Cummings v Workcover Corporation / CGU NRMA Workers Compensation (SA) Ltd (Extra Staff Pty Ltd) - [2004] SASC 308

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court: Case Stated)
CUMMINGS v WORKCOVER CORPORATION / CGU NRMA WORKERS COMPENSATION (SA) LTD (EXTRA STAFF PTY LTD)
Judgment of The Full Court
(The Honourable Chief Justice Doyle, The Honourable Justice Duggan and The Honourable Justice Gray)
29 September 2004
WORKERS' COMPENSATION - ASSESSMENT AND AMOUNT OF COMPENSATION - DISCONTINUATION OF PAYMENTS - APPLICATION BY WORKER FOR CONTINUATION OF PAYMENTS
STATUTES - ACTS OF PARLIAMENT - INTERPRETATION
Applicant awarded compensation in respect of a disability - Workcover discontinued payments on the basis that applicant no longer incapacitated for work - Applicant disputed decision and Workcover required to continue payments - The Workers Compensation Tribunal found that Workcover entitled to discontinue payments - Workcover recovered judgment in the District Court for $70,047.00 against the applicant - Under the Act applicant entitled to an award against Workcover for reasonable costs of having the decision reconsidered - Tribunal ordered Workcover to pay applicants costs of the determination of the dispute - applicant applied to Tribunal for an order that the costs of proceedings be paid directly to his solicitors - Workcover opposed the making of this order on ground that it would defeat its entitlement for set off under s 36(5) of the Act - Tribunal declined to make order on basis that not a proper exercise of discretion under s 95(4) of the Act - Applicant appealed against decision to the Full Bench of the Tribunal - Tribunal stated a question of law for opinion of the Full Court - whether the liability of Workcover to pay costs to the worker is a liability to make payments to worker for the purposes of s 36(5)(b) of the Act.
Workers Rehabilitation and Compensation Act 1986 (SA) s 2(1)(b), s 36(3), s 36(4), s 36(5), s 36(5)(a), s 26(5)(b), s 86, s 86A(1), s 86A(2), s 95(1), s 95(3), s 95(4), referred to.
Monroe Australia Pty Ltd v Hill [2003] SAWCT 59, not followed.

CUMMINGS v WORKCOVER CORPORATION / CGU NRMA WORKERS COMPENSATION (SA) LTD (EXTRA STAFF PTY LTD)
[2004] SASC 308
Full Court : Doyle CJ, Duggan and Gray JJ
DOYLE CJ
The case stated

The full bench of the Workers’ Compensation Tribunal (“the Tribunal”), in the course of hearing an appeal to it under s 86 of the Workers Rehabilitation and Compensation Act 1986 (SA) (“the Act”), has exercised its power under s 86A(1) of the Act to state a question of law for the opinion of the Supreme Court.
The case was heard by the Full Court, as required by s 86A(2) of the Act.
The question of law arises in the following circumstances.
The Workcover Corporation of South Australia (‘the Corporation”) determined to accept a claim by Mr Cummings for compensation in respect of a compensable disability under the Act. The claim included a claim for weekly payments in respect of the disability. The Corporation made such payments.
The Corporation decided to discontinue the weekly payments, on the basis that Mr Cummings had ceased to be incapacitated for work by the compensable disability, and gave notice in writing to Mr Cummings accordingly: s 36(3) of the Act.
Mr Cummings disputed the decision, and accordingly the operation of the decision was suspended and the Corporation was required to continue the weekly payments: s 36(4).
The dispute between Mr Cummings and the Corporation was heard by the Tribunal, and the Tribunal found that the Corporation was entitled to discontinue the payments. On 16 July 2002 it confirmed the Corporation’s decision.
Section 36(5) of the Act provides as follows:
“(5) If the dispute is ultimately resolved in favour of the Corporation, the Corporation may, at the Corporation’s discretion (but subject to the regulations) –
(a)recover amounts that were paid because of suspension of the operation of the Corporation’s decision from the worker as a debt; or
(b)set off the amounts against liabilities of the Corporation to make payments to the worker under this Act.”
The amount of the payments made to Mr Cummings after the Corporation’s decision was substantial. The Corporation recovered judgment in the District Court against Mr Cummings for $70,047.00, most of this amount being weekly payments made to him during the period of the dispute. The judgment has not been satisfied.
Section 95(1) of the Act provides as follows:
“(1)A party (other than the relevant compensating authority) is entitled, subject to this Part and to limits prescribed by regulation, to an award against the relevant compensating authority for the party’s reasonable costs of –
(a) the initial reconsideration of a disputed decision; and
(b) any subsequent proceedings for resolution of the dispute under this Part (but not proceedings by way of an appeal or case stated to a Full Bench of the Tribunal or the Supreme Court).
The Tribunal ordered that the Corporation pay Mr Cummings’ costs of and incidental to the determination of the dispute.
Section 95(4) of the Act provides as follows:
“(4)An award of costs to cover professional advice or assistance may, if the Tribunal considers appropriate, be made in favour of the person who provided the professional advice or assistance.”
Mr Cummings applied to the Tribunal for an order that the costs of the proceedings be paid directly to his solicitors. The Corporation opposed the making of this order, on the ground that the order would defeat its entitlement to set off the amount of the debt owed by Mr Cummings against the Corporation’s liability to pay costs to Mr Cummings.
The Deputy President who constituted the Tribunal declined to make the order sought in favour of the solicitors. He held that it was not a proper exercise of the discretion under s 95(4) to make the order sought, because that order would defeat the Corporation’s entitlement to a set-off. Such an order should be made only in exceptional circumstances, and none were made out. In so deciding he followed an earlier decision of the Tribunal: Monroe Australia Pty Ltd v Hill [2003] SAWCT 59.
Mr Cummings appealed against that decision to the Full Bench of the Tribunal. In that setting the Full Bench stated the following question of law for the consideration of the Full Court:
“Is the liability of the Corporation to pay costs to the worker pursuant to the order of Deputy President McCouaig dated 16 July 2002 a liability to make payments to the worker for the purposes of S.36 (5)(b) of the Workers Rehabilitation and Compensation Act 1986?”
The answer to the question will not determine the outcome of the appeal. The appeal is against the refusal to make an order under s 95(4). But if the question is answered in the affirmative, and if the Tribunal continues to apply its decision in Monroe, it seems likely that the appeal will be dismissed. It may be that the purpose of the question is to determine whether Monroe proceeds on the basis of a correct understanding of the application of s 36(5)(b) of the Act.
In the circumstances, it is appropriate to answer the question raised.
Consideration of the question
The award of costs under s 95(1) of the Act imposes a liability on the Corporation, which liability arises under the Act. It arises under the Act because s 95 confers on Mr Cummings an entitlement to an award, subject only to a discretion under s 95(3) to decline to make an award, or to reduce the amount of the award, by reason of Mr Cummings acting “unreasonably, frivolously or vexatiously”.
As a matter of ordinary language, the effect of the award is to create a liability on the part of the Corporation to make payments to Mr Cummings under the Act.
Mr Heywood-Smith QC, counsel for Mr Cummings, submits that the liability referred to in s 36(5)(b) is limited to a liability to make a payment of compensation under Part 4 of the Act. That is a payment of compensation, for example, for medical expenses, for property damage, by way of income maintenance, or for loss of earning capacity. He submits that such a reading of s 36(5)(b) is consistent with one of the purposes of the Act, which is to provide for “the efficient and effective administration” of the compensation scheme: s 2(1)(b) of the Act. If a worker’s liability to repay the amount of compensation paid during the period of a dispute can be set off against an award of costs, a solicitor acting for a worker who disputes a decision to discontinue weekly payments will be at risk as to the solicitor’s costs. If the worker is unsuccessful in disputing the discontinuance, there is a high likelihood that the award of costs which would otherwise operate for the benefit of the solicitor will be absorbed by the Corporation’s set-off. If that is so, solicitors will be reluctant to act for workers in such a case, and in that event the scheme will not operate efficiently or fairly.
No argument was put to us based on the lien that a solicitor has over the proceeds of litigation. There is no reason to think that the solicitor’s lien would prevail over the statutory right of set-off, if it arises.
I do not accept these submissions. The language of s 36(5)(b) is plain. It refers to a liability under the Act. Such a liability has arisen. If Parliament’s intention was as suggested by Mr Heywood-Smith, I would expect s 36(5)(b) to refer to a liability of the Corporation to make payments to a worker under Part 4 of the Act, or to refer to a liability to make payments to a worker by way of compensation. The absence of any such limitation, and the broad language used, is a clear indication that Parliament did not intend to limit the right created by s 36(5)(b) in the manner suggested.
The submission based on the purposes of the Act cannot overcome the plain meaning of the words used in s 36(5)(b). There is no ambiguity in those words of a kind to be resolved by reference to statutory purposes.
In any event, the submission by reference to the statutory purposes is not persuasive. Mr Heywood-Smith concedes that the Corporation is entitled to set off the amounts recoverable by the Corporation under s 36(5)(a) against other liabilities of the Corporation to make payments of compensation to a worker. Many would regard that right as a greater entrenchment on interests of a worker than the right to set off compensation recoverable from the worker against an award of costs in favour of the worker. One might have expected Parliament to be more concerned to protect compensation payments than awards of costs. I can find no indications in the Act of a policy or purpose to protect workers’ entitlements, that would lead to the conclusion that the right conferred by s 36(5)(b) of the Act should be limited in the manner suggested by Mr Heywood-Smith.
For those reasons I would answer the question formulated in the case stated as follows: Yes.
DUGGAN J I would answer “Yes” to the question posed in the case stated. I agree with the reasons of the Chief Justice.
GRAY J The question formulated in the case stated should be answered “Yes”. I agree with the reasons of Doyle CJ.