Gardiner v Laing O’Rourke Australia Construction Pty Ltd

1. [1]

   BASTEN JA: The issue raised in this appeal was whether a payment made in settlement of a claim of discrimination in employment, made under the Anti-Discrimination Act 1977 (NSW), precluded a claim for compensation for an injury under the Workers Compensation Act 1987 (NSW). That in turn depended on the meaning of “damages” in s 151A(1) of the latter Act.

Background to claims

1. [2]

   From about October 2011 until 12 March 2018 the appellant, Dr James Gardiner, was employed by the respondent, Laing O’Rourke Australia Construction Pty Ltd. Immediately following the termination of his employment, the appellant wrote to the President of the Anti-Discrimination Board complaining of discrimination on the grounds of disability, and victimisation, in the course of his employment with the respondent. The complaint was the subject of a conciliation conference, as a result of which an agreement was reached to settle the complaint on terms requiring payment to the appellant of $29,412, together with a further $4,400 on account of his legal costs. The terms of the settlement were set out in a Deed of Release and Confidentiality (the Deed), duly executed by both parties on 5 September 2018. The respondent paid the appellant $29,412 on 26 September 2018.

2. [3]

   On 20 March 2018, well before the settlement of the discrimination complaint, the appellant had lodged a claim for compensation under the Workers Compensation Act, on the basis that he had suffered aggravation, acceleration, exacerbation or deterioration of a psychological condition in the course of his employment. The respondent resisted the claim on the basis that the appellant had received a payment of “damages” awarded “in respect of” the same injury, so that the claim for compensation was precluded by s 151A(1) of the Workers Compensation Act.

3. [4]

   An Arbitrator at the Workers Compensation Commission upheld the respondent’s contention and dismissed the claim for compensation. The appellant lodged an appeal pursuant to s 352 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (the Workplace Injury Act). The appeal was heard by the President of the Commission, Judge Phillips who, on 19 December 2019, dismissed the appeal and confirmed the certificate of determination issued by the Arbitrator. [1]

Jurisdiction of this Court

1. [5]

   On 5 March 2020 the appellant filed a notice of appeal in this Court pursuant to s 353(1) of the Workplace Injury Act. The appeal is limited to a decision of a Presidential member in point of law.

2. [6]

   A jurisdictional argument was raised with respect to part of the appeal, the respondent asserting that the Arbitrator had made a finding of fact, not disturbed on appeal by the President, that the payment received by the appellant following the conciliation of his complaint to the Anti-Discrimination Board involved the recovery of damages “in respect of” the injury the subject of the workers’ compensation claim. The respondent submitted that that finding could not be challenged.

3. [7]

   If it were truly a finding of fact, this submission should be accepted. However, for reasons identified below, the condition of engagement of s 151A(1) of the Workers Compensation Act involves a question of statutory construction and thus a question of law. Further, the proper characterisation of the payment, being the consideration provided by the respondent under the Deed, turned on the construction of the Deed. The proper construction of the Deed also involved a question of law.

4. [8]

   The application of s 151A should be addressed first. Whatever the Deed may seek to do, it cannot vary the operation of s 151A(1) which will apply “despite any contract to the contrary”: Workplace Injury Act, s 234.

Statutory schemes

1. [9]

   Resolution of the first issue requires consideration of the interaction of two statutory schemes for redress of a wrong. As the immediate concern is the availability of workers’ compensation, it is appropriate to commence with the scheme for payment of such compensation.

(a) Workers Compensation Act

1. [10]

   Compensation is payable for an injury, defined in the Workers Compensation Act, relevantly in the following terms:

2. [11]

   It is not in doubt that a mental disorder constitutes a “disease” for the purposes of the definition of injury in s 4. [2]

3. [12]

   Pursuant to s 9, a worker “who has received an injury … shall receive compensation from the worker’s employer in accordance with this Act.” Part 3, Div 2 of the Workers Compensation Act provides for payment of weekly compensation by way of income support; Pt 3, Div 4 provides for compensation for non-economic loss, by way of a single lump sum payment. Relevantly, s 66 provides:

4. [13]

   Part 5 of the Workers Compensation Act is headed “Common law remedies”. That heading is deemed to be part of the Act. [3] The heading to Div 2 (which is also deemed to be part of the Act) is “Common law and other remedies generally”. There are four provisions in Div 2 which have a bearing on the present question; the principal provision, relied upon by the respondent to preclude a claim for compensation, is within this division, being s 151A.

5. [14]

   The preclusion in s 151A(1) turns on recovery of “damages”. That term is defined in s 149, as follows:

6. [15]

   The respondent placed weight upon the breadth of the definition of damages as including “any form of monetary compensation”. The exclusions in the definition lend support to that submission. They suggest that each of the matters set out in (c)-(h) might, if not denied inclusion, have been understood to fall within the breadth of par (a).

7. [16]

   There are, however, contrary indications within the legislative scheme. Thus, the heading to Pt 5 suggests that the subject matter of the Part is limited to “common law remedies”; by inference, statutory remedies having no basis in the common law would not be covered. That inference is supported by the limitation on entitlement to commence “court proceedings for damages” until six months after notice of injury has been given to the employer: s 151C. To similar effect, a specific limitation period is imposed with respect to “court proceedings for damages” pursuant to s 151D. As will be noted shortly, this Division is subject to the procedural requirements set out in the Workplace Injury Act (referred to in s 151DA(1) as “the 1998 Act”). Neither s 151C nor s 151D apply to a claim under the Anti-Discrimination Act which, if not resolved by the President, will be heard by a tribunal, not a court: although the identity of the tribunal has changed, the principle has applied since 1977.

8. [17]

   Division 3 in Pt 5, headed “Modified common law damages”, is said to apply “to an award of damages in respect of … an injury to a worker … caused by the negligence or other tort of the worker’s employer”: s 151E(1). Further, the Division applies to an award of damages “caused by the negligence or other tort of the worker’s employer even though the damages are recovered in an action for breach of contract or in any other action”: s 151E(3). As noted by the appellant, s 151H provides:

9. [18]

   Two propositions flow from a consideration of this scheme with respect to the interrelationship of workers’ compensation and awards of damages. First, the legislative purpose of s 151A is to ensure that a worker does not get workers’ compensation and damages with respect to the one injury. If in receipt of workers’ compensation when damages are recovered, the compensation payment will cease and past payments will be recouped from the award of damages. Similar provisions have a long history in workers’ compensation Acts. For example, s 63 of the Workers’ Compensation Act 1926 (NSW), under the heading “Remedies at common law”, was in the following terms:

10. [19]

    Secondly, the regulation of common law damages awards under Pt 5, Div 3 is clearly intended to be comprehensive. It does not envisage that there can be proceedings to recover damages from a worker’s employer on some basis not regulated by Div 3. Further, the regulation of the commencement of the proceedings which are found in Div 2 bears the same complexion. It follows that, if “damages” are recoverable under the Anti-Discrimination Act with respect to an injury suffered by a worker, they will be subject to the same constraints as those imposed on common law remedies. Yet it was not suggested by the respondent that the complaint to the President of the Anti-Discrimination Board was subject to a requirement that the appellant establish a degree of permanent impairment that is at least 15%, in accordance with the provisions for such an assessment under Pt 7 of Ch 7 of the Workplace Injury Act, in accordance with s 151H.

11. [20]

    When the Workers Compensation Act was enacted in 1987, s 149 came under the heading “Abolition of common law remedies against employer, fellow workers etc”. It read as follows:

12. [21]

    Although the abolition of common law remedies was reversed in 1989, it is significant that the definition of “damages” in subs (4) corresponded to the definition in the present s 149. Further, s 149(1) was not confined in its terms to common law remedies but was, on one view, broad enough to cover statutory entitlements. Yet s 149(1) was enacted a decade after the Anti-Discrimination Act, and continued to operate until repealed by the Workers Compensation (Benefits) Amendment Act 1989 (NSW), the repeal being retrospective to 30 June 1987. [4] It does not appear to have been contended that the effect of s 149 as enacted in 1987 was to preclude complaints under the Anti-Discrimination Act in respect of employment where an injury had occurred which might entitle a worker to compensation. If the language of these provisions as enacted did not have that effect, there is no firm basis to suggest that the very similar language in s 149 and s 151A(1) now has that effect.

13. [22]

    Although not referred to by counsel in the course of the hearing, there is a similar definition of “damages” in the Civil Liability Act 2002 (NSW). The definition in s 3 reads as follows:

14. [23]

    In Pt 2 of the Civil Liability Act, constraints are imposed on awards of “personal injury damages”, a phrase defined to mean “damages that relate to the death of or injury to a person.” (The Civil Liability Act does not apply to claims brought under the Anti-Discrimination Act or the Workers Compensation Act. [5] ) However, the apparent breadth of the definition of damages, and the curious list of excluded payments was discussed in Dionisatos v Acrow Formwork & Scaffolding Pty Ltd. [6] That case addressed a limitation on damages for loss of capacity to provide domestic services to a dependant where the dependant had “previously recovered damages in respect of that loss of capacity”: Civil Liability Act, s 15B(6). The question was whether the widow of a deceased worker who had received compensation pursuant to the Workers’ Compensation (Dust Diseases) Act 1942 (NSW) was required to deduct from any damages payable to the worker’s estate, the statutory benefits received by her. The Court held that no such deduction was required. The answer turned upon whether the payment by the Dust Diseases Board was “in respect of” the loss of capacity for which compensation was provided under s 15B. [7] Because the payment was required to be “reasonable and proportionate to the injury”, and was calculated as a portion of a rate of compensation, the prescribed amount had no particular relationship to the value of gratuitous domestic services. [8]

15. [24]

    Clearly the critical issue, and thus the focus of the analysis of the interrelationship between two statutes of the same legislature, will turn on the individual statutory provisions. However, in dealing with the definition of “damages” in the Civil Liability Act, I observed in Dionisatos:

16. [25]

    Further, s 15B(7) of the Civil Liability Act provides:

17. [26]

    In considering Acrow’s submission that the damages available under s 15B should be reduced by the statutory payments received by the widow from the Dust Diseases Board, Gleeson JA stated:

18. [27]

    These conclusions have no direct application to the present case; nevertheless, the process of reasoning, which required the reading down of the apparent breadth of the definition of “damages” and the principles on which that process of construction was undertaken, lends support to the approach set out above.

19. [28]

    It is also important to note that provisions like s 151A(1) of the Workers Compensation Act, which have an apparent purpose of preventing double recovery of compensation for loss resulting from the one injury, should not be approached on an assumption that all kinds of payments which relate to the injury necessarily involve double recovery. Northern Sydney Local Health District v Amaca Pty Ltd (Under NSW Administered winding up) [14] concerned the right of a plaintiff to retain common law damages in addition to compensation payments received under Queensland workers’ compensation legislation. As explained at [70], “[t]he critical question was how the payment to the plaintiff should be characterised.” Similar issues were addressed in Redding v Lee, [15] and National Insurance Co of New Zealand Ltd v Espagne. [16] The present case also depends upon characterisation of the relevant payment, in accordance with the statutory scheme under which it was obtained. Before turning to that legislation it is convenient to complete the review of statutes regulating workers’ compensation rights.

(b) Workplace Injury Act

1. [29]

   Chapter 7 of the Workplace Injury Act sets out a detailed and prescriptive regime for making claims for workers’ compensation and work injury damages. The regime is comprehensive. Definitions applicable to the whole Act are found in Pt 1. The term “claim” is there defined to mean “a claim for compensation or work injury damages that a person has made or is entitled to make”; the term “compensation” is defined to mean “compensation under the Workers Compensation Acts, and includes any monetary benefit under those Acts”. [17]

2. [30]

   The term “damages” and the phrase “work injury damages” are defined in Pt 1 of Ch 7:

3. [31]

   Part 2 of Ch 7 is headed “Giving notice of injury and making a claim”. Consistently with the definition of “damages”, s 253 provides:

4. [32]

   Although subject to exceptions, s 254 provides that “[n]either compensation nor work injury damages are recoverable by an injured worker unless notice of the injury is given to the employer as soon as possible…”. Section 255 prescribes how notice is to be given. Division 2 of Pt 2 provides for the making of claims for compensation and damages. A claim must be made in accordance with Workers Compensation Guidelines issued under s 376, which regulate the form in which the claim is to be made, the manner in which it is to be made, and the information it is to contain. [19]

5. [33]

   The heading and the first two provisions in Pt 2, Div 4 read as follows:

6. [34]

   There are issues in relation to the precise scope and operation of these two provisions which do not need to be determined for present purposes. However, if the respondent’s argument were correct, and the payment under the settlement of the discrimination complaint constitutes the recovery of “damages” for the purposes of s 151A(1) of the Workers Compensation Act, then the payment of that amount would appear to be a contravention of s 280B(1). The connection between the two provisions is expressly recognised in the note to s 280B.

7. [35]

   An alternative reading of the term “damages” in s 280B is that it is limited to “work injury damages”, being the phrase used in s 280A. It is possible that the definition of “damages” does not operate in s 280B, although the note tends to undermine that possibility; it should also be observed that the two provisions were not introduced at the same time. On the other hand, the existence of an alternative reading is itself posited on an assumption that work injury damages constitute a subset of the broader term “damages”, as defined in s 250. That assumption must be questioned.

8. [36]

   As already noted, there are powerful arguments in favour of the view that the Workers Compensation Act is concerned with “damages” payable in respect of an injury caused by the negligence or other tort of the employer, and not amounts recoverable in satisfaction of a liability created by an extraneous statutory scheme. That conclusion is consistent with the definition of work injury damages, namely damages recoverable from a worker’s employer in respect of an injury to the worker caused by the “negligence or other tort” of the employer. That approach allows for the harmonious operation of the two interrelated workers’ compensation statutes, as the statutes themselves require. (Section 2A of the Workers Compensation Act requires that it “is to be construed with, and as if it formed part of, the 1998 Act. Accordingly, a reference in this Act to this Act includes a reference to the 1998 Act.”)

(c) Anti-Discrimination Act

1. [37]

   On the preferred construction of the workers’ compensation legislation, recovery of damages pursuant to a complaint under the Anti-Discrimination Act will not engage the operation of s 151A of the Workers Compensation Act. That conclusion is confirmed by a consideration of the terms of the Anti-Discrimination Act generally, but may be illustrated by reference to the provisions relevant to the present case.

2. [38]

   The appellant made a claim against the respondent alleging discrimination on the ground of disability. The complaint was in respect of conduct rendered unlawful by s 49D of the Anti-Discrimination Act dealing with such discrimination in relation to work. Section 49D provides as follows:

3. [39]

   The concept of discrimination on the ground of disability is defined in s 49B, which relevantly provides:

4. [40]

   Although such discrimination may give rise to a personal injury, including a psychological injury, which would fall within the definition of “injury” in s 4(1) of the Workers Compensation Act, such an injury is not an element of a contravention of s 49D (nor of other heads of discrimination under the Anti-Discrimination Act). It is sufficient that the aggrieved person can establish less favourable treatment, or the imposition of a requirement which has a discriminatory effect.

5. [41]

   Complaints of discrimination are not made by instituting proceedings in a court or tribunal; they are made by lodging a complaint with the President of the Anti-Discrimination Board. [20] There is no limitation period applying to complaints; rather, the President is given a discretionary power to “decline a complaint” if “the whole or part of the conduct complained of occurred more than 12 months before the making of the complaint”. [21] Part 9 of the Act (ss 87-122) provides a detailed code regulating who may make a complaint, how a complaint is made and addressed, including by way of conciliation directed by the President (s 91A) and, in the event that the complaint cannot be resolved by the President, referral to the Civil and Administrative Tribunal (NCAT). The powers of the Tribunal are set out in s 108 and include, where the Tribunal finds the complaint substantiated, making an order that the respondent pay the complainant damages not exceeding $100,000 “by way of compensation for any loss or damage suffered by reason of the respondent’s conduct”: s 108(2)(a). There are a range of other orders available in appropriate circumstances, including an order enjoining the respondent from continuing or repeating any conduct rendered unlawful by the Act, an order that the respondent perform any reasonable act or course of conduct to redress any loss or damage suffered by the complainant, an order that the respondent publish an apology or a retraction, and an order declaring void any contract or agreement made in contravention of the Act: s 108(2)(b), (c), (d) and (f).

6. [42]

   The operation of this statutory scheme is coherent and self-contained. It is not possible to read it as subject to or limited by implied constraints arising from the separate and distinct provisions of the workers’ compensation legislation described above.

7. [43]

   Section 123 of the Anti-Discrimination Act provides as follows:

(d) characterising the liabilities created by the Anti-Discrimination Act

1. [44]

   The importance of treating the statutory protections provided by the Anti-Discrimination Act as a discrete and independent statutory scheme has long been recognised in this Court. In Commissioner of Police v Estate of Russell, [22] a question had arisen as to whether the State was vicariously liable for the acts of a police officer pursuant to the Law Reform (Vicarious Liability) Act 1983 (NSW), or whether vicarious liability was controlled by s 53 of the Anti-Discrimination Act. The issue did not need to be determined in the appeal, but Spigelman CJ, with whom Davies AJA agreed, stated: [23]

2. [45]

   The Chief Justice then referred to cases dealing with workers’ compensation and the indemnity available from a negligent third party in which the courts declined to treat such payments as the recovery of a debt or damages.

3. [46]

   There had been intimations of such an approach in an earlier case, Australian Iron & Steel Pty Ltd v Najdovska. [24] Priestley JA stated, with respect to the assessment of damages under the Anti-Discrimination Act: [25]

4. [47]

   In Hall v A & A Sheiban Pty Ltd [27] the Full Court of the Federal Court considered the measure of damages under s 81 of the Sex Discrimination Act 1984 (Cth), being the equivalent of s 108 of the Anti-Discrimination Act. Lockhart J stated: [28]

5. [48]

   The approach of Spigelman CJ in Russell and of French J in Hall was followed by an Appeal Panel of the Administrative Decisions Tribunal in Commissioner of Police, NSW Police v Mooney (No 3). [30] The Panel stated:

6. [49]

   In Spencer v Dowling [31] the Victorian Court of Appeal considered the assessment of damages under the Equal Opportunity Act 1995 (Vic) in respect of a claim of sexual harassment by an employer. Winneke P stated (Callaway JA agreeing): [32]

7. [50]

   The Anti-Discrimination Act operates in many areas of public activity, including employment, goods and services, accommodation, education and clubs. Approximately half of all complaints arise in the area of employment. [33] Although the Anti-Discrimination Act has been in force in this State for more than 40 years, the parties were not able to identify any case in which the issue of its interrelationship with the workers’ compensation legislation had been determined, or even raised. Each being a self-contained statutory scheme which allows for the payment of compensation with respect to aspects of an employment relationship, the possibility that compensation has been paid for discriminatory conduct which has resulted in personal injury to an employee cannot be a novel situation.

8. [51]

   While it may be conceded that the primary purpose of s 151A(1) of the Workers Compensation Act is to avoid double compensation, it is also apparent that its main area of operation is the interrelationship of workers’ compensation and what is now referred to as work injury damages. Prior to the Workplace Injury Act, it was the interrelationship between workers’ compensation and damages for a personal injury arising out of or in the course of employment. That interrelationship long predated the existence of the statutory scheme creating unlawful discrimination and providing for relief for contraventions. A purposive construction of the two separate and independent schemes of regulation does not support the proposition that a payment resulting from a complaint of discriminatory conduct, even if the discrimination gave rise to a personal injury within the meaning of the workers’ compensation legislation, should foreclose any claim for workers’ compensation or work injury damages. (There is not even an arguable basis for the foreclosure of relief for discriminatory conduct if workers’ compensation were to be obtained first.)

9. [52]

   The only basis for such a suggestion is the broad definition of damages in the workers’ compensation legislation as including “monetary compensation”. However, whatever the potential breadth of the meaning of that term in ordinary usage, its meaning in the workers’ compensation legislation may be more confined. Read in the context of the legislation as described above, it should not be understood to cover payments by way of compensation under a statutory scheme which is self-contained and independent of the workers’ compensation legislation and which was expressly stated to provide additional rights (by way of protection) to those who might be the victims of unlawful discrimination in various areas of public activity, including employment.

10. [53]

    The reasoning of both the Arbitrator and the President was inconsistent with that conclusion. Because the conclusion rests on the construction of three statutes, it involves a question of law. Accordingly the appellant is entitled to succeed.

Terms of the Deed

1. [54]

   If the foregoing analysis is correct, nothing turns on the terms of the Deed, except to characterise the deed as involving the settlement of a complaint brought under the Anti-Discrimination Act. That particular characterisation was not contested. However, if it be necessary to characterise the payment made under the Deed, in order to say whether it constitutes recovery of damages for the purposes of s 151A(1) of the Workers Compensation Act, it becomes necessary to identify the structure, purpose and content of the Deed.

2. [55]

   In accordance with the principles set out in Grant v John Grant & Sons Pty Ltd: [34]

3. [56]

   That principle has been applied by this Court in construing a deed of release dealing with complaints under the Anti-Discrimination Act. [35]

(a) recitals in Deed

1. [57]

   In the present circumstances, it is not necessary to rely on extrinsic material to identify the intended scope of the Deed. In 16 recitals the Deed set out the history of the appellant’s employment by the respondent (referred to in the deed as “LORAC”). The recitals identified three sets of “concerns” expressed by the appellant in the course of his employment, by reference to the conduct of other company officers. These were referred to as “the complaints”, which the respondent arranged to be investigated. The respondent also arranged for the appellant to be examined by a psychiatrist, who confirmed that he was suffering from a psychiatric condition, first diagnosed some years earlier. The recitals then recorded the respondent’s conclusion that the appellant was not fit to perform the inherent requirements of his role with the respondent, as a result of which his employment was terminated. The final three recitals read as follows:

2. [58]

   A number of propositions may be noted. First, the recitals identified with a degree of precision the matters which gave rise to the appellant’s “concerns” in relation to his employment, and the manner in which the respondent dealt with those concerns and terminated his employment. The primary, if not the sole, purpose of the settlement was to provide a final resolution of the subject matter of the complaints of unlawful discrimination under the Anti-Discrimination Act.

3. [59]

   Secondly, recital P expressly recognised that the parties were aware of, and did not intend to resolve, any claim the appellant might have “pursuant to any applicable [w]orkers’ [c]ompensation legislation”.

4. [60]

   Thirdly, the recitals did not identify any personal injury suffered by the appellant as forming an element of the dispute which was resolved in accordance with the terms of the Deed.

5. [61]

   Fourthly, to the extent that recital P could be read as recording an agreement “to settle all issues between [the parties] however arising out of [the identified matters] … or in any way connected to the employment or termination of the employment”, and thus covering any personal injury arising out of or in the course of the employment, that reading would give an expression of unlimited generality a life of its own, unconstrained by the context in which the words appeared. Given the express exclusion contained in the same recital, it was clearly not the parties’ intention to release the respondent from all liability, or indeed any liability, for claims pursuant to workers’ compensation legislation.

(b) operative clauses

1. [62]

   Clause 1 dealt with definitions and interpretation.

2. [63]

   By cl 2, which was headed “Payment/Termination of the ADB Complaints”, the appellant was required to provide the respondent with an executed copy of the Deed and “a Notice of Discontinuance lodged in the Fair Work Commission by Dr Gardiner in respect of the ADB Complaints”. (He was also required to provide a tax invoice from his solicitors for the agreed amount of costs.) In consideration of the appellant taking those steps, the respondent was to pay the sums agreed. The sum of $29,412 was described as “General Damages”, which, despite the capitalisation, was not a defined term and the basis of calculation was not specified.

3. [64]

   The reference to a notice of discontinuance lodged in the Fair Work Commission was a mistake; there was no evidence that the applicant had ever lodged a complaint with the Fair Work Commission (a Commonwealth body); the ADB complaints were lodged with the President of the Anti-Discrimination Board (NSW). Consistently with the rest of the Deed, the appellant was not required to discontinue his claim for workers’ compensation.

4. [65]

   The language of recital P was repeated, without significant variation, in cl 3 of the Deed. To similar effect, the release contained in cl 4 also adopted the language of recital P, although it identified “all Claims which Dr Gardiner (a) now has; (b) at any time had; (c) may have; and/or (d) but for this Deed, could or might have had against LORAC …”. However, each of clauses 3 and 4 ended with the exclusion with respect to claims pursuant to workers’ compensation legislation.

5. [66]

   The proper construction of the Deed negates any possibility that the payment by way of “General Damages” was intended to settle any claim for workers’ compensation or work injury damages which might be available subject to the controls imposed by the Workers Compensation Act and the following of the procedures set out in the Workplace Injury Act. The characterisation of the payment made as consideration of the release from liability and the discontinuation of the complaint to the Anti-Discrimination Board follows from the proper characterisation of the Deed. That involved a question of law. The conclusions of the Arbitrator and the President were inconsistent with that conclusion and therefore involved an erroneous resolution of the question of law.

(c) effect of payment

1. [67]

   The primary position of the respondent did not cavil with the construction of the Deed set out above, but rather relied upon the payment constituting a payment of “damages” for the purposes of s 151A(1) of the Workers Compensation Act, regardless of its proper characterisation under the Deed. That submission depended upon an understanding of the scope and operation of s 151A(1) which, as a matter of law, has been rejected.

(d) limit of exclusion clause in Deed

1. [68]

   A final submission by the respondent was that even if a claim for workers’ compensation fell within the exclusion from the terms of the release, a claim for work injury damages did not. That was because such a claim was made “pursuant to” the common law, and not pursuant to the workers’ compensation legislation.

2. [69]

   That submission is not consistent with the ordinary use of language in respect of claims for damages. While it is true that one may describe a claim as arising “pursuant to” a legislative provision, if that is the source of the entitlement to make a claim, that meaning is awkward. If the statute is the source of liability, the claim may arise under the statute, but it is not made “pursuant to” the statute, unless the statute prescribes or regulates the manner in which the claim is to be made and maintained. Many claims are aptly described as having been made pursuant to rules of court. A claim for work injury damages can only be made pursuant to the requirements of the Workplace Injury Act. It is apt to say that a claim has, or has not been made pursuant to a legislative provision which states that a “claim … cannot be made unless …” certain steps have been taken, which is the language of s 280A of the Workplace Injury Act.

3. [70]

   There are different ways of expressing this concept; one could say that the claim must be made “in conformity with” the legislated regime, or “in accordance with” it. [36] Either would reflect the ordinary meaning of “pursuant to”. Thus to describe a claim for compensation or damages (or, as is often the case, both) as made “pursuant to” the rules for making such claims prescribed by the workers’ compensation legislation accords with ordinary usage of that term. Nor is there any hint in the Deed that the exclusion was intended to distinguish between claims for workers’ compensation (which arose under the Workers Compensation Act) and claims for work injury damages (liability for which arose under the common law, but which were regulated by the Workers Compensation Act and claims for which were made under the Workplace Injury Act). The respondent’s contention in this respect must be rejected.

Conclusions

1. [71]

   It follows that the appeal must be allowed and the following orders made:

   1. (1)

      Allow the appeal from the decision of the President dated 19 December 2019.

   2. (2)

      With respect to the proceedings in the Workers Compensation Commission:

   3. (3)

      Remit the matter to the Workers Compensation Commission to determine the remaining issues in the dispute.

   4. (4)

      Order that the respondent pay the appellant’s costs of the proceeding in this Court.

2. [72]

   LEEMING JA: I agree with the orders proposed by Basten JA, and his Honour’s reasons enable me to explain my reasons for doing so concisely.

3. [73]

   The first question is this Court’s jurisdiction. The Workers Compensation Commission had dismissed the appellant’s claim for weekly benefits, medical expenses and lump sum compensation because it found that s 151A was engaged by the payments made pursuant to a deed of settlement. Section 151A is reproduced in Basten JA’s judgment. It relevantly provides that if a person “recovers damages in respect of an injury from the employer liable to pay compensation” under the Workers Compensation Act, then the person ceases to be entitled to compensation in respect of the injury, and has to repay any weekly payments of compensation already paid in respect of the injury. Section 151A is thus disentitling in respect of future payments of compensation in respect of the injury, as well as imposing an obligation to repay compensation already paid in respect of the injury.

4. [74]

   The respondent’s threshold submission in response to the appeal was that whether the payment made to the appellant was a payment of damages in respect of the injury was a question of fact falling outside the scope of the appeal confined to cases where a party is aggrieved “in point of law” conferred by s 353 of the Workplace Injury Act. It is fair to say that its oral submissions were more diffident than those advanced in writing.

5. [75]

   The entry into the deed, and the making of two payments totalling some $34,000 by LORAC to the appellant and his solicitors were (non-contentious) questions of fact. But whether those transfers of money amounted to the appellant “recover[ing] damages in respect of an injury from the employer liable to pay compensation under this Act” necessarily involves an analysis of (a) the legal character of the bargain struck between the parties and (b) the construction of s 151A. Both are questions of law. Only when both questions have been answered can it be determined whether the payments engaged the disentitlement effected by s 151A, and thus whether the Workers Compensation Commission constituted by the President was correct to dismiss the appeal on the basis that s 151A applied. It follows that I reject the challenge to jurisdiction.

6. [76]

   Entry into the deed created various rights and obligations between the parties, including releases, but LORAC relied merely upon the payments made by it to engage s 151A. The question then is a very narrow one. Was the payment “damages”, and if so was it “in respect of” an injury?

7. [77]

   There is a general principle in law that a payment made pursuant to a compromise of a claim bears the same nature as the amount which would have been payable if the claim had been vindicated. That may be seen in the operation of taxation legislation upon settlements. Thus a lump sum payment in compensation for the payment of income retains the character of income. See for example Commissioners of Taxation (NSW) v Meeks (1915) 19 CLR 568 at 580 and 592; [1915] HCA 34 and Heavy Minerals Pty Ltd v Federal Commissioner of Taxation (1966) 115 CLR 512 at 516-517; [1966] HCA 60. As Hill J put it in Henry Jones (IXL) Ltd v Commissioner of Taxation (1991) 31 FCR 64 at 78, “Amounts received as compensation for an income right, amounts which thus fill the [hole] of income, have the character of income.” Indeed, this is a premise of the principle associated with McLaurin v Federal Commissioner of Taxation (1961) 104 CLR 381; [1961] HCA 9 that an undissected lump sum payment by way of settlement of distinct unliquidated claims must be considered as a whole, and cannot be apportioned amongst the various claims, some of which may income, and others of a capital nature.

8. [78]

   The same general principle may be seen in the reasons of Sheppard J in Patrick Stevedores No. 2 Pty Ltd v the proceeds of sale of vessel MV “Skulptor Konenkov” (1997) 75 FCR 47 at 60 that a claim under a settlement deed retained its essential character as a claim for loss or damage to goods carried by a ship and therefore a general maritime claim within the jurisdiction of the Federal Court.

9. [79]

   The same general principle underlies the reasoning whereby a contract to settle a federal claim arising under federal law can be enforced in a federal court: the contractual rights nonetheless are a matter arising under federal law: Macteldir Pty Ltd v Dimovski [2005] FCA 1528; 226 ALR 773; Eberstaller v Poulos (2014) 87 NSWLR 394; [2014] NSWCA 211 at [16].

10. [80]

    The same general principle also gave rise to the dispute in Koutsourais v Metledge & Associates [2004] NSWCA 313 as to whether recovery by a solicitor of amounts payable under an agreement settling a dispute as to costs was itself a proceeding “for the recovery of costs by a solicitor” regulated by s 192 of the then Legal Profession Act 1987 (NSW). The general principle is not of course unqualified, but it is unnecessary to consider the position any further, because the Workers Compensation Act is explicit on this point.

11. [81]

    The definition of “damages” in s 149 is self-referential. “Damages” is defined to include “any amount paid under a compromise or settlement of a claim for damages”. Thus, consistently with the general principle mentioned above, the fact that a “claim for damages” has been settled and money is paid under the settlement does not deny the receipt of the contractual entitlement the character of “damages”.

12. [82]

    Accordingly, the legal character of the $34,000 which was paid to the appellant and his solicitors is not sufficiently identified merely by observing that they were amounts payable under a settlement. The effect of the definition of “damages”, which accords with the general principle governing the character of payments made pursuant to a settlement, is to require an analysis of what was being compromised.

13. [83]

    One therefore asks whether the claims compromised by the deed were “in respect of an injury”. That requires an evaluation of the legal relationship between the payment of money and the claim that is made in respect of any injury. These sorts of questions can be most vexed, as Windeyer J’s luminous judgment in The National Insurance Company of New Zealand Ltd v Espagne (1961) 105 CLR 569; [1961] HCA 15 illustrates. The law has not infrequently asked whether a government pension, or a donation, or a payment from an insurance company, any of which is only payable by reason of an injury suffered by a plaintiff, is to be taken into account by way of reduction of the damages for personal injury payable by a defendant whose negligence caused the injury.

14. [84]

    The answer to the question does not turn on the meaning of “in respect of” considered in isolation. Although those words encompass a wide range of relations, the meaning of such a “relational term” (to use the description given by French CJ in The Queen v Khazaal (2012) 246 CLR 601; [2012] HCA 26 at [31]) is inevitably inexact and necessarily requires regard to context in any particular case, as Meagher JA recently observed, by reference to authority, in Inghams Enterprises Pty Ltd v Hannigan [2020] NSWCA 82 at [135].

15. [85]

    But the present case is, to my mind, straightforward. The parties must be taken to have agreed that the payments were not in respect of the injury for which there was a pending claim for workers compensation, which was expressly preserved in no fewer than five of the substantive clauses (cll 3, 4, 6.3(f), 6.4 and 7.1) as well as recital P.

16. [86]

    True it is that there are limits upon the extent to which parties may agree as to the characterisation of payments between them. For example, an employer who has wrongfully withheld wages from an employee cannot in settling that dispute agree with the employee that a payment is of a capital nature and by that device defeat the operation of income taxation legislation. But there is no suggestion of any such artifice here. There is no suggestion that the appellant’s claims aside from the workers compensation claim were anything other than genuine. All indications point to the conclusion that the parties are to be taken to have compromised the long-standing complaints based on alleged discrimination and misuse of intellectual property, but to have preserved the claims arising under workers compensation legislation. There is nothing wrong with parties with multiple disputes agreeing to settle some but not all of them. And indeed, in the United Kingdom it has “long been a common practice to exempt from the scope of a ‘full and final settlement’ between an employer and employee any claim that the employee has or may have in regard to personal injury”: D Foskett, Foskett on Compromise (9th ed, Sweet & Maxwell, 2020), p 427.

17. [87]

    When one looks at the recitals in order to identify the underlying dispute which was compromised, and the substantive provisions in the deed which constitute the consideration for the payment, all point in the same direction. Each of recital P and clauses 3, 4, 6.3(f), 6.4 and 7.1 expressly excludes proceedings under “workers compensation legislation”. It follows that the payments made pursuant to the deed were not in respect of the injury that was the subject of the pending claim for compensation under the Workers Compensation Act.

18. [88]

    Although not raised before the Workers Compensation Commission, s 280B of the Workplace Injury Act confirms that conclusion. That section is necessarily to be read with s 151A, not merely by reason of s 2A(2) of the Workers Compensation Act, but also because of the note in s 280B. At the time the deed was entered into, the employer had received Dr Hong’s report which was, in due course, relied on in support of the appellant’s claim for lump sum compensation. Reading s 280B harmoniously with s 151A, there is no reason to impute to the parties an intent that the payment be one which would contravene that section.

19. [89]

    EMMETT AJA:

Introduction

1. [90]

   Section 151A of the Compensation Act relevantly provides that, if a person recovers damages in respect of an injury from the employer liable to pay compensation under the Compensation Act then the person ceases to be entitled to any further compensation under the Compensation Act in respect of the injury concerned, including compensation claimed but not yet paid. That provision must be considered in the light of the provisions of s 280B of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (the Management Act). Section 280B relevantly provides that an injured worker cannot recover damages in respect of an injury from the employer liable to pay compensation under the Management Act in respect of the injury unless and until any permanent impairment compensation to which the worker is entitled in respect of the injury has been paid. Section 280B ensures that an injured worker receives the compensation to which the worker is entitled before damages are recovered because s 151A of the Compensation Act would prevent the payment of compensation after damages are recovered. If, as LORAC contends, the payment under the Deed constitutes the recovery of “damages” for the purposes of s 151A(1) of the Compensation Act, then the payment of that amount would have contravened s 280B.

2. [91]

   On 5 March 2019, Dr Gardiner lodged an application to the Workers’ Compensation Commission of New South Wales (the Commission) claiming compensation under the Compensation Act. The application described the type of injury as being:

3. [92]

   An Arbitrator in the Commission dismissed Dr Gardiner’s claim for compensation on the basis of s 151A. On 19 December 2019, an appeal by Dr Gardiner pursuant to s 352 of the Compensation Act was dismissed by the President of the Commission, who confirmed the certificate of determination issued by the Arbitrator. [37] On 5 March 2020, Dr Gardiner filed a notice of appeal in this Court pursuant to s 353 of the Management Act. An appeal under that provision is limited to a decision in point of law.

4. [93]

   LORAC contended that the Arbitrator had made a finding of fact, that was not disturbed on appeal by the President, namely, that the payment received by Dr Gardiner involved the recovery of damages “in respect of” the injury the subject of the workers’ compensation claim. I consider that the proper characterisation of the payment under the Deed concerned the proper construction of the Deed and s 151A(1) of the Compensation Act, which are questions of law. This Court therefore has jurisdiction to entertain Dr Gardiner’s appeal.

The Deed

1. [94]

   Following his termination on 12 March 2018, Dr Gardiner lodged a complaint with the Anti-Discrimination Board of New South Wales (the ADB) alleging that LORAC had discriminated against him on the grounds of disability and victimised him in the course of his employment. Section 49D(2)(c) of the Anti-Discrimination Act 1977 (NSW) (the Discrimination Act) relevantly provides that it is unlawful for an employer to discriminate against an employee on the ground of disability by dismissing the employee. Following a conciliation conference before the ADB, Dr Gardiner and LORAC agreed, without any admissions as to liability, to settle all issues between them and entered into the Deed.

2. [95]

   By cl 3 of the Deed, the parties agreed, relevantly, that that the matters recited and agreed to by the Deed were in full and final settlement of all Claims (as defined in the Deed) that Dr Gardiner or LORAC had against the other arising from or relating in any way to:

3. [96]

   Each of the capitalised terms set out in cll 3 and 4 was defined in the Deed. The Timbrell Concerns related to allegations that included concerns that Dr Gardiner was being denied certain intellectual property rights. The Wilson Concerns were described in an email of 27 October 2017 that were not more particularly identified in the evidence. The Prof Harris Concerns were allegations made by Dr Gardiner in an email to Prof Harris regarding an issue that arose in relation to “the Drone Patent”.

4. [97]

   Relevantly, cl 2(b)(i) of the Deed provided that, within seven days of receipt by LORAC of certain documents identified in cl 2(a), LORAC was to pay to Dr Gardiner “the sum of $29,412.00 (gross) as General Damages”. It is clear enough that the sum paid by LORAC to Dr Gardiner pursuant to cl 2(b)(i) of the Deed was consideration for the settlement and release referred to in cll 3 and 4. The question is whether the payment of that sum “as General Damages” can fairly be characterised as Dr Gardiner recovering damages in respect of an injury from LORAC as the employer liable to pay compensation under the Compensation Act, within the meaning of s 151A.

5. [98]

   A recital in the Deed stated that, on 31 October 2017, Dr Gardiner sent an email to Prof Harris in which he made a number of allegations, including:

6. [99]

   “The Prof Harris Concerns” were defined as allegations made by Dr Gardiner in that email, which ended a chain of emails on 30 October 2017 and 31 October 2017. On 30 October 2017, Dr Gardiner had sent an email to Diane Cooper, with a copy to Prof Harris, seeking to arrange a meeting with Prof Harris. In that email, Dr Gardiner said:

7. [100]

   Dr Gardiner replied with the email of 31 October 2017, which was headed “Meeting drone patent - moving forward for PCT’s deadline 14th Nov”. The email began by saying:

Construction of the Deed

1. [101]

   A fair reading of the Deed indicates that the payment made to Dr Gardiner by LORAC pursuant to the Deed did not constitute damages in respect of any injury suffered by Dr Gardiner that would be compensable under the Compensation Act or the Management Act. Rather, it was a payment in consideration of the release by Dr Gardiner of LORAC in respect of his claim under the Discrimination Act and the various other matters that were referred to in cll 3 and 4. That is made clear by the several references in the Deed that the Deed was not intended to be a payment in respect of any claim that Dr Gardiner might elect to pursue pursuant to any applicable workers’ compensation legislation. That is made explicitly clear in cll 3 and 4 as well as several other provisions of the Deed.

2. [102]

   I consider that the appeal should be allowed. I have had the advantage of having considered in draft form the proposed reasons of Basten JA and Leeming JA. For the reasons expressed above, I agree with the orders proposed by Basten JA.