IN THE MAGISTRATES COURT
OF VICTORIA
AT MELBOURNENo. U01543501
BETWEEN:
CHRISTOPHER STOLSPlaintiff
And
JAMIESON BROTHERS P/L
And
CGU WORKERS COMPENSATION (VIC)Defendants
HEARING16 AUGUST 2007
DECISION30 AUGUST 2007
MAGISTRATES GARNETT
Mr Carson appeared for the Plaintiff
Mr McKenzie appeared for the Defendants
Catchwords: Accident Compensation Act 1985 -Effect of Consent Order Accord and Satisfaction – Res Judicata – Issue Estoppel
Mr Stols alleges he sustained back injuries on 2 September 1999, which arose out of or in the course of his employment with Jamieson Brothers P/L while stacking timber. His claim for weekly payments and medical expenses was rejected by the defendants and on 12 October 2001, by agreement, court proceedings issued by him were dismissed with no costs order.
The reason his claim was rejected was partly due to unfavourable comments made by his treating doctor to Mr Battlay who examined him on behalf of the defendants.
After the consent orders Mr Stols issued and recently settled proceedings against his treating doctor for breach of agreement, breach of fiduciary duty and breach of duty of care the result of which he alleged caused injury, loss and damage in himfailing to obtain weekly payments and medical expenses under the Act.
The defendants in this proceeding raise the defences of accord and satisfaction, res judicata and issue estoppelbased on the consent order made on 12 October 2001.
Mr Stols concedes that the consent order finalised his entitlements to weekly payments and medical expenses but not an S 98C impairment claim.
The issue to be determined isthe effect of the consent order on Mr Stols entitlement to pursue an impairment claim.
What is the effect of the Court Order?
Accord and Satisfaction
The defendants contend that the agreement on 12 October 2001 is accord and satisfaction consistent with the principles inPaynter v Willems[1]and Koutsouradis v Koutsoudaris[2].
The defendants allege Mr Stols understood the effect of the consent order was to finalise all of his entitlements under the Act. In support, they rely on the fact that; the solicitor and counsel who represented him in those proceedings were experienced in the jurisdiction, as are his current solicitors whom he instructed to act in 2002. Despite this, he has waited over 4 years to lodge his impairment claim and has issued proceedings against his treating doctor, the pleadings of which indicated finality of all entitlements under the Act.
Mr Stols disputes that there has been “accord and satisfaction” on the basis that although he gave instructions to settle his claim on 12 October 2001 it was not his intention to finalise all of his future entitlements under the Act. He stated that he did not attend court on that date and communications with his counsel occurred by telephone. He was advised that his case was “doomed to be a spectacular failure” due to lack of support from his treating doctor. Mr Stols gave evidence that he understood that the agreement ended his rights to claim weekly payments but was not advised it would end his future entitlements altogether.
Mr Stols relies on the decisions of Judge Dyett inWarren v Jennifer A Yates P/L[3] and Judge Hicks inMartino v CGU Workers Compensation & Remi Mechanical[4].
Like Mr Stols, Ms Warren resolved her previous claim for weekly payments and medical expenses based on a dismissal of her proceedings. Her subsequent proceeding sought a declaration of liability in relation to a S 98C claim and additional weekly payments. Judge Dyett held that the defence of accord and satisfaction did not apply, as the facts did not demonstrate that Ms Warren and her counsel were consensus ad idem to the understanding that by paying their own costs Ms Warren had released the defendants from all liability for the injuries in question.
I do not accept the submission made by the defendants on this issue. I accept Mr Stols evidence that he did not receive advice or understand that the agreement reached on 12 October 2001 finalised all future entitlements under the Act. On this basis there is no “accord and satisfaction” between the parties.
Res Judicata and Issue Estoppel
Mr Stols contends his S 98C claim is a separate and distinct cause of action and the defendant has failed to discharge the onus of proving that the issue resolved in the previous court proceeding is the same issue to be determined in this proceeding.
In Warren, Judge Dyett referred to a number of the authorities on res judicata and issue estoppel[5].His Honour held that a claim for a declaration of liability for the purposes of S 98C is a separate and distinct cause of action to a claim for weekly payments and medical expenses.Accordingly, he held that the defence of res judicata did not apply.
Martino also involved a determination of the effect of a previous consent dismissal by a court. After referring to similar authorities including Warren’s case,Judge Hicks held that he could not decide on the pleadings what issue the previous court decision actually determined apart from the workers entitlement to weekly payments at the date of the consent order. He referred toKuligowski v Metrobus[6], where the High Court held that where it is alleged the issues are not the same it is for the party relying on estoppel to demonstrate that they are the same. Judge Hicks held the defendant had not dischargedthe onus.
I do not accept Mr Stols submissions on this issue. S 82 (1) of the Act is the primary entitlement provision. A person is not entitled to compensation under the Act unless he or she first satisfies the requirements of the section. i.e. “worker”, “injury”, “arising out of”, “in the course of”, “employment”. Once satisfied, a worker has an entitlement to weekly payments – subject to being incapacitated, medical treatment – subject to them being reasonable and necessary, and an impairment benefit – subject to being permanently impaired because of “injury” and satisfying the threshold criteria in the Act. These entitlements are separate causes of action. However, these entitlements do not exist unless and until the primary entitlement criteria in S 82 (1) is established.
There is no ambiguity in the cause of action in Mr Stols previous proceeding as referred to by the High Court in Chamberlain’s case and relied on by Judge Hicks in Martino.
As Judge Higgins said in Perkins, “There will, of course, be situations where a decision by a Magistrate will create both an issue estoppel and a res judicata. A decision that the worker did not sustain injury in respect to which the workers employment was a significant contributing factor will be final. The judgment dismissing the claim will create a res judicata”.
In that case, issue estoppel and res judicata did not apply, because it was the workers entitlement to weekly payments that had been previously determined. Accordingly,Judge Higgins held that there was nothing to prevent the worker producing further evidence to prove a change in circumstances, i.e. incapacity, to warrant the bringing of fresh proceedings.
Likewise, Judge Rendit in Hall said; “One begins with the proposition that the consent orders made by the court on 22 October 1996 constitute or have the effect of an adjudication by the court upon the issues raised by the statement of claim and the defence in those proceedings. By the consent order, the parties are asking the court to give judicial effect to that to which they have agreed. Therefore the making of a judicial order converts the agreement between the parties into a judicial decision and one which can support a plea of res judicata”… and, “in addition to raising a plea of res judicata, in appropriate circumstances a consent order will also raise an issue estoppel with respect to all the issues raised, or which could have been raised and where it would be unreasonable not to have raised them in those proceedings, and which are essential to the making of the final orders of judgment”.
In Hall, there was a previous consent order that the plaintiff had a serious injury, thereby denying the defendant the ability to contest that issue at the time the order was made. However, Judge Rendit allowed the defendant to litigate the issue in the proceedings before him, as a different findingwould not be inconsistent with the previous consent order.
The distinguishing feature in Perkins and Hall is that they were concerned with the level of or entitlement to weekly payments flowing from changed circumstances in the workers condition. Unlike the present case, the prior consent orders in both cases did not involve the primary entitlement issue pursuant to S 82 (1).
Liability is, and has always been in issue in Mr Stols claim. The defendants alleged from the outset that Mr Stols did not sustain an injury, which arose out of or in the course of his employment. The S109 rejection notice and the defences in both proceedings deny that an injury arose out of or in the course of his employment and that employment was a significant contributing factor. The parties and issues in both proceedings are the same.
The consent order on 22 October 2001 has the effect of determining that Mr Stols did not sustain an injury, which arose out of or in the course of his employment with Jamieson Brothers P/L on 2 September, 1999.The issue litigated by Mr Stols in this proceeding is the same issue.
For these reasons, Mr Stols cannot pursue any claim under the Accident Compensation Act 1985 against Jamieson Brothers P/L for the injuries he alleges he sustained on 2 September 1999.
I add that the circumstances of this case are common in this jurisdiction. It appears to me that if it is the intention of the parties to protect future entitlements under the Act notwithstanding a consent dismissal of proceedings prudence dictates it be recorded in signed terms of settlement between the parties.
1
[1] (1983) 2 V.R 377
[2] (1983) 2 V.R 487
[3] Unreported County Court Decision 16 March 2006
[4] Unreported County Court Decision 3 April 2006
[5] Unreported County Court Decision, Judge Rendit in Hall v HIH 5 October 1998
Chamberlain v Deputy Commissioner of Taxation (1987-8) 164 CLR 502
Blair v Curran (1939) 62 CLR 464
Unreported County Court Decision, Judge Higgins in Perkins v GIO 12 December 1995
[6] (2004) 68 ALJR 1031.