Della Flora v Workers Rehab & Comp Corp of SA No. Scgrg-98-297 Judgment No. S6691

No judgment structure available for this case.

DELLA FLORA v WORKERS REHABILITATION & COMPENSATION CORPORATION OF SOUTH AUSTRALIA

Full Court: Doyle CJ, Millhouse and Nyland JJ

DOYLE CJ

The issue

This appeal from a decision by a judge of the District Court raises an important issue under the Workers Rehabilitation and Compensation Act 1986 (“the Act”).

The issue is this. When does a determination made under s43 of the Act, that a lump sum be paid to a worker as compensation for non-economic loss attributable to a compensable disability, become enforceable by the worker by civil action? A subsidiary issue that arises if the determination is enforceable, is the question of the entitlement of the worker to claim interest on the money the subject of a determination, if the money is not paid to the worker on the due date.

The facts

The defendant is the Corporation continued in existence by s4 of the WorkCover Corporation Act 1994. Under the Act, the Corporation is liable to make payments of compensation to persons entitled under the Act: s46(1). Under the Act, it is the Corporation that makes what I will call primary decisions as to entitlements to compensation: s53. For present purposes, I put to one side the situation of an exempt employer.

The plaintiff (“the worker”) suffered a compensable disability. Weekly payments of compensation were made to the worker.

In due course the worker claimed a lump sum payment for non-economic loss under s43 of the Act.

By letter dated 16 June 1997 the Corporation (by its agent, but I will refer only to the Corporation) determined that the worker was entitled to a payment of $38 635.06. By that letter the Corporation gave notice in writing to the worker and to the employer, as required by s53(5) of the Act.

The determination related to three permanent disabilities. The amount just referred to is the sum of the three amounts payable in respect of each disability. The disabilities were a partial loss of use of a finger, a total loss of sense of smell and a partial loss of the sense of taste. No submissions were made to us on the question of whether three determinations should have been made for separate amounts. While the determination is in respect of a single amount of money, it is expressed in a form that enables one to calculate the amount attributable to each disability.

By letter dated 20 June 1997 and forwarded to the Corporation, the worker undertook not to file a notice of dispute pursuant to s90 of the Act, and requested payment of the amount of the determination. The payment was not made.

By Notice dated 9 July 1997 the employer exercised its right under s90 of the Act to lodge a notice of dispute with the Registrar of the Workers Compensation Tribunal (“the Tribunal”). The Notice stated that the amount of the determination “is excessive”. No other details were given of the dispute.

By s90A of the Act, a notice of dispute must be lodged within one month of the party receiving notice of the decision that is disputed. However, the Tribunal has power to extend that time: s90A(1).

As required by s91 of the Act, the Corporation then reconsidered the claim. By notice dated 1 August 1997 the Corporation confirmed its decision.

On 7 August 1997 the worker issued a summons out of the District Court against the Corporation. The Statement of Claim is not before us. The Statement of Claim before the Court is an amended Statement of Claim. However, my understanding is that the claim was for payment of $38 635.06, on the basis that the determination in the worker’s favour gave the worker an enforceable claim to payment.

Section 91A of the Act requires that if the Corporation confirms its decision, the Registrar of the Tribunal must refer the dispute (initiated by the employer’s notice in this case) for conciliation. A conciliation may be conducted by a presidential member or by a conciliation officer: s92(1)(a). A presidential member is a member of the Tribunal: s78. So is a conciliation and arbitration officer, when carrying out the Tribunal’s work of conciliation and arbitration: s78 and s81(1).

The dispute was referred to a conciliation officer. A compulsory conference pursuant to s92B was held on 16 September. There was no agreed settlement at that conference.

As required by s92D of the Act, the conciliation officer then referred the dispute “into the Tribunal for arbitration”: s92D(1)(a). The conciliation officer could have referred the dispute “into the Tribunal for judicial determination”: s92D(1)(b).

It appears that at a pre-arbitration conference on 10 November 1997 the employer’s solicitor stated that the dispute related only to the determination in relation to the loss of sense of smell, in respect of which the amount determined (as part of the single lump sum) was only $3 366.31.

By letter dated 12 November 1997 the solicitors for the worker sought payment of the amounts attributable to the two disabilities in respect of which there was no dispute. The Corporation did not make that payment.

By determination dated 7 January 1998 the arbitrator affirmed the decision of the Corporation of 16 June 1997.

The employer did not exercise its statutory right under s94 of the Act to require the Tribunal to make a judicial determination of the dispute. The employer was entitled to do so “if dissatisfied with the result of the arbitration”: s94(b).

On 23 January 1998 the amount of the determination was forwarded to the worker’s solicitors, and received by them on 27 January 1998. They accepted that payment.

On 3 February 1998 the worker filed an amended Statement of Claim. It was amended to include a claim for a declaration that the worker was entitled to payment on 16 June (the date of the determination) or 1 August (the date of the confirmation on reconsideration) or on 12 November (as to $35 268.75, being the apparently undisputed amount of which the worker sought payment by letter bearing that date). The substitution of a claim for a declaration presumably flowed from the fact that, by then, payment had been made. There was also a claim for interest.

The District Court judge heard the case on agreed facts. After considering the provisions of the Act, he concluded that a disputed determination is not enforceable until the dispute is determined by the Tribunal. He entered judgment for the Corporation, presumably upon the basis that when the summons was issued the worker had no enforceable right to payment.

The Act

To avoid making this judgment unduly long, I will have to assume a working knowledge of the Act. I will not repeat the sections to which I have already referred. They reflect some aspects of the scheme of the Act.

It is a curious feature of the Act that it makes no general provision about the time at which a worker becomes entitled to require payment of compensation payable to the worker under a determination made by the Corporation in the worker’s favour. Nor is there a general provision about the worker’s rights in the event of a payment not being made when it should be made.

There is a provision dealing with payment by an employer of weekly payments of compensation in respect of the first two weeks of a period of incapacity. Under the Act, weekly payments in respect of the first two weeks are not payable by the Corporation and are payable by the employer: s46(3). Section 46(6) provides as follows:

“An employer who is liable to pay compensation to a worker under subsection (3) shall make the payment-
(a). if the claim for compensation is not disputed - within 14 days after the date of the claim; or
(b). if the claim for compensation is disputed - forthwith after the dispute is determined.”

I assume that the decision to accept or to reject the claim is a decision made by the Corporation pursuant to s53 of the Act. If, as the worker contended, compensation is always payable as soon as a determination in favour of a worker is made, there should be no need for s46(6)(b). It may be that s46(6)(b) was intended to operate upon a decision, other than one made by the Corporation, resolving a dispute over a worker’s entitlement. However, the more likely meaning, in my opinion, is that s46(6)(b) refers to a decision by the Corporation. I say this because, as will appear later, there is a separate provision relating to the enforcement of decisions by the Tribunal that determine a dispute.

There is another provision relating to the payment of weekly payments. Section 47(1) provides as follows:

“Subject to subsection (2), where-
(a). a weekly payment, or part of a weekly payment, is not paid as and when required to be paid under this Act; or
(b). the making of a weekly payment is delayed pending resolution of a dispute under this Act,
any amount in arrears shall be increased by interest at the prescribed rate.”

I have not been able to find a provision that expressly states when the Corporation is to make a weekly payment under a determination that it makes in favour of a worker. Section 53(4) requires the Corporation to determine a claim for compensation “as expeditiously as reasonably practicable.” If the claim is by way of income maintenance, it must “endeavour” to determine the claim within 10 business days after receipt of the claim. This provision does not enable one to specify a period within which payment must be made. Nor is there any provision that provides a mechanism for the enforcement of the payment of interest. There are, of course, various provisions in the Act that require expedition by the Corporation in the discharge of its responsibilities. An example is s53(4). But, as I have said, I can find no specific provision upon which s47(1) would operate.

On the other hand, s47(1) reflects an assumption that a time for the making of a weekly payment can be identified, and that in the event of a dispute the time from which a payment is delayed can be identified.

There are the well known provisions dealing with the continuation of weekly payments if a worker disputes a decision by the Corporation to discontinue or to reduce weekly payments. These provisions do not apply to an initial determination in favour of a worker. In those provisions one finds reference to suspending the operation of the Corporation’s decision to discontinue or to reduce weekly payments: see s36(4). But just when the decision comes into operation, which it must do before it can be suspended, is left unclear. I there use “operation” in the sense of being enforceable.

While dealing with weekly payments, I should add that in certain circumstances the Corporation can recover weekly payments from a worker if a decision to discontinue or to reduce weekly payments is suspended, and it is ultimately found that the Corporation was not liable to make the weekly payments: see s37(5). This provision also does not apply to the recovery of payments made under an initial determination in favour of a worker.

There are some other provisions providing for circumstances in which the Corporation can recover weekly payments: see s37(6) and (7). These provisions do not provide for a general right of recovery of moneys paid under an initial determination, in favour of a worker, that is later set aside. The Act is silent on that matter. The limited provision that is made suggests that otherwise weekly payments are not recoverable.

Overall, there is no provision in the Act that clearly identifies the time at which an entitlement to receive weekly payments, payable under a determination by the Corporation, becomes enforceable at the instance of a worker. Nor is there a provision for recovery of weekly payments paid under a determination that is later set aside.

When one turns to the other types of compensation payable under the Act, the Act is no more helpful. I can find no provision at all in relation to the time of enforceability of a determination for the payment of compensation for medical and other expenses under s32; a determination for the payment of compensation for property damage under s34; a lump sum assessment for loss of earning capacity under s42A; a determination of a lump sum for non-economic loss under s43; or a determination of compensation payable on death under s44.

Nor can I find any provision for recovery of compensation paid under a determination that is later set aside. I do not consider that the provision for the recovery of interim payments throws any light on the matter: see s106(2).

In this respect, the position is much the same under the Workers Compensation Act 1971, which was repealed by the Act, although the 1971 Act did deal specifically with the time for payment of weekly payments: see s53(1).

I turn now to look more generally at the scheme of the Act.

As is well known, the scheme of the Act is that the worker must make a claim for compensation under s52(1), and the Corporation must determine that claim: s53(4). I repeat what I said in Mitsubishi Motors Australia Ltd v Harbord (1997) 69 SASR 75 at 82-83:

“A feature of the scheme of the Act is that each time compensation is claimed, a claim for the purposes of s52 is required to be submitted. The statutory scheme hinges on this process of making a claim and, subsequently, a decision being reached in respect of the claim. The Act does not provide the making of a decision in relation to the occurrence of a compensable disability other than in the course of determining a claim for compensation.

This feature of the statutory scheme was commented upon by King CJ in Christea v Workers Rehabilitation and Compensation Corporation (1993) 61 SASR 487 at 489. He said:

‘The claim envisaged by s52 is a claim for compensation. It is not a claim to have a disability accepted as compensable. A claim for compensation made pursuant to s52 must be for one or more of the entitlements to compensation conferred by the Act .... The entitlement arises when the worker incurs one or other of the heads of expense or loss for which compensation is payable.’

The claim for compensation is to be given to the employer if the worker is employed at the commencement of the incapacity, and in any other case to the Corporation: s52(4).

Unless the employer is an exempt employer, relevant decisions are to be made by the Corporation and payments of compensation made by the Corporation. There is a statutory scheme of delegation of powers and discretions to exempt employers: s63. In what follows I will refer to the Corporation, but it is necessary to bear in mind that, in the case of an exempt employer, the relevant steps are taken and decisions made by the exempt employer.

On receipt of a claim for compensation, the Corporation is to make “such investigations and inquiries as it thinks necessary to determine the claim”: s53(1). The Corporation has power to require the worker to submit to a medical examination, and may require information from the claimant: s53(2) and (3). There is an obligation on the Corporation to make a decision “as expeditiously as reasonably practicable” and, if the claim is for income maintenance, to do so within ten business days: s53(4). After determining a claim for compensation, the Corporation is to give notice in writing of the determination to the claimant: s53(5).

It can be seen from this that the determination by the Corporation to accept or to reject a claim is central to a worker’s entitlement to compensation.”
As I said there, the determination by the Corporation to accept or to reject a claim is central to the scheme of the legislation.

As appears from the facts in this case, certain decisions by the Corporation are reviewable: s89A. While the worker is the most likely person to dispute a determination, other persons may be affected by a determination or other decision and can give a notice of dispute under s90. The employer of a worker is one such person.

Once a notice of dispute is given, the Act requires reconsideration (s91), followed by conciliation if the decision is affirmed (s91A). If the parties reach a settlement during conciliation, the conciliator may make an order to give effect to the settlement; s92C(6). That order will operate as a determination or order of the Tribunal: s92C(7). If conciliation is not successful, the conciliator must refer the dispute into the Tribunal for arbitration or for judicial determination: s92D(1).

It is implicit, although surprisingly not made explicit, that a decision by an arbitrator, as a result of an unsuccessful conciliation being referred into the Tribunal, is also a decision of the Tribunal. This must be so because the dispute is referred “into the Tribunal for arbitration”: s92D(1)(a). The decision of the arbitrator must be enforceable as a determination or order of the Tribunal.

Obviously, a judicial determination results in a judgment or order of the Tribunal.

The Act provides that a certified copy of a judgment or order of the Tribunal may be filed in the District Court: s87A(1). Section 87A(2) then provides:

“When a certified copy of a judgment or order of the Tribunal is filed in the District Court under this section, the judgment or order may be enforced as a judgment or order of the District Court.”

Presumably, any amount payable or due under a judgment or order of the Tribunal will be payable forthwith, unless the order provides otherwise, and will carry an entitlement to interest at the same rate as a judgment of the District Court. It is not necessary to consider whether interest would run from the date of the judgment or order of the Tribunal or from the date on which the judgment or order is filed in the District Court.

A decision of the Tribunal can be appealed against “on a question of law” to a Full Bench of the Tribunal: s86(1). I assume that the District Court could stay the enforcement of a Tribunal order, filed in that court, but subject to appeal.

From this survey of the Act I identify certain significant matters

First, that the Act is silent, unless some implication is to be drawn, about whether and how a determination by the Corporation can be enforced by a worker in whose favour the determination is made. The Act is equally silent, subject to the points made about weekly payments, about when such a determination becomes enforceable.

Secondly, that once the Corporation makes a determination that is a reviewable decision, the worker and other persons have a right to dispute that decision. The Corporation will have some difficulty knowing when that right has expired, because the time for the exercise of that right runs from the time when notice of the decision is received by the relevant person. Moreover, the time for the exercise of the right to dispute a determination can be extended by the Tribunal: s90A(1). Section 117(1) provides the usual presumption as to service within two business days after the date of posting, but it provides further that that presumption operates “unless the contrary is proved”.

Bearing this in mind, a determination is open to challenge for one month after notice is given, and possibly for a longer time.

Thirdly, there is no express provision (other than those referred to relating to weekly payments) for the recovery of compensation paid under a determination that is set aside after a notice of dispute is lodged. It is generally accepted that weekly payments of compensation are not recoverable if a determination is later set aside, except when the Act provides to the contrary.

Fourthly there is no provision in the Act for staying a determination by the Corporation. If a determination is enforceable, I doubt whether the power to make Rules of the Tribunal, under s88E of the Act, could provide for a stay of a determination by the Corporation. However, it is not necessary to decide that point, and it was not argued fully before us.

Fifthly once a notice of dispute is given under s90, a determination by the Corporation is liable to be set aside or varied until the dispute is finalised by an order of the Tribunal. As I have already said, that order might be the result of an agreement reached before a conciliator, the result of a decision by an arbitrator, or the result of a decision by the Tribunal upon a judicial determination. At that point, there is clearly an enforceable right, because the Tribunal’s decision is enforceable like a judgment of the District Court.

Sixthly, if the Corporation is liable to pay compensation, under a determination that is has made, upon the making of the determination, or after a notice of dispute has been lodged but before the Tribunal makes an order, the Corporation is at risk of being unable to recover money that it is later found to be not liable to pay. It is at risk, even if it has a cause of action to recover that money, in the event of the worker disposing of the money before the recovery action is brought.

Enforceability

The starting point, when considering the enforceability of a determination in favour of the worker, is the well known presumption to the effect that when a statute creates an obligation or liability to pay money to a particular person, an action will lie for the recovery of that money unless the statute contains a provision to the contrary. An action in debt will lie to recover an amount if it is a liquidated amount: Mallinson v Scottish Australian Investment Co Ltd (1920) 28 CLR 66 at 70; Gray v Gundowda Pty Ltd [1968] 1 NSWR 521; Commonwealth v SCI Operations Pty Ltd (1998) 152 ALR 624 at [65] per McHugh & Gummow JJ.

In other words, there is a presumption that when a statute creates a right, and provides no means for its enforcement, the common law provides a remedy to enforce that right should such a remedy be necessary. The fact that the statute provides for a payment by way of benefit to a particular class of persons tends to support the application of the presumption; Mallinson v Scottish Australian Investment Co Ltd (supra). However, in the end one has to consider the statute as a whole, and consider whether the presumption is rebutted.

Counsel for the worker made a number of submissions in support of an argument that the presumption is not rebutted.

First, that the payment of compensation payments will often be of critical importance to a worker’s ability to support himself or herself and dependants. Parliament could not have intended to leave a worker waiting while the Corporation fails to make a payment, or while an unreasonable third party, such as an employer, challenges a determination in the worker’s favour.

As to the latter point, it has to be borne in mind that it is not clear that money paid under a determination in favour of a worker can be recovered by the Corporation if that determination is later set aside. I have already referred to the very limited express provision on this topic. The fact that express provision is made for recovery in certain circumstances, for example, s37(5), tends to suggest that money paid under a determination is not recoverable. Quite apart from that, there is a risk of injustice if, by the time recovery proceedings are instituted, the worker has spent or otherwise parted with the money in question.

Secondly, the worker argued that it was unjust that the Corporation should have the use of money payable to a worker, interest free, to which the worker is ultimately found to be entitled. As counsel pointed out, in the present case there was never a real dispute about the worker’s entitlement to most of the money, and yet the end result was that the worker got no interest in respect of the period from about June 1997 to January 1998.

A partial answer to this submission, and it is no more than a partial answer, is that in a case in which the dispute is a limited one it may be possible for a consent order to be made, once the matter has reached the Tribunal, in relation to some parts of the determination.

Thirdly, counsel argued that it was reasonable to require the Corporation to pay an amount that the Corporation itself had determined that it should pay to a worker. There could be nothing surprising about such an obligation.

In answer to this it can be said that the scheme of the Act is one under which the Corporation is required to make an expeditious initial determination on relatively limited information. It is only if the matter reaches the Tribunal that there will be a complete hearing. A full hearing might well result in material emerging which falsifies the basis upon which the original determination was made.

Fourthly, counsel argued that if a worker sues to recover compensation payable under a determination, the courts have adequate powers to prevent entry of a judgment when the determination is still able to be challenged, or while a challenge is pending, and adequate powers in relation to interest and costs to protect the Corporation against unreasonable action by a worker

Fifthly, it was argued that the fact that the time within which a notice of dispute may be lodged cannot be finally fixed, because of the Tribunal’s power to extend time, means that an approach to liability that rests upon the absence of such a notice is inherently uncertain.

As to this point, it can be said that in many cases service by post will in fact be effective service.

I have already referred to the presumption in favour of a remedy at common law, when none is provided by statute.

There is nothing in the above matters, in my opinion, that tends to displace the presumption in relation to a determination that, after the expiry of the relevant period, is not the subject of a notice of dispute.

The issue upon which this case turns is whether payment can be enforced after such a notice has been lodged. Closely linked to that issue is the issue of whether payment can be enforced before the time for lodging a notice of dispute has expired. One would expect the same answer to be given in relation to each question.

I find the matter fairly finely balanced. However, I have come to the conclusion that the presumption in favour of the recoverability of payments by action is rebutted in relation to a payment due under a determination in respect of which 30 days from service or deemed service has not elapsed, or in respect of which a notice of dispute has been lodged.

I have concluded that Parliament did not intend that a determination should be enforceable by action on the part of a worker before the expiry of the period within which a notice of dispute can be lodged, nor after such a notice has been filed and before the dispute has been finalised. I am influenced by the potential for injustice if a payment must be made at a time when the determination might still be set aside. If payment had to be made during that period I would have expected to find a provision to that effect, coupled with a provision enabling payment to be deposed in specified circumstances. Accordingly, I am influenced by the absence of any provision requiring payment during this period, and by the absence of any provision for the staying of a determination by the Corporation. As to cases in which a notice of dispute has been lodged, I am also influenced by the express provisions for the enforcement of orders of the Tribunal. They suggest that if a notice of dispute is lodged, it is the order disposing of the dispute that is enforced, not the original determination by the Corporation.

Although it is not necessary to decide it in this case, I consider that once the period has passed within which a determination may be the subject of a notice of dispute, the Corporation is obliged to make payment and action can be brought by the worker to enforce payment. Of course, there will always remain the possibility of a relevant party proving that a deemed service was not effective, or obtaining an extension of time within which to file a notice of dispute. However, the fact that a payment had been made to a worker might be a matter that would cause the Tribunal to refuse an extension of time. In any event, I can think of no reason why the presumption in favour of enforceability should not operate in relation to a payment due under a determination that is, prima facie, not disputed.

It is not necessary in this case to express any view in relation to the time within which weekly payments must be paid. It is possible that a determination requiring the making of weekly payments is enforceable as soon as it is made.

I do not suggest that the Corporation should, routinely, defer making payment until the period for lodging a notice of dispute has expired. In many cases that would seem to be unnecessary and inappropriate.

Conclusions

For those reasons, in my opinion, in the present case the judge was correct. When the proceedings were instituted a notice of dispute had been lodged. The effect of that was to defer, until the dispute had been resolved, the time at which payment under the determination could be enforced by action. When the summons was issued, the worker did not have a cause of action against the Corporation.

I would add that, in my respectful opinion, this aspect of the Act requires reconsideration. I consider that there is much to be said for a legislative provision dealing specifically with the time within which payment of the various types of compensation must be made. Leaving this to the Court, to be decided as a matter of implication, seems undesirable.

MILLHOUSE J

I agree.

NYLAND J

I agree with the conclusions reached by the Chief Justice and therefore consider the appeal should be dismissed. The lack of certainty as to the date on which payments of compensation should be made is, however, undesirable. I support the suggestion made by the Chief Justice that this aspect of the Act be reconsidered.