Federal Court of Australia

Comcare v Friend [2024] FCAFC 4

ORDERS

THE COURT ORDERS THAT:

1.    The appeal be dismissed.

2.    The appellant pay the respondent’s costs of the appeal.

3.    Either party may seek a variation of the order in paragraph 2 by filing and serving by 4.00 pm on 8 February 2024 a written submission of no more than three pages, 1.5 spacing, 12 point font, in which event the other party may by 4.00 pm on 15 February 2024 file and serve a responding written submission of no more than three pages, 1.5 spacing, 12 point font.

4.    Subject to further order, any application for variation of the order for costs will be determined on the papers.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

RANGIAH J:

1    I have had the considerable benefit of reading the reasons of Wheelahan J in draft. I agree with those reasons and the orders proposed by his Honour.

Associate:    

Dated:    1 February 2024

REASONS FOR JUDGMENT

WHEELAHAN J:

2    The respondent to this appeal was an employee of the Australian Federal Police (AFP) until her employment was terminated in 2019 on the ground of invalidity. In March 2014, she lodged a claim for compensation with the appellant (Comcare) pursuant to the Safety, Rehabilitation and Compensation Act 1988 (Cth) (SRC Act). Subsequently, Comcare accepted the respondent’s claim as a result of which she received compensation in the form of medical expenses and weekly payments on the ground of incapacity in the total sum of $677,363.84.

3    In August 2018, the respondent lodged a complaint with the Australian Human Rights Commission (AHRC complaint) alleging discrimination on the ground of disability, discrimination on the ground of her sex, and that she had been sexually harassed in the period from March 2013 until early 2014. The four respondents to the AHRC complaint as lodged were the AFP and three AFP employees holding the ranks of Sergeant, Senior Constable, and Probationary Constable.

4    In September 2020, the respondent and the Commonwealth of Australia representing the AFP entered into a deed of release under which the AFP agreed to pay the respondent the sum of $1,250,000 in settlement of the AHRC complaint.

5    In February 2021, Comcare gave notice of its intention to recover from the respondent the sum of $677,363.84 on the ground that for the purposes of the recovery provision in s 48 of the SRC Act the respondent would recover damages as a result of the settlement of the AHRC complaint. The respondent disputed that the monies payable to her under the deed of release gave rise to an entitlement by Comcare to recover the statutory compensation. The respondent was successful before the primary judge who made a declaration in the respondent’s favour. The issue on this appeal is whether the primary judge was correct in declaring that no part of the sum of $1,250,000 paid pursuant to the deed of release in settlement of the AHRC complaint constituted “damages or a recovery of damages” within the meaning of s 48 of the SRC Act.

The legislation

6    The resolution of this appeal requires that attention be directed to the legislation.

Safety, Rehabilitation and Compensation Act 1988 (Cth)

7    When enacted in 1988, the SRC Act was titled the Commonwealth Employees’ Rehabilitation and Compensation Act 1988. In the second reading speech for the Bill in the House of Representatives, the Minister for Social Security stated that “[p]erhaps the most controversial aspect of the new legislation is that common law actions against the Commonwealth will be replaced by [...] comprehensive benefits”.

8    The SRC Act provides for the payment of statutory compensation to employees of the Commonwealth, Commonwealth authorities, and licensed private corporations. The term “employee” is defined by s 5(1) of the SRC Act as including a person who is employed by the Commonwealth. Relevantly, for the purposes of the Act an AFP employee is to be taken to be employed by the Commonwealth: s 5(2)(a).

9    As an element of the scheme, the Act abrogates actions or other proceedings for damages against the Commonwealth, Commonwealth authorities and licensed corporations or an employee in respect of an injury sustained by an employee in the course of employment. The Act does not abrogate claims for damages by employees against other parties.

10    There are some definitions in the SRC Act that are relevant to the provisions that will be considered. The term “damages” is defined by s 4(1) as follows –

damages includes any amount paid under a compromise or settlement of a claim for damages, whether or not legal proceedings have been instituted, but does not include an amount paid in respect of costs incurred in connection with legal proceedings.

11    The term “injury” is the subject of the definition in s 5A that incorporates in s 5A(1)(b) a reference to an “injury” in its primary sense –

5A    Definition of injury

(1)    In this Act:

injury means:

(a)    a disease suffered by an employee; or

(b)    an injury (other than a disease) suffered by an employee, that is a physical or mental injury arising out of, or in the course of, the employee’s employment; or

(c)    an aggravation of a physical or mental injury (other than a disease) suffered by an employee (whether or not that injury arose out of, or in the course of, the employee’s employment), that is an aggravation that arose out of, or in the course of, that employment;

but does not include a disease, injury or aggravation suffered as a result of reasonable administrative action taken in a reasonable manner in respect of the employee’s employment.

…

12    There is some circularity in relation to the definition of “injury” and the liability to pay compensation that is introduced by s 4(8) of the SRC Act, which provides –

(8)    A reference in this Act to an injury suffered by an employee is, unless the contrary intention appears, a reference to an injury suffered by the employee in respect of which compensation is payable under this Act.

13    Section 10 of the SRC Act provides for the time at which damages shall be taken to have been recovered –

10    Recovery of damages

For the purposes of this Act, damages shall be taken to have been recovered by an employee, or by or for the benefit of a dependant of a deceased employee, when the amount of the damages was paid to or for the benefit of the employee or dependant, as the case may be.

14    The central provision of the SRC Act relating to the entitlement to compensation is s 14, which provides –

14    Compensation for injuries

(1)    Subject to this Part, Comcare is liable to pay compensation in accordance with this Act in respect of an injury suffered by an employee if the injury results in death, incapacity for work, or impairment.

(2)    Compensation is not payable in respect of an injury that is intentionally self-inflicted.

(3)    Compensation is not payable in respect of an injury that is caused by the serious and wilful misconduct of the employee but is not intentionally self-inflicted, unless the injury results in death, or serious and permanent impairment.

15    Part IV of the SRC Act is titled, “Liabilities arising apart from this Act”, and comprises ss 42 to 52A. In relation to the abrogation of actions for damages by a Commonwealth employee against Commonwealth parties, s 44(1) of the Act provides –

44    Action for damages not to lie against Commonwealth etc. in certain cases

(1)    Subject to section 45, an action or other proceeding for damages does not lie against the Commonwealth, a Commonwealth authority, a licensed corporation or an employee in respect of:

(a)    an injury sustained by an employee in the course of his or her employment, being an injury in respect of which the Commonwealth, Commonwealth authority or licensed corporation would, but for this subsection, be liable (whether vicariously or otherwise) for damages; or

(b)    the loss of, or damage to, property used by an employee resulting from such an injury;

whether that injury, loss or damage occurred before or after the commencement of this section.

16    The effect of s 44 is to deny the existence of a cause of action against a Commonwealth party in respect of an injury that engages s 44(1)(a). This effect is not merely procedural, but substantive: Austral Pacific Group Limited (in liq) v Airservices Australia [2000] HCA 39; 203 CLR 136 at [21] (Gleeson CJ, Gummow and Hayne JJ).

17    There are two exceptions to the annihilating effect of s 44(1). The first is that it does not abrogate a dependant’s claim: s 44(3). The second exception is that an employee may elect not to receive certain payments on account of permanent impairment or non-economic loss, and may sue for damages in relation to the loss to which the election relates: s 45. There is a cap of $110,000 on such damages: s 45(4).

18    The first exception was introduced into the Act by the Safety, Rehabilitation and Compensation and Other Legislation Amendment Act 2001 (Cth). The explanatory memorandum to the Bill for the 2001 amending Act referred in the heading to Part 7 of the memorandum to amendments relating to “common law remedies for dependants of deceased employees”. The memorandum stated at [2.69] that the proposed amendments would clarify that s 44 does not act as a bar to dependants of deceased employees suing the Commonwealth, and that the provision reflected the intention of Parliament at the time that the SRC Act was passed that dependants of deceased employees should be allowed to sue the Commonwealth, a Commonwealth authority, or an employee “at common law” for the death of an employee.

19    Other amendments effected by the 2001 amending Act included amendments to the headings to ss 46 and 50 by substituting the word “proceeding” with the phrase “common law claims”, and corresponding changes to the text of ss 46, 48(5), and 50, by which references to proceedings were enlarged so as to include references to claims. These changes were explained in [2.161] and [2.166] of the explanatory memorandum to the Bill as being intended to capture claims for damages, whether or not formal proceedings had been instituted, and to allow the negotiation of “common law matters”.

20    There are two sections that require an employee to give notice to Comcare of the making of a claim for damages. The first is s 46, which requires notice to be given of claims for damages against third parties. The second is s 47, which is a corresponding provision in relation to claims for damages against the Commonwealth, a Commonwealth authority, licensed corporations or another employee. As to s 47, the 2001 amending Act repealed s 47 of the SRC Act and substituted it with the following –

47    Notice of common law claims against Commonwealth

(1)    If:

(a)    compensation is payable under this Act in respect of the death of an employee or an injury to an employee; and

(b)    the employee, or a dependant of the deceased employee, as the case may be, makes a claim for damages in respect of the death or injury against the Commonwealth, a Commonwealth authority, a licensed corporation or another employee;

the employee or dependant must, as soon as practicable but in any event not later than 7 days after the day on which he or she first became aware of the claim, notify Comcare in writing of the claim.

Penalty:    5 penalty units

(2)    Subsection (1) is an offence of strict liability.

21    Consistent with other amendments that were made by the 2001 amending Act, the changes that were introduced by the substituted s 47 included the reference in the heading to “common law claims against [the] Commonwealth” rather than “proceedings against [the] Commonwealth” that was in the heading to the repealed section. There was a corresponding change in terminology in the text of the section itself, which now referred to “a claim for damages … against the Commonwealth…”, rather than “proceedings against the Commonwealth…” as s 47 was originally enacted. It is relevant to mention here that headings to the sections of the SRC Act are part of the Act: Acts Interpretation Act 1901 (Cth), s 13(1), noting the transitional provision in the Acts Interpretation Amendment Act 2011 (Cth), sch 3, item 1.

22    There are at least two circumstances in which s 47 may be engaged. The first is if the dependants of a deceased employee make a claim for damages as permitted by s 44(3), and the second is if an employee makes a claim for damages, having elected not to receive certain lump sum payments, as permitted by s 45. An election by an employee not to receive lump sum payments would not have the necessary consequence that compensation was not payable under the Act, because the liability of Comcare is subject to the central provision in s 14 of the Act, and there may be an entitlement to other forms of compensation such as weekly payments and payments of medical expenses that continue. Notice to Comcare of a claim for damages for non-economic loss would facilitate Comcare exercising its right under s 50 to take over the conduct of a claim against a third party in the name of the employee, or under s 52A of the Act to take over the conduct of the defence of any action that is brought, both of which are referred to below.

23    The provision of the SRC Act under which Comcare seeks recovery from the respondent of the statutory compensation is s 48, which relevantly provides –

48    Compensation not payable where damages recovered

(1)    This section applies where:

(a)    an employee recovers damages in respect of an injury to the employee or in respect of the loss of, or damage to, property used by the employee, being an injury, loss or damage in respect of which compensation is payable under this Act; or

(b)    damages are recovered by, or for the benefit of, a dependant of a deceased employee in respect of the death of the employee and compensation is payable under this Act in respect of the injury that resulted in that death.

(2)    The employee or dependant shall, not later than 28 days after the day on which the damages were recovered, notify Comcare in writing of the recovery of the damages and the amount of the damages.

Penalty:    10 penalty units.

(2A)    Subsection (2) is an offence of strict liability.

(3)    If, before the recovery of the damages by, or for the benefit of, the employee or dependant, any compensation under this Act was paid to, or for the benefit of, the employee in respect of the injury, loss or damage, or to, or for the benefit of, the dependant in respect of the injury that resulted in the death of the employee, as the case may be, the employee or dependant is liable to pay to Comcare an amount equal to:

(a)    the amount of that compensation; or

(b)    the amount of the damages;

whichever is less.

(4)    Compensation is not payable under this Act to the employee in respect of the injury, loss or damage, or to, or for the benefit of, the dependant in respect of the injury that resulted in the death of the employee, after the date on which the damages were recovered by the employee or by, or for the benefit of, the dependant, as the case may be.

(4A)    Subsection (3) does not apply if the damages were recovered in an action for non-economic loss or by way of a settlement of such an action.

(5)    Subsection (4) does not apply if the damages were recovered:

(a)    as a result of a claim, or fresh claim, made by Comcare under section 50 (whether or not that claim progressed to the formal institution of proceedings); or

(b)    as a result of Comcare’s taking over the conduct of a claim under that section; or

(c)    as a result of an action for non-economic loss; or

(d)    by way of a settlement of such a claim or of such an action (whether or not that claim or that action progressed to the formal institution of proceedings).

…

(7)    Where an employee, or a dependant of an employee, establishes to the satisfaction of Comcare that a part of the damages referred to in subsection (1) did not relate to an injury, loss or damage in respect of which compensation is payable under this Act, subsection (3) applies in relation to that employee or dependant as if the amount of the damages were an amount equal to so much of the amount of the damages as did relate to an injury, loss or damage in respect of which compensation is payable under this Act.

...

24    In addition to s 48(3) providing for a right of recovery of compensation paid, s 48(4) provides for the termination of the obligation to pay compensation after the date on which damages are recovered.

25    Section 50 of the SRC Act relates to third party recovery by Comcare, and provides for a statutory right of subrogation to the employee’s rights to recover damages from a “person”, which is defined by s 50(9) to exclude the Commonwealth, a Commonwealth authority, a licensed corporation, or an employee. As I noted earlier, common law claims by Commonwealth employees against third parties are not abrogated by s 44. Under s 50, Comcare may make, or take over the conduct of such a claim –

50    Common law claims against third parties

(1)    Where:

(a)    an amount of compensation under this Act:

(i)    is paid to an employee in respect of an injury to the employee or in respect of the loss of, or damage to, property used by the employee; or

(ii)    is paid for the benefit of a dependant of a deceased employee in respect of an injury that resulted in the death of the employee;

(b)    the injury, loss, damage or death occurred in circumstances that appear to create a legal liability in a person to pay damages in respect of the injury, loss, damage or death; and

(c)    a claim against the person for the purpose of recovering such damages has not been made by the employee or by or for the benefit of the dependant, or, having been made, has not been prosecuted;

Comcare may make a claim or a fresh claim against the person in the name of the employee or dependant for the recovery of damages in respect of the injury, loss, damage or death or may take over the conduct of the existing claim, as the case requires.

…

(7)    Any damages obtained as a result of a claim made or taken over by Comcare under this section (including damages payable as a result of the settlement of such a claim) must be paid to Comcare and Comcare must deduct from the amount of those damages:

(a)    an amount equal to the total of all amounts of compensation paid to, or for the benefit of, the employee or dependant under this Act in respect of the injury, loss, damage or death to which the claim relates; and

(b)    the amount of any costs incidental to the claim paid by Comcare.

Comcare must pay the balance (if any) to the employee or dependant.

(8)    Where Comcare pays an amount to an employee or dependant under subsection (7), the employee or dependant is not entitled to receive any further amounts of compensation under this Act in respect of the injury, loss, damage or death to which the proceedings related until the amount of compensation that would, but for this subsection, have been payable to the employee or dependant in respect of that injury, loss, damage or death equals the amount paid by Comcare to the employee or dependant under subsection (7).

26    Section 51 of the SRC Act provides for a type of statutory right in favour of Comcare to intercept and recover directly from a third party an amount of damages that the third party agrees to pay, or which are awarded to, an employee or dependant in respect of an injury or death in respect of which an amount of compensation has been paid under the Act –

51    Payment of damages by persons to Comcare

(1)    Where a person appears to be liable:

(a)    to pay damages to an employee in respect of an injury to the employee, or in respect of the loss of, or damage to, property used by the employee, being an injury, loss or damage in respect of which an amount of compensation has been paid under this Act; or

(b)    to pay damages to a dependant of a deceased employee in respect of the death of the employee, where that death resulted from an injury in respect of which an amount of compensation has been paid under this Act;

Comcare may, by notice in writing given to the person, require that:

(c)    if the person agrees to pay damages to the employee in respect of the injury, loss or damage or to the dependant in respect of the death; or

(d)    if damages against the person are awarded to the employee in proceedings arising out of a claim made in respect of the injury, loss or damage, or to the dependant in proceedings arising out of a claim made in respect of the death;

the person pay to Comcare so much of the amount of the damages as does not exceed the amount that would be payable by the employee or dependant to Comcare under section 48 or 49 if the damages had been paid to the employee or dependant.

(2)    Subject to subsection (3), where:

(a)    a person has agreed:

(i)    to pay damages to an employee in respect of an injury to the employee, or in respect of the loss of, or damage to, property used by the employee, being an injury, loss or damage in respect of which an amount of compensation has been paid under this Act; or

(ii)    to pay damages to a dependant of a deceased employee in respect of the death of the employee, where that death resulted from an injury in respect of which an amount of compensation has been paid under this Act; or

(b)    damages against a person have been awarded:

(i)    to an employee in proceedings arising out of a claim made in respect of an injury to the employee or in respect of the loss of, or damage to, property used by the employee, being an injury, loss or damage in respect of which an amount of compensation has been paid under this Act; or

(ii)    to a dependant of a deceased employee in proceedings arising out of a claim made in respect of the death of the employee, where that death resulted from an injury in respect of which an amount of compensation has been paid under this Act;

Comcare may, by notice in writing given to the person, require the person to pay to Comcare so much of the amount of the damages as does not exceed the amount that would be payable by the employee or dependant to Comcare under section 48 or 49 if the damages had been paid to or in respect of the employee or dependant.

(3)    Where, before a notice under subsection (2) was received by a person, the person had paid to or in respect of the employee or dependant, all or part of the damages to which the notice related:

(a)    if all of the damages had been paid—the notice has no force or effect; or

(b)    if part only of the damages had been paid—the reference in that subsection to the amount of the damages shall be read as a reference to so much of that amount as had not been paid.

(4)    If a person fails to pay an amount to Comcare in accordance with a notice under this section, Comcare may recover that amount from the person in a court of competent jurisdiction as a debt due to Comcare.

(5)    The payment of an amount to Comcare by a person in accordance with a notice under this section is, to the extent of the amount paid, a discharge of the liability of that person to the employee or dependant and of the liability (if any) of the employee or dependant to Comcare under section 48 or 49.

(6)    In this section:

“person” does not include the Commonwealth, a Commonwealth authority, a licensed corporation or an employee.

27    Finally, under s 52A of the SRC Act, to which I referred earlier, Comcare is entitled to take over the defence of an action for non-economic loss brought by an employee against an employer or another employee of the employer, if the employer has paid Comcare an amount to cover liability for actions for non-economic loss.

Australian Human Rights Commission Act 1986 (Cth)

28    The Australian Human Rights Commission Act 1986 (Cth) (AHRC Act) provides in Pt IIB for redress for unlawful discrimination. Division 1 of Pt IIB provides for the lodgement of complaints by or on behalf of persons aggrieved by acts, omissions, or practices alleged to be “unlawful discrimination”, and for the conciliation of a complaint by the President. The term “unlawful discrimination” is defined by s 3(1) of the Act as including any acts, omissions or practices that are unlawful under Pt 2 of the Disability Discrimination Act 1992 (Cth) or Part II of the Sex Discrimination Act 1984 (Cth).

29    Under s 46PF of the AHRC Act, the President is required to consider whether to inquire into the complaint, or to terminate the complaint. If the President does not terminate the complaint, the President is required to inquire into and attempt to conciliate the complaint.

30    There are several discretionary grounds under s 46PH(1) of the AHRC Act on which the President may terminate a complaint. There are also grounds under s 46PH(1B) and (1C) on which the President must terminate a complaint, for instance, if the President is satisfied that the complaint is trivial, vexatious, misconceived, or lacking in substance. If the President terminates a complaint under s 46PH, an application may be made by or on behalf of an affected person to the Federal Court or the Federal Circuit and Family Court of Australia (Division 2) alleging unlawful discrimination by one or more respondents to the complaint. If the complaint is terminated under s 46PH(1)(h) on the ground that the President is satisfied that the subject-matter of the complaint involves an issue of public importance that should be considered by a court, or under s 46PH(1B)(b) on the ground that there is no reasonable prospect of the matter being settled by conciliation, an application to the court may be made without leave. Otherwise, leave is required: s 46PO(3A). In relation to such a proceeding, s 46PO(4) relevantly provides –

46PO     Application to court if complaint is terminated

…

(4)     If the court concerned is satisfied that there has been unlawful discrimination by any respondent, the court may make such orders (including a declaration of right) as it thinks fit, including any of the following orders or any order to a similar effect:

(a)     an order declaring that the respondent has committed unlawful discrimination and directing the respondent not to repeat or continue such unlawful discrimination;

(b)     an order requiring a respondent to perform any reasonable act or course of conduct to redress any loss or damage suffered by an applicant;

…

(d)     an order requiring a respondent to pay to an applicant damages by way of compensation for any loss or damage suffered because of the conduct of the respondent;

…

(Emphasis added.)

Disability Discrimination Act 1992 (Cth)

31    Unlawful discrimination occurs under the Disability Discrimination Act where a person discriminates against another person on the ground of the latter’s disability if, because of the disability, the discriminator treats, or proposes to treat, the aggrieved party less favourably than the discriminator treats, or would treat, a person without the disability in circumstances not materially different. Such discrimination includes where the discriminator does not make, or propose to make, reasonable adjustments to accommodate the person with the disability and the failure to make such an adjustment would have the effect that the person with the disability is treated less favourably than a person without it in similar circumstances: s 5. It is also unlawful under the Disability Discrimination Act to discriminate indirectly against a person on the ground of his or her disability if the discriminator requires, or proposes to require, the person to comply with a requirement or condition and, because of the disability, he or she does not, or will not be able to, comply with a requirement or condition that has, or is likely to have the effect of disadvantaging persons with the disability: s 6(1).

32    Under s 15(2) of the Disability Discrimination Act it is unlawful for an employer or a person acting, or purporting to act, on its behalf, to discriminate against a person on the ground of the other’s disability in the terms or conditions of employment that the employer affords the employee or by denying or limiting the employee’s access to opportunities for promotion, transfer or training or any other benefits associated with the employment. Section 12(5)(a) provides that s 15 has effect in relation to discrimination against “Commonwealth employees”, which term is defined by s 4(1) to include an AFP employee. Further, for the purposes of the Act the Commonwealth is taken to be the employer of all Commonwealth employees: s 124.

Sex Discrimination Act 1984 (Cth)

33    The Sex Discrimination Act provides that a person discriminates against another on the ground of his or her sex if, by reason of the sex of that person, or a characteristic in persons of that sex, the discriminator treats the person less favourably than, in circumstances that are the same or not materially different, the discriminator treats, or would treat, a person of a different sex or imposes, or proposes to impose, a condition, requirement or practice that has, or is likely to have, the effect disadvantaging persons of the same sex as the aggrieved person: s 5. It is also unlawful, by force of s 14(2), for an employer to discriminate against an employee on the ground of the employee’s sex in terms or conditions of employment that the employer affords the employee, by denying, or limiting, the employee’s access for promotion, transfer or training, or to any other benefits associated with employment.

34    Section 28A of the Sex Discrimination Act provides that a person sexually harasses another if he or she makes an unwelcome sexual advance or unwelcome request for sexual favours to the person harassed, or engages in other unwelcome conduct of a sexual nature in relation to the person harassed in circumstances in which a reasonable person, having regard to all the circumstances, would have anticipated the possibility that the person harassed would be offended, humiliated or intimidated. Conduct of a sexual nature includes the making of a statement of a sexual nature to a person or in the presence of the person, whether the statement is made orally or in writing.

35    Section 106 of the Sex Discrimination Act provides for a qualified form of vicarious liability. Like the Disability Discrimination Act, s 9(5) of the Sex Discrimination Act provides that s 14 has effect in relation to discrimination against, and sexual harassment of, Commonwealth employees in connection with their employment as Commonwealth employees. However, while s 108 of the Sex Discrimination Act replicates s 124 of the Disability Discrimination Act, the definition of “Commonwealth employee” in s 4 of the Sex Discrimination Act does not include any reference to an AFP employee. The primary judge observed at J [28] that accordingly, the Sex Discrimination Act may not apply to the AFP as an employer.

The respondent’s Comcare claim

36    There was no challenge on appeal to the primary judge’s summary at J [29] to [32] of the respondent’s claim that she lodged with Comcare under the SRC Act –

29    In a statement to Comcare dated 14 April 2014 (the April 2014 statement), Ms Friend said that she began to feel unwell in April 2013, experiencing various digestive problems and heart palpitations. About 10 years before, she had recovered from thyroid cancer and was worried that perhaps it had returned. By June 2013, her symptoms had deteriorated and she underwent tests. By August 2013, her stomach problems had not improved and she began experiencing psychological issues, including constant anxiety attacks, and developed depression. A psychologist diagnosed her as having severe depression and anxiety.

30    Ms Friend described the “workplace incident”. She said that over the previous eight months, her superior had persistently influenced others (she was unsure whether this was intentional or not) to exclude her, create a hostile workplace and spread malicious rumours. Her supervisor acted and spoke to her, among other conduct, in a demeaning and degrading way and made inappropriate comments. She gave numerous examples of this behaviour, including the superior offering a reward to the first of her teammates who ascertained if her breasts were real or not, making repeated comments about her anatomy, in particular her breasts, showing her explicit images on his iPhone, including in the presence of other team members, and asking whether she liked those, which she found thoroughly humiliating. The superior also put a more junior officer in charge of her when he was absent and told her to learn to obey the junior.

31    Ms Friend said that, prior to her transfer to the airport, she was training for a half marathon and was at the peak of her fitness. She had loved being a police officer and loved her job. But, one year later, she was no longer able to run very far because she felt stomach pain and nauseous about 70% of time. She felt a sense of hopelessness from severe depression and had withdrawn from family and friends because of the unwanted behaviours of others. She had asked management of the AFP several times if she could change to a different team. However, those requests were not acted on as, she said, the person responsible had also had a history of sexual harassment

32    On 14 July 2014, Comcare accepted Ms Friend’s claim for compensation, with effect from 13 July 2013, for acute gastritis, adjustment disorder with mixed emotional features and panic disorder as a psychological injury which was significantly contributed to by her employment (Comcare’s July 2014 decision).

The respondent’s AHRC claim

37    Nor was there any challenge to the primary judge’s summary at J [33] to [42] of the respondent’s complaint that was lodged on her behalf under the AHRC Act –

33    Ms Friend’s complaint form to the Commission repeated many of the allegations against her superior that she had made in the April 2014 statement. However, it added substantial new allegations that were not part of the previous statement, including that the superior, being the sergeant, continually rubbed himself against her in a sexual and inappropriate manner whenever he had the opportunity, making her feel uncomfortable and violated. She also made new allegations against two other more junior male officers in her team at the airport. She alleged that the first performed abusive or offensive acts in front or behind her, made fun of, practical jokes and spread malicious rumours about her, excluded her from work-related meetings, functions and events, isolated her and acted in a hostile manner towards her, including but not limited to making vindictive comments about her ability as a police officer. The second more junior officer refused to follow her directions or requests, made fun of her general duty experience and policing knowledge, played practical jokes and engaged in deliberate conduct causing her physical and social isolation, and made offensive comments about her in front of other members of the team, including refusing to acknowledge her seniority.

34    Ms Friend alleged that she had made clear, expressly or by her behaviour, to the three officers on most, if not all, occasions when they engaged in the conduct complained of that the conduct was not welcome. Their conduct was largely sexual in nature in relation to her. She complained that she felt humiliated, intimidated and offended by that conduct and that it discriminated against her on the ground of sex because the three males did not treat men in same way.

35    Ms Friend recounted that she had made several requests to the AFP management to be moved from the team that were rejected, including requests that she made after she realised that she was sick. She approached two other sergeants at the airport and the station sergeant and asked to be transferred from the team because its toxic environment was making her ill, and supplied them with medical and psychological documents to support her case. She said that several times over the following months her requests to be moved were rejected, even though her health was obviously deteriorating.

36    Ms Friend was not transferred until January 2014, when she was posted to the AFP Sydney office. She complained that if AFP management had dealt with the situation properly at the time, she would not have suffered her mental and physical illnesses and would have been fit for duty. She said that the workplace incident, being the combination of her complaints, highlighted the need for AFP management to recognise its duty of care and deal responsibly with workplace bullying. She complained that some of the behaviours of the AFP amounted to a failure to make reasonable adjustments within the meaning of ss 5, 6 and 15 of the DDA.

37    She claimed that she lost an offer of employment in Papua New Guinea at a salary of up to $300,000 per annum for not less than four years, with an option to extend for two years, that she would have exercised had she not become so unwell that she could not continue to work.

38    She repeated her account of her symptoms and conditions that she had outlined in the April 2014 statement and elaborated on later manifestations or developments of those conditions. Since then, she had spent time as an inpatient at a psychiatric clinic and also had attended day groups at the same clinic for the previous three years. Her partner had left her in 2016 largely because of the impact of conduct complained of. She had not worked since 2014 and the most recent medical evidence indicated that she was unlikely ever to return to work with the AFP or any employer at a similar level again. She said that she had received at least one recommendation for medical retirement. She noted that she had received weekly payments under the SRCA since around late 2013, amounting to about $83,200 per annum.

39    In the section of the complaint form that asked how she thought the complaint could be resolved, Ms Friend said that she wanted a public apology from the AFP. She also wanted the AFP to undertake a review of its operations in the airport to determine the extent of sexual harassment of female staff and implement reforms to its training, policies and procedures to stop similar serious discrimination and harassment from happening again. She also sought that disciplinary action be taken against the individual respondents to the complaint. In addition, she sought:

Payment of Damages; a detailed schedule of damages to be provided in due course once the expert medical report has been obtained. The Complainant’s damages are significant and not likely to be less than around $1.3 million for economic and non-economic loss and after deducting workers’ compensation payments.

(emphasis added)

40    The complaint form attached two medical reports from consultant psychiatrists acting on the instructions of the AFP, prepared by:

•    Dr Anne-Marie Rees, dated 3 March 2017, who concluded that Ms Friend was not medically fit for the full, or any modified range, of duties of a police officer and was unlikely to return to work again in any occupation for which she is reasonably qualified;

•    Dr RD Moorthy, dated 6 April 2018, who opined that Ms Friend was extremely traumatised and continued to suffer from severe depression, anxiety, panic, traumatic stress and dependence on alcohol. He also opined that she was totally and permanently incapacitated to the extent that she was unlikely to work in any occupation for which she was reasonably qualified by education, training or experience.

41    By the time that the parties entered into the deed, Ms Friend had added a fourth AFP officer as a respondent to the complaint.

    (Emphasis is that of the primary judge.)

38    At J [42] the primary judge set out some amounts that were attributable to various heads of damage in a document that was prepared on behalf of the respondent for the purpose of negotiations. I do not reproduce J [42] because the parties to the appeal accepted that his Honour should not have had regard to the figures because evidence of things done in the course of a conciliation before the Australian Human Rights Commission (AHRC) is inadmissible by operation of s 46PKA of the AHRC Act.

The deed of release

39    The deed of release recited that the respondent had made a complaint to the AHRC against the AFP and four individuals in relation to alleged incidents involving sexual harassment, sex discrimination, and disability discrimination during her employment from which she allegedly sustained psychiatric injuries. The deed recited that the respondents to the complaint did not admit liability. The recitals then set out the following –

The AFP acknowledges that Ms Friend suffers from psychiatric injuries but does not admit liability in respect of such injuries, other than to the extent that Ms Friend has an accepted workers’ compensation claim.

40    The deed recited that without admission of liability the AFP and the respondent had agreed to settle the AHRC complaint and all claims in relation to the complaint.

41    Clause 2.1 of the deed provided for the AFP to pay to the respondent the amount of $1,250,000 in full and final settlement of the complaint. In relation to that payment, cl 2.1(b) provided –

(b)    The parties agree that the Payment includes:

(i)    any amount which must be repaid as a consequence of settlement under this Deed for amounts already paid in respect of the matters the subject of the Complaint (including but not limited to payments under the Safety, Rehabilitation and Compensation Act 1988 (Cth) and the Health and Other Services (Compensation) Act 1995 (Cth)); and

(ii)    any amount of taxation payable.

42    Under clause 2.4(b) of the deed, the respondent undertook to notify Comcare of the settlement –

(b)    Ms Friend undertakes that a written notification will be submitted to Comcare by Ms Friend’s solicitor of the Complaint, the terms of this Deed and that the AFP is required to make the Payment in settlement of the Complaint in accordance with the terms of this Deed.

43    Clause 2.5 of the deed provided for a warranty by the respondent in relation to notification obligations under legislation –

2.5    Warranty as to repayment obligations

Ms Friend warrants that:

(a)    she has complied or will comply with any relevant notification obligations in relation to any compensation, pension or other entitlement or benefit received under Commonwealth, State or Territory legislation which may be triggered as a consequence of the settlement of the Complaint;

(b)    apart from possible refunds due to or charges in favour of Centrelink, Medicare Australia (Medicare) or Comcare, there are no other refunds due to, charges in favour of or liabilities owed to any governmental or semi-governmental authorities. In the event of there being any such refund or charge in favour of Centrelink, Medicare or Comcare, Ms Friend hereby indemnifies the AFP against any such refund or charge; and

(c)    she has notified the AFP of any compensation, pension or other entitlement or benefit that she has received which may trigger a notification obligation on the part of the AFP.

(Emphasis added.)

44    In addition to providing for a release by the respondent, cl 3.2 of the deed also provided for a number of indemnities, including the following –

(c)    To the extent that Ms Friend and/or the AFP are notified or otherwise become aware of any liability under any legislation (including the Safety, Rehabilitation and Compensation Act 1988 (Cth)) after the AFP has paid the Payment, Ms Friend by this document indemnifies and agrees to keep indemnified the AFP against any loss, damage or expense incurred by the AFP in relation to any such liability.

45    Clause 3.4 of the deed excluded from the release claims for statutory benefits under workers’ compensation legislation –

3.4    Worker’s compensation statutory benefits

This release and indemnity does not apply to any claim or liability in respect of statutory benefits payable under the applicable workers’ compensation legislation.

The primary judge’s reasons

46    The primary judge’s consideration of the issues raised was detailed. His Honour had regard to the scheme of the SRC Act, and in particular Part IV titled “Liabilities arising apart from this Act” to which I referred earlier. His Honour also had regard to the inter-relationship between Part IV of the SRC Act and the anti-discrimination legislation. In summary, his Honour reasoned as follows –

(1)    The respondent’s AHRC complaint and her claim for damages thereunder was not precluded by s 44 of the SRC Act. In arriving at this conclusion, his Honour applied Romero v Farstad Shipping (Indian Pacific) Pty Ltd [2014] FCAFC 177; 231 FCR 403 (Romero) at [103]-[110] (Allsop CJ, Rares and McKerracher JJ), where it was held that ss 54 and 55 of the Seafarers Rehabilitation and Compensation Act 1992 (Cth) (the Seafarers Act), which correspond to ss 44 and 45 of the SRC Act, did not preclude a seafarer from pursuing an application in the Court based upon an allegation of discrimination in contravention of the Sex Discrimination Act: J [66]-[67], [71]-[73], [93]. This was not an issue that was disputed by Comcare before the primary judge, and is not in issue on the appeal.

(2)    The scheme of Part IV of the SRC Act was to substitute the liability of Comcare to pay statutory compensation, as provided for by s 44(1), in lieu of the common law claims that a Commonwealth employee would otherwise have against a Commonwealth employer or other employees in respect of an injury sustained in the course of employment: J [63]. In relation to an employee, the one exception was where the employee elected under s 45 to make a claim for damages for non-economic loss against the employer: J [64].

(3)    The place of s 48 in the statutory scheme is to deal with the situation in which the employee or his or her dependant has recovered damages, other than, as s 48(5) provides, where damages are recovered pursuant to a claim of which Comcare assumes conduct under s 50, or as a result of an action for non-economic loss: J [65].

(4)    It would be an odd construction of s 48 of the SRC Act to hold that it was intended to apply to damages recoverable by an employee against the Commonwealth, as his or her employer, on a statutory cause of action under s 46PO(4)(d) of the AHRC Act, when the SRC Act does not provide for any compensation to be payable for damage suffered because of conduct that is a breach of s 15(2) of the Disability Discrimination Act or s 14(2) of the Sex Discrimination Act: J [70].

(5)    The gateway to the application of s 48 was that the employee must recover damages in respect of an injury “in respect of which compensation is payable under this Act”, as s 48(1)(a) provides. Therefore, Comcare had to establish that some of the damages that the employee recovered were in respect of an injury in respect of which compensation is payable under the SRC Act: J [74]. Comcare had not established that some part of the lump sum paid to the respondent under the deed of release must have been paid in respect of her compensable injury. That was because the deed of release did not attribute the lump sum to any particular claim, none of which the Commonwealth admitted, and there was no evidence that identified how the lump sum was made up, or that the parties had agreed to its attribution to any claim or head of damage: J [75].

(6)    By reference to the decision of Merkel J in Slattery v Comcare [1996] FCA 883; 70 FCR 131, the primary judge stated that s 48 of the SRC Act was concerned with preventing double-dipping in relation to an injury which gave rise to an entitlement to compensation, and not incapacity as a consequence of an injury: J [77]-[78]. The respondent’s loss of her chosen career that she claimed she had suffered could have been attributable to the bullying and harassing behaviour alone, which could be characterised as a concurrent cause of her substantial economic and non-economic losses that she claimed: J [84]. The judge noted that the only claim that had been accepted was the claim that was the subject of Comcare’s decision of 14 July 2014, to which the primary judge referred at J [32], which is extracted at [36] above, and that this was the only claim in respect of which compensation had been payable. The judge noted that no claim had been accepted in relation to any aggravation of the respondent’s injury since July 2014, such as aggravation of the injury to her mental health, in circumstances where an aggravation was capable of being a separate compensable injury under the SRC Act: J [85]-[86]. In this regard, I note that the mental injury that was accepted by Comcare was an adjustment disorder with mixed emotional features and panic disorder, whereas there was medical support for the claim by the respondent in her AHRC complaint that her diagnosis had progressed to a chronic major depressive disorder.

(7)    In relation to the measure of compensation that may be awarded under s 46PO(4) of the AHRC Act, the primary judge applied the approach of French J in Hall v A & A Sheiban Pty Ltd [1989] FCA 65; 20 FCR 217 at 281 to s 81(1)(b) of the Sex Discrimination Act (since repealed) which was a cognate provision. The judge likened the remedy to that under s 82 of the Trade Practices Act 1974 (Cth) (since renamed the Competition and Consumer Act 2010 (Cth)) in respect of which it has been held that the task of the court is to construe the relevant provisions, and not to commence by seeking to draw some analogy with general law remedies: J [89]-[93].

(8)    The liability under s 48(3) of the SRC Act to pay Comcare the amount of compensation or the amount of damages recovered, whichever is the lesser, arises only in relation to those causes of action for damages that s 44(1) provides do not lie against the Commonwealth, a Commonwealth authority, or a licensed corporation in respect of an injury sustained by an employee in the course of which the employer would be liable for damages: J [94], [111].

(9)    Citing McLaurin v Federal Commission of Taxation [1961] HCA 9; 104 CLR 381 (McLaurin), Allsop v Federal Commissioner of Taxation [1965] HCA 48; 113 CLR 341 (Allsop), and the Full Court’s decision in Weissova v The Official Trustee in Bankruptcy [1986] FCA 262; 12 FCR 106 (Weissova), the primary judge held that the single lump sum that was paid to the respondent pursuant to the deed of release could not be dissected, and could not be apportioned so as to be characterised as the recovery of damages in respect of an injury to the respondent in respect of which compensation was payable under the SRC Act: J [100]-[111].

(10)    Further, it could not be inferred that some part of the lump sum must have been a recovery of damages for the purposes of s 48(1)(a) of the SRC Act. The mere fact that a tortfeasor settled a variety of disputed claims for a lump sum did not entitle a reasonable and definite inference to be drawn about the character of the lump sum: J [113]. And because Comcare could not establish that the lump sum engaged s 48(1)(a), his Honour held that s 48(7) did not apply: J [114].

Comcare’s grounds of appeal to this Court

47    Comcare advances one numbered ground of appeal, accompanied by particulars –

GROUNDS OF APPEAL:

1.    The primary Judge erred in declaring that no part of the lump sum of $1.25 million paid to Ms Friend by the Commonwealth of Australia, as represented by the Australian Federal Police, pursuant to the deed of release dated 22 September 2020 (the $1.25 million) constituted damages or a recovery of damages within the meaning of s 48 of the Rehabilitation and Compensation Act 1988 (Cth) (SRC Act) and in dismissing Comcare’s cross claim dated 3 June 2021.

Particulars:

1.1.    The primary judge erred in concluding s 48 of the SRC Act only applies in respect of the causes of action or other proceedings for damages that s 44(1) provides do not lie against a Commonwealth employer in respect of an injury sustained by an employee in the course of which the employer would be liable (including vicariously) for damages: see [73], [94] and [111] of the Reasons for Judgment.

1.2.    The primary judge erred in concluding the principles established in Allsop v Federal Commissioner of Taxation (1965) 113 CLR 341, McLaurin v Federal Commissioner of Taxation (1961) 104 CLR 381 and Weissova v The Official Trustee in Bankruptcy (1986) 12 FCR 106 are applicable to s 48 of the SRC Act: see [110], [113] and [114] of the Reasons for Judgment.

1.3.    The primary judge erred in concluding that the $1.25 million is unable to be apportioned so as to be capable of characterisation as a recovery of damages: see [110]-[111] of the Reasons for Judgment.

1.4.    The primary judge erred in concluding that an inference could not or should not be drawn that some of the $1.25 million Ms Friend recovered was in respect of an injury in respect of which compensation is payable under the SRC Act: see [74]-[75] and [112] of the Reasons for Judgment.

Comcare’s submissions

48    Counsel for Comcare submitted that the primary judge’s declaration was in error because there was no reason why damages by way of compensation in response to a complaint under the AHRC Act cannot trigger the repayment obligation under s 48(3). It was submitted that there were several indicators within the text of the provisions of the SRC Act that supported Comcare’s argument.

49    Counsel for Comcare drew attention to the difference in language between s 48(1)(a) of the SRC Act on the one hand, and ss 44 and 45 on the other. It was submitted that the latter provisions applied to “an action or proceeding for damages”, accepting in accordance with the Full Court’s decision in Romero that the actions or proceedings that are referred to in s 44 do not include the AHRC complaint. It was submitted that s 48(1)(a) was expressed in much broader language. Reliance was placed on the definition of “damages” in s 4(1) of the SRC Act as supporting a construction that for the purpose of s 48(1)(a) damages are not limited to those recoverable in an action or proceeding of the type contemplated by s 44, but extend to damages by way of compensation that may be awarded under s 46PO(4)(d) of the AHRC Act because of unlawful discrimination in an application to a court upon the termination of a complaint by the President of the AHRC. It was submitted that orders for compensation under s 46PO(4)(d) may be directed at compensating an applicant for psychiatric injury citing, inter alia, Hughes v Hill [2020] FCAFC 126; 277 FCR 511. Comcare submitted that if such an injury was one which was compensable under the SRC Act, then there would be no reason why the repayment obligation under s 48 would not be engaged.

50    Comcare placed reliance on the heading to Part IV of the SRC Act, which refers to “[l]iabilities arising apart from this Act” as informing a broad operation of s 48. Counsel for Comcare also drew attention to the fact that ss 46, 47, and 50 of the SRC Act refer to “common law claims”, whereas the heading to s 48 refers to “damages”, thereby also indicating a broader operation of s 48.

51    Counsel for Comcare submitted that the primary judge’s construction of s 48 undermined its purpose, which was to prevent double recovery. It was submitted that a statutory policy against double recovery was also manifested in s 52 of the SRC Act, which provides that an employee is not entitled to benefits under the Act and under an industrial award in respect of the same injury, but is required to elect between the two.

52    In relation to the primary judge’s reliance on McLaurin, Allsop, and Weissova to support his Honour’s conclusion that it was not possible to dissect the payment made to the respondent pursuant to the deed of release, counsel for Comcare submitted that the issues raised by the legislation that was applied by these authorities were very different to those raised by the present matter. It was submitted that in the present matter s 48(1) applies if an employee recovers any damages in respect of a compensable injury, whether or not the quantum of those damages that were attributable to the injury could be determined. It was submitted that if s 48(1) is engaged, then s 48(7) may operate to determine what part of the damages relates to the compensable injury. It was submitted that it is therefore only necessary to identify a mutual intention that some part of the payment pursuant to the deed of release was to compensate the respondent for the injury compensable under the SRC Act.

53    Comcare submitted that the payment made to the respondent under the deed of release should bear the same nature as the monies that would have been payable had the respondent’s claim been ultimately accepted by a court, citing Gardiner v Laing O’Rourke Australia Construction Pty Ltd [2020] NSWCA 151; 102 NSWLR 599 at [77]-[82] (Leeming JA) and the cases cited therein. Comcare further submitted that there were several characteristics of the compromise of the AHRC complaint and the terms of the deed of release that gave rise to a clear inference that at least some part of the payment to the respondent was in respect of a compensable injury.

54    In relation to the primary judge’s reliance on the exclusion of liability to the respondent for statutory benefits from the release and indemnity effected by cl 3.4 of the deed of release, counsel submitted that this was irrelevant to the operation of s 48, and further that the parties could not contract out of the respondent’s statutory entitlements under the SRC Act, citing Behan v Australian Telecommunications Corporation [1990] FCA 730; 26 FCR 337 (Lockhart J). It was submitted that other provisions of the deed contemplated that the payment would have an effect on statutory entitlements, such as cl 2.1(b)(i) which provided that the payment under the deed was to be inclusive of amounts required to be repaid to Comcare under the SRC Act, and cl 2.4(b) which required the respondent to undertake to have her solicitors notify Comcare of the settlement.

The respondent’s submissions

55    Counsel for the respondent had as the centrepiece of their submissions the Full Court’s decision in Romero. It was submitted on behalf of the respondent that because s 44 of the SRC Act precluded claims for what counsel described as “personal injury damages” against the Commonwealth, Commonwealth authorities, and licensed corporations, s 48 should be construed in a like manner: cf, the references to “personal injury damages” in the Civil Liability Act 2002 (NSW) and corresponding legislation. It was submitted that s 48 should be construed as being concerned only with the payment of damages of the type with which s 44 is concerned, which did not include payments in the settlement or adjudication of complaints brought under the AHRC Act, or other legislation for that matter giving rise to similar rights, such as the Fair Work Act 2009 (Cth), or the Public Interest Disclosure Act 2013 (Cth), which provide for entitlements to compensation for the contravention of statutory obligations. Counsel for the respondents went so far as to submit that if the Court were to construe s 48 as extending to payment of damages in settlement of a claim under the AHRC Act, the Court would have to hold that the reasoning in Romero was plainly wrong.

56    In the alternative, it was submitted on behalf of the respondent that the primary judge’s decision was correct on the distinct basis that, upon a proper construction of the deed of release, what was compromised was the AHRC complaint, and not a claim for damages in respect of the compensable injuries. Counsel for the respondents relied on the fact that under the terms of the deed of release the Commonwealth denied liability for the injuries, and that the only admission that was made was that the respondent had suffered psychiatric injuries that were the subject of an accepted workers’ compensation claim.

57    In relation to the reference in cl 2.1(b)(i) of the deed of release to the payment under the deed including any amount that must be repaid under the SRC Act, counsel for the respondent submitted that this was only a contingency, and that the term did not amount to an acknowledgement by the respondent that any such sum was repayable. Nor, it was submitted, did the respondent’s agreement in cl 2.4(b) of the deed to notify Comcare of the terms of the deed amount to an acknowledgement that s 48 of the SRC Act was engaged such as to require repayment of the statutory compensation. The same submission was put in relation to the terms of the indemnity under cl 3.2(c) of the deed.

58    Counsel for the respondents submitted that what was paid to the respondent under the deed of release was an undissected lump sum, and it could not be ascertained what part, if any, was attributable to past or future economic loss, or past or future medical expenses. Counsel emphasised the respondent’s submission that what was compromised by the deed of release was not a claim in respect of a compensable injury, but the AHRC complaint.

59    It was further submitted on behalf of the respondent that the primary judge was correct in applying the decisions of the High Court in McLaurin and Allsop, which concerned taxation legislation, and was correct in holding that the payment made under the deed of release could not be dissected.

Consideration

60    The following issues arise –

(1)    does the Court have jurisdiction in this matter to determine whether s 48 of the SRC Act is engaged;

(2)    is s 48 of the SRC Act limited in its application to claims for damages of the type that are abrogated by s 44;

(3)    if not, does the payment to the respondent under the terms of the deed of release engage s 48(1)(a); and

(4)    in considering the above issue, do questions of dissection attracting the principles in McLaurin and Allsop arise?

61    I will consider the issues in turn.

(1)    Does the Court have jurisdiction in relation to the matter?

62    The proceeding below was commenced by originating application for judicial review. Amongst other relief, the respondent to this appeal sought orders for review under the Administrative Decisions (Judicial Review) Act 1977 (Cth) setting aside what were alleged to be two purported decisions of Comcare. The first was the decision of Comcare dated 16 February 2021 requiring the respondent to repay the statutory compensation pursuant to s 48(3) of the SRC Act. The second was the decision of Comcare under s 48(4) to cease payments of statutory compensation to the respondent from 14 January 2021. The respondent also sought a declaration that the payment in settlement of the AHRC complaint was not damages for the purposes of s 48 of the SRC Act. Comcare filed a cross-claim seeking a corresponding declaration that, subject to the operation of s 48(7) of the SRC Act, the payment to the respondent was damages for the purposes of s 48.

63    By orders made 28 May 2021, the primary judge set aside both purported decisions of Comcare, noting the agreement of the parties that if, after the final hearing, it was ordered that the matter be remitted to Comcare to be determined in accordance with law, it should be determined by a decision-maker, other than the original decision-maker who made the s 48(3) decision and the s 48(4) decision, without considering the contents of the position paper produced by the respondent to this appeal for the purpose of a conciliation in the Australian Human Rights Commission: J [48]. On the hearing of the appeal, counsel informed the Court that it was accepted that the decisions of Comcare were affected by apprehended bias.

64    A question arose during the course of the hearing of the appeal whether, having regard to the primary judge’s orders of 28 May 2021, there remained any justiciable matter before the Court: see, AZC20 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2023] HCA 26; 411 ALR 615. The parties provided supplementary written submissions to the Court on this question. Both parties submitted that there was a matter before the Court that was justiciable.

65    The SRC Act provides for the determination by Comcare of matters such as claims for compensation, rehabilitation programs, and premiums. The Act provides for internal and external merits review of such determinations: s 39, Part VI. The determinations that may be reviewed by these means do not include any determination under s 48(3) that compensation is repayable. That is because the liability to repay compensation under s 48(3) does not depend upon any determination of Comcare, save that the quantum of compensation that is recoverable might turn upon whether pursuant to s 48(7) the respondent has established to the satisfaction of Comcare that a part of any damages recovered does not relate to the compensable injury. Subject to this, if engaged, s 48(3) of its own effect gives rise to a liability of the employee to Comcare which may be enforced by a common law action in debt: see, Victorian WorkCover Authority v Esso Australia Ltd [2001] HCA 53; 207 CLR 520 at [15], citing Mallinson v The Scottish Australian Investment Co Ltd [1920] HCA 51; 28 CLR 66 at 70. For this reason, in my view there is a justiciable controversy before the Court, which is whether s 48 of the SRC Act is engaged, and consequently whether the primary judge’s declaration was in error.

(2)    Is s 48 of the SRC Act limited in its application to claims for damages of the type that are abrogated by s 44?

66    There are several provisions of the SRC Act which refer to actions, proceedings, or claims for damages –

(a)    s 4(1), which defines “damages” as including “any amount paid under a compromise or settlement of a claim for damages”;

(b)    s 44, which provides that “an action or other proceeding for damages” does not lie against the Commonwealth, a Commonwealth authority, a licensed corporation, or an employee in respect of a compensable injury;

(c)    s 45, which provides that an employee may elect in writing to institute “an action or proceeding” against the Commonwealth, a Commonwealth authority, a licensed corporation, or other employee for damages for non-economic loss;

(d)    s 46, which requires an employee or dependant to notify Comcare of a “claim” made against a third party for the recovery of damages in respect of a compensable injury to, or death of, the employee;

(e)    s 47, which requires an employee or dependant to notify Comcare of a “claim for damages” made against the Commonwealth, a Commonwealth authority, a licensed corporation, or another employee in respect of a compensable injury or death;

(f)    s 48, which is the focus of this appeal, which is engaged where an employee “recovers damages in respect of” a compensable injury, or where “damages are recovered by” a dependant in respect of a death where compensation was payable in respect of the injury that resulted in the death;

(g)    the subrogation provision in s 50 headed “Common law claims against third parties”, which provides that Comcare “may make a claim” for damages in the name of an employee or dependant against a person where the injury or death occurred in circumstances that appear to create a legal liability in that person to pay damages;

(h)    the form of statutory garnishee in s 51, which is engaged where a person “appears to be liable” to pay damages, and where Comcare may require the person to pay the damages to Comcare if the person “agrees to pay damages” to the employee or dependant, or if damages are awarded to the employee or dependant “in proceedings arising out of” a claim made in respect of the injury or death; and

(i)    s 52A, which applies where “an employee takes action for non-economic loss”, and under which Comcare may “take over the conduct of that action” on behalf of the party against whom the claim is made.

67    As I indicated earlier, one question that arose in the Full Court’s decision in Romero was whether s 54 of the Seafarers Act precluded an employee bringing a complaint for sex discrimination. Subsection 54(1) of the Seafarers Act corresponds to s 44(1) of the SRC Act, although there are slight but immaterial differences of expression –

54    Employee not to have right to bring action for damages against employer etc. in certain cases

(1)    Subject to section 55, a person does not have a right to bring an action or other proceedings against his or her employer, or an employee of the employer in respect of:

(a)    an injury sustained by an employee in the course of his or her employment, being an injury in respect of which the employer would, apart from this subsection, be liable (whether vicariously or otherwise) for damages; or

(b)    the loss of, or damage to, property used by an employee resulting from such an injury.

...

68    Other provisions of Part 4 of the Seafarers Act generally correspond to Part IV of the SRC Act, although there are other differences of expression. For instance, the headings to ss 56, 57, and 59 of the Seafarers Act refer to “proceedings” rather than “common law claims”, and the text of those provisions refers to the institution of proceedings rather than the making of claims. Section 58 of the Seafarers Act corresponds to s 48 of the SRC Act, and provides for an employee or dependant to account to the employer for any damages recovered, and for the termination of compensation under the Act after the date on which damages are recovered.

69    In Romero at first instance, Ms Romero claimed that she had been the subject of bullying and vilification by the captain of a ship. She claimed that the captain and her employer had engaged in wrongful conduct in breach of s 14(2) of the Sex Discrimination Act, and that the employer had breached her contract of employment, and in particular a workplace discrimination and harassment policy that she alleged was incorporated into the contract of employment.

70    At a factual level, the claims of discrimination by Ms Romero were not accepted by the trial judge, Marshall J: Romero v Farstad Shipping (Indian Pacific) Pty Ltd [2014] FCA 439 at [17]-[22]. Further, Marshall J did not accept that, even if the workplace harassment policy was incorporated into the contract of employment, that the employer had breached the policy: [31]-[33]. A claim that the employer was in breach of an implied term of mutual trust and confidence in the contract of employment was also rejected: [42].

71    After addressing Ms Romero’s claims at a factual level, Marshall J considered a jurisdictional point that had been raised by the employer in reliance on s 54(1) of the Seafarers Act. The employer submitted that s 54(1) was a complete bar to Ms Romero’s case on the ground that she had lodged a claim for statutory compensation under the Seafarers Act in respect of a compensable injury, and that her claims in the Court could only be understood as arising from such an injury. Marshall J rejected these arguments, holding that –

(1)    The consideration of the ordinary words of s 54 of the Seafarers Act conveys the meaning that it was designed to deal with claims in respect of negligence for personal injuries sustained in the course of employment and not those sustained as a consequence of treatment which breaches the Sex Discrimination Act or an employment contract: [47].

(2)    This construction was supported by extrinsic material, namely the second reading speech of the Bill which was enacted as the Seafarers Act, and also the second reading speech for the Bill which was enacted as the Commonwealth Employees’ Rehabilitation and Compensation Act to which I referred at [7] above.

(3)    Parliament did not intend to bar a breach of contract claim to which injury was largely incidental: [50].

(4)    The central focus of s 54 of the Seafarers Act was to ask what is being claimed, and Ms Romero was claiming a breach of the Sex Discrimination Act over which the Court had jurisdiction, and a breach of contract in respect of which there was accrued jurisdiction: [50]. On the other hand, the Seafarers Act was directed towards personal injury claims brought under common law: [51].

(5)    Marshall J found that Ms Romero’s claim, which included declaratory relief and an apology pursuant to s 46PO(4) of the AHRC Act, were not “in respect of” an injury, but instead, “in respect of” an alleged breach of the Sex Discrimination Act and in respect of an alleged breach of her employment contract: [52].

72    On appeal by Ms Romero, the employer cross-appealed on the ground that Marshall J had been in error in rejecting the claim that the Court lacked jurisdiction. The Full Court (Allsop CJ, Rares and McKerracher JJ) dismissed the cross-appeal, and at [103] adopted the reasons given by Marshall J. To those reasons, the Full Court added –

107    There is no doubt that the claim by Ms Romero in the proceeding below was a claim “in respect of” an alleged breach of the [Sex Discrimination Act] as well as a claim for breach of contract in the Court’s accrued jurisdiction. As the Second Reading Speech makes clear, s 54 [of the Seafarers Act] is plainly directed towards personal injury claims brought under the common law.

108    To the primary judge’s reasoning may be added the observation that s 6 [of the Seafarers Act] provides:

6    Injuries suffered by employees

A reference in this Act to an injury suffered by an employee is, unless the contrary intention appears, a reference to an injury suffered by the employee for which compensation is payable under this Act.

(Emphasis added)

109    Clearly damages either under the [Sex Discrimination Act] and the Australian Human Rights Commission Act 1986 (Cth) (AHRCA) or at common law for breach of contract are not compensation “payable under this Act” (ie the [Seafarers Act]). The claim under the [Sex Discrimination Act] is only capable of being pursued by virtue of s 46PO of the AHRCA.

110    Further, there could not possibly be any discernible policy reason to exclude such claims from the industry in which these parties were participants.

    (Emphasis in original.)

73    As I have mentioned, the parties accepted that the reasoning in Romero was equally applicable to s 44 of the SRC Act, with the consequence that the respondent’s AHRC complaint was not precluded by that provision. Further, no party submitted that the reasoning of Marshall J or the Full Court in Romero was to be doubted.

74    The primary judge’s analysis proceeded on the premise that because remedies under s 46PO(4) were outside the scope of operation of s 44(1) of the SRC Act, it was difficult to see a policy reason for adopting a construction of the word “damages” when used in the SRC Act for conduct that was able to be litigated by an employee against his or her employer for unlawful discrimination: J [93]. At J [94], the primary judge stated that s 48(1) was intended to prevent double recovery, or double-dipping, which begged the question as to what the second dip is. His Honour’s response to the question posed was that –

... It must be in respect of the causes of action or other proceedings for damages that s 44(1) provides do not lie against a Commonwealth employer in respect of an injury sustained by an employee in the course of which the employer would be liable (including vicariously) for damages. The [Disability Discrimination Act] and [Sex Discrimination Act] create just such causes of action for employees against their Commonwealth employers. Moreover, the [Disability Discrimination Act] was enacted after [the SRC Act] yet the Parliament did not limit the remedies under s 46PO(4) of the AHRC Act to “loss or damage suffered because of conduct of the respondent” by excluding injury within the meaning of [the SRC Act].

(Emphasis added.)

75    I respectfully agree with the primary judge’s conclusion that an order for damages, or an agreement to pay damages, on account of unlawful discrimination is outside the scope of s 48 of the SRC Act. I will express my own reasons for that conclusion.

76    The place to start is the text of the legislation, construed having regard to its history and context: see, Federal Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55; 250 CLR 503 at [39] (French CJ, Hayne, Crennan, Bell and Gageler JJ). Context should be regarded at the first stage and not at some later stage, and it should be regarded in its widest sense: SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; 262 CLR 362 at [14] (Kiefel CJ, Nettle and Gordon JJ). Further, the SRC Act, which establishes a comprehensive scheme for no-fault compensation which includes limitations on common law rights, and the interaction between the recovery of damages and statutory compensation, must be considered as a whole to ascertain the objects of the Act and whether its provisions are intended to achieve harmonious goals: see generally, Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [69]-[71] (McHugh, Gummow, Kirby and Hayne JJ).

77    Section 44 of the SRC Act provides that “an action or other proceeding for damages” does not lie against the Commonwealth, a Commonwealth authority, or a licensed corporation in respect of a compensable injury. Applying the Full Court’s decision in Romero, damages paid in compromise of a complaint to the AHRC alleging unlawful discrimination are, as a product of statutory construction that has regard to context and purpose, outside s 44. Such a complaint, or any proceeding that follows that complaint, is not “an action or other proceeding for damages” for the purposes of s 44, because it is not a common law action for damages of the type contemplated by the provision. It is clear that Part IV of the SRC Act includes dependants’ claims within the concept of common law actions for damages notwithstanding that they owe their existence to statute. The term “common law” appearing in the extrinsic material and in the headings to ss 46, 47, and 50, is sensitive to context, and in this context it is used to distinguish claims for damages that involve establishing common law negligence or breach of statutory duty in order to found a claim for damages from other claims that are based in statute, such as no-fault compensation. That is a delineation that is well understood, and so much is clear from the explanatory memorandum to the 2001 amendments to which I referred at [18] above. It is also clear from the fact that dependants’ claims are included within the text of ss 46, 47 and 50, which refer to “common law claims” in their headings. These headings, which were introduced by the 2001 amending Act, form part of the Act, and are indicative of the type of claims with which Part IV is concerned. Of special significance are the headings above ss 46 and 47 which contain the notice requirements in relation to common law claims against, respectively: (a) third parties; and (b) the Commonwealth, Commonwealth authorities, licensed corporations and other employees.

78    Section 48, which is concerned with the recovery of damages “in respect of” a compensable injury or death, should be construed in its surrounding context. The words “in respect of” may have a wide meaning, but as with other words and expressions, the meaning depends very much on the context in which it is found: State Government Insurance Office (Qld) v Rees [1979] HCA 52; 144 CLR 549 at 561 (Mason J), cited with approval in Workers’ Compensation Board of Queensland v Technical Products Pty Ltd [1988] HCA 49; 165 CLR 642 at 647 (Wilson and Gaudron JJ). In the latter case, Deane, Dawson and Toohey JJ at 653-654 stated that undoubtedly the words “in respect of” have a wide meaning, but that “the phrase gathers meaning from the context in which it appears and it is that context which will determine the matters to which it extends”.

79    The definition of “damages” which I set out at [10] above is important, because it includes “any amount paid under a compromise or settlement of a claim for damages”. For the purposes of s 48, a claim for damages would include at least any claim for damages that falls outside the preclusion brought about by s 44, which would encompass claims against third parties, and claims by dependants. But in my view, coherence requires that the references to “damages” in s 48 and in the definition of “damages” in s 4(1) are to damages of the type with which the other provisions of Part IV of the SRC Act including ss 44, 46, 47 and 50 are concerned, namely damages recoverable in common law actions for damages. To put it another way, the recovery of damages in respect of an injury to an employee is a recovery of damages where the injury is the subject-matter of the cause of action because damage is the gist of a common law cause of action in negligence. A complaint to the AHRC alleging unlawful discrimination is different. Its foundation is not the injury but the unlawful discrimination. This point was made by Basten JA in Gardiner v Laing O’Rourke Australia Construction Pty Ltd [2020] NSWCA 151; 102 NSWLR 599 at [40] in relation to the Anti-Discrimination Act 1977 (NSW) when considering its operation in the context of the New South Wales workers’ compensation legislation. That is not to say that an injury as a consequence of unlawful discrimination may not be the subject of the assessment of statutory damages under s 46PO(4)(d) of the AHRC Act. But the damages are to be characterised as being in respect of the unlawful discrimination, because that is the gist of the claim. This was in substance the point made by Marshall J at first instance in Romero at [52] in reasons with which the Full Court agreed.

80    Comcare submitted that one of the objects of s 48 was to prevent double-dipping. But as the primary judge stated at J [94], this begs the question as to what is the second dip. The issue is one of potential over-compensation. The prospect of over-compensation may be addressed by a respondent to a complaint to the AHRC as part of the conciliation process, or by a court should an application be made for a remedy under s 46PO(4) of the AHRC Act. Although the basis upon which damages may be awarded for unlawful discrimination is statutory, there is no reason to think that in order to avoid over-compensation the assessment of damages should not, in an appropriate case, take account of payments of no-fault statutory compensation if the compensation is not repayable. The law has a well-entrenched policy against permitting the recovery of damages representing a loss that is greater than that suffered. In Boncristiano v Lohmann [1998] 4 VR 82 at 89, Winneke P referred to this policy in the following terms –

… The law, which now embraces equity, will not permit a plaintiff, whatever procedural device is used, to recover more than the damages which have been suffered, no matter what the cause of action upon which he proceeds against the various defendants: see per Purchas L.J. in Townsend’s case [Townsend v Stone Toms & Partners (1984) 27 BLR 26 (CA)] at 49. This principle was accepted by Steyn J. (as he then was) in Banque Keyser Ullman S.A. v. Skandia (U.K.) Insurance Co. Ltd. (No. 2) [1988] 2 All E.R. 880 at 881-2.

81    This general principle was also referred to by the majority in Haines v Bendall [1991] HCA 15; 172 CLR 60 at 63, approving Lord Reid’s reference in Parry v Cleaver [1970] AC 1 at 13 to the “universal rule that the plaintiff cannot recover more than he has lost”.

82    In relation to the interaction between the assessment of damages and the receipt of no-fault statutory benefits for an injury that are not liable to be repaid, the applicable principles are those referred to in The National Insurance Co of New Zealand Ltd v Espagne [1961] HCA 15; 105 CLR 569, Adams v Ascot Iron Foundry Pty Ltd (1968) 72 SR (NSW) 120, Redding v Lee [1983] HCA 16; 151 CLR 117, Manser v Spry [1994] HCA 50; 181 CLR 428, Kempsey District Hospital v Thackham (1995) 36 NSWLR 492, and Franklins Self Serve Pty Ltd v Wyber [1999] NSWCA 90; 48 NSWLR 249. In Manser v Spry, Ms Spry injured her neck and back in a transport accident as a result of the negligence of Mr Manser and brought a claim for damages. She later received no-fault benefits for an aggravation of her neck and back that she sustained at work which were not recoverable. The question in issue was whether the no-fault benefits should be taken into account in reduction of the damages assessable against Mr Manser. The Court referred to the authorities that require that legislative intent be ascertained, and held at 438-439 that the Workers Rehabilitation and Compensation Act 1986 (SA), under which the no-fault benefits were paid –

... was not designed to confer benefits to be added to the damages to which the worker might otherwise be entitled at common law for a loss caused by an event which is not work related. The compensation benefits paid or payable under the Act are ordinary incidents of a worker’s employment which must be taken into account in assessing the damages of a plaintiff-employee for loss and damage for which a tortfeasor is liable at common law.

83    Thus, as Kempsey District Hospital v Thackham illustrates, statutory compensation that has been paid and which may be payable to an employee in the future can affect the assessment of damages. Kempsey District Hospital v Thackham, and the other cases involving similar issues to which I referred above, concerned the assessment of damages at common law. In Richardson v Oracle Corporation Australia Pty Ltd [2014] FCAFC 82; 223 FCR 334 (Oracle), Besanko and Perram JJ stated at [130] in relation to the AHRC Act that the statutory objects and purposes of a power to award damages may inform the proper approach to causation in a particular case. I venture the view that in a case such as the present, which concerns an award of damages under statute, the search for legislative intent of the type referred to in Manser v Spry might include whether the power to award damages under s 46PO(4)(d) of the AHRC Act requires that non-refundable payments of compensation under the SRC Act should be taken into account in the assessment of damages so as to avoid over-compensation.

84    In adverting to the above issues, I am not to be taken as deciding that compensation paid under the SRC Act must be taken into account in assessing damages under s 46PO(4) of the AHRC Act. The point was not argued on this appeal, and it is not an issue that arises directly because the respondent’s claim was compromised. I am saying no more than that the assessment of damages under s 46PO(4) is an appropriate point at which any question of over-compensation can be argued and addressed. That is because there are sound reasons why any question of over-compensation should be an issue for the assessment of damages under the AHRC Act, rather than a reason supporting the construction of s 48 of the SRC Act that Comcare advances. An award of general damages under statute in a case involving unlawful discrimination or sexual harassment can compensate a claimant for damage that goes well beyond any injury of the nature that is compensable under the SRC Act or by an award of damages at common law. This is illustrated by the leading cases on the assessment of damages under the AHRC Act, such as Oracle, and Hughes v Hill. The insult, distress, anxiety, unhappiness, and humiliation suffered by a claimant as a result of an act of discrimination or sexual harassment are compensable in addition to any mental or physical injury that might result from the unlawful acts. The existence of a power differential between a claimant and a respondent may be relevant to the assessment, and the objects of the discrimination legislation may be relevant: Oracle at [130] (Besanko and Perram JJ); Hughes v Hill at [51]-[52] (Perram J).

85    What follows from the above is that there will be no necessary correlation between damages assessed under the AHRC Act, and compensation paid under the SRC Act. This was accepted by Comcare. In its written submissions Comcare said that, “s 48 applies if an employee recovers any damages in respect of an injury being an injury, loss or damage in respect of which compensation is payable under the SRC Act, whether or not the precise amount of such damages can be determined: see s 48(1)(a)” (emphasis in original). Comcare submitted that this effect was ameliorated by s 48(7). But s 48(7) is a very blunt tool. In the case of an injury (as distinct from loss of or damage to property used by an employee that is also covered by s 48(1)), s 48(7) requires an employee to establish to the satisfaction of Comcare that a part of the damages did not relate to the injury. This will likely be a difficult task in the case of an indivisible award of general damages. The result is that on Comcare’s construction of s 48, any award of damages under the AHRC Act, provided that it is in respect of a compensable injury, will trigger an obligation to repay all compensation without regard to whether the compensation was on account of incapacity for work, medical expenses, or non-economic loss, and will result in the termination of any further compensation entitlements.

86    This brings me to a further point, which is that the prospect that a compromise of, or an award of damages in relation to, a discrimination or sexual harassment complaint might trigger the results referred to above could have a chilling effect on the bringing of such complaints in a way that might undermine the objects of the discrimination legislation and the AHRC Act. In making constructional choices, it is permissible for the Court to have regard to the operation of other statutes as part of the legislative context, at least where the other legislation was in existence at the time of the enactment of the legislation under consideration: see, for example, Palgo Holdings Pty Ltd v Gowans [2005] HCA 28; 221 CLR 249 at [31] (McHugh, Gummow, Hayne and Heydon JJ); Customs and Excise Commissioners v Hedon Alpha Ltd [1981] 1 QB 818 at 824 (Stephenson LJ) and 827 (Griffiths LJ). Here, the enactment of the Sex Discrimination Act pre-dated the SRC Act, and the terms in which it was originally enacted provided for the making of complaints to the Human Rights and Equal Opportunity Commission, conciliations by the Commission, and the making of declarations by the Commission that a respondent should pay a complainant damages, noting that this last feature of the legislation did not survive Brandy v Human Rights and Equal Opportunity Commission [1995] HCA 10; 183 CLR 245. The potential chilling effect on discrimination complaints is not decisive, but it gives reason to pause before accepting Comcare’s submissions.

87    While it might be said, as senior counsel for Comcare submitted, that the above conclusions have the consequence that Comcare, rather than a contravener of discrimination legislation, bears the burden of the cost of statutory compensation on account of an injury resulting from unlawful discrimination, that is a consequence of the operation of s 50 of the SRC Act, which it was accepted did not enable Comcare to exercise any rights of subrogation in these circumstances. Moreover, this submission is akin to submitting that Comcare should not bear the burden of the cost of compensation in respect of an injury resulting from some other legal wrong on the part of an employer or another employee covered by the Act, such as negligence, or breach of statutory duty. But that is not how the scheme under the SRC Act operates. Subsection 50(9) excludes the Commonwealth, a Commonwealth authority, a licensed corporation and an employee from the persons against whom Comcare may exercise its statutory right of subrogation, and s 51(6) contains a corresponding exclusion in relation to the statutory garnishee rights. As between Comcare and an employer or other employee, Comcare bears the burden of the statutory compensation.

88    If a person liable for unlawful discrimination or sexual harassment is a third party, then there are other difficulties in relation to s 50. It could hardly be supposed that Comcare could, in the name of an employee, lodge or assume conduct of a complaint to the AHRC and pursue a claim for compensation on the ground of unlawful discrimination or sexual harassment. No party to the appeal suggested that it could. For one thing, it might be said that the standing given under s 46P of the AHRC Act to bring a complaint is to bring a complaint that is personal to the person or persons aggrieved. Further, s 50 of the SRC Act which is headed “Common law claims against third parties” is engaged where the injury occurred in circumstances that appear to create a legal liability in a person to pay damages. Formulations similar to s 50(1)(b) of the SRC Act are of long standing in third party recovery provisions in workers’ compensation legislation: see Workmen’s Compensation Act 1897 (Eng), s 6; and Tooth & Co Ltd v Tillyer [1956] HCA 49; 95 CLR 605, which concerned the Workers’ Compensation Act 1926 (NSW), s 26. The formulation refers to the occurrence of an injury that would appear to give rise to liability. In the present case, any liability of the Commonwealth or other employee for damages for the respondent’s injury was annihilated by s 44. Further, a liability to pay damages in respect of the unlawful discrimination would arise only upon the President of the AHRC terminating the conciliation of a complaint in circumstances where a proceeding could be brought without leave, or alternatively if leave of the Court was required, leave was given. There would be other difficulties that it is unnecessary to traverse, especially given that it was not in dispute that Comcare cannot subrogate an employee’s complaint to the AHRC. The short point is that the recovery of damages in respect of unlawful discrimination does not fit coherently within the scheme established by Part IV of the SRC Act.

89    For the above reasons, the recovery of a payment made in compromise of a discrimination or sexual harassment complaint made under the AHRC Act, or in satisfaction of an order for the payment of damages under s 46PO(4) of the AHRC Act is outside the terms of s 48.

90    Before leaving this section of these reasons, I wish to record that I have not overlooked the decision of Logan J in Turner v Commonwealth of Australia [2019] FCA 463; 367 ALR 724, which is a revised ex tempore decision involving the approval of the compromise of a claim by a person under disability for relief under the Public Interest Disclosure Act 2013 (Cth) as a result of alleged reprisals. In giving reasons approving the compromise, Logan J stated at [29] that it was at least likely that if the proceedings continued and a compensatory sum were ordered, the applicant would be obliged to make a refund to Comcare pursuant to s 48 of the SRC Act, and that was a factor that his Honour took into account in conjunction with counsel’s opinion in forming the view that the compromise was reasonable. It does not appear that the question whether s 48 of the SRC Act applied was contested in Turner, and indeed it appears that the compromise that was approved, although confidential, would not have led to any net sum in the hands of the applicant after payment of his costs, and therefore the operation of s 48 did not in any practical sense arise: see [25].

(3)    Does the payment to the respondent under the terms of the deed of release engage s 48(1)(a)?

91    On the above analysis, little turns on the terms of the deed of release except to characterise it as being in settlement of the AHRC complaint and the respondent’s claims of unlawful discrimination and sexual harassment which were the foundation of the complaint, and not any claim for damages for injury of the type to which Part IV of the SRC Act relates. The fact that the deed was entered into in settlement of the AHRC complaint, and not a common law claim for damages in respect of a compensable injury, is plain from recitals (C) and (F) which identify the object of the release, and which control the deed of release in accordance with the common law principle of construction referred to in Grant v John Grant & Sons Pty Ltd [1954] HCA 23; 91 CLR 112 at 123 (Dixon CJ, Fullagar, Kitto and Taylor JJ) –

The principle relied upon is that adopted by the common law long ago for the restriction of wide general words in a release of obligations, viz. that the general words of a release should be restrained by the particular occasion: Knight v Cole (1690) 3 Lev 273. Thus the general words of a release are to be restrained by the particular recital: Payler v Homersham (1815) 4 M & S 423. As it is concisely expressed by Best J in Lampon v Corke (1822) 5 B & Ald 606 at 611 “If there be introductory matter, that will qualify the general words of the release.”

(Citations added in place of the footnotes.)

92    The deed is also to be construed in its objective surrounding context, in which any common law claim by the respondent against the AFP and other employees for damages in respect of a compensable injury was annihilated by s 44 of the SRC Act. Therefore, the claim that was vindicated by the deed of release was the AHRC complaint in respect of unlawful discrimination, and not a common law claim for damages in respect of a compensable injury, and the payment bears that character: see, Gardiner v Laing O’Rourke Australia Construction Pty Ltd [2020] NSWCA 151; 102 NSWLR 599 at [77] (Leeming JA), and the cases cited therein.

93    While the deed in various places contemplated that the respondent or the AFP might have to account to Comcare in relation to all or some part of the payment under the deed, that was no more than a contingency which the deed addressed. In this respect, the deed provided that the payment to the respondent was inclusive of any amount that had to be repaid by the respondent (cl 2.1(b)(i)), and provided for an indemnity in favour of the AFP in relation to any loss, damage or expense incurred by the AFP in relation to any such liability (cl 3.2(c)). Likewise, the warranties made by the respondent in cl 2.5, including in relation to notification obligations, were based upon contingencies.

94    As to the exclusion of statutory benefits from the release by cl 3.4, I accept the submission of counsel for Comcare that the parties were unable to contract out of the respondent’s entitlement to statutory benefits. This was in circumstances where the deed does not demonstrate that there was any bona fide dispute about the respondent’s entitlement to statutory benefits. Clause 3.4 is therefore neutral on the question of the proper characterisation of the payment made to the respondent under the deed, but it is certainly not inconsistent with characterising the payment due to the respondent under the deed as being in settlement of the AHRC complaint, and not a common law claim for damages.

(4)    Dissection

95    In relation to the primary judge’s treatment of McLaurin, Allsop, and Weissova, in my view no question of dissection arises in this case, because the proper characterisation of the payment under the deed of release was in settlement of the AHRC complaint relating to unlawful discrimination and sexual harassment alone, and not in settlement of any common law claim in respect of a compensable injury. Therefore, my conclusion is that for the purposes of s 48 of the SRC Act no part of the payment to the respondent was attributable to damages in respect of an injury with which Part IV of the Act is concerned. This amounts to much the same conclusion as that reached by the primary judge at J [114]-[115], with the result that Comcare has not shown that any damages were recovered by the respondent in respect of an injury such as would engage s 48(1).

Conclusions

96    The appeal should be dismissed with costs. The parties should be given an opportunity to seek any variation of the usual order for costs, in which case the Court should determine that application on the papers.

Associate:    

Dated:    1 February 2024

REASONS FOR JUDGMENT

GOODMAN J:

97    I have also had the considerable benefit of reading the reasons of Wheelahan J in draft. I agree with those reasons and with the orders proposed by his Honour.

Associate:    

Dated:    1 February 2024