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Without admission of liability

Manpower Pty Ltd v Harris [2011] NSWWCCPD 10. Roche DP.

79. For the reasons set out below, the consent orders give rise to a res judicata estoppel that binds the parties, and GIO was not entitled to stop payments to Mr Harris and not entitled to dispute liability in the second proceedings.

The words “without admission of liability” are of no effect: Ashenden v Stewarts & Lloyds (Australia) Ltd [1972] 2 NSWLR 484.

80. Ashenden concerned a claim for lump sum compensation for industrial deafness under s 16 of the Workers’ Compensation Act 1926. The employer disputed liability, but the parties later settled the claim. They handed up terms of settlement, expressed to be without admission of liability, and asked the Commission to make an order in the terms of their agreement.

The trial judge refused to do so, substantially on the ground that he was not satisfied on the evidence that the worker was getting the compensation to which he was entitled.

The employer appealed by way of a stated case.

81. Taylor AJA said (at 492E):“In accordance with general principles, parties who are sui juris may, if there is a dispute between them as to their respective rights and liabilities, settle their dispute by agreement, and, if it is so agreed, have the terms of their agreement made an order of the court.”

82. His Honour added (at 493G-494A) that the terms of settlement, when read in conjunction with the application for determination and the answer, were evidence by way of admission of facts sufficient to found the court’s jurisdiction.

The terms clearly imposed a liability on the employer.

With respect to the words “without admission of liability”, his Honour said (at 494B):

“I do not see how, on the one hand, he can say ‘I agree to become liable for the amount stated in the terms of settlement’ and at the same time assert that he makes no admission of liability. This seems to me to be just as illogical as the course that was taken in Haynes v Hirst (1927) 27 SR (NSW) 480 where the purchaser, there being a defect in title, required the vendor to remove the objection thereby electing to treat the contract as subsisting, and sought to avoid the consequences of such election by a prefatory statement that his requirement was ‘without prejudice’ to his right to repudiate the contract.

"The late Mr Justice Long Innes said [at 489] this could not be effectively done:

‘In plain language a man can only elect once, and once he has elected he is bound by his election and cannot again avail himself of his former option, merely because he claimed in the first instance to exercise his election without prejudice. A man, having eaten his cake, does not still have it, even though he professed to eat it without prejudice’.

"This defendant agreed that he was liable and he agreed that his liability should be the subject of an award of the Commission. He cannot, in my opinion, do this and at the same time say ‘I am not admitting I am liable’, since he clearly does admit his liability when he agrees to an award. This, in my view, renders the words ‘without admission of liability’ devoid of any effect whatsoever.”

83. Hardie AJA observed (at 497C) that the parties had not been prepared to disclose to the Commission “any information relevant to matters arising in the proceedings, other than the Terms of Settlement”. There was no indication of why the worker had agreed to accept a settlement substantially less than his claim. As a result, the trial judge said that he was left without any belief in the probability that the compensation he was asked to award was what the Act said the worker shall receive and declined to find it. His Honour added (at 498C) that s 51 of the 1926 Act “expressly contemplated and provided for the parties negotiating and, if possible, reaching agreement”.

84. As a result, the Court held that the trial judge had erred in declining to make the award the parties sought.

85. On the relevance of the words “by consent and without admission of liability”, his Honour said (at 498F):

“I am disposed to the view that in a settlement such as this there is in law and of necessity an admission of liability, that the words quoted are repugnant to the rest of the document and that accordingly the Commission should require those words to be eliminated from its award.

"This point, however, was apparently not raised by or before the Commission and no reference to it appears either in the stated case or in the annexed reasons. However, I do not wish to be understood as taking the view that those words are proper to be used in terms of settlement providing for the making of an award in favour of the worker or in the award in fact made.”

86. In a dissenting judgment, Jacobs JA said (at 488D) that, since the parties had declined to admit between themselves the facts necessary to jurisdiction by prefacing the agreement between them with the words “without admission of liability”, the jurisdiction of the Commission “as an inferior court did not appear and the Commission was therefore entitled to take the view that its jurisdiction should not be exercised on the material before it”.

87. Given that Ashenden concerned an appeal from consent orders in the previous Workers Compensation Commission, I am bound to apply the clear statements of principle that the words “without admission of liability” are, in the circumstances of the present case, “devoid of any effect whatsoever” and “are repugnant to the rest of the document”.


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