Senbakan v James Hardie & Co Pty Ltd [1998] NSWCC 49; (1998) 17 NSWCCR 1 (24 October 1998)

[1998] NSWCC 49; (1998) 17 NSWCCR 1

SENBAKAN v JAMES HARDIE & CO PTY LTD

Compensation Court of New South Wales: Campbell CJ

24 October 1996

Workers compensation - Weekly compensation - Redemption - Consent of worker means actual consent - A question of fact - Payment by cheque not completed until cheque presented and honoured - Workers Compensation Act 1926 (NSW), s 15

Words, phrases and maxims - "consent of worker" - Workers Compensation Act 1926 (NSW), s 15

Words, phrases and maxims - "payment" - Workers Compensation Act 1926 (NSW), s 15

P.C. Sweeney, for the applicant employer

G.A. Rich, for the respondent worker

Ex tempore

1 CAMPBELL CJ: This is an application for review of an order of Commissioner Wright of 24 May 1996, which rescinded an award of the Court made on 8 August 1994. Mr Sweeney of counsel appeared for the applicant employer and Mr Rich of counsel for the respondent worker. Counsels' submissions have been recorded and it is therefore unnecessary for me to refer to each of them, merely to ensure that they are noted. The background and facts may be taken from the judgment of Commissioner Wright, as follows:

On 8 August 1994 an application for determination by Mr Senbakan had been listed for further hearing. Evidence had been taken on 14 April 1994. He was seeking weekly payments from 26 June 1992 and lump sums for partial losses of use of the two upper limbs together with a payment for pain and suffering. The worker relied upon work injuries said to have been suffered on a day in 1983 and due to the nature and conditions of his work between 1983 and 1992. During the course of the day on 8 August 1994, after further evidence, agreement was reached between the parties. This subsequently took the form of an application for approval of a redemption in relation to any pre-1987 Act injuries and a submission to an award in respect of 1987 Act injuries. The redemption proposal was approved for payment of $250 and orders were made in accordance with the Short Minutes of Order signed by counsel for both parties. Orders were also made in favour of the worker with respect to the 1987 Act injuries. Orders totalling payment of $44,750 and an agreement to meet medical expenses up to an amount of $5,000 upon production of receipts or accounts. There were no orders for weekly payments. It was evident from the written instructions obtained from the applicant worker that there was an element of compromise in the agreed figure with issues about injury by way of aggravation and any nexus between his left arm condition and his work. There is no reference in the document to any Social Security pay back figure, but on the other hand there is no reference to the sum of $45,000 being a figure clear of all liabilities. The award of 8 August 1994 contained the two sets of orders. The relief sought is to set aside the award, which I assume to mean, in the absence of any precision, the totality of the award. The matter comes before the Court by notice of motion. The solicitors for the worker moved that the Court reconsider, pursuant to section 17(4) [of the Compensation Court Act 1984], the award and the approval to the redemption given by the Court. The basis for the application by the worker is set out in the affidavit dated 13 March 1996 and Mr Dominic Iso, solicitor on the record for the worker, and who also gave oral evidence before me on 29 March 1996. That evidence briefly is that the worker was not aware that there would be a charge from the Department of Social Security which amounted to $11,479.76 levied in respect to the redemption sum. The affidavit of Mr Iso asserts that the Department of Social Security has levied a charge in respect of Social Security benefits paid to the worker and that the sum of $11,479.76 was recovered from the applicant's compensation entitlement, as he received a payment of compensation partly in respect for lost earnings or lost capacity to earn, namely the sum of $250. The applicant did not appreciate this fact and the settlement was structured in this way at the request of the respondent. The facts are that on the second day of the hearing, at about 1.00 pm, an offer was made acceptable to the worker to settle his claims for $45,000 plus an amount for medical and hospital expenses. Mr Iso said that he did not understand that the settlement would be structured so as to include amount for the 1983 claimed injury. Mr Iso was not present when the final documents were signed. Subsequently agreements signed by counsel on behalf of the worker contained the nominal amount of $250 to redeem any liabilities under the 1926 Act. It was the evidence of Mr Iso that he was aware prior to the settlement negotiations that the worker had been a recipient of Social Security benefits during some of his time off work. Mr Iso did not seek details of any charges which might be levied by the Department of Social Security prior to the court orders being made. A transcript of proceedings on 8 August 1994 records that the worker re-entered the witness box and agreed to settle his rights for all injuries up to 30 June 1987 for the sum of $250, excluding any claim for boilermaker's deafness, and that he would receive another sum of monies in respect to his later injuries. There were no questions put to the worker about Social Security implications for the settlements. The Short Minutes of Order form appear to have been signed by counsel for the respective party. The consent to redemption form located on the reverse side is a form of acknowledgment by the worker that the contents of the redemption agreement had been explained to him by his solicitor/counsel. Neither of the words `solicitor' or `counsel' have been ruled through. There is a signed statement by the Turkish Interpreter, Mr Suit Kojed, at the bottom of the form that he read the document to the worker in the Turkish language and that he interpreted when advice was given by the counsel/solicitor. The worker in an affidavit dated 7 February 1996 claimed that he had not been informed prior to the settlement that there was any charge by the Department of Social Security. On 16 December 1994 the worker's solicitors made application for a reconsideration of the award and a stay of proceedings was ordered at the request of the worker. The respondents are purported to pay a cheque of $33,520.24 to the worker for the balance of the money, but the cheque was not negotiated and has become stale. Mr Iso has unsuccessfully sought a review of the determination of the Social Security delegate. In the present case the worker declined to bank or to use the monies offered following the authorisation of the court. The monies were offered to the worker as payment but were not accepted. The monies paid to the Department were not paid at the worker's direction but by force of the relevant statute. Whilst the solicitor for the worker would have been prudent to make the usual inquiries on the day the matter was heard I [and that is the Commissioner] understood his evidence to be that he did not contemplate that there would be a redemption in respect of the earlier injury, and hence there would have been no need for such inquiries. In any event the Court is satisfied that there was not an informed consent of the worker to the redemption proposal put to the worker by his counsel. Had the worker been aware of the implications it is unlikely that the bargain would have been formulated in this way. I conclude that not only there was no informed consent by the worker, but also that the redemption was not finally effectuated because of the absence of payment by the employer to the worker.

2 In his judgment the learned Commissioner also said:

If I am right about these matters, the relief sought by the worker can have no special hardship upon, nor be oppressive for, the employer. The employer may have paid monies the subject of a charge to the Department of Social Security, but these can be set off against any entitlements that are finally determined.

3 The relief now sought is based, Mr Sweeney put, on errors of law as follows:

1. In holding that there was a lack of consent by the worker to the redemption application of 8 August 1994.

2. In holding that the redemption was not finally effectuated because of the absence of payment by the employer to the worker.

3. In holding that there was no hardship or prejudice to the employer in granting the worker the relief sought in circumstances where the employer had paid money to the Department of Social Security consequent upon the award of 8 August 1994.

4. In confusing the concept of consent with informed consent.

4 The notice of motion being dated 17 June 1996, a question arose as to whether the appropriate process was a review under s 36 of the Compensation Court Act 1984 (the Court Act), as it was prior to amendment, or whether it should be an appeal under s 34A of the Court Act. The answer to that question depends upon whether the application for reconsideration before Commissioner Wright, which is dated 14 March 1996, is regarded as being part of the original proceedings commenced in 1992 or whether it is regarded as the commencement of fresh proceeding. In fact the application was brought by way of notice of motion and that notice of motion bore the number of the original proceedings. The matter was argued before Commissioner Wright without any point being raised that it was inappropriate to deal with the matter in that way. Pt 27, r 2(i) of the Compensation Court Rules 1990 (the CCR) provides that:

An application for the exercise by the Court of any of its powers under section 17(4) shall be by motion under Part 14.

Pt 14, r 1 of the CCR provides:

The provisions of this Part apply to an interlocutory or other application in or for the purpose of or in relation to any proceedings and any application to which this Part applies should be made by motion.

5 In my view, the application made to Commissioner Wright is properly to be regarded as part of the 1992 proceedings and accordingly review is the appropriate procedure in this case. Mr Rich did say that his submission was to the contrary of that view, however, he did not develop that position in his address.

6 In any event, since Mr Sweeney made it clear that he relied upon errors of law, the same points could be made by way of appeal under s 34A.

7 Further, having regard to the views to which I have come, the outcome would have been essentially the same whichever procedure was adopted.

8 I deal with the grounds of appeal seriatim:

1. There is evidence which the learned Commissioner accepted and was entitled to accept, including the applicant's unchallenged evidence that he did not consent to the arrangement that was made, and purported to be effectuated, by the application made to the Commissioner on 8 August 1994. In these circumstances, this proposition cannot establish an error of law.

I might add, that were the matter to be approached as one of factual review I would share the Commissioner's view and certainly do not consider it to be shown to be wrong.

2. It was not put by Mr Sweeney that payment was not necessary to effectuate the redemption, see Gosper v Christopherson [1986] HCA 28; (1986) 160 CLR 423 at 428; however, he submitted that the receipt by the applicant of the cheque constituted payment. It was held in Re Hone [1951] Ch 85, that payment in the case of payment by a cheque does not mean the date when the cheque is handed to the payee but the date when the money is collected. That case was concerned with an application of a section of the English Bankruptcy Act 1914; however, the point made by Harman J, was a general one. He said, at 89:

It is quite true that having accepted the cheque they could not sue for the debt unless and until the cheque was dishonoured. Nevertheless it was not until the cheque was honoured that they were paid.

Mr Sweeney did not refer me to any authority to support the proposition that the delivery of the cheque amounted to payment. I do not consider that Ground 2 has been made out.

3. The point the learned Commissioner was making here is that, since the redemption was not effectuated, to set aside the Court's determination would not cause hardship to the respondent as the Court's order was not followed by a redemption and therefore could not preclude the applicant continuing with his claim. It seems to me correct to say that the setting aside of the award would not cause special hardship or be oppressive. Indeed, one would think that the prospects of the employer recovering the money paid to the Department of Social Security could only be improved by the recision of the award, which had led the employer, no doubt in substance the insurer, to make the payment. Whilst the circumstances were unusual there is, I think, room for a view that the employer was the author of its own problem by paying the Department before confirming that the redemption was concluded by an effective payment to the worker. In John While & Sons Pty Ltd v Changleng (1985) 2 NSWLR 163 at 166, 167 Mahoney JA, as he then was, said, speaking of s 15(1) of the 1926 Act:

There are at least two possible views of the subsection on a literal reading of it, the provision contemplates the redemption of the liability in question by the payment of a lump sum. That is, it contemplates that the liability is redeemed and so extinguished by the act of the employer in paying to the worker, with the worker's consent, a sum determined by the Commission. The function of the Commission in that process is and is only to determine the sum payment of which may cause the process of redemption to operate. On this view the section does not authorise the Commission to order redemption and consequently to force an unwilling employer to redeem. On the second view of the subsection the Commission is, by implication, given the power both to determine the sum to be paid and to order a redemption to be made. But if this be the correct view of the subsection it is necessary to read into it a grant of power to the Commission to award an unwilling employer to redeem. Bearing in the mind the rules governing the implication of words in statutes I am not satisfied that there is in this section warrant for such an implication.

Approached in this way, s 15 requires that the payment be consented to by the worker. It is arguable that the action of the worker in not presenting the cheque founds an inference that he did not consent to the payment, albeit questions might arise as to whether, and if so up to what stage, a worker might, assuming he had indicated agreement to the redemption contemplated, change his mind.

It should be observed that neither side has sought throughout this matter to distinguish between the redemption order and the other orders. It is therefore unnecessary to consider whether the position would be different if only the redemption order was sought to be rescinded. I do not consider that Ground 3 has been made out.

4. "Informed consent" is not a term of art. The meaning of the words depends upon the context. The learned Commissioner was merely conveying that no true consent had been given to the redemption, albeit the documents might suggest otherwise. In Sorcevski v Steggles Pty Ltd (1991) 7 NSWCCR 315, Judge Burke found that although the documents included reference to a back condition the applicant did not consent to that inclusion. Before the Court of Appeal, Steggles Pty Ltd v Sorcevski, NSWCA, No. 40693/91, 29 July 1994, unreported, it was accepted that the Judge could so find. In the present matters the documents suggest an arrangement the effect of which would be that the applicant would receive in his hand some $11,400 odd less than the amount which he intended to accept. It was open to the learned Commissioner to find that he did not consent to that arrangement. I do not consider Ground 4 has been made out.

9 In my view the challenge to the decision of the learned Commissioner fails. I would add that had I come to a reconsideration of his decision I would have reached the same conclusion. In the events that occurred I consider that it is in the interests of justice that the award and orders be revoked and that the matter now proceed to a new hearing.

10 In so far as the applicant for review relied upon payment of the money to the Department as a matter of prejudice, I note that no evidence was placed before me or the learned Commissioner, or submissions made, based on the relevant law and legislation that the money could not be recovered if the award upon which the payment was based was rescinded. Prima facie one would expect that either as a matter of law or of administrative discretion such a repayment would be made. That view can the more readily be accepted in the absence of any evidence or relevant submissions to the contrary.

Orders

1. I dismiss the application for review.

2. Confirm the orders made by Commissioner Wright.

3. Order that the employer pay the worker's costs of the application for review.

Orders accordingly

Solicitors for the applicant employer: AO Ellison & Co

Solicitors for the respondent worker: D La Rossa, Izz & Co