Federal Court of Australia

Friend v Comcare [2021] FCA 837

ORDERS

THE COURT ORDERS THAT:

1.    It be declared that no part of the lump sum of $1.25 million paid to the applicant by the Commonwealth of Australia, as represented by the Australian Federal Police, pursuant to the deed of release dated 22 September 2020 constituted damages or a recovery of damages within the meaning of s 48 of the Rehabilitation and Compensation Act 1988 (Cth).

2.    The cross claim be dismissed.

3.    On or before 30 July 2021, the applicant file and serve any evidence and written submissions limited to 2 pages in respect of the order for costs that she seeks.

4.    On or before 6 August 2021, the respondent file and serve any evidence and written submissions limited to 2 pages in respect of costs.

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

REASONS FOR JUDGMENT

RARES J:

1    In September 2006, Kelly-Anne Friend was engaged by the Commissioner of the Australian Federal Police (AFP) on behalf of the Commonwealth as an employee pursuant to s 24 of the Australian Federal Police Act 1979 (Cth) (the AFP Act) and began performing uniform general duties as a constable in the Australian Capital Territory. She had graduated from university with degrees in ancient history and archaeology and subsequently graduated with a master’s degree in counter-terrorism. In about 2011, she began working in Sydney in the crimes operations portfolio. In about 2013, she began working at Sydney International Airport within the aviation portfolio.

2    In late 2013, Ms Friend was referred to a psychologist who diagnosed her as suffering from severe depression, anxiety and PTSD.

3    On 14 March 2014, she applied to Comcare for workers’ compensation under the Safety, Rehabilitation and Compensation Act 1988 (Cth) (SRCA) claiming that she had conditions of gastritis, irritable bowel syndrome, adjustment disorder with depressed and anxious mood and panic disorder without agrophobia. She first noticed her gastric issues on 20 March 2013. She reported that her condition was because of exposure to prolonged harassment and bullying from her supervisor while working for the AFP.

4    On 14 July 2014, Comcare accepted liability under s 14 of the SRCA for her conditions of acute gastritis, adjustment disorder with mixed emotional features and panic disorder. It found that the first date when Ms Friend required medical treatment was for her gastrointestinal issues on 13 July 2013, being the deemed date of injury under s 7(4) of the SRCA.

5    On 27 August 2018, Ms Friend lodged a complaint with the Australian Human Rights Commission pursuant to s 46P of the Australian Human Rights Commission Act 1986 (Cth) (AHRC Act) claiming that she had been discriminated against because of, first, her disability (anxiety, depression, PTSD, resulting physical manifestations, including but not limited to insomnia and vomiting issues) and, secondly, sex, because she was female. Thirdly, she claimed that she had been sexually harassed in the period between March 2013 and early 2014. The complaint alleged that the AFP and four of its employees (the officers) had engaged in the acts of unlawful discrimination and that one of them, a sergeant, had engaged in the sexual harassment. It also alleged that, on the medical evidence, the conduct complained of by then had resulted in her being unlikely to ever be able to return to work for the AFP or for any employer at a similar level again. In the section of the complaint form headed “How do you think this complaint should be resolved?” she said that she wanted a public apology from the AFP, a requirement that it undertake a review of its operations at 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 in the future, and that disciplinary action be taken against the officers. She also sought payment of damages that the complaint stated were likely to be not less than about $1.3 million for economic and non-economic loss, after deducting workers compensation payments.

6    In early May 2020, the President of the Commission held a conciliation conference under s 46PJ of the AHRC Act. The parties engaged in the conciliation process until 22 September 2020, when the Commonwealth of Australia, represented by the AFP, entered into a deed of release with Ms Friend under which the Commonwealth agreed to pay her a lump sum of $1.25 million in full and final satisfaction of the complaint.

The issue

7    Comcare alleges, and Ms Friend denies, that the payment of the lump sum to her was a recovery of “damages” within the meaning of s 48 of the SRCA because some part of it was “in respect of an injury… for which compensation is payable under this Act”.

The statutory schemes

The SRCA

8    In these reasons I have tried to simplify, somewhat, the discussion of the statutory provisions in the SRCA by omitting certain of the alternatives, such as claims or rights to compensation for damage to property as well as all of the employers covered, such as a licensed corporation. That is because the principles going to the application of those provisions are the same and this proceeding, in particular, involves an injury to Ms Friend and the Commonwealth as her employer.

9    The SRCA relevantly provides in s 4(1):

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.

non-economic loss, in relation to an employee who has suffered an injury resulting in a permanent impairment, means loss or damage of a non-economic kind suffered by the employee (including pain and suffering, a loss of expectation of life or a loss of the amenities or enjoyment of life) as a result of that injury or impairment and of which the employee is aware.

10    Importantly s 4(8) provides:

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.

(emphasis added)

11    Relevantly s 5A(1)(b) defines “injury” to mean

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.

12    Part II of the SRCA provides for compensation for injuries. By force of s 14(1), Comcare is liable to pay compensation in accordance with the SRCA in respect of an injury suffered by an employee if the injury results, relevantly, in incapacity for work. Comcare is also liable to pay compensation to an employee in respect of an injury that results in a permanent impairment (s 24(1)). And, where the injury to an employee results in permanent impairment so that compensation is payable in respect of the injury under s 24, Comcare is liable to pay additional compensation in respect of that injury in accordance with s 27 for any non-economic loss suffered by the employee as a result of the injury or impairment, in accordance with a statutory formula. The formula has the effect of limiting the amount of non-economic loss to which an employee will be entitled under the SRCA.

13    Part IV of the SRCA, headed “Liabilities arising apart from this Act”, includes the following provisions in ss 44 (1) and 45(1):

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.

45      Actions for damages—election by employees

(1)    Where:

(a)      compensation is payable under section 24, 25 or 27 in respect of an injury to an employee; and

(b)      the Commonwealth, a Commonwealth authority, a licensed corporation or another employee would, but for subsection 44(1), be liable for damages for any non-economic loss suffered by the employee as a result of the injury;

the employee may, at any time before an amount of compensation is paid to the employee under section 24, 25 or 27 in respect of that injury, elect in writing to institute an action or proceeding against the Commonwealth, the Commonwealth authority, the licensed corporation or other employee for damages for that non-economic loss.

(emphasis added)

14    An employee or his or her dependant must as soon as practicable, but in any event not later than 7 days after the date when he or she first becomes aware of the claim, notify Comcare in writing where he or she makes a claim against the Commonwealth, a Commonwealth authority, a licensed corporation (the employer) or another employee for the recovery of damages in respect of an injury to, or death of, the employee that occurs in circumstances that appear to create a legal liability in a person other than the employer (s (46)(1)). Correspondingly, the employee or dependant must within the same timeframe notify Comcare in writing if compensation is payable under the SRCA in respect of an injury to, or death of, the employee and he or she makes a claim for damages in respect of the injury or death against the Commonwealth or a Commonwealth authority (s 47(1)). Failure of the employee or dependant to give such a notice is an offence of strict liability (ss 46(2) and 47(2)).

15    As these provisions and s 44(3) envisage, the SRCA contemplates that dependants with claims under the local State or Territory analogue of Lord Campbell’s Act will be able to receive compensation under the SRCA or, if they elect, in proceedings on the compensations to relatives legislation, cf: Workers’ Compensation Board of Queensland v Technical Products Pty Ltd (1988) 165 CLR 642 at 646 per Wilson and Gaudron JJ and 655 per Deane, Dawson and Toohey JJ.

16    The critical provision for present purposes is s 48, which provides relevantly:

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.

(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).

(6)     A reference in subsection (3) to compensation under this Act that was paid for the benefit of a dependant does not include a reference to compensation paid under subsection 17(5).

(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.

(emphasis added)

17    Where compensation is payable under the SRCA in respect of an injury that resulted in the death of an employee, s 49 provides that if the dependant or dependants of the employee recover damages, he, she or they will be liable to pay the, or a proportion of the, amount of the compensation payable under the SRCA to Comcare (as calculated in accordance with s 49(4) and (5)) or the amount of damages they recover, whichever is the less.

18    The SRCA gives Comcare rights in respect of claims that an employee has in respect of an injury that appears to create a legal liability in a person (other than the employer or another employee) which in s 50, relevantly, provides:

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).

    (emphasis added)

19    In addition, s 51 gives Comcare the right to give notice in writing to a person (other than the employer or another employee) who appears to be, or is found, liable to the employee or dependant, in respect of an injury to, or death of, the employee. The notice requires the person to pay Comcare the amount of damages that would be payable to it under ss 48 and 49 by the employee or dependant, in respect of the amount of compensation that he or she has been paid under the SRCA or to otherwise pay to Comcare any damages that the person either has agreed to pay to the employee or dependant in respect of the injury or death, or that are awarded to the employee or dependent.

20    Also, if an employee is entitled both to compensation under the SRCA and benefits under a workplace award or enterprise agreement or the like, he or she must elect which of the remedies he or she will pursue in respect of the same injury and cannot recover under both provisions (s 52). Where an employer has paid a premium to cover its liability for actions for non-economic loss brought by its employees, and an employee brings such an action for non-economic loss against the employer or another employee of that employer, Comcare also has the right under s 52A to take over the conduct of any such action from the employer. That right is effectively akin to a statutory right of subrogation for Comcare to exercise in respect of its insured.

The AHRC Act

21    The AHRC Act provides in Pt IIB for redress for unlawful discrimination. Division 1 of Pt IIB provides for conciliation of a complaint by the President. A person may lodge a written complaint with the Commission alleging that one or more acts or have been done or one or more omissions or practices have occurred that is or are “unlawful discrimination” as defined in s 3(1). Unlawful discrimination under s 3(1) includes any acts, omissions or practices that are unlawful under Pt 2 of the Disability Discrimination Act 1992 (Cth) (DDA) or Part II of the Sex Discrimination Act 1984 (Cth) (SDA).

22    If the President terminates a complaint under ss 46PE, 46PF(1)(b) or 46PH of the AHRC Act, any person who is affected adversely in relation to a complaint may apply, pursuant to s 46PO, to the Federal Court or the Federal Circuit Court alleging unlawful discrimination by one or more of the respondents to the terminated complaint. In 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)

The DDA

23    Unlawful discrimination occurs under the DDA 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 DDA to indirectly discriminate against a person on the ground of his or her disability if the discriminator requires, or proposes to require, that 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)).

24    Under s 15(2) of the DDA 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.

25    Importantly, s 12(5)(a) provides that s 15 has effect in relation to discrimination against Commonwealth employees in connection with their employment as Commonwealth employees. For the purposes of the DDA, s 124 provides that “the Commonwealth shall be taken to be the employer of all Commonwealth employees”. The definition of Commonwealth employees in s 4(1) applies expressly to the Commissioner, Deputy Commissioner, AFP employees and special members of the AFP.

The SDA

26    The SDA 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.

27    Section 28A 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.

28    Like the DDA, s 9(5) of the SDA 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 SDA replicates s 124 of the DDA, the definition of “Commonwealth employee” in s 4 of the SDA does not include any reference to the AFP. Accordingly, the SDA may not apply to the AFP as an employer.

Ms Friend’s description of her injury in her SRCA claim

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 complaint to the AHRC

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.

42    During the negotiations for settlement of the complaint in the Commission, Ms Friend provided the respondents with the following schedule of her claimed damages:

The settlement deed

43    The deed recited that Ms Friend had been employed by the AFP from 29 September 2006 and that her employment was terminated on 26 June 2019 on invalidity grounds under s 32 of the AFP Act. It then recited:

(C)     Ms Friend has made a complaint to the Australian Human Rights Commission (AHRC) against the AFP and other named persons (James Miller [the sergeant], Jeremy Alderson, Jarryd Mayers and Conrad Jensen) (collectively the Respondents) in relation to alleged Incidents involving sexual harassment, sex discrimination and disability discrimination during the Employment, from which Ms Friend allegedly sustained psychiatric injuries (AHRC reference 2018-13697) (the Complaint). The Respondents do not admit liability in respect of the Complaint.

(D)     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.

(E)    Ms Friend acknowledges that neither she nor anyone who claims through her has or may have any claims arising directly or indirectly out of the Employment and Termination.

(F)    Without admission of liability, the AFP and Ms Friend have agreed to settle the Complaint and all claims in relation to the Complaint against all Respondents on the terms contained in this document.

    (bold emphasis added; italic emphasis in original)

44    The deed defined “claims” as including, among others, all applications for internal, merits or judicial review, causes of action, legal or other proceedings. Importantly, cl 2.1 provided:

2.1.     Payment and other benefits

(a)    The AFP will pay to Ms Friend the amount of $1,250,000 (gross) in full and final settlement of the Complaint (the Payment).

(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.

        (bold emphasis added; italic emphasis in original)

45    The deed required Ms Friend to confirm in writing that she or her lawyers had notified Comcare of the complaint, the terms of the deed and that the AFP was required to pay Ms Friend the settlement sum in settlement of the complaint (cll 2.3(b)(iv) and 2.4(b)). Ms Friend also warranted that, apart from possible refunds due to, or charges in favour of, Centrelink, Medicare Australia or Comcare, she was not obliged to make any other payments to governmental or semi-governmental authorities and she promised to indemnify the AFP against any such obligation. Ms Friend released each of the respondents named in recital C and all other employees, officers and agents of the AFP from any claims or liability arising directly or indirectly out of the complaint, her employment and its termination (cl 3.1). Ms Friend gave a number of indemnities including that in cl 3.2(c) as qualified in cl 3.4, namely:

3.2    Ms Friend provides an indemnity

(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.

…

3.4    Workers’ 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.

    (emphasis added)

46    Ms Friend promised to do all things necessary to bring the complaint to an end and to withdraw it within seven days (cl 5). She also promised that she would take no further proceedings or make any further claims against any of the respondents to the complaint, or any AFP officers, employees or agents in respect of any matter arising directly or indirectly out of the complaint, her employment and its termination (cl 7).

Comcare seeks to rely on s 48 of the SRCA

47    On 16 February 2021, an officer of Comcare purported to make two decisions under, first, s 48(3) and, secondly, s 48(4) of the SRCA. The first decision required Ms Friend to repay the amount of $677,363.84 in respect of compensation payments made up to 14 January 2021. That sum compromised medical expenses of $43,332.84 and the balance, being payments in respect of Ms Friend’s incapacity between 13 July 2013 and 3 February 2021. The second decision was that Comcare would cease making compensation payments from 14 January 2021.

48    By consent, on 28 May 2021, I set the two decisions of 16 February 2021 aside and noted the agreement of the parties that if, after the final hearing, it is ordered that the matter be remitted to Comcare to be determined in accordance with law, the determination should be made by a different decision-maker without considering the contents of the position paper produced by Ms Friend for the purpose of the conciliation in the Commission.

Comcare’s submissions

49    Comcare argued that the recovery that Ms Friend made under the deed was a case of “double dipping” that s 48 of the SRCA was intended to prevent. It contended that Pt IV of the SRCA should be construed to give effect to a legislative intention to prevent an employee receiving both compensation under that Act and damages in respect of the same injury. It is submitted that s 48 is expressed in much broader language than ss 44 and 45 and therefore captured more than just recoveries of damages for common law claims but extended to any action or proceeding for damages of any kind. Comcare argued that the non-exhaustive definition of “damages” in s 4 of the SRCA evinced a legislative intention that such damages could be recovered even though the action or proceeding in which the damages were sought might not necessarily be characterised as one for “damages”, and included situations where no action or proceeding has in fact been instituted. It contended that s 48 should not be construed narrowly so as to do no more than already achieved by ss 44 and 45, particularly having regard to the other provisions of Pt IV of the SRCA.

50    Comcare also submitted that s 45(4) made clear that the Parliament intended, where the employee had made an election to bring a common law claim for damages, that the limit for awards of non-economic loss suffered by an employee should be $110,000. It argued that the decision of the Full Court in Romero v Farstad Shipping (Indian Pacific) Pty Ltd (2014) 231 FCR 403 did not deal with the analogue of s 48. It contended that, while ss 44 and 45 allowed Ms Friend to seek recovery of damages by pursuing her complaint to the Commission, s 48 applied once she recovered any such damages. Comcare submitted that, by force of s 48(7), she would have to satisfy it that a part or the whole of the damages in the lump sum that she recovered did not relate to an injury in respect of which compensation was payable to her under the SRCA.

51    Comcare contended that the headings to ss 46, 47 and 50, that referred to common law claims, should be treated as, at best, a minor aid to construction of the kind previously fulfilled by marginal notes and were not necessarily an accurate or complete guide to the provisions that they introduced so that they could not be used in aid of a reading down of the ambit of s 48. This followed, so the argument ran, because ss 44(3) and (4), 46, 47, 48 (2), 49 and, in part, ss 50 and 51, applied to actions and claims by dependants which were precluded at common law and could only proceed pursuant to legislation creating a statutory cause of action for wrongful death (i.e. the local analogues to Lord Campbell’s Act). Comcare also submitted that important indicia of the scope of s 48 were the heading of Pt IV itself, “Liabilities arising apart from this Act”, which encompassed far more than common law claims, and the heading to s 48 itself, which used the term “damages”, as opposed to “common law damages”.

52    Comcare argued that Ms Friend’s reliance on the decision in Gardiner v Laing O’Rourke Australia Construction Pty Ltd (2020) 102 NSWLR 599 was misplaced because, first, the New South Wales legislation was radically different to the SRCA and, secondly, the entitlement to compensation paid to the employee in that case differed from the entitlement to compensation recovered by Ms Friend in settlement of the complaint. Comcare submitted that s 46PO(4)(d) of the AHRC Act expressly provided for the Court to order an award of damages by way of compensation for any loss or damage suffered because of the respondents’ conduct complained of. It argued that such damages fall within the natural and ordinary meaning of “damages” and therefore so did some, at least, of the money paid in settlement of the complaint.

53    Comcare submitted that s 48(1) of the SRCA should not be interpreted and applied in a way that would result in s 48 only applying if Comcare could establish that “all of the damages an employee recovers [are] ‘in respect of an injury to the employee, being an injury, loss or damage in respect of which compensation is payable under this Act’”. It contended that such a construction would deprive s 48(7) of any work to do and would place an onus on it to characterise the damages recovered when s 48(7) expressly placed that onus on the employee. Comcare submitted that s 48(1)(a) would be satisfied if, on the balance of probabilities, “at least some part of the damages recovered” are in respect of any injury to the employee, being an injury, loss or damage for which compensation is payable under the SRCA.

54    Comcare argued that there was a real and definite inference that some part of the lump sum that Ms Friend recovered from the AFP was in respect of an injury for which compensation had been paid or was payable under the SRCA. It contended that this inference arose from, first, Ms Friend’s claims that the deed resolved, including Fox v Wood (1981) 148 CLR 438 damages, a quantum of around $1.3 million for economic and non-economic loss after deducting workers’ compensation and, secondly, the improbability that her claims for an apology, a review by the AFP of its operations and that disciplinary action be taken could be worth the $1.25 million lump sum. Comcare submitted that the reasoning in cases such as McLaurin v Federal Commissioner of Taxation (1961) 104 CLR 381 and Allsop v Federal Commissioner of Taxation (1965) 113 CLR 341 was inapplicable to the issue under s 48 of the SRCA which specifically provides in s 48(7) for apportionment of a lump sum settlement.

Consideration

The construction of Part IV of the SRCA

55    Section 45 confers on the employee an election to pursue a cause of action against the Commonwealth or other employee where the injury suffered has resulted in a permanent impairment for which s 24 makes Comcare liable to pay him or her compensation. Section 27 extends the employee’s entitlement by creating a right to additional compensation, calculated in accordance with the formula in s 27(2), for any non-economic loss suffered by the employee in respect of the injury from which the permanent impairment resulted. The effect of s 45(4) is to limit the amount of non-economic loss that an employee may recover in an action he or she has elected to pursue against the Commonwealth or other employee under s 45 to a maximum of $110,000.

56    The purpose of ss 46 and 47, as their headings suggest, is to require an employee or dependant who makes a claim against a third party (s 46) or the Commonwealth or other employee (s 47) in respect of an injury or death for which compensation is payable under the SRCA, to give Comcare notice of that claim within 7 days. Where a dependant recovers damages in respect of an injury that resulted in the death of an employee and compensation is payable under the SRCA in respect of that injury, s 49 requires the dependant to pay Comcare the lesser of the amount of the compensation paid or payable to that dependant or the damages recovered. As with ss 44(1)(a), 45(1)(a), 46(1)(a) and 47(1)(a), s 49(1)(a) establishes a criterion of an injury for which compensation is payable under the SRCA as a precondition of the section’s application to a set of facts.

57    In contrast, s 50, headed “Common law claims against third parties”, gives Comcare rights analagous to an insurer’s right of subrogation to the rights of its insured whom it has indemnified or is liable to indemnify. Thus, s 50 operates where Comcare has paid an amount of compensation under the SRCA to an employee or dependant where the circumstances in which the injury or death occurred appear to create a legal liability in a third party to pay damages in respect of the injury or death and the employee or dependant has not either made or prosecuted a claim against the third party (s 50(1)(a), (b) and (c)). In that situation, s 50(1) gives Comcare a right to make its own claim against the third party in the name of the employee or dependant, or take over an existing claim for the recovery of damages in respect of the injury to, or death of, the employee. Once Comcare exercises that right, s 50 gives it substantive control over the conduct of any existing claim and the right to seek orders from a court that the employee or dependant sign any agreement to settle that action (s 50(4), (4A) and (4B)).

58    Where Comcare recovers damages in a proceeding under s 50, it must deduct, from the damages and costs recovered, the total amount of compensation paid to or for the benefit of the employee or dependant under the SRCA “in respect of the injury, loss, damage or death to which the claim relates”, and its own costs incidental to the claim. Comcare must then pay the balance to the employee or dependant (s 50(7)). However, if further compensation is payable under the SRCA in respect of the injury, loss, damage or death after Comcare pays a balance to the employee or dependant under s 50(7), then s 50(8) operates to suspend the employee’s or dependant’s right to receive further compensation payments until the total of the suspended right equals the balance of the damages recovered that Comcare paid the employee or dependant.

59    Next, s 51 gives Comcare a similar right to give a notice in writing to require, including before a proceeding is brought, a person, who appears to be liable, to pay damages to an employee or dependant in respect of an injury, loss, damage or death “in respect of which an amount of compensation has been paid under this Act”. The notice requires the person to instead pay Comcare the damages that the person either had agreed, or had been ordered, to pay the employee or dependant, up to the amount that the employee or dependant would have had to pay Comcare under ss 48 or 49, if he or she had already been paid damages.

60    An employee must elect, by force of s 52(1), whether he or she will seek to receive compensation under the SRCA or benefits under an award, determination, order or agreement, under a law of the Commonwealth, a State or Territory, that makes provision for benefits payable to employees in respect of injury or disease causing death or incapacity in circumstances associated with their employment. The purpose of s 52 is to preclude an employee recovering both from Comcare or such an award.

61    The last section in Pt IV of the SRCA is s 52A, which deals with the situation where an employer has paid a premium to Comcare to cover liability for actions for non-economic loss and an employee takes action against that employer or another employee of the employer for non-economic loss. This section gives Comcare similar rights in the nature of subrogation in respect of such a claim as in ss 50 and 51.

62    The headings to each section of an Act are part of the Act by force of s 13(1) of the Acts Interpretation Act 1901 (Cth). I reject Comcare’s argument, based on the version of that Act before the 2011 amendment to s 13(1) that created its current form, that the use of the expression “common law claims” in the headings of ss 46, 47 and 50 could only be a minor aid to construction.

63    Reading Pt IV in the context of the SRCA as a whole, I am of opinion that its purpose was to substitute the liability of Comcare to pay compensation, as provided in s 44(1), in lieu of the common law claims that an employee would otherwise have had against an employer of a particular description and its other employees in respect of an injury sustained in the course of his or her employment. The description of the employers for which Comcare assumes liability to pay compensation under the SRCA is akin to an insured, namely the Commonwealth, a Commonwealth authority, a licensed corporation under Pt VIII of the Act (the insured employer) and other employees of those bodies politic or corporate.

64    In effect, the Parliament intended that Comcare would be in a position akin to an insurer in respect of the insured employer’s liabilities, but the injured employee (or his or her dependants) would have only a right to compensation under the SRCA, unless he or she had a permanent impairment resulting from the injury and elected under s 45 to prosecute a common law claim, in which case s 45(4) capped the liability for non-economic loss. The remaining provisions of Pt IV of the SRCA seek to ensure that, first, a deceased employee’s dependants are limited in their claims against the insured employer to no more than the rights to compensation created by the SRCA, secondly, Comcare can act as an insurer under its statutory rights of subrogation and, thirdly, where the employee or his or her dependants recover damages against the employer or a third party, in respect of an injury sustained in the course of his or her employment, he or she must repay Comcare from those damages the total amount of the compensation which he or she has received.

65    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, first, as s 48(5) provides, or, secondly, as a result of an action for non-economic loss under an election pursuant to s 45 or in accordance with s 52A.

How Pt IV of the SRCA operates

66    In Romero 231 FCR at 433–435 [103]–[110], Allsop CJ, Rares and McKerracher JJ considered ss 54 and 55 of the Seafarers Rehabilitation and Compensation Act 1992 (Cth) (the Seafarers Act), which were almost identical analogues of ss 44 and 45 of the SRCA. The Full Court held that the “central focus of s 54 of [the Seafarers Act] was to ask what was being claimed” (at 434 [106]). The claims there that gave the Federal Court jurisdiction were claims under the SDA and a common law claim for damages for breach of contract.

67    The Full Court held that s 54 of the Seafarers Act “is plainly directed towards personal injury claims brought under the common law” (at 434 [107]). The Full Court applied the language of the analogue of s 5(8) of the SRCA (s 6 of the Seafarers Act) and concluded (at 435 [109]– [110]) in respect of Ms Romero’s claims that she had suffered unlawful discrimination within the meaning of the SDA:

Clearly damages either under the SDA 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” (i.e. the SRCA). The claim under the SDA is only capable of being pursued by virtue of s 46PO of the AHRCA.

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

(emphasis added)

68    Here, the only claims that Ms Friend could make in her complaint to the Commission that, if not resolved, could be litigated under s 46PO in this Court (or the Federal Circuit Court) were for unlawful discrimination in contravention of the DDA and the SDA. Moreover, s 12(5)(a) of the DDA operates to create a cause of action against the Commonwealth as an employer, such as the AFP, for a contravention of s 15(2) of the DDA. Likewise, s 9(5) of the SDA operates to create a cause of action against the Commonwealth or a Commonwealth authority as an employer for a contravention of s 14(2) of the SDA, although possibly not the AFP.

69    In contrast, the SDA does not create a cause of action against the Commonwealth in any capacity for sexual harassment of one of its employees in contravention of s 28A of the SDA. This means that, in a case such as the present, only an individual who is an employee of the Commonwealth can be liable for a contravention of s 28A of the SDA

70    It would be an odd construction of s 48 of the SRCA 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 SRCA 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 DDA or s 14(2) of the SDA. That is because s 44(1) provides, subject to s 45, that:

… an action or other proceeding for damages does not lie against the Commonwealth… or an employee in respect of

(a)     an injury sustained by the employee in the course of… her employment, being an injury which the Commonwealth… but for this subsection, be liable (whether vicariously or otherwise) for damages

(emphasis added)

71    Both s 12(5)(a) of the DDA and s 9(5) of the SDA expressly create a cause of action against the Commonwealth as an employer of an employee who has suffered unlawful discrimination in his or her employment. Moreover, the DDA was enacted in 1992, four years after the SRCA, and consequently s 12(5)(a) cannot be read as being subject to s 44(1) of the SRCA. Nor, in my opinion, did the Parliament intend to repeal or modify s 9(5) of the SDA when enacting the SRCA. In each case the Parliament intended to make particular forms of discrimination unlawful and to give new remedies for them.

72    A construction of s 44(1)(a) of the SRCA that denied the efficacy of s 12(5)(a) of the DDA or s 9(5) of the SDA would defeat the legislative policy of the latter two Acts. Rather, the purpose of s 44(1) of the SRCA was to abolish common law causes of action against an employer for an injury suffered by, relevantly, an employee of the Commonwealth, unless the employee made an election under s 45, and to replace those causes of action with a statutory entitlement to be paid compensation under the SRCA for that injury.

73    Thus, an injury to an employee for which compensation is payable under the SRCA is one to which s 44 applies. That is because the SRCA substitutes a right for an employee to claim compensation for an injury under s 14 or for impairment under ss 24 and 27 for the right of an employee, that s 44(1) precludes, to bring a cause of action (absent an election under s 45) in respect of which the Commonwealth, as the employer, would otherwise be liable: Romero 231 FCR at 434–435 [107], [109]–[110].

Double recovery

74    Section 48(1) is the gateway to the application of the rest of the provisions of s 48 because it determines when, if at all, s 48 applies. Relevantly, here, for s 48(1)(a) to be engaged, the employee must recover damages in respect of an injury “in respect of which compensation is payable under this Act” (see too s 5(8)). Thus, Comcare must be able to establish, for s 48(1)(a) to be engaged, that some of the damages that the employee recovers were in respect of an injury in respect of which compensation is payable under the SRCA.

75    I reject Comcare’s argument that some part of the lump sum “must have been paid” in respect of Ms Friend’s injury for which compensation was payable under the SRCA because of the large claim for economic and non-economic loss in the complaint form ($1.25 million excluding workers’ compensation) and over $3.5 million in her particulars (see [42] above, including Fox v Wood (1981) 148 CLR 438 damages). Comcare asserted that, as a result, some of the undivided lump sum paid to Ms Friend under the deed must have been in respect of the injury for which it paid her compensation and that s 48(7) threw the onus on her to satisfy it about how much was so paid. The assertion failed to come to grips with the fact that the deed required payment of a lump sum without attribution to any particular claim, none of which the respondents admitted. As I explain below, there is no evidence that identifies how the lump sum was made up or that Ms Friend or the AFP agreed to its attribution to any claim or head of damage. The terms of the deed do not give rise to any clear or definite inference about its basis, beyond that it was to resolve Ms Friend’s unadmitted claims and did not deal with her admitted claim for workers’ compensation.

76    If an aggravation of the pre-existing injury that arises out of, or in the course of, the employee’s employment, occurs, even if the employee is already entitled to compensation under the SRCA for the original injury, he or she obtains a separate and independent right to compensation under the SRCA: Department of Defence v West (1998) 85 FCR 491 at 503 D–F per Merkel J, with whom O’Connor J agreed, applying Slattery v Comcare (1996) 70 FCR 131 at 133–135.

77    In Slattery 70 FCR at 133D–135B, Merkel J explained that, while s 48 of the SRCA sought to prevent “double dipping” (at 133F), the statutory scheme operated consonantly with a long established principle of workers’ compensation legislation to provide an injured employee with a new right to compensation for each cause of the injury or an aggravation of it. In Accident Compensation Commissioner v CE Heath Underwriting of Insurance (Aust) Pty Ltd (1994) 121 ALR 417 at 421, Brennan J, with whom Mason CJ, Deane, Dawson and Toohey JJ agreed, said:

Liability to make weekly payments or to pay a lump sum is imposed on any employer liable in respect of any injury which caused or materially contributed to the incapacity. In Bushby v Morris [1980] 1 NSWLR 81 at 87 the Privy Council said in reference to the New South Wales Workers’ Compensation Act 1926:

It is well established in common law contexts that an injury or incapacity may be attributable to more than one cause, in the legal sense, operating concurrently … There is no room for an artificial rule of law that, in such a situation, one or other accident must necessarily be selected as the cause of the incapacity, apparently on an entirely arbitrary or capricious basis.

And in Australian Eagle Insurance Co Ltd v Federation Insurance Ltd (1976) 15 SASR 282 at 289, King J said in reference to the South Australian Workmen's Compensation Act 1971:

If the incapacity results in a true sense from more than one accident, a workman must be entitled to claim compensation in respect of all or any of the relevant accidents. If the accidents occur in the employment of different employers, he must be entitled to claim compensation against each employer. If the accidents occur in the employment of the same employer, he is nevertheless entitled to base his claim upon all or any of the accidents.

Similarly, liability under the Act to make weekly payments during incapacity or to pay a lump sum in redemption of that liability arises from each of the injuries which caused or materially contributed to the incapacity. 

(emphasis added)

78    Merkel J held that the same principles apply to the SRCA in both Slattery 70 FCR at 134E–G and West 85 FCR at 503D–E. He explained in Slattery 70 FCR 134G– 35B how s 48 and its earlier analogue prevented “double dipping”. There, a seaman was injured when HMAS Melbourne collided, first, with HMAS Voyager in 1964 and, secondly, with USS Frank E Evans in 1969. The seaman suffered post-traumatic stress and a liver condition as a result of the Voyager collision. He suffered an aggravation of those injuries as a result of the later Frank E Evans collision, giving rise, his Honour found, to a separate and additional entitlement to compensation. However, Merkel J also noted that decisions as to “double dipping in respect of an injury are distinguishable from those in respect of incapacity, which is a consequence of an injury” (70 FCR at 137C–D). He said that s 48 of the SRCA is:

concerned with preventing "double dipping" in respect of the injury which gave rise to the entitlement to compensation as a result of supervening incapacity rather than with the supervening incapacity which crystallised the entitlement to payment of compensation: see Fisher v Hebburn  [(1960) 105 CLR 188] at 203.

Construction of the deed

79    Here, Ms Friend’s complaint, as expanded to include the fourth officer, covered a range of claims against the Commonwealth as an employer on the ground of unlawful discrimination because of:

    her disability, based on her mental health, when she sought but was refused transfers from her team and the airport, and by the AFP’s failure to make reasonable adjustments to accommodate that disability, in contravention of ss 5, 6 and 16 of the DDA;

    her sex, based on her unfavourable or detrimental treatment in a way in which a man would not have been treated in the same circumstances, in contravention of s 14 of the SDA.

80    In addition, she had apparently substantial claims of sexual harassment against the sergeant in contravention of s 28A of the SDA and claims against each of the four officers for contraventions of s 14 of the SDA on the same basis as against the Commonwealth. If those claims were established, they may have entitled Ms Friend to substantial damages, including possible aggravated and exemplary damages. The jurisdictional foundation for those claims for damages was the statutory causes of action under the DDA and (possibly) SDA against the Commonwealth as Ms Friend’s employer, the officers under the SDA as the individuals whose conduct allegedly amounted to unlawful discrimination, and the sergeant as the person who allegedly contravened s 28A.

81    As Perram J, with whom Collier and Reeves JJ agreed, asked rhetorically in Hughes (t/as Beesley and Hughes Laywers) v Hill (2020) 277 FCR 511 at 521 [47], in a case of sexual harassment contrary to s 28A of the SDA, “what is the ruin of a person’s quality of life worth?” (see too at 511 [47]–[48]). His Honour also affirmed that, in assessing statutory damages for unlawful discrimination in accordance with s 46PO(4)(d), the statutory objects of the SDA, and I would add the DDA, are relevant considerations, including the object of the elimination of such discrimination. Such awards can have a public vindicatory effect both for the applicant affected and the public at large. Here, the SDA included the following objects in s 3(a), (b), (c) and (d):

3      Objects

The objects of this Act are:

(a)     to give effect to certain provisions of the Convention on the Elimination of All Forms of Discrimination Against Women and to provisions of other relevant international instruments; and

(b)     to eliminate, so far as is possible, discrimination against persons on the ground of sex, sexual orientation, gender identity, intersex status, marital or relationship status, pregnancy or potential pregnancy or breastfeeding in the areas of work, accommodation, education, the provision of goods, facilities and services, the disposal of land, the activities of clubs and the administration of Commonwealth laws and programs; and

   …

(c)     to eliminate, so far as is possible, discrimination involving sexual harassment in the workplace, in educational institutions and in other areas of public activity; and

(d)     to promote recognition and acceptance within the community of the principle of the equality of men and women.

(emphasis added)

82    The DDA has similar objects in s 3.

83    Substantial awards of damages under s 46PO(4)(d) would be well within the discretion of the Court, if it found that Ms Friend’s allegations were established, in order to achieve those objects, especially given that such conduct involved the AFP, whose officers the community expects will obey and uphold the law and treat all persons, so far as is reasonably possible in the circumstances, equally regardless of sex or disability.

84    In a real sense the conduct complained of can be seen, if proved, as having driven Ms Friend from being able to pursue her career and, as Perram J put it, ruined her life. She was complaining of bullying and harassing behaviours to the point where, if proved, leaving the injuries to her mental and physical health to one side, she was entitled to consider that it would be impossible to be happy or satisfied in her chosen career because her employer had not, and would not, create a workplace environment in which the alleged unlawful discrimination would not exist or be remedied and that the alleged perpetrators were left to act with impunity. The cause of her claimed loss of a chosen career, because it had been made impossible to pursue could be characterised as a separate, but actual, concurrent cause along with her health conditions, of the potential economic and substantial non-economic losses she claimed.

85    Ms Friend’s only accepted claim, to which recital D in the deed and Comcare’s invalid decisions of 16 February 2021 referred, was for the conditions accepted in Comcare’s July 2014 decision. Importantly, Ms Friend has not made, and Comcare has not accepted, any claim for any aggravation of her injury to her mental health, as appears to have occurred since 14 July 2014 when she had not received a diagnosis as serious as those in the reports of Drs Rees and Moorthy.

86    Any compensation that Comcare has paid can only be characterised under the claim it accepted on 14 July 2014. That is because, first, s 53(1) of the SRCA provides that that Act does not apply in relation to an injury to an employee, such as Ms Friend, unless notice in writing is given to Comcare as soon as practicable after the employee becomes aware of the injury. Secondly, s 54(1) provides that compensation is not payable to a person under the SRCA unless a claim for compensation is made by, or on behalf of, him or her in the prescribed claim form accompanied by a certificate, also in a prescribed form, by a legally qualified medical practitioner. More significantly, the deed provided that the AFP made no admissions about Ms Friend’s allegations or her psychiatric injuries “other than to the extent that Ms Friend has an accepted workers’ compensation claim”, being the claim accepted in Comcare’s July 2014 decision.

87    Both parties analysed Gardiner 102 NSWLR 599 in their submissions. It is important to appreciate that this decision concerned the workers’ compensation scheme and legislation of New South Wales which has a different statutory basis to the SRCA. Nonetheless, both jurisdiction’s workers’ compensation, common law and statutory remedies that provide for an employer’s duties and liabilities owed to employees, include legislative provisions designed to protect against an employee who has received workers’ compensation being able to obtain double recovery or to “double dip” by retaining the benefit of those payments while recovering damages in a personal injuries proceeding for past economic loss.

88    Hence, the employee’s statutory obligation to repay the workers’ compensation that he or she received up to the time of recovering damages is a head of common law damages because it is a reasonably foreseeable consequence of the employer’s breach of its duty of care to the injured employee: Fox 148 CLR at 441–442 per Gibbs CJ, with whom Aickin and Wilson JJ agreed, 446–447 per Brennan J. The Court held that the employer was liable to pay the employee damages for past economic loss in the sum of the gross value (including income tax) of the workers’ compensation payments he or she had received plus interest up to the time of the award of damages.

89    In Gardiner 102 NSWLR at 616 [50]–[52], Basten JA observed that there the parties were not able to identify any case dealing with the interrelationship of damages awarded under the Anti-Discrimination Act 1987 (NSW) and workers’ compensation legislation. His Honour held that damages for personal injury arising out of the course of employment should be treated as separate and independent from damages for unlawful discrimination. That was because each was a separate, independent and self-contained remedy. He drew on what French J had said in Hall v A & A Sheiban Pty Ltd (1989) 20 FCR 217 at 281 about the nature of damages under the then s 81(1)(b)(iv) of the SDA that, unconstitutionally (Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245), had empowered the President to make a declaration that a respondent to a complaint pay, as now s 46PO(4)(d) of the AHRC Act authorises this Court to order, “an applicant damages by way of compensation for any loss or damages suffered because of the conduct of the respondent”. French J said that the measure of compensation for such loss or damage:

… is to be found, not in the law of tort, but in the words of the statute which require no more to attract the exercise of the Commission's discretion than that the loss or damage be "by reason of" the conduct complained of. That is not to say that every adverse consequence, however remote, is to be compensated. For in this context, as in the wider reaches of the law, "causation is to be understood as the man in the street, and not as either the scientist or metaphysician would understand it": Yorkshire Dale Steam Ship Co Ltd v Minister of War Transport [1942] AC 691 at 706, per Lord Wright. And within the cause-effect framework created by the words of the statute the selection of effects which give rise to liability may be influenced by policy and not merely by logic. In this regard the reasoning of Gummow J in relation to s 82 of the Trade Practices Act 1974 (Cth) is of assistance: Elna Australia Pry Ltd v International Computers (Aust) Pry Ltd (No 2) (1987) 75 ALR 271 at 279; 16 FCR 410; see also Munchies Management Pry Ltd v Belperio (1988) 84 ALR 700 and Pavich v Bobra Nominees Pry Ltd (1988) ATPR (Digest) 46-039.

(emphasis added)

90    I am of opinion that French J’s approach to the construction of the analogue of s 46PO(4)(d) is correct. The remedy, like s 82 of the Trade Practices Act 1974 (Cth) (TPA), misleadingly renamed the Competition and Consumer Act 2010 (Cth), is a statutory, not a general one: see also Watts v Australian Postal Commission (2014) 222 FCR 220 at 284–285 [281]–[282] per Mortimer J. In Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388 at 407 [44] (and see Wyzenbeck v Australasian Marine Imports Pty Ltd (2019) 272 FCR 373 at 390–391 [68]–[69]), Gleeson CJ, McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ said that it was wrong to approach the provisions in Pt VI of the TPA, such as ss 82 and 87, that dealt with remedies for contravention of that Act, “by beginning the inquiry with an attempt to draw some analogy with any particular form of claim under the general law” (216 CLR at 407 [44]). They observed that the primary task of the Court in relation to a claim for a statutory remedy under Pt VI of the TPA was to construe the relevant provisions in the legislation and that (at 407 [44]-[45]):

In the present case, analogies with the tort of deceit appear to have led to an assumption, at least at trial, that a person can suffer only one form of loss or damage as a result of a contravention of Pt V of the Act.

The Act’s references to “loss or damage” can be given no narrow meaning. Section 4K of the Act provides that loss or damage includes a reference to injury. It follows that the loss or damage spoken of in ss 82 and 87 is not confined to economic loss [Marks (1998) 196 CLR 494 at 513 [46], per McHugh, Hayne and Callinan JJ; at 526-527 [93]-[96], per Gummow J]. What kinds of detriment constitute loss or damage, when a detriment is to be identified as occurring or likely to occur, and what remedies are to be awarded, may all raise further difficult questions. Especially is that so when it is recalled that remedies may be awarded to compensate, prevent or reduce loss or damage that has been or is likely to be suffered by conduct in contravention of the Act.

(emphasis added)

91    In Wyzenbeck 272 FCR at 392–393 [74]–[76], Rares, Burley and Anastassiou JJ distilled the following principles apposite to statutory remedies for compensation for loss or damage, that apply here to remedies for unlawful discrimination that s 46PO(4) of the AHRC Act provides, saying:

The High Court has repeatedly denied that the loss or damage recoverable under ss 82 and 87 for a contravention of s 52 of the TPA and their analogues is constrained by analogies to remedies available under the general law. In particular, since the decision in Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494, in an appropriate case, a person may recover loss or damage that is causally connected to a contravention of the statutory norm of conduct expressed in s 52: see e.g. Kenny & Good Pty Ltd v MGICA (1992) Ltd (1999) 199 CLR 413 at 459-461 [123]-[129] per Kirby and Callinan JJ with whom Gummow J agreed on this point at 449 [93]; I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109 at 121-122 [33] per Gleeson CJ; at 128-129 [58] per Gaudron, Gummow and Hayne JJ; at 142-144 [106]-[110] per McHugh J; 179-180 [220] per Callinan J.

In I & L Securities 210 CLR at 130 [62] Gaudron, Gummow and Hayne JJ said (see too at 128 [57]; and also at 121 [33] per Gleeson CJ; at 135-138 [84]-[93] per McHugh J; and at 175 [210] per Callinan J):

As was recognised in Henville v Walker [(2001) 206 CLR 459 at 474 [35], per Gleeson CJ; at 481-483 [65]-[72], per Gaudron J; at 493 [106], per McHugh J; at 507 [153], per Gummow J; at 510 [166], per Hayne J], there may be cases where it will be possible to say that some of the damage suffered by a person following contravention of the Act was not caused by the contravention. But because the relevant question is whether the contravention was a cause of (in the sense of materially contributed to) the loss, cases in which it will be necessary and appropriate to divide up the loss that has been suffered and attribute parts of the loss to particular causative events are likely to be rare. Further, it is only in a case where it is found that the alleged contravention did not materially contribute to some part of the loss claimed that it will be useful to speak of what caused that separate part of the loss as being “independent” of the contravention.

(bold emphasis added)

Gleeson CJ identified the reason that it is sufficient to attract the remedial provisions in ss 82 and 87 if the misleading conduct in contravention of s 52 is a cause of the injured party’s loss or damage in I & L Securities 210 CLR at 121-122 [33] (and see too at 129-130 [60]-[61] per Gaudron, Gummow and Hayne JJ; 138 [91]-[92] per McHugh JJ; and 179-180 [220] per Callinan J) as follows:

The relevant purpose of the statute was to proscribe misleading and deceptive conduct in circumstances which included those of the present case. In aid of that purpose, the statute provided for compensation, by an award of damages, to a victim of such conduct. The measure of damages stipulated was the loss or damage of which the conduct was a cause. It was not limited to loss or damage of which such conduct was the sole cause. In most business transactions resulting in financial loss there are multiple causes of the loss. The statutory purpose would be defeated if the remedy under s 82 were restricted to loss of which the contravening conduct was the sole cause.

(emphasis added)

92    While the AHRC Act and s 46PO, in particular, are not in the same terms as those in the Competition and Consumer Act, the principles that Gleeson CJ identified in I & L Securities 210 CLR at 121–122 [33] are apposite to the construction of s 46PO(4). This is so because the purpose of s 46PO(4) is to provide remedies for contraventions of statutory norms of conduct that the Parliament established in, among other enactments, the DDA and SDA and to give effect to the policies articulated in the objects of those Acts. And, so long as the proscribed conduct of unlawful discrimination was a cause of the loss or damage suffered by a person in Ms Friend’s position, the Court can order the respondent to pay “damages by way of compensation for any loss or damage suffered because of the conduct of the respondent”. As Henville v Walker (2001) 206 CLR 459 established in cases under the Competition and Consumer Act, the applicant is entitled to recover his, her or its entire loss or damage, even if the applicant had been contributorily negligent in incurring it. Thus, the statutory measure of damages in s 46PO(4)(d) is not the common law measure. Rather, that section is addressed to remedy a contravention of a statute.

93    Once it is appreciated that the Parliament intended the remedies in s 46PO(4) of the AHRC Act for contravention of the DDA and SDA involving Commonwealth employees (although, as I have noted above, the SDA might not apply to the AFP) were outside the scope of the operation of s 44(1) of the SRCA, it is difficult to see a policy reason for adopting a construction of the word “damages” when used in the SRCA to include the remedy in s 46PO(4)(d) for conduct that, itself, is able to be litigated by a Commonwealth employee against his or her employer for unlawful discrimination. The Parliament is unlikely to have intended that the special remedy of damages in s 46PO(4)(d) for commonplace reactions to unlawful discrimination, such as depression and anxiety caused by bullying, sexual harassment or discrimination on the basis of disability or sex, to be denied by the effect of s 44(1) of the SRCA. Emotional trauma is a likely consequence of unlawful discrimination and that trauma can manifest in many ways including in a personal injury to a person of the kinds Ms Friend complained of.

94    I reject Comcare’s argument that s 48 of the SRCA is intended to apply to any remedy for “damages”. Crucially, s 48(1) is intended to prevent double recovery or “double dipping”. That begs the question as to what the second dip is. 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 DDA and SDA create just such causes of action for employees against their Commonwealth employers. Moreover, the DDA was enacted after the SRCA 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 SRCA.

Can the lump sum be dissected?

95    In my opinion the word “damages” is used throughout Pt IV of the SRCA consistently. The purpose of the SRCA was, subject to s 45, to abolish common law claims for damages for personal injury and replace them with a scheme of statutory compensation. Of course, as Comcare noted, s 44(3) did not affect claims by dependants for compensatory damages under State and Territory analogues of Lord Campbell’s Act. Instead, the SRCA used ss 48 and 49 to ensure that the dependants did not receive compensation twice for the same cause of loss or damage, namely the death of the employee on whom they were dependant. Because s 44(3) expressly allowed dependants to bring proceedings for damages, ss 47, 48 and 49 apply to their recovery of damages for the wrongful death of the employee. Such actions have been a feature of the relationship between employers and the dependant relatives of their deceased employees for over 175 years since Lord Campbell promoted the Fatal Accidents Act 1846 (UK). They are unlike the SDA, which had only been enacted 4 years before the SRCA, and the DDA which created new rights for employees themselves and set norms of behaviour in, among others, employment relationships.

96    In Gardiner 102 NSWLR at 616–617 [54], 618–619 [66] (Basten JA), 621–622 [82]–[84] (Leeming JA) and 626 [101] (Emmett AJA), each member of the Court of Appeal of the Supreme Court of New South Wales considered the correct characterisation of the payment that the employer there made to its former employee when they had entered into a deed to settle proceedings under the Anti-Discrimination Act that he had commenced. That was necessary because, after receiving the settlement moneys described in that deed as “general damages”, the former employee brought a workers’ compensation claim in respect of a psychological injury that the employer contended was barred by s 151A of the Workers’ Compensation Act 1987 (NSW) on that basis that he had recovered “damages in respect of an injury from the employer liable to pay compensation under this Act”. Basten JA construed the settlement deed there as negating any possibility that it was intended to settle any claim for workers’ compensation (at 618–619 [66]) since the deed itself expressly excluded that claim.

97    Leeming JA noted that the employer had relied on the fact of payment under the settlement deed as creating the statutory extinguishment of the right to claim workers’ compensation. He saw the question as whether the payment amounted to “damages” and, if it did, was it “in respect of” an injury (at 620 [76]). He referred to the principle that a payment made pursuant to the compromise of a claim bears the same character or nature as the amount that would have been payable had the claim been vindicated, citing, among other authorities, McLaurin 104 CLR 381. His Honour referred to the definition of “damages” in s 149 of the Workers’ Compensation Act that, like the definition in s 4(1) of the SRCA, provided “damages includes any amount paid under a compromise or settlement of a claim for damages”. He said that definition was “self-referential” and that, consistently with the principle his Honour had identified, “the fact that a ‘claim for damages’ has been settled and money is paid under the settlement does not deny the receipt of the contractual entitlement the character of ‘damages’”. However, he said that this required “an analysis of what was being compromised”, namely an evaluation of the legal relationship between the payment of money and the claim that is made in respect of any injury (at 621 [77]–[83]). That evaluation involves considering the expression “in respect of” in provisions such as s 48(1) in context and not in isolation (at 622 [84]).

98    Like Basten JA and Emmett AJA, Leeming JA found decisive the fact that the parties expressly recorded in their settlement deed that the payment was not in respect of any injury for which the employee had a workers’ compensation claim. His Honour noted that parties cannot contract out of the operation of legislation, but they can characterise, bona fide, the purpose of a payment in settlement of disputes which can exclude one or some disputes that they intended remain unaffected (at 622 [85]–[87]).

99    Emmett AJA set out the nature of the discrimination claim as recorded in a recital in the settlement deed. That claim included the employee’s allegation that his superior’s behaviour towards him was insensitive and intolerable, his psychologist had said that his current situation was causing him undue stress triggering depression and leading to suicidality and the employee believed that it almost seemed that his superior wanted him to kill himself. The recital also recorded that the employee had raised those concerns after the superior had ignored his urgent request for guidance as to how to protect a patent application in light of an imminent deadline. His Honour found that the unlawful discrimination complaint was about the way in which the employer was dealing with the employee’s concerns involving the patent and not a complaint about an injury such as the exacerbation of the employee’s psychiatric condition (at 625–626 [98]–[100]). Accordingly, Emmett AJA construed the payment under the settlement deed as not constituting damages in respect of any injury for which compensation was payable under the Workers’ Compensation Act but as settlement of the unlawful discrimination complaint, as the document stated (at 626 [101]).

100    As McLaurin 104 CLR 281 and Allsop 113 CLR 341 establish, the payment of an undissected lump sum in settlement of a claim for damages based on multiple integers or causes of action ordinarily will be treated as a payment for the release of the claim. This is a conventional process of contractual interpretation that involves the Court reading the document objectively, in the manner that Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ explained in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at 179 [40], namely:

This Court, in Pacific Carriers Ltd v BNP Paribas ((2004) 218 CLR 451), has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction (Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451 at 461-462 [22]).

(emphasis added)

101    The surrounding circumstances known to both parties, however, are not to be confused with the subjective evaluation that each party may make about his, her or its knowledge of the other’s claim or negotiating position. In McLaurin 104 CLR 381, the taxpayer had settled claims for negligence against the Commissioner for Railways arising out of a fire that caused considerable damage to his grazing property. The damage involved the death of many sheep and other animals, damage to wool on surviving sheep, buildings, fences, a tennis court, a well-developed garden and other items of property. The property could not be used for several months. The taxpayer claimed and obtained deductions from his income for expenditures to repair fences, yards and other structures on the property. He made an itemised claim for damages of £30,500 against the Commissioner for Railways. The latter instructed a valuer to appraise the damage. The valuer provided the Commissioner an itemised report that included values for each of the taxpayer’s heads of damage resulting in a total value of £12,350. The Commissioner made a lump sum offer to settle the claim of £12,350 without disclosing to the taxpayer the basis on which it was made, who then accepted the offer in full settlement of all claims arising out of the fire exclusive of costs. The Commissioner of Taxation obtained the valuer’s itemised report and issued an amended assessment to the taxpayer that included £11,000 described as a proportion of the payment received for the bush fire.

102    Dixon CJ, Fullagar and Kitto JJ held that the amended assessment had wrongly included any part of £11,000. They said the settlement “was for a lump sum of damages, not composed of agreed constituents, offered and accepted in full satisfaction of the appellant’s causes of action” (104 CLR at 391). They said it made no difference if the appellant could have guessed, based on negotiations, how the offer was arrived at and what its elements were because:

… he was not concerned to make the guess. He had simply to weigh £12,350 against the entirety of his claim, and accept it or reject it as a whole. Obviously, to accept the lump sum was not to assent to any figure in respect of any individual item of his claim.

(emphasis added)

103    Their Honours held that the dissection of the lump sum that the Commissioner of Taxation made could not “be justified either in fact or in law”. The reason why it was not justified on the facts was that the manner in which the valuer reached his total (104 CLR at 391):

.. is only an account of his reasons for the recommendation he made to the Assistant Solicitor for Railways; and even though those reasons may have been adopted by that officer, or even by the Commissioner for Railways himself, the offer that was made was not of a total of itemized amounts, but was of a single undissected amount. And in point of law it would plainly be unsound to allow a determination of the character of a receipt in the hands of the recipient to be affected by a consideration of the uncommunicated reasoning which led the payer to agree to pay it.

(emphasis added)

104    Their Honours said that in a proper case a single payment or receipt of a mixed nature can be apportioned among the various heads or items to which it relates. That is provided that the settlement is of distinct claims, at least some of which are liquidated or are otherwise ascertainable by calculation. However, they held (104 CLR at 391):

… it cannot be appropriate where the payment or receipt is in respect of a claim or claims for unliquidated damages only and is made or accepted under a compromise which treats it as a single, undissected amount of damages. In such a case the amount must be considered as a whole: Du Cros v. Ryrill ( (1935) 19 Tax Cas. 444 at 453).

(emphasis added)

105    Similarly in Allsop 113 CLR 341, the taxpayer received a lump sum settlement of £37,500 from New South Wales in respect of multiple claims arising from the earlier payment by him of fees for permits to operate his road transport business that the Privy Council held infringed s 92 of the Constitution which he alleged had been “improperly demanded under colour of office”. He claimed that on two occasions over a three year period, officers unlawfully detained his vehicle and interfered with the goods being carried. The settlement was recorded in a deed which recited briefly the nature of the court proceeding and noted that the Government denied all liability but, without admissions, had agreed to pay £37,500, which the taxpayer agreed to accept in full satisfaction of all his causes of action in the proceeding he had brought (113 CLR at 349).

106    Barwick CJ and Taylor J, with Windeyer J agreeing in separate reasons, held that the £37,500 did not constitute a refund of any part of the fees the taxpayer had paid. Barwick CJ and Taylor J held that the taxpayer’s claims were for not only the refund of fees unlawfully exacted but also unlawful interference with his vehicles and his business operations. Their Honours said that his claim for a refund was not admitted by the State. Significantly, for Comcare’s contentions, the case stated in the High Court recorded in par 10(g) that at all times during the negotiations for the settlement, the appellant and his solicitors regarded the negotiations to settle the action “as relating solely to the recovery of permit fees” which he had paid and that, in their minds, the £37,500 represented a part repayment of those fees and nothing else (113 CLR at 345). Barwick CJ and Taylor J said (113 CLR at 351):

There is no suggestion that the release was illusory or that it was not designed to operate, or, that it did not operate according to its tenor and, that being so, we do not regard the allegations contained in par. 10 (g) of the case stated as relevant matters for our consideration. But even if they are taken into consideration they would not affect the conclusion that the amount payable was an entire sum paid by way of compromise of all these claims and no part of it can be attributed solely to a refund of the fees paid by the appellant for permits. In these circumstances there is no warrant for regarding the amount paid by him or any part of it as a refund or recoupment to him of any revenue disbursement made in carrying on his business or for regarding it on any other ground as an income receipt.

(emphasis added)

107    Windeyer J held that, by the deed, the taxpayer released a variety of claims that he had, or might be thought possibly to have had and that, objectively, “no definite part of it was computed, paid and received as a refund of particular amounts” (113 CLR at 352).

108    Beaumont J, with whom Evatt and Neaves JJ agreed, applied those principles in Weissova v The Official Trustee in Bankruptcy (1986) 12 FCR 106 at 111, saying that no apportionment is permissible where a party releases a variety of claims that the party has or might possibly have against the releasee in consideration of the payment of a lump sum that is not referable to the whole or any particular claim or claims.

109    That is the position here. Ms Friend released all the claims she had, or might have possibly have had, against all five respondents, namely the Commonwealth, representing the AFP, and the four officers. Those claims and the release she gave were not colourable or illusory. The respondents made no admissions and the lump sum was, like the Sphinx, inscrutable as to how it was calculated. In addition, the deed recognised in recital D that Ms Friend’s Comcare claim was admitted and recital E recorded that Ms Friend had no claims other than the complaint and, by necessary implication, her Comcare claim formed no part of the settlement. While cll 2.1(b)(ii), 2.3(b)(iv) and 2.5(b) recognised the possibility that Ms Friend might have to make a refund to Comcare and had to notify it of the settlement, again she made no admissions. Crucially, cl 3.4 provided that the release and indemnity that Ms Friend gave “does not apply to any claim or liability in respect of statutory benefits payable under the applicable workers’ compensation legislation”.

110    In those circumstances, I am of opinion that s 48(1)(a) has no operation on the settlement sum of $1.25 million that Ms Friend received. That payment cannot be characterised as the recovery of damages in respect of an injury to Ms Friend in respect of which compensation is payable under the SRCA: McLaurin 104 CLR at 392; Allsop 113 CLR at 351; Weissova 12 FCR 352 at 111. Rather, because that payment was a lump sum, it is unable to be apportioned so as to be capable of characterisation as a recovery of damages. In addition, the deed expressly excluded in cl 3.4, bona fide, its application to the subject matter of the accepted Comcare claim: Gardiner 102 NSWLR at 618–619 [66], 622 [85], 626 [101]. That clause was not illusory, for Ms Friend had numerous claims under the DDA and the SDA (for the latter of which the Commonwealth may or may not have been liable) against each of the Commonwealth and the four officers.

111    Moreover, the nature of the damages under s 46PO(4)(d) for the alleged unlawful discrimination and sexual harassment is distinct from damages in respect of an injury in respect of which compensation is payable under the SRCA. No compensation is payable under the SRCA for unlawful discrimination amounting to a contravention of the DDA or the SDA or for sexual harassment in contravention of s 28A of the SDA. Even if, contrary to my opinion, s 48(1) extended beyond recovery of damages on the causes of action that s 44(1) provides do not lie against the Commonwealth, the bona fide lump sum character of the release and payment of $1.25 million under the deed results in it being impermissible as a matter of fact or law to apportion it so as to render the payment into a recovery of damages in respect of an injury in respect of which compensation is payable under the SRCA within the meaning of s 48(1)(a): McLaurin 104 CLR at 392.

112    Comcare’s assertion that some part of the lump sum must have been a recovery of damages within the meaning of s 48(1)(a) of the SRCA (see [54] above) is not an inference that can or should be drawn in the absence of proof that some of the lump sum fell within the statutory criterion in s 48(1)(a). Comcare relied on what Dixon, Williams, Webb, Fullagar and Kitto JJ said in Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1 at 5 about the use of circumstantial evidence to meet the civil onus of proof. Their Honours said:

The difference between the criminal standard of proof in its application to circumstancial evidence and the civil is that in the former the facts must be such as to exclude reasonable hypotheses consistent with innocence while the latter you need only circumstances raising a more probable inference in favour of what is alleged. In questions of this sort where direct proof is not available it is enough in the circumstances appearing in the evidence give rise to a reasonable and definite inference: they must do more than give rise to conflicting inferences of equal degrees of probability so that the choice between them is mere matter of conjecture (see per Lord Robson, Richard Evans & Co Ltd v Astley [1911] AC 674 at 687). But if circumstances are proved in which it is reasonable to find a balance of probabilities in favour of the conclusion sought then though the conclusion may fall short of certainty it is not to be regarded as a mere conjecture or surmise: cf per Lord Loreburn, above, at 678.

(emphasis added)

113    This is not a case about circumstantial evidence. Moreover, Comcare is seeking to convert its conjecture into “a reasonable and definite inference” that “at least part of the compensation” that Ms Friend recovered from the AFP was in respect of which compensation was paid or is payable under the SRCA. Comcare’s suggested construction of ss 48(1)(a) and (7) misunderstands the role of each provision. So long as s 48(1)(a) is satisfied in that some part of the damages (including any settlement) is “in respect of an injury… in respect of which compensation is payable under this Act”, on which Comcare has the onus of proof, s 48(7) then throws the onus on the employee to establish that a part of the recovery (and how much of it) did not relate to such an injury. But the mere fact that a tortfeasor employer settles a variety of an employee’s disputed claims for a lump sum, the components of which are not agreed or identifiable, does not entitle the drawing of any reasonable and definite inference about the character of the lump sum. It is wrong in fact and law to speculate that some part of it actually relates or inferentially must relate to what a third party, such as Comcare, the Commissioner of Taxation or the Official Receiver would wish it to be: McLarin 104 CLR at 392.

114    Nor can Comcare’s argument be right that s 48(7) will apply so that Ms Friend can have an opportunity of satisfying Comcare that some of the $1.25 million did not relate to such an injury. The provision can only apply if s 48(1)(a) is satisfied because at least a part of the payment was, as a matter of fact, in respect of such an injury. Just as the Commissioner of Taxation could not establish that any part at all of each settlement sum in McLaurin 104 CLR 381 and Allsop 113 CLR 431 was assessable income, so too, here, Comcare cannot establish that the lump sum was a recovery of “damages in respect of an injury to [Ms Friend] being an injury in respect of which compensation is payable under the SRCA”.

115    Here, Ms Friend received a lump sum to settle her claims that the deed expressly provided did not apply in respect of the benefits payable under her accepted Comcare claim. She had alleged that, because of the conduct comprising the unlawful discrimination and sexual harassment, she had lost the career that she had loved and any future career. The claims that Ms Friend released in the deed, which the AFP and the four officers did not admit, were for statutory damages by way of compensation for any loss or damage she had suffered or would suffer in the future because of that conduct of the AFP and the four officers in her claims.

Conclusion

116    For these reasons Ms Friend is entitled to a declaration that no part of the lump sum of $1.25 million paid to her pursuant to the deed constituted damages or a recovery of damages to which s 48 of the SRCA applied. Comcare’s cross claim must be dismissed.

117    Ordinarily, costs should follow the event, but the parties wish to make submissions on costs, so I will order that Ms Friend file any evidence and submissions in support within 7 days and Comcare any evidence and submissions in reply within 7 days thereafter.

Associate:

Dated:    23 July 2021