A1 Granny Flats v Workers Compensation Nominal Insurer (icare)

In the case of A1 Granny Flats v Workers Compensation Nominal Insurer (icare), the applicant, A1 Granny Flats, sought reimbursement from the Workers Compensation Nominal Insurer (icare) under section 145 of the Workers Compensation Act 1987. The dispute arose from the insurer’s refusal to reimburse the applicant for compensation payments made to two former employees who had suffered psychological injuries. The case was heard by the Industrial Division of the NSW Supreme Court, which had to determine whether the insurer's liability for reimbursement was valid and if the applicant had satisfied the onus of proof required to challenge the notice under section 145. The court also needed to assess whether the injury of the former employees was wholly or predominantly caused by the applicant's actions regarding employment benefits, as stipulated in section 11A of the Workers Compensation Act 1987.

The primary legal issue before the court was whether the applicant had successfully discharged the onus of proof in challenging the section 145 notice. The court had to determine if the proceedings were inquisitorial in nature, as argued by the respondents, and whether the applicant had clearly identified the error in the grounds of appeal concerning the interpretation of the medical evidence and the broader context of the injury causation. The court needed to consider the principles set out in Raniere Nominees Pty Limited v Daley [2005] NSWCA 121, which established that the applicant bears the onus of proof in challenging a section 145 notice. Additionally, the court had to interpret section 11A of the Workers Compensation Act 1987, which requires the injury to be wholly or predominantly caused by the employer's actions regarding employment benefits.

The court found that the applicant had not discharged the onus of proof in challenging the section 145 notice. It determined that the nature of section 145 proceedings is not inquisitorial, following the decision in South Western Sydney Area Health Service v Edmonds [2007] NSWCA 16. The court also held that the deemed date of injury, as affixed by section 15(1)(a) of the Workers Compensation Act 1987, was applicable in this case, in line with the decision in Inghams Enterprises Pty Ltd v Thoroughgood [2014] NSWCA 166. The court further noted that the medical evidence, including the reports of Dr Khan and Dr George, did not support the applicant’s claim that the injury was wholly or predominantly caused by its actions regarding employment benefits. The Senior Member’s findings at reasons [393] to [399] highlighted the unchallenged evidence that the injury was also caused by other factors. The court rejected the applicant's argument that the Senior Member had erred in construing the medical evidence and found that the applicant had not clearly identified the alleged error in the grounds of appeal, as required by Kowalski v Repatriation Commission [2011] FCAFC 43 and Construction, Forestry, Maritime, Mining and Energy Union v Quirk [2023] FCAFC 163.

The court dismissed the appeal and affirmed the decision of the Senior Member, finding that the applicant had not satisfied the onus of proof in challenging the section 145 notice. The court concluded that the applicant had not demonstrated that the injury was wholly or predominantly caused by its actions regarding employment benefits, and thus the insurer's liability for reimbursement remained valid.