Section 66A Complying Agreements and The Principles of Finality

Walters v Good Guys Discount Warehouse (Australia) Pty Ltd [2023] NSWPICPD 29 (24 May 2023)

President of the PIC finds 2014 complying agreement was valid and the worker cannot bring a further claim for lump sum compensation.

The Appellant, Susan Walters, suffered an accepted left knee injury at work with the Respondent on 31 March 2012.

On 20 January 2014 she made a claim for lump sum compensation under Section 66 of the Workers Compensation Act 1987 (WC Act) for 4% WPI (2014 claim).

At the time of her claim, the Court of Appeal decision in Goudappel v ADCO Constructions Pty Ltd [2013] NSWCA 94 permitted her to bring that claim even though her assessment did not meet the more than 10% WPI threshold imposed by Section 66(1). The High Court had not yet delivered its decision in ADCO Constructions Pty Ltd v Goudappel [2014] HCA 18, which would have made the claim invalid.

The parties entered into a Complying Agreement for 4% WPI on 26 February 2014.

In November 2018, the Appellant underwent a left total knee replacement. Following surgery, she developed a consequential right knee condition which required a total knee replacement in March 2020. On 30 August 2021, she submitted a further claim for lump sum compensation in respect of 34% WPI for both knees pursuant to Section 66 of the WC Act (2021 claim).

The 2021 claim was disputed on the basis that the Appellant had already made her one claim for permanent impairment lump sum compensation arising from the accepted injury and Section 66(1A) of the WC Act prevented her from bringing another claim.

The matter proceeded to the Personal Injury Commission (PIC) and the Member found that the Appellant was not entitled to pursue the 2021 claim. The Member entered an award for the Respondent.

Appeal

The Appellant appealed against the decision. She argued that:-

1. The 2014 claim was not a valid claim as it did not reach the more than 10% WPI threshold imposed by Section 66(1); and
2. Any agreement reached in relation to the 2014 “invalid” claim cannot operate to prevent the 2021 claim.
3. Alternatively, the 2021 claim was an amendment to 2014 claim.

The Respondent submitted that the Member correctly decided that the final resolution of the 2014 precluded the Appellant from pursuing the 2021 claim by virtue of the operation of Section 66(1A) of the WC Act. The Respondent stated that the 2014 claim, having been resolved, could not be amended by the 2021 claim. The Respondent relied on the reasoning of Arbitrator Harris (as he then was) in the matter of Yildiz v Victoria Yeeors Pty Ltd [2016] NSWWCC 108 (Yildiz) where Arbitrator Harris found that Mr Yildiz’s rights had merged by the issuing of a Certificate of Determination and that he could not pursue a further claim for lump sum compensation arising from the same set of facts. The Respondent also relied on Cram Fluid Power Pty Limited v Green [2015] NSWCA 250 (Cram Fluid), where the Court of Appeal held that a Complying Agreement had the effect of finally resolving a claim for permanent impairment under Section 66 of the WC Act.

Discussion

President Judge Phillips considered that the main issues for determination were:-

1. the validity of the 2014 claim,
2. whether the execution of the Complying Agreement had the effect of resolving the 2014 claim,
3. whether the Complying Agreement was rendered invalid by the High Court’s later decision in ADCO Constructions Pty Ltd v Goudappel [2014] HCA 18 (Goudappel No 2).

President Judge Phillips referred the knowledge of the surrounding circumstances known to the parties at the time that they entered into the Complying Agreement on 26 February 2014.  He concluded that the parties would have known that at that time, the law permitted the payment of the Appellant’s claim for lump sum compensation in respect of 4% WPI.

President Judge Phillips also referred to the ‘principles of finality’, saying that the purpose of finality leaves the courts free to develop principles in later cases, free from worry lest such development render previously-resolved matters invalid. He also spoke to one of the objects of the WC Act to “encourage early dispute resolution” by way of a Complying Agreement which has the effect that scarce court and tribunal resources are not then taken up with hearing matters that ought to be resolved by agreement. He relevantly noted that there was no issue taken with any aspect of the Complying Agreement or the circumstances by which it was entered.

Decision

President Judge Phillips made the following findings:

1. The 2014 claim was a valid claim for lump sum compensation.
2. The execution of the Complying Agreement had the effect of resolving the 2014 claim.
3. The agreement was not rendered invalid it was no longer a ‘live claim’ capable of being affected by the later High Court decision in Goudappel No 2.
4. The resolution of the 2014 claim by Complying Agreement meant that the claim was at an end and was incapable of being ‘amended’ by the 2021 claim.
5. Section 66(1A) prevents the Appellant from bringing a further claim for lump sum compensation under Section 66 in relation to this injury.

Implications

This decision demonstrates that where a claim for lump sum compensation was validly made and resolved in accordance with the law that applied at that time, it is a valid claim which can prevent a worker from bringing a further claim under Section 66. Subject to the operation of Section 66A(3), the worker cannot claim additional compensation or seek to amend their original claim.

The workers compensation system has undergone significant changes over the last two decades, and it is important to be aware of the legislation that was in force at the relevant time in order to know whether a claim can or cannot proceed.

Should you have any queries concerning a workers compensation matter, please contact our team on either (02) 4929 9333 or (02) 8297 5900.