IN THE MAGISTRATES’ COURT OF VICTORIA

AT MELBOURNE

WORKCOVER DIVISION C12837237

BETWEEN:

BRUCE FREDERIK FARRELL Plaintiff

-and-

DEBORAH ANN FRANCIS First Defendant

-and-

PATRICKS STEVEDORES HOLDINGS PTY LTD Second Defendant

VICTORIAN WORKCOVER AUTHORITY Applicant

-and-

BRUCE FREDERIK FARRELL Respondent

MAGISTRATE: Ginnane

WHERE HEARD: Melbourne

DATE OF DECISION: 22 September 2017

MEDIUM NEUTRAL CITATION: [2017] VMC021

REASONS FOR DECISION

Accident Compensation Act 1985 – application by VWA to set-off weekly payments of

compensation payable to worker pursuant to s 97 (4B) of the Accident Compensation Act 1985

against order for compensation made in its favour pursuant to s 86 of the Sentencing Act

1991

1

APPEARANCES Counsel Solicitors

For the Plaintiff Mr E Makowski Williams Winter

For the VWA Mr I McDonald Thomson Geer

HIS HONOUR:

1. The history of the plaintiff’s involvement in litigation for compensation is well known.

It is set out in detail in my reasons for decision dated 1 July 2015 as well as in the

reasons for decision of Zammit J who heard and dismissed an appeal by the Victorian

Workcover Authority (‘the VWA’) against my decision.

2. Following the VWA’s unsuccessful appeal and on 19 May 2016 the plaintiff wrote to

both defendants seeking payment of weekly payments of compensation in

accordance with my decision.

3. On 30 June 2016 the plaintiff wrote a further letter to the defendants seeking

compliance with my order together with advising of the making of a claim pursuant to

s 128 of the Accident Compensation Act (1985) (‘the ACA’), a provision that allows for

an award of compensation to be made to a worker where, in any proceeding under it

for the payment of compensation, the Court forms the opinion that the employer, the

VWA or the self-insurer is guilty of ‘unreasonable delay’.

4. On 5 July 2016 the plaintiff issued a summons against the defendants seeking to

quantify the amount of weekly payments and interest due to him by my order as well

as seeking penalty interest pursuant to s. 1281 of the ACA as foreshadowed in the

plaintiff’s previous correspondence.

5. On 8 August 2016 the VWA issued a summons seeking an order that the amount of

any weekly payments payable to the plaintiff pursuant to my decision be set off

against the amount owed by the plaintiff to it pursuant to s. 97 (4 B) and/or s. 114 F

(4) of the ACA by virtue of an order made in its favour against the plaintiff under the

Sentencing Act (1991).

6. As at the date of the summons issued by the VWA the amount owed to it by the

plaintiff stood at $213,203.17.

7. The determination of the respective summonses but in particular the summons

brought by the VWA raises matters of importance.

1 Referred to in the plaintiff’s summons as a claim for ‘penalty interest’

2

The competing applications

8. There are two applications before the Court. The plaintiff’s application by summons

seeks relief including, pursuant to the liberty to apply reserved generally to the parties

by my orders, that I make further orders being:

1. Quantifying the amount of weekly payments payable to the plaintiff pursuant

to paragraph 1 of the Orders made by the Court on 1 July 2015;

2. Quantifying the amount of interest on the amount payable to the plaintiff

pursuant to paragraph 3 of the Orders I made on 1 July 2015 pursuant to s

114E of the ACA;

3. An order in the nature of a penalty by way of an award of additional

compensation pursuant to s 128 of the ACA.

9. The plaintiff’s summons was supported by an Affidavit of Bernard Reginald Francis

McMahon (‘McMahon’).

10. The plaintiff argued that he is unable to enforce the fruits of the judgement he

obtained from me without the quantification sought in paragraph 1 of his summons,

and that he is therefore, for example, prevented from pursuing recognised forms of

enforcement such as the issuing of a Statutory Demand under the Corporations Act

(2001) for payment of the sum due.

11. The VWA summons dated 8 August 2016 seeks an order that:

The amount of any weekly payments payable pursuant to paragraph 1 of the

Orders made on 1 July 2015… be set off against the amount owed by the

Respondent to the Applicant pursuant to s 97 (4 B)… of the Accident

Compensation Act 1985 by reason of Orders made under the Sentencing Act

1991.

12. The VWA summons was supported by an Affidavit made by Bruce Charles Crosthwaite

(‘Crosthwaite’) affirmed 8 August 2016. The Crosthwaite affidavit traversed the non-

contentious factual chronology including that on or about 29 July 2015 the VWA

issued a ‘Notice’ to the plaintiff advising him that it intended to apply to set off the

amounts owed by him pursuant to the repayment order under ss 97 (4 B) and/or 114

F (4)2 of the ACA against the amount of weekly payments owed to him pursuant to the

orders made by me on 1 July 2015.

13. The plaintiff sought Conciliation of the decision of the VWA expressed in its Notice

dated 29 July 2015 and a Conciliation Outcome Certificate was issued on 26 August

2015 identifying the existence of a Genuine Dispute.

2 Section 114 F(4) was not pressed

3

14. A second affidavit was made by Crosthwaite and affirmed on 15 August 2016. The

second Crosthwaite affidavit deposed that on 29 July 2016 the VWA through its

authorised agents forwarded a letter to Centrelink advising it of the current

proceedings and enclosed a Compensation Advice of Periodic Payments Form. On 11

August 2016 the VWA received a notice from Centrelink advising it that pursuant to s

1184 of the Social Security Act 1991 it proposed to recover from the VWA an amount

of $94,448.56 comprising the amount of recoverable Centrelink payments received by

the plaintiff from 12 November 2010 to 4 August 2016.

15. In the event the VWA is found liable to make weekly payments of compensation to

the plaintiff then pursuant to the Social Security Act 1991 it was said that it is unable

to make such payments of compensation to the plaintiff whilst the Centrelink Notice

remains in effect.

The statutory provisions under consideration

16. Section 97 of the ACA is expressed as follows:

(1) Except as provided in section 96, regard shall not be had, in respect of

the entitlement to, or amount of, compensation under this Part, to any sum paid or

payable—

(a) under any contract of assurance or insurance (including a

contract made with any friendly or other benefit society or association or any

trade union); or

(b) out of any relief or sustentation fund or other fund (whether by

way of accident make-up pay under any industrial award; or

(d) in lieu of accrued annual leave or long service leave.

(2) If a worker who is receiving weekly payments ceases to reside in

Australia, his or her entitlement to weekly payments ceases unless the worker has

before leaving Australia satisfied the Authority or self-insurer that the worker has no

current work capacity and is likely to continue indefinitely to have no current work

capacity.

(2AA) If a worker ceases to reside in Australia and subsequently claims to be

entitled to the payment of weekly payments, the worker must in addition to

establishing his or her entitlement satisfy the Authority or self-insurer that the worker

has no current work capacity and is likely to continue indefinitely to have no current

work capacity.

(2A) If a worker who is receiving weekly payments is temporarily absent

from Australia, his or her entitlement to weekly payments is limited to a maximum

aggregate period of 28 days in respect of any certificate or certificates provided by a

medical practitioner outside Australia unless the Authority or self-insurer is satisfied

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that there are special circumstances which justify the extension of that period for a

further period as is specified in the certificate.

(3) If the Authority or self-insurer is satisfied that the worker has no current

work capacity and is likely to continue indefinitely to have no current work capacity, a

worker to whom subsection (2) or (2AA) applies is entitled to receive at quarterly

intervals the amount of weekly payments accruing due during the preceding quarter if

the worker proves in the prescribed manner and at the prescribed intervals—

(a) his or her identity; and

(b) the continuance of the incapacity in respect of which the weekly

payment is made.

(4) Compensation under this Act is absolutely inalienable whether by way

or in consequence of any sale, assignment, charge, execution, bankruptcy, attachment,

legal process or by operation of law or any other means and no claim may be set off

against compensation under this Act.

(4A) Despite subsection (4), the Authority or self-insurer is entitled to set off

against any weekly payments to which a worker is entitled any amount of

compensation in the form of weekly payments previously paid to the worker if the

worker was not entitled to receive that amount of compensation by virtue of section

96(1) or 96(2) and the worker has failed to give any notice in writing required under

section 96A.

(4B) Despite subsection (4), the Authority or self-insurer is entitled to set off

against any weekly payments to which a worker is entitled the amount awarded to the

Authority or self-insurer by an order made by a court under this Act or section 86 of the

Sentencing Act 1991 after the worker is convicted, or found guilty, of an offence under

this Act or of an offence under the Crimes Act 1958 in connection with a claim for

compensation under this Act.

(5) A person is not entitled to receive compensation in the form of weekly

payments in respect of the same injury under this Act and the Workers Compensation

Act 1958.

(6) If a worker is entitled to receive weekly payments under the Workers

Compensation Act 1958 and under this Act at the same time, the sum of the rate of

the weekly payments received under the Workers Compensation Act 1958 and the rate

of the weekly payments under this Act must not exceed the maximum rate of weekly

payments specified in this Part and the amount of weekly payments payable under this

Act is reduced accordingly.

(7) A person is not entitled to weekly payments under this Act in respect of

any period during which the person serves a sentence of imprisonment (whether

imposed under the law of this State or of any other place) in a prison within the

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meaning of the Corrections Act 1986 or in a prison or similar institution outside

Victoria.

Sentencing Act Compensation Order

17. Section 86 (1) of the Sentencing Act 1991 states:

If a court finds a person guilty of, or convicts person of, an offence it may order

the offender to pay a person who has suffered loss or destruction of, or

damage to, property, as a result of the offence, any compensation (not

exceeding the value of the property lost, destroyed or damaged) that the Court

thinks fit.

18. Both parties proceeded on the assumption that the Sentencing Act order was lawfully

made and no arguments were raised to the contrary.

The competing arguments

19. The plaintiff’s argument in opposing the VWA summons were numerous. The plaintiff

submitted that because the VWA was the beneficiary of the order made under the

Sentencing Act but because it was not a party to the compensation proceedings heard

by me a set off is not permissible. The plaintiff contended nonetheless by way of an

alternative submission that the VWA is directly liable to him under the provisions of

the ACA for the payment of weekly payments of compensation and therefore the

VWA is not a stranger in a ‘real sense’ to the litigation conducted before me and as a

result had it intended to raise a set-off it should have done so in those proceedings.

20. The plaintiff argued that the defendant employers did not plead reliance on s 97 (4B)

of the ACA in their defence to the plaintiff’s claim for reinstatement of weekly

payments and that it is now too late to do so. The plaintiff argued that the effect of s

97(4B) is that it operates as a plea in bar. The plaintiff also submitted that s 97(4B) of

the ACA should be construed as a defence to the plaintiff’s action by way of a plea in

bar. The plaintiff referred to the decision of O’Bryan J In re K.L. Tractors Ltd [1954] VLR

505 in which his Honour had this to say:

Set-off is the creature of statute. It is part of the law of procedure which

enables a debtor in an action brought against him by his creditor to raise as a

defence a cross-debt or liquidated demand. But a set-off is not a denial of the

debt-it is a plea against its enforcement. It is in substance a plea in bar. It

differs in substance from a plea of payment or record and satisfaction which in

effect alleges that the claim no longer exists. A plea of set-off, on the other

hand, in effect admits the existence of the debt, but sets up a cross-claim as

being a ground on which the person against whom the claim is brought is

excused from payment and entitled to judgement on the plaintiff’s claim. Until

judgement in favour of the defendant on the ground of set-off has been given,

the plaintiff’s claim is not extinguished (citations omitted it follows that, even if

the company has a right of set-off against the Commonwealth debt, the

6

Commonwealth debt is not extinguished, although it could be met in an action

to enforce it by a special plea of set-off. Hence set-off or no set-of, the

Commonwealth is a creditor who may present this petition.

21. I am not persuaded that the decision in K L Tractors Ltd assists in the construction and

operation to be brought to s 97(4B) in that I am not persuaded that s 97(4B) operates

as a plea in bar as described by O’Bryan J in K.L Tractors Ltd. The language of s 97(4B)

contemplates an award of compensation being set-off and it does not authorise

making a claim by way of set off.

22. The plaintiff referred to an ‘admission’ made by the VWA in the Crosthwaite Affidavit

that the VWA is liable to the plaintiff. The Crosthwaite affidavit does not contain an

admission to such effect. Paragraph 9 of the Crosthwaite affidavit recites the orders I

made expressed in favour of the plaintiff and against, “[T]he First and Second

Defendant…”

23. Mr Makowski counsel for the plaintiff was correct to point out that on the hearing of

the appeal in the Supreme Court from my decision both defendants were represented

by the one firm of legal practitioners whereas in the hearing before me in this court

the defendants were separately represented. I do not regard that fact as relevant to

the determination of the matters in issue.

24. The plaintiff argued in the alternative that if the VWA was in law a stranger to the

Magistrates’ Court compensation proceedings then it is open for me to find that the

defendants are each liable to pay compensation to him and therefore s 97 (4B) of the

ACA would not apply to any weekly payments being made to the plaintiff by Patricks

because it was not the recipient of the award of compensation made under the

Sentencing Act.

25. The plaintiff also submitted that as a model litigant the VWA knew or ought to have

known of the existence of the order made under the Sentencing Act well prior to the

date that the plaintiff commenced the weekly payments proceedings and therefore it

was obliged to have initiated action under s 97(4B) of the ACA prior to the weekly

payments proceedings or to have taken action to ensure its application to set-off

comprised part of that proceeding. The order under the Sentencing Act was made on

30 November 2010 and the plaintiff remained in receipt of weekly payments until

March 2012 other than for the period of his imprisonment however the VWA took no

steps to enforce the Sentencing Act order until after the proceedings before me were

heard and determined.

26. The plaintiff succeeded before me in obtaining orders making the defendants jointly

and severally liable to him in the form of weekly payments of compensation in

connection with different claims for distinct injuries sustained by him with them as his

employers.

27. Paragraph 9 of Crosthwaite’s First Affidavit records that on 9 July 2012 the plaintiff

claimed against Patricks for a neck injury sustained on 1 October 2008. At paragraph

7

13 of the affidavit he deposed that the plaintiff’s solicitors advised the solicitors for

the VWA in writing that the plaintiff nominated Patricks to be liable to meet the

orders made by me on 1 July 2015for weekly payments of compensation. The plaintiff

submitted that in the result his entitlement to weekly payments of compensation can

be characterised as flowing from his claim for compensation made against Patricks for

a significant neck injury suffered on 1 October 2008 and hence he should be insulated

from any set off under the Sentencing Act order made in favour of the VWA.

Principles of statutory interpretation

28. The ACA is beneficial legislation and therefore it should be construed in a manner

consistent with that broad object and in light of its expressed purposes. In Project

Blue Sky (1998) 194 CLR 355 the following principles of statutory construction were

distilled as relevant where resort to statutory construction is required and these

include:

relevant provisions should be construed so that they are consistent with the

language and purpose of all provisions in the statute;

the meaning of a provision under consideration must be determined by reference

to the language of the instrument viewed as a whole;

a legislative instrument must be construed on the prima facie basis that its

provisions are intended to give effect to harmonious goals;

where conflict arises from the language of particular provisions, conflict must be

alleviated so far as possible by adjusting the meaning of the competing provisions

to achieve that result which will best give effect to the purpose and language of

those provisions whilst maintaining the unity of all the statutory provisions; and

a court construing a statutory provision must strive to give meaning to every word

of the provision (no clause, sentence, or word shall prove superfluous, void or

insignificant, if by any other construction they may all be made useful and

pertinent).

29. Elsewhere in Project Blue Sky the High Court said [at 384]:

[T]he duty of the court is to give the words of a statutory provision the meaning

that the legislature is taken to have intended them to have. Ordinarily, that

meaning (the legal meaning) will correspond with the grammatical meaning of

the provision. But not always. The context of the words, the consequences of a

literal or grammatical construction, the purpose of the statute or the canons of

construction may require the words of a legislative provision to be read in a

way that does not correspond with the literal or grammatical meaning.

30. In Alcan (NT) v Alumina Pty Ltd v Commissioner of Territory Revenue (Northern

Territory) (2009) 239 CLR 27 the majority of the High Court said at 46-47:

8

This Court has stated on many occasions that the task of statutory

interpretation must begin with a consideration of the text itself. Historical

considerations and extrinsic materials cannot be relied on to displace the clear

meaning of the text. The language which is actually been employed in the text

of legislation is the surest guide to legislative intention. The meaning of the text

may require consideration of context, which includes the general purpose and

policy of the provision, in particular the mischief it is seeking to remedy.

31. The plaintiff also referred to the requirement to give consideration to the principle of

‘legality’, a principle that requires that statutes be construed where constructional

choices are open to avoid or minimise the encroachment upon rights and freedoms at

common law: Momcilovic v The Queen (2011) 245 CLR 1 at 46.

Section 97 (4) and (4B)

32. The plaintiff characterised s 97 (4) of the ACA as a ‘leading provision’ and 97 (4B) as a

‘subordinate provision’. The plaintiff argued that s 97(4) should be regarded as a

leading provision because its subject matter was the protection of an injured worker

through ensuring that he continue to receive compensation for work-related injuries

irrespective of other claims that might be made against him and regardless of past

dishonesty and misconduct.

33. The plaintiff submitted that compensation payments made under the ACA are

inalienable and the legislature’s intention in this regard could not have been more

clearly expressed. The plaintiff’s counsel referred to the decision of Kay v Legal

Profession Tribunal & Anor [2000] VSC 4633. However, Kay’s case was concerned with

action taken by a solicitor to set off from the compensation payable to the worker the

solicitor’s professional costs and it is not authority involving a statutory set-off under

s 97(4B). There are no reported decisions on s 97(4B) of the ACA or its like provision in

s 176(3) of the Workplace Injury Rehabilitation and Compensation Act 2013 that I was

referred to by counsel and I have been unable to locate any in my own researches.

34. However, the plaintiff reasoned that the subordinate provision, s 97 (4B), should be

construed strictly, because ‘it would appear to remove the rights and protections

afforded by section 97 (4)’. As I have noted earlier the plaintiff in his submissions

alluded to the principle of legality wherein the removal of a common law right by

legislation needs to be transparent and unambiguous in language. I am not persuaded

that the principle of legality has application to the matters in contest before me. No

common law right is at risk as a result of the relief sought by the VWA in its summons.

35. The fact of the matter is that the ‘subordinate provision’ as the plaintiff characterised

sub-section 97(4B) of the ACA does more than give the appearance of the removal of

3 See to like effect the decision of the Full Court of the Supreme Court of South Australia in Scammell & Co v

WorkCover Corporation and Anor [2006] SASC 258

9

the ‘inalienability’ that is expressed in s 97(4) – in actuality it interferes with it in a

substantial and apparently deliberate manner. Acknowledging this reality the plaintiff

contended for an alternative submission which was that I should adopted a narrow

interpretation of the express exception to inalienability created by s. 97 (4B) and

argued that ‘the purpose of s 97(4B) is [to] provide for a set-off against any weekly

payments to which a worker is entitled save and only to the extent that a

compensation order has been made [under the Sentencing Act] for offences in relation

to the one and the same particular claim for compensation the subject of the

compensation order’. It was submitted that I should construe the words ‘in connection

with a claim for compensation’ in this restricted fashion. The plaintiff argued that if a

person commits an offence in relation to a particular claim by committing fraud or by

obtaining financial advantage by deception then it would ‘appear clear’ why all or any

of that person’s entitlement to weekly payments for such amounts wrongly obtained

can be set off. However, it was argued that the plaintiff’s offending was not so clear

cut in its effect as to set at nought his subsequent claim for injury with Patricks.

36. Mr Makowski acknowledged that the plaintiff made a claim for a particular injury with

his former employer Debra Ann Francis and obtained payments of compensation

through a deception. However, thereafter, the plaintiff suffered an independent and

significant injury with Patricks which became the subject of a new and separate claim

for compensation. The plaintiff submitted that there is nothing contained in the ACA

to exclude the plaintiff making a claim for compensation for a subsequent injury in

such circumstances and that it would be inimical to the beneficial nature of the ACA

that a worker who suffered injury would fall to be without coverage in relation to a

separate claim for an injury because of the existence of the commission by him of a

fraud perpetrated under a previous claim. The plaintiff submitted that there must

exist identity between the subject claim underpinning the compensation order made

under the Sentencing Act and the claim for compensation in relation to which the

offence was committed before a set-off would be available to the VWA. The plaintiff

argued by reference to the Notice of 29 July 2015 issued by QBE (as agent) that the

claim related to Patricks was unconnected with his criminality as opposed to the claim

he made and the payments he received against Debra Ann Francis. The plaintiff

contended that the present circumstances do not give rise to the required uniformity

of interest and therefore s 97(4B) cannot apply and permit a set-off. Mr Makowski

denied that the plaintiff is enjoying the fruits of compensation system free from any

obligation to be accountable. Rather he submitted that the plaintiff suffered serious

injuries and has no current work capacity and is entitled to compensation as

recognised by my decision and orders.

37. Thus the concession made by the plaintiff is to the effect that if the only claim for

compensation before the court were a claim for which the offending occurred then an

order for compensation under the Sentencing Act could and indeed should be set-off

but that to do so when there is more than one claim, one of which has been attended

with fraud and another not so, that to apply a set off without distinction between

10

claims would be inimical to the operation of the compensatory and beneficial nature

of the legislation.

38. The VWA disputed this approach to the interpretation of s 97 (4B). It argued that the

language adopted by Parliament is to allow a ‘set-off against weekly payments to

which a worker is entitled the amount awarded to the Authority …by an order made by

a court under …section 86 of the Sentencing Act 1991 after the worker is convicted…in

connection with a claim for compensation under the Act’ and is not limited in the way

the plaintiff would have it. It fixed its attention and directed its submissions to the

words ‘in connection with a claim for compensation’ and it argued that the plaintiff’s

submission was tantamount to redrafting the provision by adding language such that

it should be read as ‘in connection with [‘the’] claim for compensation’. Mr McDonald

submitted that the language adopted by the legislature is a clear indication of its

intention not to restrict its reach to allow a set-off of the amount of compensation

awarded to the VWA only against any weekly payments that were the subject of the

offending but instead to capture and enable recovery from a worker of the amount of

compensation under a Sentencing Act order made on a finding of guilt or conviction of

a plaintiff for offending in respect of any claim where compensation by way of weekly

payments has been made.

39. I am not persuaded by the plaintiff’s submission that if the VWA’s interpretation is

adopted it would lead to a result where a worker who suffered injury would fall to be

without coverage in relation to a new and separate claim for an injury because of the

existence of the commission by him of a fraud under a previous claim. The

entitlement of a worker to an order for compensation for a compensable work injury

would exist and s 97(4B) in no way inhibits a proper determination of liability and an

award of compensation for payment of weekly payments under the ACA being made

by a court in warranted circumstances. Instead where a compensation order is made

under the Sentencing Act the VWA may set off from the obligation to make weekly

payments the amount of the compensation due to it. In some instances an award of

compensation in the form of weekly payments may have no occasion to be impacted

by a set- off against of an award under the Sentencing Act because, for example, it

might have been satisfied by other means of execution or the amount awarded under

the Sentencing Ac, having been offset against weekly payments, there yet remains

arrears of weekly payments and/or ongoing payments to be made to a worker.

The concept of the separateness of claims made under the Act

40. The plaintiff’s submission highlighted what it argued for as comprising the approach

to interpretation consistent with the structure of the ACA, that is, a statutory

framework that recognises and treats each claim by an injured worker as separate and

distinct. The plaintiff’s claim for compensation against Debra Ann Francis although the

subject of the criminal offences committed by him for which he was jailed and a

compensation order made in the VWA’s favour under the Sentencing Act, his claim

11

against Patricks and for liability for the payment of compensation was ordered was

not the subject of criminal offending.

41. In support of this line of reasoning the plaintiff referred to the decision of Magistrate

Garnett in Robinson v SPI Electricity [2012] VMC 30. Robinson involved a question of

the jurisdiction of the Magistrates’ Court to entertain by way of a justiciable claim a

dispute in which no notice of decision had been made. The dicta in Robinson cannot

be extrapolated to have application to the circumstances of the disputes before me.

Interest does not apply to section 97 (4B) of the ACA

42. In regard to interest the plaintiff submitted that the VWA is not entitled to set-off any

component of interest arising on his weekly payments. The plaintiff said that had

Parliament intended to permit a set-off of interest accruing on an amount awarded

under s. 86 of the Sentencing Act it would have made express provision in the

language of s 97(4B) of the ACA but it did not. The plaintiff submitted that given the

primacy of the principle of the inalienability of compensation established by s 97(4) of

the ACA, if interest is able to to be set-off in addition to any amount the subject of a

compensation order made under the Sentencing Act then clear and unambiguous

wording should be required.

43. The plaintiff referred me to the decision of his Honour Magistrate B Wright in Tucker v

Patrick Stevedores No 2 [2010] VMC 47, a decision in which his Honour addressed the

scope of s 114E of the ACA and, in the circumstances there prevailing, refused interest

sought by the worker on outstanding weekly payments that had been paid and were

cancelled but which notice was subsequently withdrawn prior to conciliation and

outstanding weekly payments thereafter being made. Section 114E is located in the

ACA in an entirely unconnected set of circumstances to those the subject of these

proceedings and the prescriptive expression of when interest will accrue in relation to

outstanding weekly payments does not assist the plaintiff in the current

circumstances.

44. The plaintiff further submitted by reliance on ‘discretionary considerations,’ that I

should not include interest to form part of the VWA’s application for a set-off under s

97 (4B) of the ACA by reason of the fact that VWA having obtained the order for

compensation under the Sentencing Act 6 years ago it has only belatedly sought to

include the interest component as part of the total amount to be set-off at the

penalty interest rate.

The VWA’s submissions

45. The VWA’s submissions were developed in part by reference to and in the context of

the following chronology:

In April 1994 the plaintiff brought a claim for compensation against the Debra

Ann Francis for injuries to his right knee. The claim was accepted and weekly

payments commenced to be paid to the plaintiff.

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In December 1997 the plaintiff brought a further claim for compensation

against the Debra Ann Francis for injury to the left knee arising from the right

knee injury. This claim was accepted.

The plaintiff received weekly payments of compensation with respect to the

injuries from 1994 to February 2009.

Between 2002 and 2009 the plaintiff was employed by Patricks. Whilst

employed by Patricks he simultaneously received $137,979.60 in weekly

payments of compensation.

On 1 October 2008 the plaintiff sustained injuries in the course of his

employment with Patricks. The plaintiff made a claim for compensation and it

was accepted.

On 20 February 2009 Debra Ann Francis terminated weekly payments.

On 12 November 2010 the plaintiff commenced receipt of Centrelink benefits.

Subsequently the plaintiff was charged with 8 counts of Obtaining a Financial

Advantage by Deception contrary to the Crimes Act 1958.

On 30 November 2010 the plaintiff entered a plea of guilty to the 8 counts and

he was sentenced to a term of imprisonment of 21 months in the Magistrates’

Court of Victoria. In addition an order was made pursuant to s 86 (1)

Sentencing Act 1991 that he pay an amount of $136,979.60 compensation to

the VWA.

The plaintiff appealed the sentence imposed by the Magistrate but not the

conviction or the compensation order made under the Sentencing Act.

On 24 March 2011 the plaintiff was sentenced in the County Court to a

minimum term of imprisonment of 1 year. The order for compensation made

in favour of the VWA under the Sentencing Act was not disturbed.

On 9 July 2012 having served the term of his imprisonment, the plaintiff made

claims for compensation against Debra Ann Francis and Patrick Stevedores

seeking reinstatement of weekly payments of compensation and medical and

like expenses from 24 March 2012. Both claims for compensation were

rejected and the plaintiff issued proceedings in the Magistrates’ Court to have

the decisions set aside.

On 1 July 2015 I made orders in favour of the plaintiff including that Debra Ann

Francis and Patrick Stevedores pay to the plaintiff weekly payments in

accordance with the ACA for no current work capacity from 24 March 2012

and for such payments to continue in accordance with law together with costs

and interest pursuant to s. 114 E of the ACA.

13

On 6 July 2015 the plaintiff advised Debra Ann Francis and Patrick Stevedores

that he nominated Patrick Stevedores as the defendant liable to meet the

order of this Court but without prejudice to any rights against Debra Ann

Francis.

On 29 July 2015 the VWA via QBE as agent for Patricks issued a notice to the

plaintiff advising him that it intended to set-off the amount currently owing to

him under the compensation order made by me together with interest under s

2 of the Penalty Interest Rates Act 1983 in an amount of $204,178.41 pursuant

to s 97 (4B) and s.114 F (4) of the ACA.

The plaintiff challenged the decision of the VWA.

On 26 August 2015 a Notice of Genuine Dispute issued.

The defendants appealed my decision in favour of the plaintiff to the Supreme

Court of Victoria, The appeal was dismissed.

On 19 May 2016 the plaintiff wrote to both defendants seeking payment of

weekly payments pursuant to my orders.

On 30 June 2016 the plaintiff wrote a further letter to the defendant seeking

compliance with my orders and advising of a claim pursuant to s. 128 of the

ACA.

The plaintiff has not paid any amount in reduction of the compensation order

made in the VWA’s favour and nor have the defendants paid any weekly

payments of compensation to the plaintiff pursuant to my orders.

On 5 July 2016 the plaintiff issued a summons against the defendant seeking a

calculation of the amount weekly payments together with interest and penalty

interest pursuant to s. 128 of the ACA.

20 July 2016 the agent for the VWA and Patrick Stevedores, Employers Mutual

Limited, advised Centrelink of the proceedings and enclosed compensation

advice periodic payments form.

On 8 August 2016 the VWA issued a summons seeking that the amount of any

weekly payments payable pursuant to my orders be set off against the amount

owed by the plaintiff to the VWA pursuant to s. 97 (4B) and/or s 114 F (4) of

the ACA by reason of orders made under the Sentencing Act 1991.

On 11 August 2016 Centrelink issued a compensation recovery notice to the

VWA care of Employers Mutual Limited indicating that it would seek to recover

from the VWA the sum of $94,448.56 being the amount recoverable of centre

link payments wrongly received by the plaintiff on 12 November 2010 to 4

August 2016.

14

As at the date of issuing of the VWA’s summons the amount owed to it under

the Sentencing Act was calculated at $213,203.17.

The plaintiff’s Application against the defendants

46. The defendants reserved their right in relation to the plaintiff’s application and in

particular in relation to the claim pursuant to s. 128 of the ACA.

Sentencing Act Order

47. I have already set out the language of s 86 (1) of the Sentencing Act 1991.

48. Section 87 of the Sentencing Act is also an important provision and it provides that an

order made by a court under s 86 (1) must be taken to be a judgement debt due by

the offender to the person in whose favour the order is made. The section is

expressed thus:

Subject to section 30 or section 36ZA of the Confiscation Act 1997, an order

under section 86(1), including costs ordered to be paid by the offender on the

proceeding for that order, must be taken to be a judgment debt due by the

offender to the person in whose favour the order is made and payment of any

amount remaining unpaid under the order may be enforced in the court by

which it was made.

49. Section 107 of the Magistrates’ Court Act 1989 provides that every judgement debt

carries interest at the rate for the time being fixed under s. 2 of the Penalty Interest

Rates Act 1983 from the time the order was made.

50. It is for this combination of reasons that the VWA submitted that as a matter of law it

is entitled to penalty interest accruing at the appropriate rate from time to time under

the Penalty Interest Rates Act on the order made under the Sentencing Act and that I

do not have discretion in relation to interest. Alternatively, it submitted, that if the

exercise of the power to award interest does carry with it a discretion, the plaintiff has

not identified any or any sufficient grounds for its exercise in his favour against such

an award.

51. The VWA also submitted that once the award of compensation under the Sentencing

Act has been made in its favour it became a matter for it to determine what, if any,

processes it engaged as the means to enforce the judgement debt. It submitted that s

97 (4B) of the ACA is a statutory mechanism to recover a judgement debt that has

already accrued to it. It developed its submission by arguing that in this sense the

position is no different to other means of debt recovery that might have been

available to it such as a garnishee on wages or levying execution on property and

assets owned by the plaintiff.

52. Under s 87 of the Sentencing Act a compensation order amount awarded to a person

must be taken to be a ‘judgment debt’ and ‘any amount remaining unpaid under the

order may be enforced in the court by which it was made’. The Magistrates’ Court Act

15

and Rules contain a regime for the enforcement of orders. However, the set-off

recognised in s 97 (4B) of the ACA is a special mechanism made available by way of a

statutory set-off but nonetheless is defined as a ‘judgement debt’ and therefore there

is no reason to not regard it as attracting interest like any other judgment debt.

53. In furtherance of its arguments the VWA submitted that:

The lawfulness of the order made under the Sentencing Act is not disputed by

the plaintiff and never had been; and

The order is made by way of ‘compensation’ to be paid to the VWA

54. The VWA submitted correctly that Debra Ann Francis and Patricks were the

defendants to the plaintiff’s claim for reinstatement of weekly payments of

compensation but were not parties to the award of compensation made under the

Sentencing Act and therefore had no legal capacity to seek to set up the amount of

that award of compensation in the substantive workcover proceedings heard and

adjudicated upon by me. I agree.

Legislative structure

55. Section 97 is located in Division 2 of Part IV of the ACA. In large measure Part IV

consists of provisions that determine the benefits payable to an injured worker in the

form of weekly payments, medical and like expenses, death benefits and impairment

claims. Broadly speaking ss 93 (7) to 97 of Division 2 limit entitlements to

compensation subject to numerous provisions and exceptions.

56. Section 97 in its various sub-parts addresses a number of discrete but disparate topics

such as :

disregarding payments made pursuant to, inter alia, contracts of

insurance;

workers who cease to reside in Australia;

inalienability of compensation;

exceptions to inalienability;

prohibitions deigned to preclude potential double entitlements pursuant

to the Workers Compensation Act and the ACA;

prohibition on entitlement to weekly payments for any period when a

person is serving a sentence of imprisonment

57. It is readily apparent that the concept of inalienability of compensation provided for

under the ACA is not inviolate and the various sub-parts within s. 97 make provision to

limit the compensation that a worker might otherwise be entitled to despite a

compensable injury. The VWA contended that such limitations are consistent with the

objects of the ACA and it rejected the plaintiff’s submission that s 97 (4B) should be

16

interpreted “strictly against it for the purposes of this application” because the

express language provides to the contrary, and furthermore, the plaintiff’s submission

was bereft of support by way of judicial authority. I think there exists a valid point of

distinction between a provision that ‘limits’ the circumstances in which benefits are

payable to a worker and a provision that sanctions the deduction y way of a ‘set-off’

from benefits found to be due to a worker for a compensable work injury a sum

separately awarded by way of compensation to the VWA under another enactment

such as the Sentencing Act.

58. The VWA referred to the fact that s.97 (4B) was inserted by Act number 107/1997

(the Accident Compensation (Miscellaneous Amendment) Act 1997) and amended by

Act number 81/1998 (the Accident Compensation (Amendment) Act 1998) and that

on neither occasion did the Minister’s Second Reading Speech refer to s 97 (4) or s 97

(4B) of the ACA. Mr McDonald submitted that this was a telling omission and should

be seen as deliberate and not a mere oversight.

Inalienability

59. Section 97 (4) of the ACA is immediately followed by s.97 (4A) and s. 97 (4B) which

provide for express statutory exceptions to the general position laid down in s. 97 (4).

Section 97 (4B) is expressed in clear words and states:

Despite subsection (4), the Authority or self-insurer is entitled to set off against

any weekly payments to which a worker is entitled the amount awarded to the

Authority or self-insurer by an order made by a Court under this Act or section

86 of the Sentencing Act 1991 after the worker is convicted, or found guilty, of

an offence under this Act or of any offence under the Crimes Act 1958 in

connection with a claim for compensation under this Act.

60. The VWA submitted that the sub-section should be interpreted in light of the normal

principles of statutory interpretation, that is to say, that the statute is to be

interpreted according to the intent of the Parliament and that such intention is to be

found by an examination of the language used in the statute as a whole.

61. In the proceedings conducted before me, I found that the plaintiff had an entitlement

to compensation and I found the defendants jointly and severally liable to pay the

plaintiff compensation in the form of weekly payments. The words ‘in connection with

a claim for compensation’ used in s 97(4B) are important. They are at first blush words

of wide import and the VWA argued that ‘a claim’ should be interpreted to mean ‘any

claim’ for compensation made by a worker and should not be limited to ‘the claim’ in

which the fraud was committed, the finding of guilt was made or the conviction

entered that gave rise to the order for compensation under the Sentencing Act.

62. This reasoning leads to the question whether Parliament intended that a person who

is found to have suffered a compensable work injury and becomes entitled to weekly

payments is susceptible to having his entitlement to weekly payments set-off because

17

of an offence of dishonesty committed by him in connection with obtaining payments

of compensation to which he was not entitled made under a separate claim for injury?

63. The VWA disputed that its entitlement to set off the order made in its favour under

the Sentencing Act should be limited to the claim made by the plaintiff in respect of

which the fraud was committed. It submitted that such a limitation would be

inconsistent with the objects of the ACA and, moreover, would amount to reading

words into the section that do not exist.

64. A point of comparison was sought to me made by the plaintiff to s. 96 (1) of the ACA

which expressly limits the reduction of the weekly payments to the particular

employment out of which the injury arose. However, in in the compensation

proceedings before me the plaintiff sought and was successful in obtaining judgement

against both defendants. As I have earlier noted, his solicitor’s letter of

correspondences giving notice of election to Patricks (while expressly preserving his

rights as against Debra Ann Francis) does not alter this fact. To suggest otherwise

would in my opinion create a fiction and lead to a potential mischief in which a worker

engaged in a criminal fraud in which the VWA has paid out of the Fund to him

compensation in the form of weekly payments could be shielded from recovery where

a second employer is nominated as the payee.

65. The plaintiff advanced some hypothetical scenarios it argued identified the potential

unfairness in the event the VWA’s application found favour. In my opinion the

example of the quadriplegic is unhelpful because as Mr McDonald pointed out in

response, the same quadriplegic may have received a month’s payment fraudulently,

but at the same time might be in receipt weekly payments until age 65, together with

many hundreds of thousands of dollars by way of an impairment benefit claim. In such

a situation it would not be unfair to compel the repayment of benefits obtained

fraudulently.

66. The VWA argued as well that that the term ‘set-off’ is not used in the sub-section as a

noun but as a verb. The section does not purport to give the VWA the right to claim a

‘set off’ (as that expression is used in the context of civil litigation but rather that is

entitled ‘to set-off’ the compensation order under the Sentencing Act against any

weekly payments to which the worker is entitled. I agree with this analysis.

67. Counsel for the VWA also referred to s 35 (a) of the Interpretation of Legislation Act

1984 (Vic) that requires in the interpretation of the provision of an Act of Parliament a

construction that would promote the purposes and objects underlying the relevant

enactment in preference to a construction that would not.

68. The objects of the ACA are contained in s 3 and they include:

(e) ensuring workers compensation costs are contained so as to minimise the

burden of Victorian businesses

(h) to establish and maintain a fully funded scheme;

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(d) to provide adequate just compensation to injured workers.

69. The VWA submitted that it would be contrary to these objects and the general

purpose underpinning the ACA to interpret s 97 (4B) in such a way as to allow a

worker who:

has obtained a very significant sum of $137,979.60 fraudulently under the

ACA;

has been convicted of criminal offending involving that fraudulent behaviour

under the ACA and been sentenced to a term of imprisonment;

has an order against him for a payment of compensation to the VWA under

the Sentencing Act that has not been paid in any amount whatsoever;

by virtue of the same legislative scheme has a further entitlement to

compensation

to enjoy the fruits of the compensation system free of any obligation to account for

the sums that he has fraudulently obtained by virtue of the abuse of that very same

legislative scheme.

70. Further, the VWA submitted that the adoption of the provision according to its

ordinary expressed meaning is not draconian because had the plaintiff complied with

the compensation order, i.e. repaid the amount or reduced the sum awarded to the

VWA, the need to resort to giving the Notice of the Decision to raise a set- off under s

97 (4B) would not have arisen. In addition the VWA argued that had it had recourse to

other means to enforce the compensation order as a debt due, for example, by

execution against any assets owned by the plaintiff or a garnishee of any wages then

there could have been no legitimate complaint by the plaintiff. That is undoubtedly

correct.

71. The VWA relied on what it characterised as the clear and unambiguous language of s

97 (4B) which when applied using the grammatical and ordinary sense of the words

leads to the conclusion that it is entitled to set-off the compensation order made in its

favour and in doing so submitted that it does not give rise to any absurdity,

repugnancy or inconsistency with the remainder of the ACA.

72. In relation to set-offs, Chitty on Pleading Volume 1, 7th Edition, 1844, page 595 put it

this way:

‘At common law, and independently of the statutes of set-offs, a defendant is

in general entitled to retain, or claim by way of deduction, all just allowances or

demands accruing to him, or payments made by him, in respect of the same

transaction or account, which forms the ground of action. But this is not a set-

off in the strict legal sense of the word, because it is not in the nature of a cross

demand or mutual debt, but rather constitutes a deduction, rendering the sum

to be recovered by the plaintiff so much less. So, where demands, originally

19

cross, and not arising out of the same transaction have by subsequent express

agreement been stipulated to be deducted, or set off against each other, only

the balance is the debt and sum recoverable, without any special plea of set-

off.’

73. Statutory set-off found form in the Insolvent Debtors Relief Act of 1729 and the Debts

Relief Amendment Act 1735 (known together as the ‘Statutes of Set-Off’). The rules as

to set-off were extended at the time of the English Judicature Acts 1873-1875.

Although the old statutes have long ago been repealed their effect has been

preserved and are reflected in the Civil Procedure Rules such as the Magistrates’

Court (General Civil Procedure) Rules which give a defendant the right to assert a

cross-claim for a debt as a defence to a claim against it for a debt it owes to a plaintiff.

However, and separately, there are recognised limited statutory rights to a set- off for

dealing with proofs of debt exists in the Bankruptcy Act and the Corporations Act.

Section 97 (4B) of the ACA is another limited form of the statutory right of set-off.

74. The nature of the proceeding between the plaintiff and the defendants conducted in

this Court needs comment. The plaintiff sought relief in the Magistrates’ Court

pursuant to the provisions of the ACA. The Magistrates’ Court’s jurisdiction is a limited

jurisdiction. The plaintiff following his release from prison made claims for

compensation against Debra Ann Francis and Patricks seeking reinstatement of weekly

payments of compensation and medical and like expenses from 24 March 2012. The

plaintiff named the employers as the defendants because it was against them that the

plaintiff asserted liability to pay him compensation in accordance with s 125A of the

ACA. The VWA was never a party to the Magistrates’ Court proceedings. The

subrogated rights that come into operation under the provision of the ACA by way of

a statutory contract of indemnity do not in my judgement make it otherwise.

Furthermore, a cross-claim in the nature of a set-off can only be raised by the parties

to the action and not a stranger and, as I have said, the VWA was a stranger: see

Indrisie v General Credits Ltd [1985] V.R 251 at 254. I am unable to accept the

proposition made by the plaintiff that the VWA could have either procedurally or

legally raised a set-off under s 97(4B) of the ACA in the principal proceedings heard

before me in this Court.

75. Furthermore, the Rules of the Magistrates’ Court in relation to proceedings brought

under the ACA make no allowance for a set-off being pleaded in a proceeding. Neither

do they provide, by way of further example, the bringing of a counterclaim. Mr

McDonald submitted that if it were otherwise, an employer could in a given set of

circumstances, bring a counterclaim or a cross demand against an employee for an

overpayment of wages in the context of a proceeding for weekly payments of

compensation or for medical and like expenses and such action would be

counterproductive to the operation of the ACA. There is merit in counsel’s submission.

76. I am satisfied that in response to the plaintiff’s proceeding against the defendants in

the Magistrates’ Court the defendants had no right to invoke s. 97 (4B) of the ACA for

20

the purposes of a set-off against a potential liability by the defendants to the plaintiff

because the defendants were not the beneficiaries of the compensation order made

under the Sentencing Act and the VWA was not a party to the Magistrates’ Court

proceeding. Furthermore, I am satisfied that in any event the right in the VWA to set-

off the compensation order against the plaintiff’s weekly payments of compensation

did not crystallise until, at the very earliest, the orders were made by me on 1 July

2015.

77. I am satisfied by the evidence that the VWA moved promptly following publication of

my reasons for decision to enforce its rights by issuing the Notice dated 29 July 2015.

Does Anshun apply?

78. The plaintiff also resists the relief by the VWA relying on the principles expressed in

Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR589 (‘Anshun’). The

VWA submitted that the principles set out in have no application and, in the

alternative, if they do, then I should exercise any discretion in the VWA’s favour based

on ‘public policy’ considerations. Principally the VWA’s submission was that the facts

in Anshun bear no parallel to the facts to this proceeding.

Anshun

79. The facts in Anshun are worth noting. Both the Port of Melbourne Authority (the

‘PMA’) and Anshun were sued by an injured worker in relation to an accident involving

the use of a crane on the docks. The crane was used by Anshun and hired from the

PMA. In that proceeding each of the defendants claimed contribution from each other

pursuant to s. 94 of the Wrongs Act (1985) (Vic). The jury found both defendants

liable and contribution was split 90/10 in favour of Anshun. Subsequently PMA

commenced an action against Anshun claiming full indemnity for the damages and

costs under a term of a hiring agreement. Anshun’s defence was that there was an

estoppel that arose that barred PMA’s claim because it was a matter that should have

been raised in the earlier proceeding. This defence was upheld at first instance in the

Supreme Court of Victoria and also on appeal by Full Court and ultimately the High

Court. The decision of the High Court in Anshun is well known for its pronouncements

concerning the difference between issue estoppel and res judicata. The Court held

however that the case did not involve res judicata or issue estoppel in the strict sense.

Rather the critical issue was whether the further or subsequent proceeding ought to

have been stayed as an ‘abuse of process’ on the basis of the public policy principle

that parties should bring forward their whole case, and the Courts will not, subject to

special circumstances, permit the same parties to open the same subject matter of

litigation in respect of a matter which might have been brought forward as part of an

earlier proceeding.

80. A number of principles can be extracted from the judgement of the High Court in

Anshun including:

21

The later cause of action must be between the same parties. For the reasons I

have already expressed that situation does not apply in this instance;

There will be no occasion of an estoppel arising unless the matter relied upon as a

defence to the subsequent action was so relevant to the subject matter of the first

action that it would have been unreasonable not to rely on. Here aside from the

fact that different parties are involved, there were, and are, issues of fact to be

determined by virtue of the VWA’s application. Further, the High Court recognised

that a party may justifiably refrain from litigating an issue in a proceeding it wished

to litigate the issue in another proceeding due to considerations of expense and

the importance of the particular issue;

Significantly the High Court held that a party would be estopped from bringing an

action which, if it succeeded, would result in a judgement conflicting with an

earlier judgement. In the current circumstances there is no such possibility. This is

because the plaintiff’s entitlement to compensation has already been established

by my primary decision and the VWA’s application does not seek to impeach the

plaintiff’s entitlement to compensation.

81. More recently in Timbercorp Finance Pty Ltd (in liquidation) v Collins [2016] HCA 44 the High Court unanimously dismissed appeals from the Court of Appeal of the Supreme Court of Victoria, holding that investors in a previous group proceeding against the Timbercorp Group were not precluded by estoppel or abuse of process from raising issues specific to them in subsequent proceedings. . The majority opinion French CJ, Kiefel, Keane and Nettle JJ (Gordon J wrote a separate but concurring opinion) concluded that ‘raising the defences in these proceedings can in no way be said to amount to an abuse of process. To the contrary, the preclusion of the respondents' defences to the appellant's claims would be unwarranted in principle and therefore unjust’ [at 73].

82. Timbercorp Finance Pty Ltd provided loans to investors in horticultural and forestry projects which were operated as managed investment schemes by Timbercorp Ltd (of which Timbercorp Finance was a subsidiary). The companies in the Timbercorp Group, including these two and their successors, were placed in liquidation in June 2009. The respondents had applied for loans from the appellant between May and October 2008. They had also participated in an earlier group proceeding brought against the Timbercorp Group in October 2009. This proceeding was unsuccessful at trial and on appeal. The current proceeding commenced when the liquidators brought an action alleging that the respondents had defaulted on their payments under the loan agreements in 2009. The appellants argued that the respondents were precluded from raising their filed defences either by Anshun estoppel, or because of an abuse of process. The High Court outlined the principle in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 as:

‘the respondents should be estopped from pursuing their defences because they could and should have raised them for determination in the group proceeding’. [at 5]

22

83. The majority judgment in Timbercorp Finance noted that Anshun states that estoppel will not exist ‘unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it’ [at 56]. The majority opinion found:

‘By way of contrast, in these proceedings, it could hardly be said to have been expected that the respondents would raise their individual issues about their loan agreements referred to above in the group proceeding, where the common issues were undisclosed risks and misrepresentations affecting the entry of investors into the schemes. The only connection between those matters and their loan agreements was the relief sought regarding the enforceability of the loan agreements. There was no issue in the group proceeding about the validity of the loan agreements which would have made the claims in the respondents' defences relevant in the group proceeding’. [at 58]

84. The High Court also dismissed the argument that the defences would be an abuse of process, saying:

‘At most it may be said that the respondents' claims were not brought to the attention of the Court. It could not be said that the failure to do so affected the case management decisions open to the Court. There is no reason to suppose that knowledge of the respondents' claims would have altered the course that the Court took’ [at 73].

85. In my judgement and after making allowance for the nature of the proceedings

brought by the plaintiff under the ACA, the reasoning disclosed in Anshun and more

recent judicial pronouncements, I am satisfied that there exists no sound reason to

apply the doctrine as a basis to decline the VWA’s relief. Estoppel is founded on the

public policy that exists in avoiding re-agitation of issues and of preventing issues

being raised that could have been and should have been decided in earlier litigation.

The High Court in Anshun recognised that there is a difference between a failure by a

person to traverse an allegation made by the other side, and a failure to plead

affirmative matters that would not have conflicted with any reversible allegation. In

my judgement the application made by the VWA consists of an affirmative matter

which does not conflict with either the plaintiff’s entitlement to compensation, or any

defence raised by the defendant employers in the original proceedings. I am also

satisfied that the VWA’s rights did not crystallise until such time as the plaintiff had

established an entitlement to compensation which came about as a result of my

judgment and the dismissal of the subsequent appeal from in the Supreme Court of

Victoria. I am also satisfied that s 97 (4B) of the ACA does not create any substantive

right that could, or ought to have been, litigated in the earlier proceedings between

the plaintiff and the employer defendants.

86. I am also persuaded that adherence to the sound public policy espoused in Anshun is

not imperilled by the grant of relief in the VWA application and, in fact, there is

another public policy consideration at work in allowing the relief sought by the VWA

23

to go forward which is the public policy in maintaining the integrity of the

compensation scheme and the protection of the public purse.

Additional compensation pursuant to s 128 of the ACA

87. Section 128 of the ACA confers on the Court a discretion to give a worker an

additional amount where there has been unreasonable delay by the employer or the

VWA. Neither counsel for the plaintiff nor the VWA directed me to any authority in

which the section has been utilised. However, there are instances in older cases but

they turn on their particular facts and these include, Durrant v Melbourne &

Metropolitan Tramways Board (1953) 3 WCBD (Vic) 74; Mack v Hector Crawford

Productions Pty Ltd (1956) 3 WCBD (Vic) 132; Muscat v ACC (1987) 1 Vic ACR 383 and

Gorman v GIO (County Court Victoria) Judge Harbison 7 March 1997 (Unreported).

88. The plaintiff argued that for the defendants to have only raised the s 97 (4B) issue

following the attempts by the plaintiff to have his judgement satisfied amounts to

unreasonable conduct. The plaintiff contended that he should be entitled to increased

compensation in circumstances pursuant to s 128 (1) of the ACA because the VWA has

been responsible for unreasonable delay in relation to the payment of compensation

to the plaintiff. I am not persuaded by the history of the proceedings that the

employers or the VWA have been responsible for any unreasonable delay. In any

event I am satisfied that neither the VWA (which is not liable to pay the plaintiff

compensation pursuant to my order in any event) nor the employer defendants have

been responsible for ‘unreasonable’ delay in that:

orders were made on 1 July 2015 in the plaintiff’s favour;

the appeal from my decision was made within time and a stay of my orders

was sought and obtained from an Associate Justice;

the appeal was not dismissed and the stay lifted until 19 May 2016

the precise amount of compensation owing to the plaintiff pursuant to my

orders was subsequently quantified; and

the plaintiff has been on notice since shortly after my judgement that the VWA

would seek to exercise its rights pursuant to s. 97 (4B) in relation to the

payments of compensation

89. I note for the sake of completeness that had I been persuaded that the VWA’s rights

pursuant to s. 97 (4B) of the ACA could and should have been raised in the substantive

proceeding for weekly payments of compensation, it would not have altered the

outcome of the proceedings in this court given their nature and scope. I am not

persuaded that as a result the plaintiff has been prejudiced in a relevant sense. I am

not satisfied that the VWA’s application creates any ‘conflict’ with the decision in the

plaintiff’s favour in which he was awarded compensation.

24

90. Separately from the issue of the assertion of a claim to entitlement of s 128 compensation, I am satisfied that the plaintiff is entitled to interest on the weekly payments as a matter of right pursuant to s 114 E of the ACA at the ‘prescribed rate’ which is in fact the prevailing penalty interest rate. The defendants have not disputed the plaintiff’s entitlement to interest and ultimately it will be a matter of agreement between the parties, and in the absence of agreement, an order by me specifying that amount of interest that the weekly payments have accrued.

91. Mr McDonald pointed out that counsel for the second defendant appearing before

me in the principal hearing did raise at the end of her final address the prospects that

the order now sought by the VWA in it summons might be pursued should the

plaintiff’s claim for reinstatement succeed. The plaintiff’s counsel raised no objection

at that time. The fact that the matter of a possible action by the VWA was adverted to

by counsel appearing for the second defendant does not in my judgment diminish the

force of the submissions made by the VWA of the separateness of parties and I refer

to my reasons on this point expressed earlier.

Approach to statutory Interpretation

92. Ultimately I have not been persuaded that the resolution of this matter has called for

the application of a purposive approach to statutory construction. I am not persuaded

that there exists a conflict in the statutory provisions under consideration because I

am not satisfied that there is a conflict between the language of s.97 (4), (4A) or (4B).

The subsections are plainly expressed as amounting to exceptions by way of

amendments made to the ACA to the general principle provided for in s 97(4) that

payments of compensation are absolutely inalienable. However, in the event I am

wrong in this approach, then in my opinion, and having regard to the reasoning and

principles expressed in Project Blue Sky referred to earlier, I would not have been

persuaded to adopt the plaintiff’s preferred construction based on the analysis of the

language I have adopted.

The nature of the relationship between employers and the VWA

93. Employers have rights and obligations imposed on them under the ACA. The ACA

imposes an obligation on the VWA to indemnify an employer in respect of the

employer’s liability as an employer of a worker to pay compensation and damages in

accordance with the ACA for injuries suffered by the worker arising out of, in the

course of, or due to the nature of employment by the employer. The VWA in turn has

subrogated to it under the ACA a suite of extensive rights by way of action or by way

of recovery that an employer might have in a given situation against a person

including paying compensation to a person entitled and conducting and defending

proceedings before a court or tribunal and defending actions against employers both

under the ACA and at common law.

94. The ACA contains a scheme that established a Workcover Authority Fund to be

operated by the VWA and secured from various sources, including premiums paid by

25

employers, and from which may be paid out of the Fund things such as payments of

compensations and payments for costs and expenses relation to the VWA’s

performance of its functions.

95. Significant subrogated rights can be seen as surrendered by an employer to the VWA

under the ACA such as whether to accept or reject a claim and the decision by the

VWA to accept a claim was binding on the employer subject to an employer’s ability

to seek to review a decision to accept a claim. The VWA as well as the employer is

directly liable to a worker to pay any compensation and damages in accordance with

the ACA in respect of any injury arising out of, or in the course of, employment and

the ACA has provision for a statutory contract of insurance under which the VWA

becomes liable to indemnify the employer and the employer in return pays premiums.

96. In my judgement the clear intention of Parliament under the ACA has been to confer

on the VWA and remove from the named employer powers to do those central tasks

connected with the defence and administration of a claim made under the ACA. These

are additional reasons to not accept the plaintiff’s arguments that seek to repose

direct liability on the named employers.

Conclusion

97. The structure of s 97 of the ACA and the language of the sub-section 97(4B) provides a

strong indication that the VWA may apply and should be permitted to set-off from the

amount of weekly payments the amount of the compensation order made in its

favour together with interest at the rates applicable from time to time under the

Penalty Interest Rates Act. There is no discretion to refuse interest on the judgment

debt comprising the order for compensation under the Sentencing Act and if I am

wrong about this, then based on the above analysis of facts and the chronology of

events referred to, I am not satisfied the plaintiff is entitled to the exercise of a

discretion in his favour such as to refuse the interest claim or to refuse interest

forming part of the amount that may be set-off from the weekly payments due to

him.

98. I am satisfied that the plaintiff is entitled to an order quantifying the amount of

weekly payments payable to him and of interest on such payments pursuant to my

orders dated 1 July 2015 but otherwise his summons be dismissed.

99. I grant the relief sought in the VWA’s summons and order that the amount of weekly

payments payable to the plaintiff pursuant to my orders dated 1 July 2015 together

with interest on them be set-off against the amount owed to the VWA by the plaintiff

pursuant to s 97(4B) of the ACA.

100. I will hear the parties on the final form of orders including any arguments regarding

costs.