Major consequences follow court’s rebuff of WCQ’s stroke compensation claim denial

WorkCover is required to accept or reject an application for workers compensation within 20 business days of receiving a worker’s application.

That time constraint has led to a practice of approving some applications while awaiting further information and in the knowledge it can revisit the decision and terminate benefits if it turns out the application was not one for acceptance.

That practice is likely to be turned on its head by a recent Supreme Court decision.

The contest that came before Justice Peter Applegarth concerned an application by Chang Mo Yang who had suffered a stroke at work said to be as a result of workplace stress.

WCQ rejected the application but on review, the Workers Compensation Regulator – who preferred the expert opinion of a doctor who had examined the applicant to that one who had never laid eyes on him – the application was accepted.

WCQ then obtained the opinion of another medical practitioner who stated “I do not think the cerebral haemorrhage is secondary to hypertension caused by work stress”.

That led to a notification two days later by the claims officer that “in light of new medical information the decision has been made to cease your claim”. The new advice was that the stroke had been due to “pre-existing untreated hypertension”.

Chang promptly filed an application under the Judicial Review Act for a review of that decision, contending that WCQ had commissioned the third report to bulldoze the Regulator’s decision.

It could not in those circumstances – he argued – rely on WCRA s 168 which allows WorkCover to “review a person’s entitlement to compensation” if it considers their “entitlement to compensation may have changed.”

The section was not intended – he asserted – to allow the insurer to have a second crack at assembling evidence to defeat the claim ab initio.

WCQ essentially agreed that it had relied on the further report not so much for evidence that his status had changed but to support its view that the initial claim should never have been accepted in the first place.

It justified its position on a broad interpretation of s 168: that it had power to reassess as to whether an applicant ever met the statutory threshold at any time if there has been a “change in circumstances”.

His Honour noted the difficulty with that submission was that s 168 is not pre-conditioned upon a “change in circumstances”.

“Permitting an insurer to change its mind in the light of further information or further reflection” may Justice Applegarth observed, “introduce a lamentable measure of uncertainty and disturb the welfare of injured persons”.

After an intricate examination of the pros and cons of both sides of the argument, he concluded WCQ did not have power under s 168 to revisit earlier decisions on new evidence it receives.

Rather, the occasional acceptance of a claim that subsequently turned out to be one for rejection, “is a price that the legislature seemingly accepts in the interest of the efficient administration of the scheme for the greater good of the overwhelming majority of claimants”.

The respondent’s decision of June 2021 to terminate Chang’s entitlement to workers’ compensation was thus set aside.

Based on this decision, there will be many instances over many years of WCQ having wrongly relied upon s 168 to re-open an accepted claim terminate to workers’ compensation benefits.

The sting in the tail is the court’s clarification that s 168’s purpose is to allow WCQ to terminate benefits if it considers a worker’s entitlement has changed, regardless of whether its view is correct.

So in the case of a worker who has undergone remedial surgery, WCQ does not have to wait months for an assessment of the success or failure of the surgery but rather it can cease benefits immediately based on its expectation of a good result.

Yang v WorkCover Queensland [2021] QSC 274 Applegarth J, 22 October 2021

source https://cartercapner.com.au/blog/courts-rebuff-of-workcovers-2nd-crack-at-stroke-compensation-claim-denial-has-major-consequences/

Aspiring airline pilot seeks $7 mil in damages for child sexual assault

The victim of a sexual assault as a youth by the owner of a suburban theatre in 1985 has sought damages for the resulting psychiatric injury he claimed prevented him becoming an airline pilot and caused his life to “take a completely different turn”.

Then aged 16, Paul Miles – a pseudonym offered by the court – worked as a casual lighting operator at the Kogarah Mecca Cinema owned and operated by Philip Doyle.

Around the time of the August 1985 school holidays Miles – under the influence of alcohol supplied to him by Doyle – accepted an invitation from the cinema owner to stay overnight at his unit where it became clear he was expected to engage in sex acts.

Other than mentioning it to another boy, Miles told no one what had occurred and the incident was never spoken of between the two participants.

He later reported the incidents to police. Doyle was convicted of a series of sexual assaults  and was serving a sentence when the latter’s civil injury compensation claim came before Justice Richard Cavanagh in the NSW Supreme Court in July.

Notwithstanding his denial of liability in Miles’ lawsuit, the court was satisfied Doyle had behaved towards the youth in the way that had been recounted in evidence.

“The plaintiff was given alcohol by the defendant who then took advantage of him in his intoxicated state,” Justice Cavanagh concluded. “Whist he did not physically resist and temporarily froze before protesting, he did not consent to the defendant sexually touching him”.

His Honour then set about a “challenging” assessment of what damages Miles was entitled to be awarded.

“Challenging” because Miles – in his view and contrary to the conclusions of both forensic psychiatrists – had not developed his psychiatric illness until many years after the actual assault all the time keeping the incident hidden from the world around him.

Having completed Year 12 in 1986 in Lismore with good grades, he commenced officer training at Duntroon in Canberra.

He left there though in May 1987 and with him left his hopes of becoming a military pilot and then a highly paid airline pilot 20 or so years later in receipt of a military pension.

In fact he struggled to hold down a job and – although working most of the time – his work was short term, part-time or only for brief periods.

His only commitment to tertiary education was to complete a Bachelor of Media at Southern Cross University in 2009.

Remarkably though, over the 25 years since the assault, Miles occasional visits to doctors left no record of treatment for psychological issues.

All that changed once the Doyle criminal prosecution began in 2012. His engagement in that process brought on depression, anxiety and PTSD for which Miles received a disability support pension.

Justice Cavanagh rejected the opinions of psychiatrists Alex Apler and John Baker that the youth had suffered from a psychological illness since almost immediately after the assaults.

“Neither the contemporaneous records nor the plaintiff’s evidence support the assumptions and conclusions of fact which they have made”.

Rather his symptoms increased or accumulated over time – in His Honour’s view – possibly because for many years he declined treatment and declined antidepressant medication.

He was satisfied that Miles’ incapacity to work from about 2013 – in the absence of evidence from Doyle that it was the result of other factors – was a result of the psychiatric conditions caused by the assault.

He rejected the foregone airline career theory.

“In my view, the plaintiff has not established that the effect of the sexual assaults was that he was unable to stay in the military and become a commercial pilot”.

Justice Cavanagh thus declined Miles’ $7 mil ask. Rather he allowed a past loss of income at the rate of average weekly earnings, namely $1.1k/week for eight years in the sum of $457k.

For the future, he merely allowed a ‘buffer’ of $200k and assessed general damages – on a common law basis as is allowed in NSW for sexual assault – at a further $200k.

Aggravated damages – to account for the long-term burden of shame, embarrassment and indignation over and above the injury itself – were awarded at $35k making up a total damages award of $1.273 million.

Miles v Doyle (No 2) [2021] NSWSC 1312 Cavanagh J, 15 October 2021

source https://cartercapner.com.au/blog/court-awards-1-27-mil-for-aspiring-airline-pilot-child-sexual-assault-at-cinema/

Economic loss claim slaughtered: “capable and intelligent” manager likely only to earn $1.2k/week

A mother with an impressive employment history and a string of occupational qualifications has been ruled by the Supreme Court as likely only to have earned average wages but for the serious injuries she sustained in a motor accident at Mudgeeraba in February 2015.

Kate Sutton had completed year 12 and then worked for Cue Design progressing to store manager after 5 years. She then worked for Jeans West as a manager for three years and then in a car dealership as a finance manager for two years.

Her four year stint in real estate after gaining her real estate licence was paused to raise her two sons born in 2005 and 2010.

The injuries she sustained in the 2015 accident resulted from the impact of a rear end accident that was so heavy, both vehicles were written off.

Allianz – as insurer for at fault driver Lauren Hunter – admitted liability for the accident but disputed the extent of Kate’s damages for the resulting psychological injury when the matter came before Justice Paul Freeburn in September.

Psychiatrists Alfred Chung, Jon Chalk and Trevor Lotz each offered differing opinions. Dr Chalk concluded Kate could return to work for up to 20 hours per week. Dr Lotz – her treating psychiatrist who she saw monthly – considered her “a prisoner in own home” who he believed to be unemployable.

Observing that a treating psychiatrist has a conflict between “saying the right thing for the patient” and giving objective expert evidence, the judge gave greater weight to the views of Dr Chalk whose views were consistent with his own impression of Ms Sutton as “impressive”, “capable and intelligent”.

The court allowed an ISV of 13, yielding general damages of $21k.

Kate’s loss of income case relied on the formulation in a report from forensic accountant Michael Lee which was found to be based on unproved assumptions as to roles she would likely have taken on and the income she would have received, but for the accident.

“Mr Lee has no particular expertise in the labour market or in education, training and expertise for particular positions,” Justice Freeburn ruled. And even if he did, he did not analyse “Ms Suttton’s qualifications, expertise and experience” as against those required for the positions on which he had based his calculations.

With the report unable to be relied on, His Honour was invited to make a “global award”, an approach that he considered inconsistent with the Civil Liability Act s 55 obligation that requires a court to state the assumptions on which an award is based and the methodology used.

“It is doubtful that the court is entitled to adopt a global approach to economic loss,” he observed before embarking on a longhand assessment based on findings that Kate would have returned to work as an employee on a part-time basis earning the average after-tax weekly wage of $1.2k/week.

His Honour rejected the submission she would likely have been recruited as “business development manager” earning a far higher income because the qualifications for such a role – which she did not possess – included a degree in finance or law “with working knowledge of the stock market and takeover regulations”.

Past economic loss of $240/day for 2-3 days/week for 5 years was awarded at $212k.

Future loss of income was assessed at $91k over four years to 2025 by which time she was assumed – according to Dr Chalk’s evidence of likely achieving a “relative recovery” – to be able to resume full-time work. That sum was reduced by 15% for contingencies.

The gratuitous care claim was the next to come under the judge’s scrutiny.

Care was claimed for 442 hours at 17 hrs/week for the first 26 weeks, such information being derived from a “guesstimation” compiled by her husband two years after the accident.

The guesstimation indicated all of the household tasks he performed for the family of four with 25% of the total said to have been performed for the benefit of the plaintiff.

His Honour was not satisfied that such methodology was sufficiently precise. Neither did he consider a claim for 17 hours/week for “watching her medication” to be realistic or claimable as a “service” in the absence of any medical evidence that observation of that nature was required to be performed.

He declined to accept the invitation to adjust the figure claimed downwards, rather ruling that the legislative requirement in CLA s 59 not having been met, no award for gratuitous services – past or future – could be made.

The resulting damages award totalled $314k.

Sutton v Hunter [2021] QSC 249 Freeburn J, 7 October 2021

source https://cartercapner.com.au/blog/economic-loss-claim-slaughtered-capable-and-intelligent-manager-likely-only-to-earn-1-2k-week/

Facebook abuse injury claim seeks novel “carriage service” damages

A retired NSW solicitor who chose to commence proceedings in the Federal Court for injury compensation over vile and abusive Facebook messages has paved the way for an additional legal remedy to deploy against the scourge of cyberbullying.

Robert Mulley received the first abusive message from Warren Hayes in January 2020.  The second message a month later – to his wife – labelled him a “paedophile” and his wife a “slut”.

Both messages threatened violence to the recipients.

Mulley issued proceedings seeking damages for loss of consortium and for psychological injuries caused by the violent and offensive content the sending of which was unlawful by operation s 474.17 of the Criminal Code Act (Cth) which prohibits use of a “carriage service” to menace, harass or cause offence.

He also claimed damages for the defamatory imputations in the second message received by his wife.

It was not in dispute that Facebook Messenger is a “carriage service” because it carries “communications by means of guided and/or unguided electromagnetic energy”.

The claim came before Justice Michael Lee who noted that it was not at first glance one whose subject matter of itself brought it within the court’s jurisdiction.

His Honour noted however – in relation to the carriage service claim – that the question remained open as to whether “the law of Australia recognises tortious liability for harm caused by unlawful acts directed against an applicant”.

He concluded Mulley’s claim – although “novel” – was arguable as “a common law action on the case”.

In a hearing on the separate issue of “whether the jurisdiction of the court had been properly invoked” he considered whether such a common law claim in reliance on a federal statute meant the Federal Court had “subject-matter jurisdiction to quell the dispute”.

That answer depended in turn on whether “the rights, duties, or subject matter with which the controversy is concerned have their origin in or owe their existence to a law of the Commonwealth”.

Those questions were – in relation to the carriage service claim – both answered in the affirmative.

And even if that claim were to fail, there was “sufficient commonality” concerning the underlying facts and allegations in relation to the defamation action, to allow it to proceed in the Federal Court regardless.

On the other hand, the court would have had no jurisdiction to deal with a pure defamation claim, ie one that was unaccompanied by the separate claim relying on the breach of the federal carriage service law.

A final determination on the matter is likely to occur in early 2022.

Mulley v Hayes [2021] FCA 1111 Lee J, 13 September 2021

In further developments in the law of defamation, the High Court found media organisations who posted content relating to news stories on their public Facebook pages, they were liable for the publication of defamatory “comments” posted by third-party Facebook users in response to the content.

By a 5:2 majority, the court held that – by facilitating and encouraging the third-party comment – the media organisations “participated” in the communication of the defamatory material and were thereby publishers of it.

Fairfax Media Publications Pty Ltd V Dylan Voller; Nationwide News Pty Limited V Dylan Voller; Australian News Channel Pty Ltd V Dylan Voller [2021] HCA 27 Kiefel CJ, Gageler, Keane, Gordon, Edelman, Steward, Gleeson JJ, 8 September 2021

source https://cartercapner.com.au/blog/facebook-abuse-injury-claim-seeks-novel-carriage-service-damages/

Jurisdiction error proved fatal for father’s aircraft crash nervous shock claim

The father of an 11-yr-old girl killed when her light aircraft crashed minutes after take-off from an idyllic Hawkesbury River waterway, has lost what is likely to have been his last chance to win damages over the psychological injury sustained in coping with the aftermath of the calamity.

Heather Page – together with her mother, stepfather, two stepbrothers and the pilot – died when the six-seater de Havilland Beaver floatplane met disaster on New Year’s Eve in 2017 on return to the Sydney Seaplanes base in Rose Bay.

The Australian Transportation Safety Bureau ultimately concluded that the pilot had been overcome by carbon monoxide from exhaust gas entering the cabin through holes in the main firewall where bolts were missing and in gaps around other bolts that were worn or were “non-specific”.

Ingestion of the fumes during the 27-minute taxi to the pickup location at Cottage Point left the pilot vulnerable to the onset of confusion, visual disturbances and disorientation when the engine and exhaust gases were at maximum output during and after take-off.

Alex Page filed his claim for compensation for “nervous shock” against Sydney Seaplanes as carrier in the Federal Court pursuant to – and prior to the two-year deadline specified in – the Civil Aviation (Carrier’s Liability) Act (Cth).

That was the fundamental legal error from which – despite valiant attempts – he was unable to recover, dooming any chance of a successful compensation outcome.

Regrettably, that Act had no application as it applies only to interstate and overseas commercial passenger transport.

The error was not one that could be rectified by simply amending the claim to refer to the NSW Act applying identical liability provisions to intra-state commercial air operations.

Page’s claim was thus struck out by Justice John Griffiths in April 2020 who ruled that no amount of amendment could remediate the plaintiff’s position because the Federal Court had no jurisdiction to determine a matter devoid of any element of federal legislation or intercourse between states.

Because the two-year limitation period had already expired, it was too late to file fresh proceedings.

Page’s lawyers devised a “work around” by applying to the NSW Supreme Court to have the Federal Court matter transferred across contending that the Federal Courts (State Jurisdiction) Act (NSW) applied to the FCA order striking out Mr Page’s “state matter” claim for “want of jurisdiction”.

Justice Christine Adamson agreed and made an order that the FCA proceeding be treated as a Supreme Court matter that had commenced on the day it was filed in the Federal Court, ie within the two year deadline.

Sydney Seaplanes or rather its insurers, appealed.

Overruling the literal interpretation applied by the primary judge, the appeal judges came to the “unavoidable conclusion”, the State Jurisdiction Act was intended only to apply to matters in which “want of jurisdiction” arose from a “constitutionally invalid conferral of jurisdiction” on the FCA.

It was after all, an urgent stop gap measure implemented by every state to remediate the effect of a High Court ruling that invalidated their respective Jurisdiction of Courts (Cross-vesting) Acts.

It was never intended – noted Justice Mark Leeming – to be a “safety net for litigants who misguidedly take the serious step of commencing proceedings in the Federal Court without first considering the issue of jurisdiction”.

So while the literal meaning of the State Jurisdiction Act allowed Mr Page’s claim to be revived in the Supreme Court, that meaning was rejected because it was inconsistent with its statutory purpose.

“The literal meaning of words in a statute will not always, correspond to their legal meaning,” observed the Appeal Court President, Justice Andrew Bell.

Barring a further appeal to the High Court of Australia, that is the end of the road for Mr Page’s claim against the carrier.

Sydney Seaplanes Pty Ltd v Page [2021] NSWCA 204 Bell P Leeming JA Emmett AJA, 7 September 2021 Read case

source https://cartercapner.com.au/blog/jurisdiction-error-proved-fatal-for-fathers-aircraft-crash-nervous-shock-claim/

Senior employee wins psych damages claim for reasonable management action taken unreasonably

An employee of a regional council centered on Moranbah in the Bowen Basin has won a ruling that the management action that caused an adjustment disorder as a result of a disciplinary proceeding that was reasonable management action taken unreasonably.

Trevor Maher joined the Isaac Regional Council as a Regulatory Services Program Leader in March 2016.

In May 2018 and number of concerns arose in relation to his conduct.

A meeting to discuss the suspension was convened by two management representatives “very close to knock off time” without any notice to Maher of its purpose and without affording him any opportunity to prepare any response to the allegations. Neither was he given, the opportunity to bring in a support person until – on the council’s version of events – the meeting was underway and before its purpose was revealed.

Regardless, he was suspended on pay while an “external investigation” was carried out.

Some of the allegations were – in a draft report from the Council’s consultants, Livingstones – found to have been substantiated, as a result of which he was issued a Show Cause Notice in August 2018 concerning breaches of the Council’s Code of Conduct.

His employment was terminated as a result of the findings in May 2019.

He is recorded as suffering “an adjustment disorder with anxiety and depressed mood” as from 29 August 2018 but his application for workers’ compensation was denied by Local Government WorkCover on the grounds that any such injury resulted from “reasonable management action”.

Maher’s referral of the matter to the Regulator in August 2019 resulted in the original decision being confirmed.

He appealed that decision to the Queensland Industrial Relations Commission, contending that the absence of prior notice of the purpose of the “suspension” meeting and the giving of opportunity to call a support person into the meeting, was unreasonable.

The matter came before Commissioner McLennan before whom Maher also alleged it had been unreasonable for the Council’s Show Cause Notice not to fully particularise all allegations in the grounds on which they were made; and to have issued that Notice prior to its receipt of the final version of the external investigation report.

The Council denied these allegations and contended that if there were any instances of procedural unfairness, they amounted to a mere “blemish”.

It also assert that although Maher was summoned to his manager’s office at 4:40 PM “cold”, he must have “sniffed the wind”.

In the Commissioner’s view “it should not have been left to Mr Maher to assume what the meeting was about… rather, the onus is on the Council to tell him in advance”.

Further “the failure to offer Mr Maher the opportunity for a support person prior to the suspension interview was unreasonable”.

In relation to the Show Cause Notice, the court found that there was insufficient particularisation within the notice itself in breach of the particular disciplinary provisions of the Local Government Regulations.

Further, the Council should have required the external investigated to prioritise the delivery of the final investigation report including all attachments to enable its prompt deliberation on the matters “in their entirety”.

Having regard to the breaches concerning the Show Cause Notice and the suspension meeting, the court was compelled to conclude that the action taken in relation to Mr Maher, however reasonable, was not taken on a reasonable manner.

As a result the Council was not afforded the defence under s 32 (5) of the Workers Compensation and Rehabilitation Act in relation to “reasonable management action”.

Several of Mr Maher’s other submissions were rejected by the court. Maher will now be entitled to receive statutory time off work compensation, a lump sum payment and/or common law damages for the injury sustained.

Maher v Workers’ Compensation Regulator [2021] QIRC 313 McClennan IC, 10 September 2021

source https://cartercapner.com.au/blog/senior-employee-wins-psych-damages-claim-for-reasonable-management-action-taken-unreasonably/

Oz courts to aid overseas Ruby Princess pax: class action waiver clause “unfair”

The Ruby Princess departed Sydney on 8 March 2020 for New Zealand and returned on 19 March becoming the catalyst for the worst COVID-19 outbreak in the first phase of the pandemic.

Carnival – the giant US cruise boat operator of Princess, Carnival and P&O cruises – was exonerated by the NSW Commission of Enquiry notwithstanding the ship’s crew were aware of the outbreak before they docked let loose more than 2600 infected passengers into the community.

A class action against Carnival by passengers alleges it even knew of the likelihood of a Covid outbreak before setting off for New Zealand and that that the cruise should have been cancelled for that reason. The claims are in negligence, contract and for breaches of statutory warranties under the Australian Consumer Law.

Nearly 700 of their number purchased their cruise in the US on terms specified in their ticket that a lawsuit can only be filed against Carnival in California and that those passengers must not join any class action.

Carnival petitioned the Federal Court in Sydney to stay the claims of all US passengers in the class action so they could be heard in the US with US law could be applied.

At the outset Justice Angus Stewart decided in relation to Patrick Ho – the court appointed representative of all US pax – that the exclusive jurisdiction and class action waiver clauses were not incorporated into his cruise contract because they were contained in a document issued by the cruise line after the contract of carriage had in fact already been formed.

His Honour noted that each passenger’s circumstances would have to be separately examined to determine whether the same conclusion could be drawn in their cases.

He went on to make other findings in case he had erred on the incorporation of contract terms point.

He was not prepared to hold that the exclusive US jurisdiction clause was of itself an unfair term under the Australian Consumer Law but had no hesitation in concluding that the class-action waiver Carnival wanted to enforce was invalid for that very reason.

Justice Stewart went on to decide that in those circumstances it was preferable to have the US passenger claims heard in Australia specifically because they would have the advantage of class-action representation here that would be denied to them by a California court.

It was undesirable in his view that litigation dealing with “essentially identical claims” be “fractured” by being heard in two different countries with potentially different outcomes being reached.

Carnival also argued that Sydney was a “clearly an appropriate forum”. Not so, said the judge because the claims “have a substantial connection with NSW” with breaches, conduct and omissions having occurred in Sydney.

Further, because the Australian Consumer Law applied in many respects to the claims, it was very appropriate that the proceedings – even for overseas passengers – be conducted here.

The plaintiffs had argued that the court was prevented from staying  the ACL proceedings because s 138 of  the Competition and Consumer Act 2010 confers jurisdiction on the FCA in respect of all ACL matters. His Honour did not however accept the “implied prohibition” contended for.

The court reserved the issue of the law that applied to the negligence claims with Carnival asserting that they had to be determined under US maritime law.

This decision is a big win not just for for Ruby Princess passengers but for all Australian consumers as it demonstrates the effectiveness of our consumer protection law and how anti-consumer contract terms favoured by international conglomerates like Carnival will not be allowed to flourish here like they have been allowed to do in the USA.

Karpik v Carnival plc (The Ruby Princess) (Stay Application) [2021] FCA 1082 Stewart J, 10 September 2021

source https://cartercapner.com.au/blog/oz-courts-to-aid-overseas-ruby-princess-pax-class-action-waiver-clause-unfair/