Reported Decision : (2002) 23 NSWCCR 719 Compensation Court of New South Wales CITATION : Metcalfe v K & C Harris Plasterers [2002] NSWCC 36 Stephen Metcalfe PARTIES : v K & C Harris Plasterers MATTER NUMBER(S) : 17705 of 2002 JUDGMENT OF: Armitage J at 1 CATCHWORDS: Statutes & Delegated Legislation :- LEGISLATION CITED: CASES CITED: DATES OF HEARING: 02/07/02 EX TEMPORE JUDGMENT DATE : 07/02/2002 FOR APPLICANT:Mr Whiteside, solicitor of Firths. LEGAL REPRESENTATIVES: FOR RESPONDENT: Ms C Pinkerton, instructed by Dexter Healey. JUDGMENT: 1. This is a summons supported by an affidavit of the applicant's solicitor, Carl Joseph Mickels, in which the applicant seeks orders that the respondent pay the applicant's costs pursuant to s 122(1) of "the 1998 Act" (referring no doubt to the Workplace Injury Management & Workers Compensation Act 1998) in relation to costs incurred in attempting to negotiate the commutation of the applicant's future rights, and that the respondent pay the applicant's costs of the summons. 2. The affidavit of Mr Mickels materially establishes that the question of commutation was opened, if I may so put it, by the respondent's insurer, which for convenience I shall call CGU, although it identified itself as CGU Workers Compensation Insurance at the top of its letter to the applicant of 5 October 2000, which is Exhibit A to Mr Mickels affidavit. 3. It is enough to say that following that letter, negotiations occurred which did not however result in agreement being reached on a commutation of the applicant's rights. When that occurred the applicant's solicitors in the person of Mr Mickels sent the solicitors who by then were acting for the respondent, Messrs Dexter Healy, a costs assessment which was not replied to, which the applicant's solicitors took ( I am sure correctly) as an indication that the respondent was unprepared to pay the applicant's costs in respect of the unsuccessful negotiations for commutation which had occurred. 4. Mr Whiteside's argument for the applicant is simply that the matter is covered by s 112 of the Workplace Injury Management and Workers Compensation Act 1998 ("the 1998 Act") and particularly by s 112(2) and s112(7) in conjunction. S 112(2) where material reads: Subject to this Act and the regulations and the rules of the Compensation Court and subject to any other Act: (a) Costs in or in relation to any proceedings are in the discretion of the Court, and (b) the Court has full power to determine by whom, to whom and to what extent costs are to be paid in or in relation to any proceedings ... 5. S 112(7) where relevant reads: An order of the Court for payment of costs may include: (a) The costs actually incurred or to be incurred by a party claiming compensation ... 6. I should indicate at this point that Mr Whiteside did not rely on subparagraphs (b) to (f) of s112(7), and in my opinion he was correct in taking this course as subparagraph (a) is in my view the only one that could conceivably have any application in this case. 7. The question therefore posed for me is whether the costs the applicant's solicitor, Mr Mickels, seeks are, within s112(7)(a) of the 1998 Act, "costs actually incurred or to be incurred by a person claiming compensation". The answer to that question is to be reached by inquiring whether the applicant in the circumstances outlined above was "a person claiming compensation" within s 112(7)(a). Mr Whiteside's argument, as I understand it, is simply that because the applicant was participating in discussions with the respondent which might have lead to a commutation agreement being reached, he was "claiming compensation", in the sense that he was "claiming" a commutation by writing to the employer about it and requesting its agreement to commutation in a particular sum, which offer was refused by the respondent. 8. The further question behind that proposition however is whether a commutation is "compensation" within s112(7)(a). Ms Pinkerton for the respondent in reply to Mr Whiteside's submission draws my attention to Gosper v Christopherson (1986) 65 ALR 472. In that case a somewhat different question to that presently under discussion arose. It was whether, in a context where compensation was sought on the basis that the worker had contracted a disease by a gradual process, one of the worker's employers who paid a redemption sum under s 15 of the Workers Compensation Act 1926 could seek contribution under s 7(4) of the 1926 Act to the redemption sum from other employers who had employed the worker within the 12 months preceding his incapacity. Involved in that question obviously was whether the redemption sum could be said to be "compensation", because the right to contribution in s 7(4) abovementioned was predicated on payment of "compensation". The High Court held against the employer seeking contribution, on the basis that a redemption sum was not "compensation". In so holding the full High Court (Mason, Wilson, Brennan, Deane and Wilson JJ) referred at 473 to s 15 of the 1926 Act which relevantly read: (1) Subject to this Act, the liability in respect of any weekly payment may, with the consent of the worker, be redeemed either in whole or part by the payment of a lump sum, determined by the Commission, having regard to any dispute as to liability to pay compensation under this Act and the injury, age, and occupation of the worker at the time of the occurrence of the injury, as well as to his diminished ability to compete in an open labour market (1A)Where the Commission determines a lump sum under subsection (1) and the worker agrees that the payment for lump sum should also redeem any liability to make a payment under s 10 or s 16 in respect of the injury, payment of the lump sum also redeems any liability to which the agreement of the worker relates. 9. Consequently at 474-5, contrasting a determination of a redemption sum under s 15 with an order to pay "compensation" within the various entitlement sections of the 1926 Act, the High Court said: By contrast, a determination pursuant to s 15 (1) of the amount of a lump sum which may be paid in redemption of a liability to pay compensation enforces no liability. An employer is not obliged to make a lump sum payment by way of redemption in the amount determined by the Court, although the Court has a jurisdiction to determine with the worker's consent an amount which, if paid, redeems the liability. 10. Their Honours referred in support of that proposition to John While & Sons Pty Limited v Changleng (1985) 2 NSWLR 163 per Mahoney JA at 166-7. Thus their Honours determined that a redemption sum determined by the Court under s 15 of the 1926 Act was not "compensation" for the purpose of seeking an order for contribution under s 7(4) of that Act. Ms Pinkerton as I understand her submission contends that s 51 of the Workers Compensation Act 1987, which applied at the time of the negotiations presently being considered, is not materially different in principle to s 15 of the former Act which was considered in Gosper. Relevantly, s 51 read: (2) A liability in respect of any weekly payment of compensation to which this section applies may, with the consent of the worker, be commuted (either in whole or in part) to a lump sum, determined by the Compensation Court, having regard to: (a) any dispute as to liability to pay compensation under this Act; (b) the injury, the age of the worker, and the occupation of the worker at the time of the occurrence of the injury; and (c) the worker's diminished ability to compete in an open labour market. (3) If: (a) the Compensation Court determines any such lump sum; (b) the worker agrees that payment of the lump sum should remove any liability to make a payment under Division 3 or Division 4 in respect of the injury; and (c) the terms of any relevant regulations or approval of the Authority under subsection (1) have been complied with, payment of the lump sum removes any liability to which the agreement of the worker relates. 11. The similarity of this section in the wording quoted above to that of s 15 of the 1926 Act as set out by the High Court in Gosper also quoted above will be noted. The significant difference between the two sections is the use of the word "commutation" rather than "redemption". There are authorities in this Court which consider that difference, but Mr Whiteside does not urge that anything hangs on it and I do not think it does either. Essentially the operation of both sections is that if the employer pays the worker a particular lump sum previously determined by the Court, then its liability to the worker to whom it pays the sum is redeemed or commuted in whole or in part, depending on the terms of the agreement. 12. S 52 does not oblige the employer, any more than s 15 did, to pay a particular sum to the worker; all it does, as I have said, is to provide that if the sum is paid, then the liability of the employer to the worker is commuted either in whole or in part, again depending on the terms of the agreement reached between the parties. That being so, I think that Gosper applies, so as to require me to determine that a commutation sum under s 51 of the 1987 Act as it applied at the time of the negotiations presently being considered was not "compensation." This obviously has the consequence that within s 112 (7) (a) of the 1998 Act the applicant was not "a person claiming compensation" at the time of those negotiations; what he was seeking was not "compensation" but a commutation sum under s 51 of the Act if agreement could be reached on its amount. 13. Even if such agreement were not reached, if the commutation sum were "compensation", s 112(7)(a) would in my opinion apply to entitle the applicant to costs against the respondent because the costs were "actually incurred" within s 112(7)(a), but because they were not "incurred" in "claiming compensation", the subparagraph has no application and does not permit me to make the order sought by the applicant. 14. In those circumstances I decline to make the orders sought by the summons and I make no order as to costs. Mr Whiteside, solicitor of Firths appeared for the applicant. Ms C Pinkerton, instructed by Dexter Healey appeared for the respondent. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.