clearly the application on which the applicant was granted leave to proceed before Wright C on 12 April 1994. This application solely nominates NEM as the insurer of the respondent and relies on the two injuries, viz. that of 15 January 1980 and the "nature and conditions" of the applicant's work duties between 15 January 1980 and 30 June 1985 "which exerted strain to [the worker's] neck, shoulders and back". Paragraph 10 alleges that "full payments of weekly compensation have been made for periods of total and partial incapacity pursuant to the award in CR 4833 of 1988, up to 21 February 1992". In addition to claiming section 60 expenses this application also claims weekly payments from 17 March 1993 pursuant to either section 11(1) or section 11(2) of the former Act, and interest. Whilst there is no evidence of it before me, nor before the Commissioner, the Commissioner stated in his reasons for decision of 13 May 1994 that the worker lost his job in March 1993. There was no complaint made about this to me, so I assume that it is common ground between the parties. This explains why the worker seeks weekly payments from 17 March 1993. It was also an agreed fact before the Commissioner that the worker made a request for suitable duties on 29 July 1993 and that there was a subsequent refusal by the employer. This would ground an entitlement to the worker to benefits under section 11(2) of the former Act if the worker be entitled to an award and entitled to rely on this provision.

I shall not recite the grounds of either the answer or the amended answer, as the grounds argued before the Commissioner are set out in his reasons for decision. It should be noted that those answers were filed by Messrs Hunt & Hunt, solicitors, who also had acted for NEM in the original proceedings.

The proceedings under review came on for hearing before Wright C on 12 April 1994. Mr Catsanos appeared for the worker and Mr Hall QC with Mr MacFarlane appeared for the employer. The Commissioner reserved his decision which was given on 13 May 1994. "Preliminary arguments" on legal issues only were argued before the Commissioner on 12 April 1994 and it is with such arguments that he dealt in his ruling on 13 May 1994.

The decisions of the Commissioner

No formal orders have been taken out following the Commissioner's decision. This should in future be done. It appears to me that the following decisions were made:

1. The proceedings were not in proper form. In effect, the worker was seeking a review of the original award pursuant to the Workers Compensation Act 1987, section 55. This was a submission made by Mr Hall QC which appears to have been acquiesced in by Mr Catsanos.

2. An order, nunc pro tunc, that the worker file an application in proper form (From 15). This order was perfected by the filing of an amended application for determination on 2 June 1994.

3. It was only open to the worker to rely on the injury of 15 January 1980 as the injury due to "nature and conditions of employment" was a finding of a "disease" which was an injury deemed to have occurred on 27 January 1987, the liability in respect of which had been redeemed by operation of law as a result of the determination in the redemption proceedings and the payment of the sum of $60,000. Therefore the worker's claim, in so far as he was relying on "nature and conditions" between 15 January 1980 and 30 June 1985 failed. Alternatively, the worker was estopped from relying on that period of "nature and conditions", if being a series of microtraumata rather than a disease, as the matter was res judicata: the worker had not proved it in the original proceedings.

4. The claim under section 11(2) was dismissed, as the "worker's 11(2) rights are only enforceable against the last causative injury" which the Commissioner assumed was the "disease" injury, which could not be relied upon in these proceedings.

5. Balance of the matter stood over for hearing to a date to be fixed.

The review applications

The decisions under review were made on 13 May 1994. The employer filed its application for review on 14 June 1994. For a reason not clear to me, this was allocated Matter No. 7704 of 1994 by the Registrar, although it was not an originating process. The worker filed an application for review on 1 July 1994, but that was allowed to remain in Matter No. 12413 of 1994. Under the Compensation Court Rules 1990 (CCR), Part 30, rule 3(4), applications for review are to be filed within 28 days. Each application was out of time. However at the parties' request, I exercised my powers under CCR, Part 4, rule 3 to extend time so that each was within the rules.

The employer's application seeks the entry of an award on its behalf and such was how Mr Hall QC argued his client's case. At the hearing before me, he also sought a declaration that the employer has had no liability under the award in the original proceedings since the redemption was effected. The worker's application for review, in essence, seeks that the decisions numbered by me as 3 and 4 be set aside.

At the heart of the numerous arguments canvassed before me lie, in my view, the legal effect of the original award and the legal effect of redemption. To these issues I now turn.

The legal effect of the original award

1. Categorisation of the "nature and conditions" injury

From the extract from the original decision of the Commissioner which I set out above, it is clear from the second paragraph that the Commissioner found that, in the frank injury on 15 January 1980, the worker suffered damage to a cervical disc and that that condition was aggravated and exacerbated by the work he performed for the employer between 15 January 1980 and 26 January 1987. The third paragraph in the extract suggests that the incapacity for work resulted from the work that the worker did "after 11 December 1986". However the Commissioner's formal findings were:

"(1)ÿ The applicant received injury in the course of his employment on 11 December 1980;

(2)ÿ The applicant received a further injury as a result of the nature and conditions of his employment with the respondent during the two terms of employment with the respondent between 11 December 1980 and 27 January 1987;

(3)ÿ As a result of the injury of 1980 and as a result of the second injury, namely the nature and conditions of his employment with the respondent between 11 December 1980 and 26 January 1987, the applicant has been partially incapacitated for work from 23 June 1988 to date and continuing."

Before me, the parties agreed that there was a slip in these formal findings and that one ought read "15 January 1980" for "11 December 1980". This is also clear from the Commissioner's reasons given on 13 May 1994. It appears to me, therefore, that "1 December 1986" where it appears in the third paragraph of the extract may also be a slip for 15 January 1980. Even if I be wrong in that, it seems to me that I should rely on the formal findings made by the Commissioner, rather than an inconsistent statement in his reasons for decision. Certainly the argument before me proceeded on that basis. In the decision under review the Commissioner said:

"The injuries found to be causative of incapacity for work were the frank injury and the 'nature and conditions' injury. Although no

express finding was made, the 'second injury' falls clearly with the provisions of section 16 of the 1987 Act, being arguably an aggravation of a pre-existing disease."

Whilst he used the word "arguably" it is clear that that was what the Commissioner held. The phrase "nature and conditions of employment" is not a term of art, although many who practise in this jurisdiction seem to think so. One Judge of Appeal recently referred to it as "quaint." My colleague Burke J has repeatedly referred to it as a "meaningless concept". It is used in this place as a shorthand way of alleging that, although no frank incident is relied upon, there was some aspect of the work carried out by a worker over a period of time, e.g. repeated lifting or bending, which caused some pathological condition or acted upon some underlying pathological condition to cause incapacity. Some classify such a period of work as a series of traumata or microtraumata, others classify it as causing a disease of gradual process within section 15 of the Act (where the pathology was caused by such work) or as the aggravation, acceleration, exacerbation or a deterioration of a disease within section 16. The "microtraumata" contention was that advanced by the worker on review.

What I am being called upon to do here is to interpret the original decision and award of the Commissioner. I am not called upon to solve the general problem of classification, if there be a general solution. In the current matter, I agree with Wright C that the "second injury" found by him was within section 16. My reasons are:

1. The Commissioner used terms of art - terms used in section 16: aggravation and exacerbation. This is reinforced by his use of "aggravated, exacerbated, accelerated or deteriorated" in the final sentence of the above quoted extract from his original decision. Whilst they are part of a finding that a certain work in self-employment did not have any causative effect on the worker's condition, it is clear that the Commissioner had section 16 in mind and the words "aggravation" and "exacerbation" used earlier must bear the same meaning.

2. The Commissioner's second formal finding was of "a further injury", singular rather than plural. This is inconsistent with the repeated traumata contention.

3. The Commissioner's third formal finding refers to the period of "nature and conditions" as a "second injury". Again, the use of the word "second" is inconsistent with there being "further injuries" as the repeated traumata contention would require.

4. The Commissioner accepted that the frank incident of 15 January 1980 caused a cervical disc lesion. This is a morbid pathological condition of the body. It is also a condition of a part of the body whose function is disturbed or deranged. Now the occurrence of the lesion is in fact an injury, but once the lesion exists work activities playing on it are better viewed as the aggravation etc. of an underling morbid condition, i.e. of a disease. See per Kirby P in O'Neill v. Lumbey (1987) 11 NSWLR 640 at 646 and per Powell JA in MGH Plastic Industries Pty Ltd v. Zickar (1994) 34 NSWLR 617 at 633.

2. Did the incapacity "result from" both injuries?

It is clear from the Commissioner's original reasons and his formal findings that he held that the incapacity resulted from both the frank incident on 15 January 1980 and the aggravation etc. of disease, to which aggravation etc. the employment was a contributing factor. Pursuant to section 16(1)(a)(i) of the Act, the second injury is deemed to have occurred on 26 January 1987, the day the worker last worked in the relevant employment. The Commissioner also referred to, inter alia, Bushby v. Morris [1980] 1 NSWLR 81. However, was this a true "Morris v. George situation", as has been recently referred to in the Court of Appeal? In my view it was not. In ordinary English, A can be said to be the result of B and C either if A results from each of B and C or if A is the result of the cumulative effect of both B and C. Where the one incapacity results from each of the two injuries, each employer becomes liable for the same award: Morris v. George [1977] 2 NSWLR 552. Where incapacity results from the cumulative effect of two injuries, in law it does not result from each of them. In my view the original award was based on the cumulative effect of the two injuries. Such is the clear inference I draw from reading the whole of the extract of the decision given above. One need only read the following sentence:

"I find that the injury of 1986 [scilicet 1980] did not give rise to a bodily condition which merely predisposed the worker or made him more vulnerable to later injury, but was itself a significant injury upon which was superimposed [my emphasis] the successive strains to the neck and shoulders up until January 1987, when the applicant ceased work."

If there had been an application for apportionment it would clearly have failed: MMI Ltd v. NEMGIA Ltd [1989] NSWCC 6; (1989) 5 NSWCCR 47;

MMI v. NEMGIA Ltd (1990) 6 NSWCCR 351; IGF/NEM v. GIO General Ltd (1994) 33 NSWLR 247; IGF/NEM v. MMI (1994) 10 NSWCCR 431); Maritime Services Board of NSW v. Moore, Court of Appeal, No. 40325/92, 26 May 1995, unreported and Leone Holdings Pty Ltd v. JW Kirkwood Pty Ltd, Court of Appeal, No. 40200/94, 9 June 1995 unreported. Both the insurers in this case, NEM and MMI, were no doubt well aware of this as only MMI paid the award.

In the claim under review, the Commissioner said that "there appears to be no impediment to the worker pursuing his rights to a determination as to the liability of the employer for the degree of incapacity resulting from the 1980 injury". He went on to point out that, had section 22 (in its current form and before the commencement of the Workers Compensation Legislation Amendment Act 1995) been in force at the time of the original decision, he could have apportioned liability for the one incapacity between the two insurers. After setting out section 22 and then referring to IGF/NEM v. GIO General Ltd (1994) 33 NSWLR 247, the Commissioner said: "It [section 22] would ordinarily be applicable in such a matter as this case, because an incapacity results from more then one injury to the worker". In so far as the Commissioner believed he could apportion the original award, in my view he fell into error. Indeed, Mr Catsanos, who appeared both before Wright C and before me, conceded that there was no power to apportion the earlier award.

The legal effect of the redemption

The operation of section 15 of the former Act is preserved by Schedule 6, Part 4, clause 6 to the 1987 Statute. Section 15(1) is in the following terms:

" (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 Court, 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."

The question is, what exactly was redeemed? The award purports to redeem liability in respect of injuries received after 30 June 1985. If it be effective, it clearly redeems liability for the "second injury" found by the Commissioner, the aggravation etc. of the disease being an injury deemed to have occurred on 26 January 1987.

Mr Hall QC submitted that the redemption was effective to redeem the whole of the award; in so far as the redemption determination purports to limit the extent of the redemption, it was a nullity. He submitted and the words "in whole or in part" qualified the weekly payment and not the liability. If I were against him on that, he submitted that the liability was the weekly payment so that it indirectly qualified "weekly payment".

In my view these submissions are correct, so far as they go.

Mr Hall QC submitted that the liability of the employer crystallised at the time of the second injury, i.e. 26 January 1987, when the incapacity commenced. He referred to a passage in the judgment of Meagher JA in IGF/NEM v. GIO General Ltd (1994) 33 NSWLR 247 at 260F. His Honour said:

"In National & General Insurance Co Ltd v. South British Insurance Co Ltd [1982] HCA 62; (1982) 149 CLR 327, the High Court of Australia unanimously decided that the case where an employee suffers a succession of injuries, the liability to pay compensation on the basis of 'deemed total incapacity' envisaged by section 11(2) of the 1926 Act arose on, and flowed from, the last injury from which the partial incapacity resulted, and the insurers at risk at the time of that last injury were solely liable to indemnify the employer in respect of its liability to pay compensation on the basis of deemed total incapacity. If that case governs the present situation, the appellant must win."

Which, of course, is what happened! The current law in relation to section 11(1) awards is the same. Cole J in MMI Ltd v. NEMGIA Ltd [1989] NSWCC 6; (1989) 5 NSWCCR 47 made a similar finding on section 11(1) awards relying on the same authority of the High Court. That decision was upheld by the Court of Appeal in MMI Ltd v. NEMGIA Ltd (1990) 6 NSWCCR 351.

The employer's liability arose on 20 January 1987. That liability has been redeemed in whole by the payment of $60,000 to the worker. In my view, no liability remains in the employer under the original award.

I should deal shortly with Mr Hall QC's argument as to what is actually redeemed - the liability or the weekly payments. In Gosper v. Christopherson [1986] HCA 28; (1986) 160 CLR 423 at 423, the Court (Mason, Wilson, Brennan, Deane and Dawson JJ) said:

"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 payment, the latter being at the option of the employer."

Mr Hall QC submitting, contrary to his own interests, that this dictum suggest that it is the "liability" rather than the "weekly payments" which may be redeemed in whole or in part. The subsection appears to me to postulate that there is a weekly payment being made (either voluntarily or pursuant to an award) or an as-yet-unquantified liability to make such payments. It is clear that the section as originally enacted did not redeem liability under section 10 (hospital and medical expenses) and section 16 (lump sum payments) of the former Act. Hence the necessity to insert subsection (1A) in section 15. Their Honours in the High Court were not dealing with the question now put to me. It appears to me that Mr Hall's second submission is correct in any event - the liability is the weekly payment. That which the section permits is, in my view, best shown by an example. A liability exists to pay $71 per week. That liability may be redeemed in part by redeeming liability to pay $35 per week for a lump sum of $15,000. The employer is still liable to pay $36 per week.

Applying these principles to the present case it is clear that the employer was liable to make a weekly payment of $71 per week. That liability arose on 26 January 1987.

The liability for injuries occurring after 30 June 1985 has been redeemed in full. Therefore the liability under the original award has been redeemed. The submissions of Mr Hall QC I have thus far, if I understand them correctly, adopted. His arguments are clearly inconsistent with his opening submission to the Commissioner that the proceedings before him were, in effect, an application under section 55 of the Act for a review of the weekly payment under the original award. The original award no longer had any force or effect. The employer's liability in respect of it had been redeemed. There was nothing to review. In my view the Commissioner, encouraged by the employer and not dissuaded by the worker, fell into error in making the first two decisions which I have set out above.

What are the worker's remaining rights?

The employer submitted in its opening address that the worker had no remaining rights against the employer. To permit the worker to claim weekly payments from 17 March 1993 was to permit him to prove what he had failed to do in the original proceedings i.e. to prove an incapacity resulting from the injury of 15 January 1980. With great respect, how could the worker have possibly done so? In the application before Wright C in the proceedings under review, the worker was claiming weekly payments from 17 March 1993. How possibly could the worker prove, in the original proceedings determined in 1989, that he had an incapacity for work resulting from the injury of 15 January 1980, commencing on 17 March 1993?

In his address in reply, Mr Hall expanded his argument pointing out that an estoppel arises from the original award precluding the calling of any evidence contrary to the original findings. That is undoubtedly right. However the original decision can only speak up until that time. The facts could have changed remarkably after 13 April 1989. True it is that for the period whilst the worker enjoyed the benefit of the award, i.e. up until the redemption was effected, he would now be estopped from saying that things were otherwise: he cannot approbate, by taking the award moneys and the lump sum redemption, and reprobate, by saying that during that period the facts were otherwise than as originally found by Wright C. After the award was extinguished by operation of law, there does not appear to me to be in law any reason why the worker could not, as he now seeks to do, allege incapacity resulting solely from the injury of 15 January 1980. There may, of course, be severe evidentiary problems and credit issues that arise, but such problems do not amount in my view to some form of cause of action estoppel or issue estoppel.

The employer is estopped from denying:

(1) that the worker was injured on 15 January 1980;

(2) that the injury was a cervical disc lesion; and

(3) that as a result thereof he had a "continuing physical incapacity" (scilicet "disability") up to the date of decision on 13 April 1989.

The worker's problems in the presentation of his case will be in proving that he had an economic incapacity (as distinct from "a physical disability") (see Arnotts Snack Products Pty Ltd v. Yacob [1985] HCA 2; (1985) 155 CLR 171) from 17 March 1993 resulting from the injury of 15 January 1980, and assuming section 11(2) of the former Act is available to him, whether he had the requisite mutuality to engage in suitable employment with the employer from 29 July 1993 when there was an admitted failure by the employer to provide suitable employment. There may be real evidentiary problems for the worker in doing that, but, in my view, no legal preclusion. If a worker be able to prove that he has a continuing economic incapacity, either total (section 9 of the former Act) or partial (section 11(1) of the former Act), or a continuing disability and his employer has failed to provide him with suitable employment (section 11(2) of the former Act), then his right to obtain an award of compensation is only determined by his death, the recovery of damages at common law in respect of the injury or a redemption of the employer's liability to make weekly payments in respect of that injury. The redemption that has been effected here redeems the employer's liability to make weekly payments in respect of injuries occurring after 30 June 1985. On the construction of the effect of the redemption determination that I have made (as urged upon me by Mr Hall QC), that redemption order is also effective to redeem weekly payments in respect of the cumulative effects of injuries where the last injury causative of the incapacity occurred after 30 June 1985. The effect of Mr Hall QC's extended argument is that it is also effective to redeem the employer's liability in respect of weekly payments for any injury occurring before 30 June 1985. Mr Hall QC's effective client, NEM, wishes to obtain the benefit of MMI's redemption. With great respect, that does not appear to me to arise as a matter of law. Factually that may well be the case, but the facts have not yet been determined.

I shall explain my reasoning by an example.

Unfortunately, it is not uncommon to hear cases in this Court where a worker suffers a severe injury but by dint of his own dedication to work or of economic necessity continues, albeit with difficulty, to perform his pre-injury duties for an extended period. The work that he performs makes the original injury worse. Eventually, the worker ceases work and his services are terminated. Because of a long period of rest, the worsening effects of the work done over the extended period ceases. As the medical reports invariably say "the aggravation has ceased". He has been paid compensation up until the time of the cessation of the "aggravation". If he be able to prove that thereafter he had an incapacity on the open labour market reasonably accessible to him, he is still entitled, in my view, to an award for partial incapacity. This, I am told, is the case which the worker in this matter seeks to establish. Mr Catsanos sought to put before me on the review medical reports to establish that the aggravation and exacerbation originally found by Wright C had ceased. I rejected the tender on the basis that such evidence was not germane to the legal issues arising in the review. If the worker be unable to prove that the aggravation and exacerbation originally found has ceased or if he fail to prove an incapacity for work on the open labour market, then this claim for partial incapacity under section 11(1) of the former Act must fail. I now turn to the question as to whether the worker is entitled to maintain a claim under the former section 11(2).

Is the worker entitled to claim under section 11(2)?

In dealing with this issue the Commissioner referred to National & General Insurance Co Ltd v. South British United Insurance Co Ltd [1982] HCA 62; (1982) 149 CLR 327, Pickersgill v. Freightbases Pty Ltd [1982] 3 NSWLR 117 and IGF/NEM v. GIO General Ltd (1994) 33 NSWLR 247. He continued:

"Consequently, the action by the applicant in so far as it involves a reliance upon section 11(2) is misconceived. The worker's 11(2) rights are only enforceable against the last causative injury. In accordance with the principles laid down in Port of Melbourne Authority v. Anshun Pty Ltd(1981) [1981] HCA 45; 147 CLR 589 and in Salmon Street Ltd (in Liq) v. Jorgensen [1991] SASC 2963; (1991) 56 SASR 158, any rights to section 11(2) appear to have merged with the order of the Court [the determination on the redemption application made by Cross C] to permit redemption and the subsequent payment of the determined redemption sum."

The Commissioner was undoubtedly right in saying that the liability to make weekly payments under section 11(2) flows from the last injury causative of the incapacity or physical disability. However, his statement that the worker's reliance on section 11(2) was misconceived was, in my view, based on a false premiss. It assumes that the effects of the second injury are continuing. If the effects of the second injury are continuing, then the redemption is effective to prevent the worker obtaining any compensation. If the effects of the second injury are not continuing, has the employer any liability to provide suitable employment to a worker with an incapacity or physical disability flowing from the first injury? The answer to this question is, in my view, yes.

The employer's obligation under section 11(2) is a continuing one. To use the words of Roper CJ in Eq in Wheatley v. John Herford & Sons Ltd (1954) 54 SR (NSW) 232 at 238:

"I think the word 'during' means throughout, and the obligation to provide employment remains for as long as the partial incapacity remains."

A worker may at one time be not ready, willing or able to engage in suitable employment, but be so at a later time and may "revive" his entitlement under section 11(2) by a further request: Asciak v. Australian Glass Manufacturers Pty Ltd [1964] 38 WCR (NSW) 101 (FC). Where a worker has two incapacities following upon separate injuries only the employer liable for the second injury is under the obligation to provide suitable employment: Sydney City Council v. Ince (1989) 16 NSWLR 690. Clarke JA (with whom Hope and

Meagher JJA concurred) pointed out (at 704B) that the making worse of a worker's condition by the second injury destroyed that worker's mutuality necessary to support an award under section 11(2) against the first employer. However, if the effects of the second injury disappear, then there is nothing in law, in my view, to prevent a worker "reviving" his entitlements under section 11(2) against the first employer.

Let me provide another example.

Whilst employed by X, a worker loses a leg. He is fit to do clerical work. After a period in which he had been paid compensation, he obtains clerical work with Y. Whilst doing that work he develops a carpal tunnel syndrome in his dominant hand. He goes off work and is paid compensation by Y. The condition in his dominant hand abates after surgery being successfully performed. He again becomes fit for clerical work but Y either fails to or is unable to provide him with such work. Has X's obligation to provide its one-legged worker with suitable employment ceased? In my view it has not. In my view, there is no difference if, in the example given, the worker was employed on each occasion by the same employer. It is not a matter of excuse for the employer to say "I paid you compensation when you were off work with the carpal tunnel syndrome" in order to prevent his supplying to his injured, one-legged worker, suitable employment.

The Commissioner's reference to Anshun's case and Jorgensen's case is in my view inapposite. The worker was being paid compensation under section 11(1). The Commissioner's reference to these authorities clearly relates to the fact that the worker, in the original proceedings, did not claim under section 11(2). Any rights to claim weekly payments under that section in respect of the injuries the subject of the original award were extinguished by the redemption. However it did not extinguish the worker's rights under section 11(2) in respect of the injury of 15 January 1980. The question is one of mutuality as Ince suggests.

Conclusion

Earlier in these reasons, I identified five decisions made by the Commissioner. In discussing the legal effect of the redemption, I found that the first two decisions were wrongly made. In discussing the legal effect of the original award and the categorisation of the "nature and conditions" claim, I upheld the Commissioner's third decision. In discussing whether the worker is entitled to claim under section 11(2), I found the Commissioner's fourth decision to be wrong.

The fifth decision that the Commissioner made was to stand the matter over to a date to be fixed. That order was appropriate, as there are issues to be tried. The only remaining question is the form of orders that I make.

Mr Hall QC asked me to make a declaration as to the effect of the redemption. That course of action was not opposed by Mr Catsanos. Whilst I am diffident about the power of this Court to make declarations, I shall do as requested. In the event that this Court has no power to make declarations, they may be taken as findings. Finally, I note that Mr Hall QC and Mr MacFarlane asked me to hear the remainder of the current application, in the event that there was something to be heard. It appears to me to be more appropriate that Wright C hear the balance of the matter as he, unlike me, has already had the benefit of seeing and hearing the worker in the witness box, albeit a long time ago. However, passive memory may come to his assistance in the event that he has no active recollection of Mr Mirkovic. The employer's review has, in the main, failed but that of the worker has been, in the main, successful. The costs orders which I make shall reflect that.

Orders

1. I declare that the redemption effected pursuant to the determination of the Court on 24 July 1992 in Matter No. 8455 of 1992 was effective to redeem the whole of the liability of the employer under the award of 13 April 1989 in Matter No. CR 4833 of 1988.

2. I declare that the worker is entitled to bring a claim for weekly payments based solely on the injury of 15 January 1980 at such time after the said redemption was effected as may seem appropriate to him.

3. I declare that in any such application the worker is entitled to rely on the provisions of section 11(2) of the former Act as preserved by Workers Compensation Act 1987, Schedule 6, Part 4, clause 5.

4. I revoke the order made by Wright C on 13 May 1994 in Matter No. 12413 of 1992 that the worker file and serve an amended application for determination seeking variation of the award in Matter No. CR 4833 of 1988.

5. I order the worker to file and serve within 14 days an amended application for determination (Form 1) congruent with the reasons for judgment in this matter.

6. I remit Matter No. 12413 of 1992 to Wright C to determine in accordance with this decision.

7. I direct the Registrar to list Matter No. 12413 of 1992 for mention before Wright C as soon as possible so that Wright C may fix a date for further hearing of that matter.

8. Employer to pay the worker's costs of the review application, being the costs of presenting his review application and his costs of opposing the employer's review application but, on assessment, to be assessed as one matter only, to avoid duplication of costs.

Orders accordingly

Solicitors for the employer: Hunt & Hunt

Solicitors for the worker: White Barnes & McGuire