Corporate Management Services (Australia) Pty Ltd v Country Energy

[2010] NSWWCCPD 5

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:		Corporate Management Services (Australia) Pty Ltd v Country Energy and ors [2010] NSWWCCPD 5
APPELLANT:		Corporate Management Services (Australia) Pty Ltd
FIRST RESPONDENT:		Country Energy
SECOND RESPONDENT:		The Nominal Insurer
THIRD RESPONDENT:		Steven Richard Cutler
FOURTH RESPONDENT:		GIO General Limited
FILE NUMBER:		A1-3544/09
ARBITRATOR:	Mr R Bell
DATE OF ARBITRATOR’S DECISION:		23 September 2009
DATE OF APPEAL DECISION:		13 January 2010
SUBJECT MATTER OF DECISION:		Leave to appeal; monetary threshold on appeal; section 352(2) of the Workplace Injury Management and Workers Compensation Act 1998; insurance; whether the Commission has jurisdiction to determine if an employer carried workers compensation insurance at the date of injury; correct legal identity of party to be joined where employer is uninsured
PRESIDENTIAL MEMBER:		Deputy President Bill Roche
HEARING:		On the papers
REPRESENTATION:		Appellant:	Hunt & Hunt
First Respondent:	Rankin Nathan Lawyers
Second Respondent:	DLA Phillips Fox
Third Respondent:	Whitelaw McDonald
Fourth Respondent:	Lee & Lyons
ORDERS MADE ON APPEAL:		Leave to appeal is refused.
The appellant (Corporate Services Management (Australia) Pty Ltd) is to pay the costs of the appeal of the third respondent (Steven Richard Cutler).  Each other party to the appeal is to pay its own costs of the appeal.

BACKGROUND

1. The worker, Mr Cutler, started work as an apprentice electrical fitter with Oxley County Council, now known as Country Energy, the first respondent in the appeal, sometime in the 1960s.  He completed his apprenticeship, ultimately became a linesman, and over the years progressed to become a supervisor.

1. On 28 October 1969, Mr Cutler suffered a severe laceration to his right middle finger in the course of his employment with Country Energy.  His wound was stitched at Port Macquarie Hospital, but he later required surgery at Royal North Shore Hospital to repair damaged tendons.  He was off work for approximately 11 weeks and was paid compensation for that time.  Ultimately, he sought lump sum compensation under section 16 of the Workers Compensation Act 1926 (‘the 1926 Act’).  A Medical Panel under section 51(4) of the 1926 Act assessed that claim on 15 October 1970.

1. On 23 September 1970, Mr Cutler slipped off a ladder and fell about four to five metres to the ground, landing awkwardly on his right leg.  As a result, he sustained major ligament damage to his right knee.  He attended at Port Macquarie Hospital where his knee was bandaged.  He later came under the care of Dr Cummings and underwent surgery.  He was off work for four months and was paid compensation in that period.  On his return to work, he performed lighter duties and gradually returned to his normal duties.

1. Mr Cutler’s right knee has continued to cause him problems and has deteriorated over time.  He now has significant post-traumatic osteoarthritis in his right knee and his treating surgeon, Dr Roe, has recommended a total knee replacement.

1. In proceedings commenced in the Commission in 2005 (matter number 14659/05) Mr Cutler sought lump sum compensation from Country Energy and the WorkCover Authority of New South Wales (‘WorkCover’) in respect of both his finger injury and his right knee injury.  This claim was settled on 11 November 2005 when the Commission made the following orders by consent:

“1.     Award for the Second Respondent [WorkCover].

2.      Award for the First Respondent [Country Energy] in respect of the claim for lump sum compensation for permanent loss of use of the right middle finger.

3.      That the proceedings against the First Respondent [Country Energy] in respect of the claim for lump sum compensation in respect of the right leg be discontinued.

4.      That the First Respondent pay the Applicant’s costs as agreed or assessed.”

1. The Commission also noted that the parties agreed to file a section 66A agreement in respect of a 27.5 per cent loss of use of the right leg or greater part thereof, totalling $6,050.00 compensation under section 16 of the 1926 Act.

1. No insurer took part in matter number 14659/05.

1. In an Application to Resolve a Dispute registered in the Commission on 8 May 2009 and amended on 15 June 2009, Mr Cutler sought medical expenses of $390.85 plus “a general order for knee reconstruction and associated costs”.  The costs of the knee reconstruction were estimated at $6,760.00. 

1. The Application alleged that Country Energy was uninsured as at September 1970 and purported to join WorkCover as a second respondent.  The claim should have been against the Nominal Insurer (for whom WorkCover acts), but nothing turns on the incorrect naming of WorkCover. 

1. In the alternative, the Application alleged that Country Energy was insured at the relevant time by either Corporate Management Services (Australia) Pty Limited (‘CMS’) as agents for Bishopsgate Insurance Australia Limited (in liquidation) (‘Bishopsgate’), or by GIO General Limited (‘GIO’) on risk for Royal Insurance Company Limited.

1. Each of the nominated parties filed Replies disputing liability. 

1. Country Energy disputed liability on the grounds that it was not uninsured as at September 1970, but was insured by Steadfast Insurance Company Limited (‘Steadfast’) (a company that changed its name to Bishopsgate in 1975), or by Royal Insurance Company Ltd whose liabilities have been assumed by GIO General Limited. 

1. CMS disputed liability on the grounds that Bishopsgate, for which it acts as agent for the Insurers’ Guarantee Fund, did not insure Country Energy in September 1970.  It also disputed that Mr Cutler had an entitlement to any order for the payment of medical expenses of $6,760.00 on the ground that those expenses had not been incurred. 

1. Acting on behalf of the Nominal Insurer, WorkCover disputed liability on the ground that Mr Cutler was unable to establish that Country Energy was uninsured under section 140 of the Workers Compensation Act 1987 (‘the 1987 Act’).

1. GIO disputed liability on the grounds that:

(a)     the Commission has no jurisdiction to determine an insurance issue;

(b) the dispute as to insurance is not a dispute within the meaning of section 4 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act);

(c)     the employer was estopped from denying liability and must accept the claim, and

(d)     injury and entitlement to compensation generally.

1. The Commission listed the matter for conciliation and arbitration on 15 September 2009 when all parties, including Country Energy, were separately represented by counsel or a solicitor.  The Arbitrator incorrectly stated that the Application sought section 60 expenses under the 1987 Act in the amount of $6,760.00.  He stated the issue in dispute to be the identification of the relevant insurer at the time of the claimed injury in 1970 (T1.47).  Counsel for CMS stated the issue as follows (at T3.8):

“So I would be submitting that the threshold issue is: can the worker prove that the respondent was insured? That’s number one.  And, if so, by whom?”

1. The matter proceeded with the parties making submissions on the issues identified by the Arbitrator and counsel for CMS.  In an ex tempore decision, the Arbitrator determined that Country Energy was insured in 1970 by Steadfast.  The Commission issued a Certificate of Determination on 23 September 2009 in the following terms:

“The determination of the Commission in this matter is as follows:

1. That the name of the Second Respondent is amended as shown above.

2. That the Commission finds that the Respondent was insured for the

purposes of the Act at the claimed time of injury.

3. That the Commission finds that the relevant insurer at the time of injury
    was ‘Steadfast Insurance Company Limited’.

4. That the First Respondent pay the Applicant’s section 60 of the Act

expenses on production of accounts or receipts.

5. Award in favour of the Second Respondent, Uninsured Liabilities.

6. That the First Respondent pay the Applicant’s costs as agreed or assessed.

7. I certify this matter as complex for the purposes Schedule 6, Table 4, Item

4, of the Workers Compensation Regulation 2003; there is to be 20% increase to the costs applicable to all parties.

Reasons for certification as to complexity:

The applicant submitted that the matter is complex for costs purposes due to the difficulty and research required in attempting to identify the relevant insurers, the length of time since the claimed injuries.  I agreed with their submissions for the reasons given at the conference, and consider that the increase should be in this instance 20% pursuant to Schedule 6, Table 4, Item 4.”

1. In an appeal filed on 12 October 2009, CMS seeks leave to challenge the Arbitrator’s determinations.

ON THE PAPERS

1. Section 354(6) of the 1998 Act provides:

“(6)   If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”

1. CMS seeks an oral hearing of the appeal on the ground that it is an important matter and the Commission would “be advantaged by receiving oral submissions” in addition to its written submissions.  Whilst I agree that the issues are of general importance, I do not agree that an oral hearing is necessary or appropriate.

1. Having regard to Practice Directions Numbers 1 and 6 and having regard to the detailed written submissions before me, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing and that is the course I propose to adopt.

LEAVE TO APPEAL

1. Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act.

1. The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.

1. Country Energy disputes that the appeal meets the monetary threshold in section 352(2) of the 1998 Act. That subsection provides:

“The Commission is not to grant leave to appeal unless the amount of compensation at issue on appeal is both:

(a)at least $5,000.00 (or such other amount as may be prescribed by the Regulations), and

(b)at least 20% of the amount awarded in the decision appealed against.”

1. Country Energy argues that the amount at issue in the proceedings is $390.85, as particularised in part 5.3 of the Application and any potential monetary cost of the claim, whether past or future, is irrelevant to whether the monetary threshold is satisfied.  It is submitted that prospective section 60 expenses cannot be the subject of an award by the Commission (Widdup v Hamilton [2006] NSWWCCPD 258 (‘Widdup’)) and cannot be taken into account to meet the section 352(2) threshold. Section 60 of the 1987 Act is an indemnity provision (New South Wales Sugar Milling Co-op Ltd v Manning (1998) 44 NSWLR 442) (‘Manning’) and does not provide for the payment of future medical expenses.  In other words, section 60 only authorises the payment of hospital and medical expenses to be made after the cost has been incurred and properly verified.

1. CMS’s response on the monetary threshold is merely that Country Energy’s submission is wrong and that the Arbitrator made a “general order, in which respect the expenses exceed $5,000.00”.  It refers to the Arbitrator’s statement at T1.44 that the Application involves an application for section 60 expenses “at this point in the amount of $6,760.00.” 

1. The current claim was clearly particularised in the sum of $390.85 and the reference to “a general order for knee reconstruction and associated costs” sought something that the Commission has no jurisdiction to award.  The ultimate order made by the Arbitrator (that Country Energy pay Mr Cutler’s section 60 expenses on production of accounts or receipts) is of no legal consequence so far as it purports to relate to expenses that have not been incurred.  Though it is appropriate for the Commission to make such “general orders” for the payment of section 60 expenses, their legal effect will, of necessity, be limited because the Commission has not made a determination as to whether any future expenses are reasonably necessary as a result of the relevant injury (section 60(1) of the 1987 Act).

1. Country Energy’s submissions are correct.  The Commission has no jurisdiction to order the payment of section 60 expenses that have not been incurred.  CMS’s submission has failed to acknowledge the difference between the claim for section 60 expenses that have in fact been incurred ($390.85) and the attempt to claim a “general order for knee reconstruction and associated costs”.  A claim for costs incurred is perfectly appropriate and is a matter over which the Commission has jurisdiction.  A claim for a “general order for knee reconstruction and associated costs” in relation to proposed future surgery is not an order that the Commission has any power to make (Widdup, Manning).  Therefore, future medical expenses in respect of the anticipated surgery are not “compensation” that is in dispute in the current matter (Robinson v Forster Tuncurry Memorial Services Club Limited [2007] NSWWCCPD 84).

1. It follows that the amount of compensation at issue on appeal ($390.85) is well below the $5,000.00 threshold in section 352(2) and leave to appeal must be and is refused.

1. If I am wrong on this issue, it is appropriate, given the parties’ submissions and the nature of the issues in dispute, that I state my views on those issues.

ISSUES IN DISPUTE

1. The issues in dispute in the appeal are:

(a)     whether the Arbitrator had jurisdiction or power to make an order of a kind that adversely affected the appellant (‘jurisdiction’), and

(b)     whether there is any evidence to support a finding that the appellant insured Country Energy as at September 1970 (‘evidence of insurance’).

THE EVIDENCE

1. The evidence establishes, or it is conceded:

   (a)     a company known as Harvey Trinder (NSW) Pty Ltd (‘Harvey Trinder’) had been a licensed workers’ compensation insurer in NSW between 1938 and 1 July 1968.  After it ceased to be a licensed insurer, it continued business as an insurance broker (changing its name to Harvey Trinder (Northern) Pty Ltd) dealing with workers’ compensation insurance;

   (b)     in or about 1969 and 1970, Oxley County Council arranged its workers compensation insurance through Harvey Trinder (see Report of Injury forms dated 3 November 1969 and 12 October 1970, and the claim forms dated 29 October 1969 and 25 September 1970).  The Report of Injury forms have the following headings:

“HARVEY TRINDER

(NSW) Pty Limited

INSURANCE BROKERS”

The claim forms have the following headings:

“HARVEY TRINDER (NSW) Pty Ltd 275 George St., Sydney”

(c)     on 1 September 1970 Harvey Trinder, acting on behalf of Oxley County Council, applied for a medical examination of Mr Cutler’s right middle finger (injured on 28 October 1968) under section 51(4) of the 1926 Act (see Application for Medical Examination under Section 51(4) 1 October 1970);

(d)     in or about 1969, Steadfast took over Harvey Trinder’s business (see letter from CMS to Whitelaw McDonald dated 23 July 2004);

(e)     Steadfast was a licensed insurer under the 1926 Act and issued workers’ compensation policies in the period 30 June 1969 to 30 June 1970 and 30 June 1970 to 30 June 1971 (see policies issued by Harvey Trinder, as agent for Steadfast, to Sulphide Corporation Pty Ltd on 21 October 1969 and 13 October 1970);

(f)      on 25 November 1975, Steadfast changed its name to Bishopsgate (see historical company extract 1 September 1997);

(g)     Bishopsgate went into liquidation and, along with several other companies, came under the control of the Insurers’ Guarantee Fund and Statutory Funds.  CMS is the agent for that fund;

(h)     as a broker, Harvey Trinder placed “most” of its “business” with Bishopsgate (Steadfast) (see letter CMS to Whitelaw McDonald 20 May 2004);

(i)      in response to an enquiry from Whitelaw McDonald on 7 April 2004 seeking the identity of the insurer against whom Mr Cutler might make a claim in respect of his injuries on 28 October 1969 and 23 September 1970, WorkCover wrote on 1 June 2004 that “the following insurance policy details had been found:” Oxley County Council had been insured with Royal Insurance Australia Ltd in respect of claim 80W1240 date of injury 1 January 1969.  The letter then added “Harvey Trinder (NSW) Pty Ltd – Bishopsgate Insurance Australia – refer to Corporate Management Services”.

SUBMISSIONS, DISCUSSION AND FINDINGS

Jurisdiction

1. CMS submits that:

(a)     the Arbitrator’s order against Steadfast is in the nature of a declaration of insurance and he had neither the jurisdiction nor the power to make such an order;

(b)     under section 105 of the 1998 Act the Commission has exclusive jurisdiction to examine, hear and determine all matters arising under that Act and under the 1987 Act.  That does not extend to the determination of the existence of insurance, or the identity of a particular insurer at a particular time as they are matters that do not arise under either Act;

(c)     the Commission’s jurisdiction is to hear and determine claims for compensation, but has no jurisdiction or power over the identity of an insurer at a particular time;

(d)     the Commission has a statutory jurisdiction.  Those statutes do not confer an ancillary jurisdiction and there is no implied jurisdiction;

(e)     the function of the Commission is to determine proceedings between a worker and an employer.  Normally, an award will be made in favour of a worker against an employer and it is only in exceptional circumstances that an award may be entered other than against an employer;

(f)      though an insurer can be granted leave to be separately represented, that is only where an insurer’s rights can be adversely affected because of some finding of fact in the proceedings between the worker and the employer, and

(g)     the nature of the Arbitrator’s order (a declaration of insurance) is one reserved for the Supreme Court or other court of appropriate jurisdiction.

1. Country Energy submits that:

(a)     the characterisation of the Arbitrator’s order as being “in the nature of a declaration of insurance” is apt to mislead.  In the course of determining the dispute raised by the worker as to who was liable to pay compensation for his injury, the Arbitrator determined that Steadfast was the relevant insurer on risk on 23 September 1970.  The determination was not made in the abstract on an issue joined solely between the worker and Country Energy, but was made to finally determine the dispute between all parties to the proceedings;

(b)     after extensive attempts to identify the relevant insurer, the worker’s Application sought a declaration of non insurance and orders that WorkCover (on behalf of the Nominal Insurer) pay any compensation and costs awarded against Country Energy.  After extensive enquiries, he also joined those insurers who were implicated by the evidence.  No party challenged the fact that the worker had joined it to the proceedings;

(c)     at no stage did any party challenge the Commission’s jurisdiction to determine the issues in dispute.  CMS made submissions engaging the issue which it now asserts the Commission has no jurisdiction to determine (T15.10);

(d)     the dispute was properly before the Commission and it had a statutory obligation to determine all matters in dispute;

(e)     in determining whether Country Energy was insured, CMS must have anticipated that the determination would extend to identifying the insurer liable to provide indemnity, and

(f)      reliance is placed on Devine v Devine & Queensland Insurance Co Ltd (1929) 29 SR (NSW) 1 (‘Devine’), Liverpool & London & Globe Insurance Co Ltd v J W Deaves Pty Ltd & others [1971] 2 NSWLR 131 (‘Deaves’), Wilson v TH & NO Berkint/as Penola Preservation Products & others (1997) 15 NSWCCR 634 (‘Wilson’), and Greenfield Workers Compensation Insurance (NSW) v Nohil Pty Ltd & ors (1996) 13 NSWCCR 74, as providing authority that the Commission has jurisdiction to make the orders CMS now challenges.

1. Mr Cutler submits:

(a)     the identity of the insurer at a particular time is a matter which arises under both the 1998 Act and the 1987 Act.  Section 105 gives the Commission jurisdiction to determine “all matters” arising under the 1998 Act and the 1987 Act;

(b)     Division 6 of the 1987 Act deals with Uninsured Liabilities and clearly indicates that insurers can be joined to proceedings and that the issue of insurance or non insurance be dealt with;

(c)     section 142(3)(d) provides that if an insurer denies liability to indemnify the employer, the Nominal Insurer shall deal with the claim in the manner provided by Division 6 and the claim may be made against the Nominal Insurer;

(d)     pursuant to section 144(2), WorkCover may join as a party to the proceedings “any person who…may be liable to pay the applicant compensation under this Act”.  That “person” in the present matter is CMS;

(e)     the Commission then, pursuant to section 144(3), “may hear and then determine any such Application and make such orders in relation to the application as the Commission thinks fit”, and

(f)      if the person whom WorkCover is of the opinion may be liable to pay compensation under the Act is joined to the proceedings, it is absurd to think that the Commission has no powers to decide they are in fact liable to pay compensation.

1. I agree with Country Energy that it is not appropriate to describe the Arbitrator’s decision as being “in the nature of a declaration of insurance”.  The issue before the Arbitrator involved proceedings against Country Energy, the Nominal Insurer, CMS, and GIO.  The Arbitrator was not asked to make a “declaration of insurance” but, in the words of CMS’s own counsel, to determine “can the worker prove that the respondent [Country Energy] was insured?…And, if so, by whom?” (T3.8)  They were the critical questions that arose from the pleadings and the positions each party adopted at the arbitration.  None of the parties submitted that counsel had incorrectly stated the questions to be answered. 

1. CMS now seeks to argue on appeal that the Arbitrator erred in determining the very questions that its counsel submitted had to be determined.  Given that a party is normally bound by the conduct of his or her case at first instance (University of Wollongong v Metwally [No 2] (1985) 59 ALJR 481 at 483; Coulton v Holcombe (1986) 162 CLR 1 at 7), I have some reservations as to whether CMS is entitled to now take a contrary position on appeal. As this point has not been fully argued and as it is unclear if the different position on appeal results in any prejudice to any of the parties, or if it is merely a legal argument that they have fully met, I will assume that it is now entitled to argue that the Commission has no jurisdiction to determine the insurance question.

1. I have no hesitation in determining that the Commission does have jurisdiction, in the circumstances of the present case, to determine if Country Energy was insured as at 23 September 1970. The insurance question arises as a direct result of the section 74 notice served by WorkCover in which it disputed non-insurance for the purpose of section 140 of the 1987 Act and asserted, by implication, that the insurer was Harvey Trinder. All of the insurers joined in the proceedings denied that they insured Country Energy. Though the implied assertion by WorkCover that Harvey Trinder was the insurer in 1970 was incorrect, the Commission could not determine the question of non-insurance without determining if Country Energy was insured at the relevant time. Therefore, the identity of Country Energy’s insurer as at 23 September 1970 is “a matter arising under” the 1987 Act and is a matter over which the Commission has exclusive jurisdiction under section 105 of the 1998 Act. This conclusion is consistent with the authorities cited by Country Energy.

1. Campbell CJ reviewed the authorities in Wilson. The Chief Judge noted (at 645D) that in Devine, the Full Court answered in the affirmative the question:

“Has the Commission jurisdiction to hear and determine the question whether an employer against whom an award has been made in favour of the dependants of the employer’s deceased worker had obtained from a licence insurer an indemnity for the full amount of the employer’s liability…”

1. The Chief Judge also referred to Deaves, where Else-Mitchell J declined to make a declaration that the insurer, a licensed insurer under the 1926 Act, was not bound to indemnify the employer.  The Chief Judge (at 645G) quoted the following passage from Deaves:

“This distinction leads me to the conclusion that the Workers’ Compensation Commission [established under the 1926 Act] has exclusive jurisdiction under section 36 in any case where the statutory rights of the worker to an award are sought to be determined so as to bind him or some other person against whom an award of compensation could be made. Stated in another way, the question whether an award should be made against an employer, a licensed insurer or the uninsured liability scheme at the instance of a worker is a matter or question which arises under the Workers Compensation Act, and section 36 gives the Commission exclusive jurisdiction to make that award, and that section and section 37 declare the determination of the Commission to be final and not open to be questioned except by the limited appellate provisions prescribed by section 37(4).”

1. Sections 36(1) and 37 of the 1926 Act were in substantially the same terms as sections 105 and 350 of the 1998 Act.  It follows that Else-Mitchell J’s observations are equally applicable to the current proceedings.  Campbell CJ concluded, “that issues between the employer and a licensed insurer may be dealt with by this Court” (646B). 

1. It follows that, given the nature of the dispute in the present case, namely whether Country Energy was insured as at 23 September 1970, the fundamental issue before the Commission was whether the award of compensation could be made against the Nominal Insurer (formerly known as the Uninsured Liability and Indemnity Scheme).  The Commission could not determine that issue without determining if one of the joined insurers insured Country Energy on 23 September 1970.  That is a dispute that arises under Division 6 of the 1987 Act and is clearly a matter that the Commission has jurisdiction to determine.

1. Rights under the contract of insurance, however, do not arise under either the 1998 Act or the 1987 Act and accordingly it would not be within the Commission’s jurisdiction to determine matters relating to those rights, unless the order sought would have the effect of binding the worker in respect of any rights arising under the Acts (C P Mills Workers Compensation (New South Wales) second edition, at 359).  That is not the issue in the present case.

Evidence of insurance

1. CMS submits that there is no evidence that Steadfast insured Oxley County Council in September 1970.

1. Country Energy submits:

(a)     as a matter of probability, Oxley County Council had been insured by Harvey Trinder;

(b)     after it became a broker (presumably in July 1968), Harvey Trinder managed Oxley County Council’s workers’ compensation insurance business and acted in that capacity in September 1970;

(c)     CMS admits that Harvey Trinder placed most of its business with Bishopsgate;

(d)     Bishopsgate did not exist under that name until 1975 when Steadfast changed its name to Bishopsgate;

(e)     Steadfast was a licensed insurer at the time of Mr Cutler’s injury (23 September 1970).  CMS conceded that Harvey Trinder’s “business was subsequently taken over by Steadfast Insurance Co Ltd and later by Bishopsgate Insurance Australia Ltd” (see CMS’s letter to Whitelaw McDonald 23 July 2004);

(f)      contrary to CMS’s submissions to the Arbitrator, Steadfast was issuing statutory workers’ compensation policies in its own right through Harvey Trinder both before and after Mr Cutler’s injury on 23 September 1970;

(g)     CMS conceded that it assumed Steadfast’s liabilities (though only up to 1 July 1968) (T13.38).

1. Country Energy essentially relies on the history of Oxley County Council’s association with Harvey Trinder, that Harvey Trinder, as a broker, continued to manage the Council’s workers’ compensation insurance in 1969 and 1970, and the admission by CMS that Bishopsgate (Steadfast) took over Harvey Trinder’s business and that Harvey Trinder (as a broker) placed most of its business with Bishopsgate (Steadfast).  Rather than dealing with the merits of this submission, CMS’s response is that there is no evidence that Steadfast insured Oxley County Council in September 1970. 

1. The insurance question must be decided on the balance of probabilities.  The Commission is not bound by the rules of evidence and must act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms (section 354(3) of the 1998 Act).  It is entitled to draw inferences from the established evidence.  A party who relies on circumstantial evidence to prove a fact must show “that the circumstances raise the more probable inference in favour of what is alleged” (per Ipp JA in Flounders v Millar [2007] NSWCA 238 at [35]).

1. It is clear beyond doubt that Harvey Trinder was intimately involved (as a broker) in Oxley County Council’s workers’ compensation insurance in 1969 and 1970.  It issued and accepted claim forms that carried its letterhead and arranged for section 54 medical panel assessments on behalf of the Council.  Given this close association with Oxley County Council, it is logical that it would refer the Council’s workers’ compensation business to the company that took over its (Harvey Trinder’s) business, namely Steadfast. 

1. That Harvey Trinder was not a licensed insurer in September 1970 is of limited relevance.  The admission that Bishopsgate (Steadfast) took over Harvey Trinder’s business is significant because Steadfast was a licensed insurer in 1969 and 1970, but it is not determinative, because it is not known if Bishopsgate took over Harvey Trinder’s workers’ compensation insurance business or only the broking business.  CMS’s counsel submitted before the Arbitrator that Steadfast assumed all of Harvey Trinder’s liabilities, but only “up to and including 1 July 1968” (T13.43).  The evidentiary basis for that submission is not apparent.

1. However, CMS’s admission that when Harvey Trinder operated as a broker it placed most of its business with Bishopsgate (Steadfast) is highly significant as, in my view, it raises the strong probability that Oxley County Council’s business, which Harvey Trinder still handled (as a broker) in 1969 and 1970, would have been placed with Steadfast.  This compelling conclusion results from an analysis of the objective documentary evidence, the history of Oxley County Council’s dealings with Harvey Trinder, and CMS’s admissions. 

1. In these circumstances, were it necessary for me to decide this issue, I would be satisfied, on the balance of probabilities, that Country Energy (Oxley County Council) was not uninsured as at 23 September 1970 because it held insurance with Steadfast, which later changed its name to Bishopsgate.

OTHER MATTERS

1. There is some confusion as to the identity of the party representing the alleged uninsured interests of Country Energy.  Though it is now irrelevant, as I have found that Steadfast is the relevant insurer, it is appropriate that this be clarified. 

1. Mr Cutler’s solicitors appear to have sued the WorkCover Authority of New South Wales, though the Uninsured Employer Cover Sheet filed with the Application refers to the Workers Compensation Nominal Insurer c/-WorkCover Authority of New South Wales.  However, the solicitors acting for WorkCover filed a Reply identifying the second respondent as Uninsured Liabilities – As Agent for the NSW WorkCover Scheme. 

1. In his formal orders, the Arbitrator amended the second respondent’s name to be Uninsured Liabilities – As Agent for the NSW WorkCover Scheme.

1. By amendments to the 1987 Act that took effect on 1 July 2007, section 154A established a Workers Compensation Nominal Insurer.  On and from that date, the Nominal Insurer assumed the assets, rights and liabilities of the Uninsured Liability and Indemnity Scheme (see Regulation 247B of the Workers Compensation Regulation 2003).

1. The Nominal Insurer is a legal entity (section 154A(2)(a)) and may take proceedings and be proceeded against in the name of the Workers Compensation Nominal Insurer (section 154A(2)(b)).  Therefore, the Nominal Insurer is the entity to be joined in proceedings where an employer is alleged to be uninsured.  WorkCover acts for the Nominal Insurer (section 154C(1)).

CONCLUSION

1. Leave to appeal is refused.  Had leave to appeal been granted, I would have, for the reasons given in this decision, agreed with the Arbitrator’s conclusions and orders, save as to the correct name of the second respondent.

DECISION

1. Leave to appeal is refused.

COSTS

1. The appellant (Corporate Services Management (Australia) Pty Ltd) is to pay the costs of the appeal of the third respondent (Steven Richard Cutler).  Each other party to the appeal is to pay its own costs of the appeal.

Bill Roche
Deputy President

13 January 2010

I, TUYET WALLIS, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

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