Latest case updates for self-insurers – August 2022

By Ilona Strong and Grace Bowran-Burge

In our latest update for self-insurers, we look at some recent cases, including two possible outcomes about whether an agreement reached at Conciliation is always binding; a Victorian Court of Appeal decision in the heavily litigated Shah case; whether an injury sustained by a worker while walking his dog and on call for his employer occurred during the course of his employment; and how the Tasmanian Supreme Court has taken a step towards increasing awards for non-economic loss to be consistent with other Australian jurisdictions.

Is an agreement reached at Conciliation always binding?

It is not uncommon for workers who have settled their WorkCover claim by way of the Accident Compensation Conciliation Service (Conciliation) to later agitate the matter. Two recent cases demonstrate the possible outcomes in this scenario.

In McKenzie v Healthscope [2020] VSCA 309 the worker developed a psychiatric condition and lodged a WorkCover claim. This claim was accepted. The worker’s payments were then terminated before he had received 130 weeks, on the basis that his incapacity was no longer materially contributed to by his claimed injury. The worker referred the decision to Conciliation. Prior to the Conciliation conference, the dispute resolved and the worker received a further period of weekly payments. Subsequently, the worker sought further weekly payments.

The court concluded that, based on all the available evidence, the agreement reached at Conciliation should be construed as only resolving the worker’s entitlement to payments up to 130 weeks. Therefore, the worker was able to seek further weekly payments after that time.

In Bye v Danzante [2022] VMC 12 the worker lodged a WorkCover claim in September 2017, relating to a claimed psychological injury. The claim was rejected and the matter referred to Conciliation. In December 2017, prior to the Conciliation conference, the matter settled for a limited period of medical expenses and weekly payments of compensation. In 2019 and 2020 the worker lodged further claims for psychological injury arising out of the same circumstances. These claims were again rejected and Genuine Dispute Certificates obtained. The worker subsequently issued Magistrates’ Court proceedings in respect of the second and third claims.

Magistrate Hoare dismissed the worker’s proceedings, distinguishing the matter from McKenzie. Magistrate Hoare noted that in McKenzie the dispute related to the termination of weekly payments prior to 130 weeks rather than a rejection decision. In addition, in Danzante, the evidence indicated both parties understood the settlement reached at Conciliation had the effect of finalising any entitlement to claim benefits beyond December 2017.

These two cases demonstrate it is important to look at exactly what dispute is being resolved at Conciliation, and whether any disputes may remain outstanding. In McKenzie, the question of the worker’s entitlements after 130 weeks remained outstanding. By contrast, in Danzante the only dispute was whether the worker’s claim should be accepted, and this resolved at Conciliation.

Aggregation of injuries – the story of Shah continues

In our June 2021 newsletter, we considered the case of Shah v Victorian WorkCover Authority [2021] VSCA 137, in which the Court of Appeal found that a serious injury determination cannot hinge on there having been a determination of a degree of impairment. In what is proving to be a heavily litigated claim, in Shah v Victorian WorkCover Authority [2022] VSCA 95 the Court of Appeal has now considered this case again, this time affirming the decision of Justice Misso that the worker cannot aggregate two discrete injuries, one to the neck and one to the lower back.

The worker claimed to have sustained injuries to his neck and lower back arising throughout the course of his employment. He argued that his spinal injuries, when considered together, amounted to a serious injury. However, the Victorian WorkCover Authority asserted that the claim made by the worker was based on two discrete incidents resulting in one injury to the neck and a later injury to the lower back. Accordingly, the Authority argued the claimed injuries could not be combined.

At the initial hearing, Justice Misso accepted the submissions of the Authority that the worker had not suffered injuries to his lower back and neck due to the nature of his work over time. Rather, he found the worker sustained an injury to his lower back from a specific incident and the worker did not sustain any ongoing neck injury arising out of his employment. Accordingly, any incapacity or impairment flowing from the neck injury was irrelevant but, if it was relevant, it could not be combined with the effects of the lower back injury.

The Court of Appeal upheld Justice Misso’s decision, finding there was no evidentiary basis to conclude that the claimed neck and lower back injuries arose due to the nature of the worker’s duties over a period of time. Once the neck injury was seen as separate and distinct from the lower back injury, it was impermissible to aggregate the two injuries. In addition, the Court of Appeal upheld Justice Misso’s finding that the evidence did not support that the neck injury was caused by employment.

This case serves as a useful reminder that care should be taken when determining whether to combine injuries, even when those injuries are generally permitted to be aggregated (such as neck and back injuries). In order to aggregate injuries, a worker must still demonstrate the claimed injuries are work-related and arose from the same cause of action.

Worker’s injury sustained while on call not compensable

In Hydro Electric Corporation v Nazar [2022] TASSC 37, the Tasmanian Supreme Court determined that an injury sustained by a worker, who fell on a log when walking his dog and while on call for his employer, did not occur during the course of his employment.

The worker was employed as a relief area coordinator for Hydro Electric. At the time of the incident, the worker was on call at the employer’s accommodation, having commenced a seven-day shift. The worker was entitled to a daily on-call allowance and resided in accommodation provided by his employer. The worker and his partner had taken their dog for a walk on a nearby beach. The beach was close enough that the worker could respond to a call within 15 minutes, as required by his employer. The worker was injured when he slipped on a log on the beach.

At first instance, the incident was found to have arisen during the course of the worker’s employment as he was walking his dog on call and within the designated 15-minute radius. However, upon appeal, Justice Geason found that the injury happened while the worker was engaging in a recreational activity (trying to climb over the log) rather than an injury occurring by reference to the specific place the worker was in. He then determined that the worker had not been induced or encouraged to step over the log. Rather, the worker had engaged in the activity ‘of his own volitation and for his own purpose.’ Accordingly, the worker was not entitled to compensation.

The case reinforces that just because an injury is sustained while a worker is ‘on call’, it does not necessarily follow that the injury is compensable. Consideration must be given to the exact circumstances of the injury and particularly whether it arises by reason of an activity the worker is engaged in.

Tasmanian damages on the increase?

In Scattergood v Commonwealth [2022] TASSC 21, the Tasmanian Supreme Court has taken a step towards increasing awards for non-economic loss to be consistent with other Australian jurisdictions.

In February 2018, the Plaintiff was in the front passenger seat of her husband’s car when the car was rear-ended by another vehicle. The second vehicle was driven by an employee of the Commonwealth of Australia. The Plaintiff subsequently suffered whiplash and developed a psychiatric injury.

In May 2018, the Plaintiff was again in the front seat of her husband’s car when he suddenly applied the brakes. While there was no impact with another car, the sudden stop aggravated the Plaintiff’s whiplash injury.

The Plaintiff subsequently commenced proceedings in respect of the February 2018 incident. The court was required to disentangle the consequences of the two incidents.

In awarding general damages, His Honour Chief Justice Blow commented that it was well known that awards of damages for non-economic loss were for many years significantly lower in Tasmania than in most, if not all, mainland jurisdictions. He went on to state ‘there is no reason why that should any longer be so.’ His Honour also noted that it may be appropriate to give weight to current general ideas of fairness and moderation as reflected in other awards made by other Australian jurisdictions. The Plaintiff was ultimately awarded $100,000 in general damages.

The decision suggests that awards for general damages in Tasmania are likely to increase.