Ritson v State of New South Wales (NSWCA 2023)

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 Key Takeaways

A worker cannot make a further claim for workers compensation payments for an injury for which they have previously entered into a Deed of Release and been paid damages in respect of that injury. Additionally, payment made under a Deed of Release recovered in respect of an injury will be characterised as ‘damages’ irrespective that the payment is a global sum inclusive of legal costs.

Brief Facts

The applicant was a police officer with the NSW Police Force (NSWPF). On 22 January 2003, he sustained an injury to his right thumb and received compensation under the Workers Compensation Act 1987 (the 1987 Act). On 22 November 2011, the applicant was medically discharged from NSWPF. On 22 November 2011, the applicant and NSWPF executed a Deed of Release (the Deed) in respect of various claims the applicant had commenced, including a claim for work injury damages. The ‘Background’ clause to the Deed identified several injuries sustained by the applicant which included the injury to his right thumb.

Pursuant to clause 3.1(b) of the Deed, NSWPF agreed to pay to the applicant ‘an amount of five hundred thousand dollars ($500,000) for damages (clear of workers compensation payments made to date and inclusive of costs)’. That payment was expressed to be ‘in full and final satisfaction of the injuries as set out in this document’. The applicant was actually paid $498,789.20 to take into account wage payments that were made.

Nearly 10 years later, in August 2021, the applicant received further treatment for his right thumb, totaling $825. He sought reimbursement of this medical expense pursuant to s60 of the 1987 Act. The applicant eventually obtained leave to make an application in the District Court which was subsequently dismissed by Judge Neilson (primary judge) in May 2022 on the basis that s151A of the 1987 Act precluded his claim.

In November 2022, the applicant filed proceedings in the Court of Appeal. The grounds of appeal contended that the payment under cl 3.1(b) of the Deed was neither ‘damages’ (Ground 1), nor was it recovered ‘in respect of’ his right thumb injury (Ground 2) and that the primary judge denied the applicant ‘natural justice’ by failing to address his argument that the State’s conduct created an estoppel by convention (Ground 3). In December 2022, the NSWPF sought that the appeal be dismissed as incompetent, on the basis that it did not satisfy the financial threshold of $100,000 as required by s127(2)(c) of the District Court Act 1973 (the DC Act).

Judgment

On 27 September 2023, Acting Judge of Appeal Simpson with the support of Judge of Appeal Meagher and Acting Judge of Appeal Griffiths held, dismissing the application for leave to appeal and the purported appeal: In making this determination, Simpson considered the following:

First issue – the competence of the applicant’s appeal?

The applicant contented that ‘the matter in issue’ before the District Court was the sum of $498,789.20, which the primary judge found he had recovered as damages following the execution of the Deed.

Simpson determined that ‘it is plain beyond question that the appeal he proposes involves the sum of $825.00 and no more’. Therefore, the applicant could not proceed without leave and the appeal was considered incompetent.

Second issue – should leave to appeal be granted?

Simpson rejected all three grounds of appeal and determined that:

• the payment of $498,789 did constitute payment of damages for the purposes of section 151A of the 1987 Act, irrespective that it was a ‘global sum’ covering damages, costs and consideration for the releases and undertakings contained in the Deed.
• The payment of the $498,789 was in respect of the injury sustained on 20 January 2006, finding that there was nothing in the ‘surrounding circumstances’ that overcame the clear intentions of the parties that the right thumb injury was included as part of the settlement recorded in the Deed.
• The primary judge did not deny the applicant procedural fairness by failing to address an argument that conduct of NSWPF created an estopped by convention. The applicant submitted that he had received ’wages payments’ in respect of the psychological injuries he claimed and not in respect of the right thumb injury, based on a letter which enclosed payment for work injury damages that was issued by the insurer for NSWPF. Simpson determined that the primary judge’s findings that payments which were attributed to other claims by the insurer, rather than the one claim specified in the Deed of Release ‘have no bearing on the proper interpretation of the [D]eed because it was done after the [D]eed had been executed’.

Implications

This decision serves as a reminder to legal practitioners to advise their clients of the impact to which a settlement by way of Deed of Release will have on their statutory workers compensation rights in respect of the injuries included in the Deed of Release.

An insurer can attribute payments to different or multiple claim numbers after the Deed of Release has been signed. This will have no implication on the interpretation of the Deed of Release.