Operation of section 151a: damages recovered in respect of same injury

Gardiner v Laing O’Rourke Australia Construction Pty Limited [2019] NSWWCCPD 66

This appeal considered the terms of a Deed of Release entered into on 5 September 2018 by Mr Gardiner (‘the Appellant’) and Laing O’Rourke Australia Construction Pty Limited (‘the Respondent’).

The question for determination was whether or not, as a result of the execution of the Deed, Sections 149 and 151A of the Workers Compensation Act 1987 (NSW) (‘the 1987 Act’) operated to deny the Appellant the right to any further statutory workers compensation benefits.

Material Facts

In these proceedings the Appellant worker alleged that he suffered a psychological disease injury, or in the alternative that the disease had been aggravated, accelerated, exacerbated or deteriorated in the course of his employment. The Appellant worker experienced mental health issues from time to time during his employment and was at some point ordered to consult a work-appointed Psychiatrist, which ultimately led to the termination of his employment by the Respondent in March 2018.

The Appellant worker had previously filed a complaint with the Anti-Discrimination Board of NSW alleging that he had been discriminated against on the grounds of his disability, as well as being victimised in the course of his employment. The complaint was subject to a conciliation conference before the Board and was ultimately resolved by the parties, which resolution was reflected in the Deed of Release dated 5 September 2018. The Respondent paid the Appellant worker what was described as “general damages”.

Notably, it was repeatedly expressed in the Recital and Operative Terms of the Deed that the agreement contained therein would constitute full and final settlement of all claims which Mr Gardiner might have against the Respondent, excluding any claim that Mr Gardiner might make pursuant to Workers Compensation legislation.

Legislation

151A EFFECT OF RECOVERY OF DAMAGES ON COMPENSATION

  1. If a person recovers damages in respect of an injury from the employer liable to pay compensation under this Act then (except to the extent that subsection (2), (3), (4) or (5) covers the case)–
    1. (a) the person ceases to be entitled to any further compensation under this Act in respect of the injury concerned (including compensation claimed but not yet paid)…

149 DEFINITIONS

  1. In this Part–
    “damages” includes–

    1. (a) any form of monetary compensation, and
    2. (b) without limiting paragraph (a), any amount paid under a compromise or settlement of a claim for damages (whether or not legal proceedings have been instituted)…

Grounds

The Appellant worker relied on three main grounds of appeal:

  1. The Arbitrator made an error of fact in finding that the Appellant had recovered ‘damages’ ‘in respect of the injury concerned’.
  2. The Arbitrator made an error of law in that she failed to give effect to the purpose and intent of Section 151A, which is to avoid double recovery of compensation.
  3. The Arbitrator failed to give any or any adequate reasons for giving no weight to the repeated exclusions set out in the Recital to the Deed.

Ground one

President Judge Phillips agreed with the Appellant’s submission that the Commission was required to determine whether the ‘damages’ recovered are for the same ‘injury’ which would give rise to an entitlement to workers compensation under the 1987 Act (Adams v Fletcher [2008] NSWCA 238 and Super IP Pty Limited v Mijatovic [2016] NSWWCCPD 33).

The Appellant challenged the Arbitrator’s conclusion that the Deed should be construed to include an exacerbation of his psychological condition and asserted that this was not open to the Arbitrator on the evidence. The President rejected this submission, finding that there was a real and obvious connection between the facts which gave rise to the claim before the Anti-Discrimination Board and the facts which the medical evidence revealed caused an exacerbation to worker’s mental condition. The Arbitrator had correctly interpreted the evidence to conclude that the specific psycho-social hazards which had caused or exacerbated of the Appellant’s psychiatric condition/s gave rise to two claims; one under Anti-Discrimination legislation and one under Workers Compensation legislation. Therefore, it was open to conclude that the injury referred to in the Deed was the same injury as pleaded in the Application to Resolve a Dispute (ARD).

The President also noted that Section 149 defined the term ‘damages’ broadly, and what was determinative was the making of a payment with respect to ‘the injury concerned’. The way that the payment had been described, i.e. ‘general damages’, was not decisive.

Thus, the President held that the injury pleaded in the ARD had been subject to a recovery of damages pursuant to the Deed, and Section 151A operated to prevent double recovery. Ground one was rejected.

Ground two

The Appellant argued that the Section 151A prohibition against double recovery was not enlivened in this circumstance, as this provision does not prohibit a worker from pursuing different causes of action. The President accepted that the Section 151A prohibition only applies in circumstances where damages have been recovered with respect to the same injury.

However, because the Arbitrator found (and the President agreed) that the monies recovered in the Anti-Discrimination proceedings were for the same injury as advanced in these proceedings, the prohibition against double recovery was enlivened. Thus, the Appellant had resolved all of his rights when he executed the Deed and recovered damages. Ground two was rejected.

Ground three

The Appellant asserted that the Arbitrator had failed to give weight to the repeated exclusions set out in the Deed. The President noted several exclusions within the Recitals and throughout the Deed which specifically applied to workers compensation rights. He considered it clear in the Arbitrator’s reasons that she had adequately considered whether the exclusions applied.

The President noted that it was important to understand that the Release was from ‘all claims’. The Arbitrator had concluded that the operation of the Workers Compensation exception was defeated because of the broad language of the Release. The President found the Arbitrator’s reasoning in this regard to be adequate and rejected this ground of appeal.

Implications

Section 151A operates to preclude double-recovery in circumstances where a worker has previously been paid damages in respect of the same injury. In determining whether the injuries are the same, decision makers will look to the connection between the injury which has previously been the subject of payment of damages, and the injury pleaded in the ARD. Where there is a real and obvious connection between the subject injuries, it is open to the decision maker to conclude that damages have been awarded in respect of the same injury, and Section 151A will be operational.

The exclusion clause in the Deed (to exempt any workers compensation claim) does not overcome the effect of Section 151A.

NOTE: The worker has filed a Notice of Intention to Appeal in the NSW Supreme Court of Appeal. Stay tuned.

If you have any questions about a particular workers compensation matter, please contact our team by phoning 02 4929 9333 (Newcastle) or 02 8297 5900 (Sydney).