THE BROKEN HILL PROPRIETARY CO LTD v DERON SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL GLEESON CJ, MASON P and MEAGHER JA 18 March 1998, 27 March 1998 [1998] NSWCA 226 LIMITATION OF ACTIONS — WORKERS COMPENSATION Workers Compensation Act 1926 s63(3)(a) — worker paid compensation in 1970 — commences common law action more than three years later — whether worker knew of receipt of compensation — HELD — trial judge erred in finding employer had not established worker knew of receipt of compensation. Gleeson CJ By an action commenced in 1988 the respondent, Mr Deron, sued the appellant, BHP, for damages for personal injury received by him in the course of his employment with BHP. The injury was sustained in June 1970. There may be a connection between the delay in commencing the proceedings and the fact that, as well as suing BHP, the respondent also sued certain solicitors. The appellant pleaded, by way of defence, that the respondent's claim against it was statute-barred. An order was made that this be determined as a separate issue. The trial of that issue came before Sperling J, who resolved it in favour of the respondent. The appellant, by leave, appeals against that decision. The primary ground of appeal is a challenge to Sperling J's decision on a question of fact. That decision did not turn upon an assessment of the credibility of witnesses, but depended mainly upon inferences to be drawn from primary facts which were substantially undisputed, and from documents in the nature of business and professional records. It is argued on behalf of the appellant that the primary judge's decision was wrong and should be reversed. The principles governing an appellate court's proper function when dealing with such a challenge to a primary judge's findings of fact are not in dispute. (See, for example, Zuvela v Cosmarnan Concrete Pty Ltd (1996) 140 ALR 227 and the authorities there discussed.) The issue of fact arose in the following circumstances. It was common ground that the respondent suffered an injury at work on the morning of 24 June 1970. Sperling J found, and the finding is not disputed, that on 3 July 1970, the appellant paid the respondent a sum of money, which included an amount of $26.40 intended by the appellant to be paid as workers compensation for four days incapacity for work. At the relevant time, the respondent's entitlement to pursue a remedy at common law was governed by s63(3)(a) of the Workers Compensation Act 1926, which provided that, where any payment by way of compensation under the Act in respect of an injury was received by a worker, no proceedings against the employer, independently of the Act, in respect of the injury, should be maintainable unless such proceedings were instituted within three years after the date upon which such payment was so received by the worker. There was a provision enabling a court to extend the time for action in circumstances which are presently irrelevant. 2 UNREPORTED JUDGMENTS The appellant established that it had made a payment by way of compensation under the Act to the respondent, in respect of the injury in question, in July 1970. No common law proceedings were instituted within the period of three years. Although the appellant also established that the sum of money paid by way of compensation was accepted by the respondent, the authorities establish that the concept of receiving a payment by way of compensation involves knowledge on the part of the worker that money is being paid to the worker by way of workers compensation under the Act. (Joyce v Smith [1953] VLR 662 Duic v Dillingham Corporation of New Guinea Pty Ltd (1972) 2 NSWLR 266, Verschuuren v Tom's Tyres Corporation (1992) 110 FLR 170). The onus of proof is upon the employer. This was not an issue in respect of which the respondent claimed to be in a position to offer the court any substantial assistance from his own recollection. In an affidavit, he said that, as far as he could recollect, he was not paid compensation, but he also said that due to the injuries he received, (which were injuries to his head), and subsequent mental health problems, his memory of events surrounding the accident in 1970 was non-existent. The following facts were established by the evidence. The respondent, who was then aged 21, received his injury some days after he had given notice of resignation to the appellant and a few days before that notice was due to take effect. The injury of 24 June 1970 resulted from a table that was being welded by the respondent falling and pinning him. He suffered injury to his head. The appellant is a self-insurer and at all relevant times has had established internal procedures for dealing with compensation entitlements. In accordance with the appellant's standard procedures the respondent on the day of his injury reported to the appellant's medical centre. A case report was prepared stating that he was unable to work as a consequence of his injury. A certificate to the same effect was issued on 25 June 1970. On 25 June 1970 the respondent was referred to the Mater Hospital at Newcastle as an outpatient. The hospital's medical officer signed a certificate saying that he would be unfit for work until 27 June 1970. On 29 June 1970 the BHP medical officer signed a further document certifying that the respondent was still unfit for work and that he was due for review on 3 July 1970. On 29 June 1970 the respondent signed a document headed "Statement from Injured Employee" recording the circumstances of the accident. On 30 June 1970 at a conference held in accordance with the appellant's usual internal procedures the company accepted that the respondent had an entitlement to workers compensation. On 3 July 1970, the appellant's medical officer certified that the respondent was fit to resume work, and the company acted on the basis that his compensation entitlements ceased on that day. On 3 July 1970, which was a fortnightly pay day, and which was the first pay day after the respondent's resignation came into effect (30 June 1970), the appellant paid the respondent a total amount of $129.30. Sperling J found that this included an amount of $26.40 by way of workers compensation. The slip which was handed to the respondent with the payment identified that amount as "comp". On 3 July 1970, the respondent was examined by a BHP medical officer who certified that he was fit for work The certificate, which was in evidence, contains the following hand-written note made by the medical officer: URJ THE BROKEN HILL PROPRIETARY CO LTD v DERON (Gleeson CJ) 3 "(Mr Deron) has left employment BHP but states unable to work due to headaches and will be consulting own doctor with view further compensation." It should be mentioned that the respondent had previously received workers compensation in relation to another incident. It was not suggested that he has not capable of understanding, and did not understand, what workers compensation was. The note made by the medical officer, which forms part of BHP's business records, shows that, on 3 July 1970, the matter of the respondent's compensation entitlements was an unresolved issue between the respondent and BHP, as was the question of his fitness for work. The evidence established that the respondent in fact pursued the question of his entitlements to further compensation, as the medical officer's note recorded that he intended to. If the medical officer's note had I stood alone, it might have reflected nothing more than speculation on the part of its author, having no basis in anything the respondent said. However, when considered in the context of previous and later events, it indicates that the note recorded information which was conveyed to the medical officer by the respondent. Later conduct on the part of the respondent showed that the information was correct. The medical officer, who had no motive to misrepresent what the respondent told him, attributed to the respondent a future intention which was borne out by subsequent events. There is no reason why the note should not be taken as a substantially accurate reflection of what the respondent told the medical officer. Sperling J said he gave no weight to the medical officer's note. I regard this as an error. On 9 September 1970, the respondent consulted a solicitor, Mr Brown, of Moroney Rutter and Mantach. Mr Brown said, in an affidavit: "2. On 9 September 1970 the plaintiff attended upon myself at the offices of Moroney Rutter & Mantach at Newcastle and gave me certain instruction and a history in respect of an accident he said he suffered at Broken Hill Proprietary Co Ltd at Port Waratah about three months beforehand when his head was squashed between a table of a machine and the ground. 3. At the time I took instructions I made notes in respect of the history given to me by the plaintiff in my own handwriting. The plaintiff told me that he had received workers compensation payments from BHP for a short time after his accident, for 2 or 3 weeks until he got a job with (another employer)." The fact that the respondent had received a payment by way of workers compensation was a matter of some significance to a solicitor in the position of Mr Brown. It involved certain admissions on the part of the client's employer which could be material in any dispute as to further entitlements. Mr Brown's hand-written notes of what he was told by the respondent included the following: "Prior to my accident I had put in my notice. I got compensation for 2 or 3 weeks until I got a job with Gardiner Bros as a painter." The statement that the compensation covered 2 or 3 weeks was erroneous, as was Mr Brown's record of the date of the accident as 16 June 1970. It was, however, undoubtedly the fact that the respondent had received compensation. That is not now in dispute. On 4 November 1971, (the delay is unexplained but some of the correspondence makes reference to attempts to gain re-employment with BHP), Mr Brown wrote to the appellant concerning the respondent's compensation entitlements. The letter commenced as follows: 4 UNREPORTED JUDGMENTS "We are acting on behalf of (Mr Deron) who sustained injuries whilst employed by you on or about 24 June 1970 while working in the Bloom Mill. We understand you paid him compensation for a short while and then he left your employ as you would not re-employ him on light work. He has recently undergone an operation and has been told by his doctor...that he would be able to do suitable light work." There is no suggestion that there was any possible source of the understanding referred to in the second sentence apart from information Mr Brown had received from his client, the respondent. The understanding, it should be noted, was correct. The appellant also relied upon three subsequent formal claims for compensation filed in the Workers Compensation Commission by solicitors representing the respondent. Each of those claims asserted that the claimant had received compensation Sperling J regarded the evidence of those assertions as inadmissible. That is disputed by the appellant, but it is unnecessary to determine the issue, which is of minor importance. I am content to deal with the matter without taking that evidence into account in favour of the appellant. It is not suggested that it could possibly have favoured the respondent. What is set out above constitutes the facts and the circumstances relevant to Sperling J's conclusion that he could not be satisfied that, in 1970, the respondent knew he had received a payment of workers compensation from the appellant. With respect, I am persuaded that this factual judgment was wrong, and that, on the contrary, the evidence established that the respondent had the relevant knowledge. In his reasons for judgment, Sperling J took account of the fact that the respondent was of below average intelligence, that he was taken to hospital as an outpatient immediately after the accident, that he suffered from headaches and dizzy spells, and that there was evidence of a degree of brain damage and later mental health problems. He noted that the evidence of the respondent was that he had no memory of the events surrounding the accident, but that, as far as he could recollect, he was not paid compensation. Tf all the appellant had to rely upon, as evidence that the respondent knew that he received compensation, had been the pay slip, referring to "comp", handed to the respondent at the time he left the employment of BHP, then these considerations would be compelling, especially having regard to the small amount of money involved. What is clear, however, is that, following his departure from BHP, the respondent took steps to pursue a claim for what was described in the medical officer's note of 3 July 1970 as "further compensation", a claim he is recorded in that note a having said that he intended to pursue. He knew what workers compensation was, and he was paid a sum of money covering a number of days on which he did not work as a consequence of his injury. The respondent has never suggested that he did not know what he was doing when he consulted Mr Brown in 1970, and Mr Brown was quite clear that he was being consulted about a claim for compensation. Naturally, Sperling J found it necessary, in his reasoning, to deal at some length with the evidence of Mr Brown and, in particular, with Mr Brown's contemporaneous hand-written note recording that the respondent told him that the respondent had received compensation. In cross-examination, Mr Brown acknowledged that his hand-written note was not a verbatim transcript of what the respondent said to him, and that the word "compensation" was _ his URJ THE BROKEN HILL PROPRIETARY CO LTD v DERON (Gleeson CJ) 5 interpretation of what he was told by the respondent. This, however, was not a subject of merely incidental importance. It was Mr Brown's duty to investigate with the respondent the question whether the respondent had received any compensation, and Mr Brown did so. This was all in a context of a discussion about the respondent's entitlements against BHP. The most obvious of which was a possible entitlement to workers compensation. Sperling J reasoned as follows: "Tt is apparent that Mr Brown understood from his conversation with the plaintiff that the plaintiff had received compensation for the injury but I am not satisfied, on the basis of this evidence, that that is what the plaintiff said or that that was what the plaintiff understood. Compensation was paid for four days, but Mr Brown's note is that it was paid for two or three weeks. The conference with Mr Brown was only seven weeks after the injury; there was no time for the plaintiff to misremember four days compensation as having been two or three weeks compensation. A far more likely explanation for Mr Brown's note is that questioning by Mr Brown elicited a response from the plaintiff which was related to the termination pay he had received and which Mr Brown mistook as reference to compensation." It is one thing to say that the respondent may have been confused or mistaken about the amount of compensation he received. If, however, he believed that he had received some compensation, that belief was not mistaken. It was correct. The fact that the respondent had received termination pay was unimportant to Mr Brown except insofar as that termination pay included an amount by way of workers compensation. Whatever it was exactly that the respondent said that caused Mr Brown to note (correctly) that the respondent had received compensation, it is probable that Mr Brown directed the respondent's mind to that subject. He had a good reason to do so. It is hardly satisfactory to suggest that what occurred was that Mr Brown, in accordance with his duty, asked the respondent a question designed to find out whether the respondent had received any compensation, that the respondent failed to understand the question, that the respondent came out with some information about a different subject matter, that this led Mr Brown to believe that the 'respondent had received compensation. and that, by a coincidence, that belief turned out to be correct. A simpler and more obvious explanation is that Mr Brown asked the respondent whether he had received compensation, that the respondent understood the question, and that he gave a truthful answer, any mistake or uncertainty being related to the matter of the amount of the compensation that had been received. Ockham's razor should be applied. It is not the circumstances considered individually and separately that are important; it is the combination of circumstances. The respondent was entitled to compensation; he was paid compensation; this wars not something that BHP attempted to conceal from him; the medical officer recorded that the respondent informed the medical officer at the time of his departure that he would be pursuing the question of further compensation; he pursued the question of further compensation; and, when he was interviewed by his solicitor. the solicitor recorded having been told by the respondent that the respondent had received some compensation. Those matters, taken in combination, seem to me to require the conclusion that, whatever may be the present state of his recollection, in 1970 the respondent knew that he had received a payment by way of compensation. The appeal should be allowed. 6 UNREPORTED JUDGMENTS The orders made by Sperling J should be set aside. On the separate issue as to whether the proceedings are not maintainable against the first defendant because of the matters pleaded in paral of the first defendant's second amended defence, there should be judgment for the first defendant. The respondent should pay the appellant's costs of the appeal and of the trial of the separate issue. The respondent should have a certificate under the Suitors Fund Act. Mason P I agree with the Chief Justice. Meagher JA I agree with the Chief Justice. 1. Appeal allowed. 2. Orders of trial judge set aside. Judgment for first defendant on separate issue as to whether proceedings statute barred. 3. Respondent to pay appellants costs of appeal and of trial of separate issue and to have certificate under Suitors Fund Act. Counsel for the appellant: R Stitt QC/P Wines Solicitors for the appellant: A B Squires, Newcastle Counsel for the respondent: B Gross QC/B Pluznyk Solicitors for the respondent: Newman Associates