The difficulties for defendants in relying upon past common law settlements for the purpose of making estoppel-based arguments in statutory benefit claims was recently addressed in the Magistrates Court matter of Dusan Zubic v PPG Industries Pty Ltd.
The court was asked to decide, as a preliminary point, whether a previous common law settlement for $360,000 prevented the plaintiff from pursuing an action for weekly payments based on s134AB(36) of the Accident Compensation Act 1986 (Act) and on the principle referred to as Anshun estoppel derived from the decision of Port ofMelbourne Authority v Anshun Pty Ltd (the Anshun decision).
The common law settlement concerned injuries to the neck and back and psychiatric injury. The weekly payments proceeding focused mainly on injury to both shoulders.
Section 134AB(36) of the Act provides:
“If judgment is obtained, or a compromise or settlement made in respect of (common law proceedings) in respect of an injury, the Authority, the employer or self-insurer is not liable –
- where pecuniary loss damages are awarded, to pay weekly payments in respect of the injury; or
- where pain and suffering damages are awarded, to make payments under section 98C or 98E in respect of the injury.
In the Anshun decision, the High Court addressed the “extended principle” expressed in the 1843 English decision of Henderson v Henderson, that where a matter has been the subject of adjudication by a court of competent jurisdiction, the court requires the parties:
“to bring forward their whole case, and will not…allow the same parties to a dispute to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The plea of res judicata applies…not only to points upon which the Court was actually required by the parties to form an opinion and pronounce judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at that time.”
In 2008 the plaintiff lodged a serious injury application in relation to back, neck and psychiatric injury. In the draft statement of claim that accompanied the serious injury application, the plaintiff alleged injury occurring throughout the course of his employment between 20 October 1999 and January 2004 and specifically on 8 January 2004.
The plaintiff’s serious injury application was accompanied by two affidavits dated to 5 November 2005 and 30 July 2008. The affidavits made reference to the plaintiffs back and neck pain but also to pain in his shoulders.
On 21 January 2010 the plaintiff settled his common law claim for $360,000. It appears that the common law settlement came about in negotiations after the lodging of the application (presumably during the statutory conference process) and before any formal grant of leave to commence proceedings.
On 28 January 2010 the plaintiff executed a release. In the usual way, the release contained a series of definitions, including that “the claim” means “the application under section 134AB of the Act and includes the proposed claim at common law in respect of each cause of action which the release or seeks to maintain”.
The current proceeding
The proceeding that came before Magistrate Ginnane was framed by an amended complaint dated 8 July 2015 and followed a claim made on 29 May 2014. The amended statement of claim pleaded a course of employment injury involving heavy and repetitive lifting and moving of goods and items. The particulars of injury listed injuries to the right and left upper arms and shoulders, the neck and cervical spine along with stress anxiety and depression. The plaintiff claimed reasonable medical and like expenses and weekly payments from 3 January 2009 to date and continuing.
Counsel for the defendant accepted that the draft statement of claim included with the application for serious injury made no reference to any injuries to the plaintiff’s shoulders. However, injuries to both shoulders were mentioned in the plaintiff’s affidavits in support of the serious injury application and in various medical reports. Counsel for the defendant submitted that in light of these references, the Magistrate should be satisfied that the plaintiff was “fixed with knowledge of injury in relation to his shoulders prior to the execution of the release in a common law claim and that as a result of the plaintiff should be forestalled by the operation of” Anshun from pursuing the current claim.
Counsel for the defendant argued that the grant of leave to commence proceedings for damages is a “gateway provision that once opened and crossed enables a plaintiff to pursue a damages action for all injuries and not merely those the subject of the application”. Counsel submitted that this meant it was open to the plaintiff to have pursued his bilateral shoulder injuries in the application for serious injury.
The Magistrate did not agree with the defendant’s submissions and determined the matter in favour of the plaintiff. His Honour noted that an estoppel can apply following consent judgement but difficulties can arise in determining what questions were concluded by consent.
Magistrate Ginnane stated that had the plaintiff included the shoulder injuries in his serious injury application and been granted leave to bring a common law action for damages, then the matter might have been considered differently, but this was not the case. This was because, His Honour stated, “a serious injury application is not a final decision” and the “granting of leave in no sense finally determines the rights of the parties”.
Counsel for the plaintiff submitted that the omission by the plaintiff to include, in his draft common law pleading, a claim for bilateral shoulders, “was not an adversely determinative matter because after all had the matter not been compromised and had the plaintiff been granted leave then it would have been open to him to have included such injuries and had he then failed to do so, then he may well have been caught by the doctrine of Anshun”. But this is not what happened and leave was not formally granted in this way.
Counsel for the plaintiff also pointed to the manner in which the claims agents managing the claims administered the matters by disclaiming bilateral shoulders as injuries arising from his original claim.
Magistrate Ginnane accepted the submissions of the plaintiff and was not satisfied that the proceeding before him was precluded by reliance on Anshun estoppel.
The defendant also pleaded “accord and satisfaction” in its amended defence. Magistrate Ginnane examined cases relevant to that doctrine and equitable principles generally and found that the release did not satisfy the plaintiff’s cause of action against the defendant for weekly payments in respect of the injuries to both shoulders. The current proceeding did not seek to agitate the previous injury and involved different injuries, different claims and different causes of action.
The Magistrate was unable to conclude the parties were “ad idem” and the accord and satisfaction argument was not made out.
This article was written by David Guthrie, Partner.