FAI General Insurance Company Limited v De Saye

[1992] TASSC 76

Serial No 23/1992
List “A”

CITATION:              FAI General Insurance Company Limited v De Saye [1992] TASSC 76; A23/1992

PARTIES:  FAI GENERAL INSURANCE COMPANY LIMITED
  ST JOHNS HOSPITAL
  v
  DE SAYE, TERESA MARIE

TITLE OF COURT:  SUPREME COURT OF TASMANIA

FILE NO/S:  LCA 7/1992
DELIVERED ON:  7 May 1992  
JUDGMENT OF:  Underwood J 
CATCHWORDS:

Workers Compensation – Workers Compensation Act, s.81(2) – Who may refer a matter to the Commissioner – Section 81(3) – Meaning of “genuine dispute”.

Judgment Number:  A23/1992
Number of paragraphs:      22

Serial No 23/1992

List “A”

File No. LCA 7/1992

FAI GENERAL INSURANCE COMPANY LIMITED and ST JOHNS HOSPITAL v TERESA MARIE DE SAYE

REASONS FOR JUDGMENT  UNDERWOOD J.

7 May 1992

1. This is an appeal from orders made pursuant to the Workers Compensation Act 1988, s.61. by a part time commissioner.

1. The respondent was an employee of St. Johns Hospital. Its licensed insurer was F.A.I. General Insurance Co. Ltd. They are respectively the second and first named appellants.

2. On 15 January 1992 the respondent completed a document entitled “Worker‘s Report”. I was told by counsel that it was a claim for compensation within the meaning of the Act, s.32(1), para.(b) of which provides that the making of a claim for compensation within the period prescribed is a condition precedent to entitlement to compensation. Section 34(1)(a) enacts that a claim for compensation shall be in the prescribed form. The Workers Compensation Regulations 15788 reg.4 and form 1 set out the prescribed form which, not surprisingly, is entitled “WORKER’S CLAIM FOR COMPENSATION”. The form relied on in the present matter does not assert that it is a claim for compensation (apart from a passing reference in the authority to provide medical information) and bears only “a general resemblance to the form prescribed ...” per Zeeman J., Precise Timbers Pty. Ltd. & F.A.I. General Insurance Co. Ltd. v. Burgess, Full Court, 701991 at p.1 of his Honour‘s reasons. There are differences between the prescribed form and the form completed in this case that could be significant. For example, the prescribed form enquires, “... when and where the injury/disease was suffered” and asks “Is the condition to which the claim relates solely and totally due to the injury/disease? ... Yes/No”. The form completed by the respondent asks “Date and time the injury or condition was first noticed or identified” and “Is your condition solely due to this occurrence?” The Act imposes liability to pay compensation when an injury or disease is suffered in circumstances prescribed by s.25(1). Incapacity for work which results from such injury or disease imposes liability to make weekly payments after compliance with the specified procedural and evidentiary requirements. In addition, suffering one or more of the compensable injuries specified in s.71(1) imposes liability to pay the appropriate amount as provided by s.71. Liability to pay compensation imposes liability to pay funeral, medical and other expenses. On receipt of a claim for compensation an employer is required to consider whether there is a liability to pay compensation. Such consideration will not be greatly assisted by information about when either the injury or condition (whatever that means) was first noticed or identified by some unspecified person, nor whether a condition was solely due to some unidentified occurrence. If the prescribed form is lacking in any respect it should be changed. If it is satisfactory it should be used. However, in the present case the form completed by the respondent was treated by the learned commissioner as a valid claim for compensation. See s.34(3). No complaint is made about him doing so. It was accompanied by a medical certificate which is almost in accordance with the prescribed form.

3. The prescribed form for a claim for compensation is divided into two parts. Part B is headed “Employer’s Report on Claim for Compensation”. That part of the claim form in the present matter is headed “Employer‘s Report”. It bears little resemblance to the prescribed form. It purports to have been signed on 17 January 1992 by a person identified as “Admin. Manager”.

4. The claim for compensation was sent by the employer to its insurer. Within the period prescribed by s.81(2), the insurer filed the following document in the workers compensation division of the Court of Requests.

   Workers Compensation

   Form 3  Regulation 6

   Tasmania

   Workers Compensation Act 1988

   No. .............

   APPLICATION TO COMMISSIONER

   To The Registrar,
   Court of Requests,
   Workers Compensation Division.

   ^*Hobart................

   I, F.A.I. INSURANCE FOR & ON BEHALF OF ST. JOHNS HOSPITAL

   of 125 COLLINS STREET HOBART...................................................

   hereby apply to the Workers Compensation Commissioner to hear and determine the following:– ⁺  THERE IS INSUFFICIENT EVIDENCE TO SUBSTANTIATE THAT THE INJURY IS WORK RELATED. APPARENTLY THE WORKER HAS A CHRONIC BACK PROBLEM UNRELATED TO WORK. WE ARE OBTAINING MEDICAL REPORTS.

   This application is made pursuant to section ..81.. of the Workers Compensation Act 1988.

   Date ..20..1....’92  Emma Lee Arnold

   Signature of Applicant

   The Workers Compensation Act imposes heavy penalties for giving false or misleading information.

   Note – A copy of the claim for compensation should be attached along with any other documentary evidence which you consider relevant to this application.

   ^* Insert name of city at which application will be filed – Hobart, Launceston, Devonport or Burnie.

   ⁺ Applicant should insert here details of the matter he or she wishes to be determined by the Workers Compensation Commissioner.”

   6. The intention was to refer “the matter” pursuant to s.81(2)(b). No form has yet been prescribed for the purposes of that paragraph so Form 3, prescribed by reg.6 to be the form for making an application pursuant to s.42(1), was used. It was inappropriate to use this form for a proceeding pursuant to s.81(2)(b) which empowers a referral, not an application. Section 81(2) gives an employer the right to refer a claim for compensation to the Commissioner who is then obliged, not to determine any application, but to act as directed by subs.(3).
   7. By letter dated 21 January 1992, the insurer wrote to the employee in the following terms [formal parts omitted]:

   “We acknowledge receipt of your claim form for workers compensation. We wish to advise that the claim is disputed under section 81 of the Workers Compensation Act 1988 as there is insufficient evidence to substantiate that the injury is solely work related.

   We have notified your employer and the Workers Compensation Commissioner that a dispute exists.”

   On 23 January 1992, the Registrar issued a notice in the following terms:

   “TASMANIA

   WORKERS COMPENSATION ACT 1988

   Inquiries: Mr. McCulloch              Phone: 33 4694

   In the Court of Requests
   (Workers Compensation Division)

   Application No 4292

   NOTICE TO PERSON HAVING INTEREST IN SETTLEMENT

   (S.42(5))

   RE: ST JOHNS HOSPITAL –V– TERESA MARIE deSAYE
     F.A.I. INSURANCE

   I advise pursuant to Section 42(5) of the Workers Compensation Act 1988, the Commissioner has determined you to be a person who appears to have an interest in the settlement of the claim for compensation to which the abovementioned application relates. Enclosed is a copy of the application for your information.

   ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––

   NOTICE TO ATTEND HEARING

   (S.45(1))

   TAKE NOTICE THAT this application has been set down for hearing before the Commissioner at the WORKERS COMPENSATION HEARING ROOM, 2ND FLOOR, 99 BATHURST STREET, HOBART ON FRIDAY THE 14TH DAY OF FEBRUARY 1992 AT 10.30 A.M. YOUR ATTENDANCE IS REQUIRED AT THIS HEARING to present your case.

   P. Kent

   for REGISTRAR

   23021992

   Your attention is drawn to Section 60(6) of the Act which provides that if you neglect or fail to attend, without reasonable excuse, you may be liable to a penalty not exceeding $2,000 andor 6 months imprisonment.”

   8. The following can be said about this notice:

   1.    On the face of it, it fails to identify the person to whom it is directed.

   2.    It has no legal effect. Section 42(5) confines the Registrar‘s power to issue such a notice to cases in which a claim for compensation has been referred to the learned commissioner pursuant to s.42(1).

   9. There was a hearing before the learned commissioner on 14 February 1992. The transcript bears the heading:

   “APPEARANCES:    Mr. Docking for the Claimant

   Miss Drew for F.A.I.”

   10. In the course of argument, Miss Drew submitted to the learned commissioner that, from the application form and certificate, there was insufficient evidence to show that the worker’s claimed incapacity for work was causally related to her employment and that it appeared she may have suffered a previous injury to her back. There was reason to make this submission. The questions and answers on the claim for compensation, included the following:

   “9. Date and Time the                   251291
   Injury was First Noticed or           14192
   Identified  2100 pm

   10.Type of injury or disease, and  Left leg, neck, back part of body affected.

   11. Is your condition solely due to Yes
     this occurrence.

   12.Are there other causes of your  ? [sic] condition

   13. Name of treating doctor.         Dr. J. Mills, Dr. J.
     Banks, Dr. A. Hunn,
     Dr. D. Weidmann”

   11. The accompanying medical certificate stated (inter alia):

   “The worker named above stated the condition to be caused by excessive lifting of patients at work, exacerbated by emotional stress of work place ... I do consider that is an aggravation or a recurrence of a previous condition.”

   12. At the hearing before the learned commissioner, medical certificates were produced by Mr. Docking. One of them, had not been seen by Miss Drew. She was given an opportunity to read it. It contained the following sentence:

   “I have treated Miss De Saye for neck and headaches over the past year and this would have no relevance or connection with the present sacral lower back pain and left sciatica.”

   13. The author of that sentence was not one of the medical practitioners identified in the claim for Compensation as one of the treating doctors. A certificate from Dr. Weidmann stated that Miss De Saye:

   “... is currently unable to work by reason of depressive illness from 10 Feb. 92 until 10 March 92 inclusive. She also has sciatica treated by [indecipherable] specialist.”

   Mr. Hunn wrote that he was:

   “... unable to see that there is any connection between this injury [a lifting accident at work on 14 January 1992] and her previous upper cervical and headache symptoms.”

   14. Miss Drew argued that before “we accept the claim” time was required to investigate the existence of the pre–existing condition and its relation to the claimed incapacity for work. Miss Drew told the learned commissioner “they” were getting medical reports.
   15. At the conclusion of the hearing the learned commissioner said that he would dismiss the application. His written reasons concluded, “I therefore formally order that the application be dismissed”. Such a formal order was, of course, inappropriate for the matter he had to determine was whether the provisions of s.81(1) should apply and if they should apply, with what modification. The written order of the court transmitted to this Court is undated and unsigned. The body of it provides:

   “After hearing the parties on 14 February 1992 I order:

   1.  That subsection (1) of section 81 should apply in the circumstances of this case. That is the respondent be paid weekly payments of workers compensation in respect of incapacity to work from the date of the making of the claim.

   2.  The application is dismissed.”

   16. In his written reasons for making the order, the learned commissioner said:

   “The insurer for the employer submitted to me that they had instructions which would cast some doubt upon whether or not the worker had suffered an injury that was work related. The application was based upon their assertion that they were obtaining medical reports in regard to what was perceived to be a chronic pre–existing back problem unrelated to a work injury.

   I permitted counsel to appear for the employee. He submitted to me that the provisions of section 81(3)(b) could not be satisfied in this case as there was insufficient evidence to show that a genuine dispute existed. I had given to me a copy of a report prepared by Dr. Mather dated 12 February 1992 indicating an absence of any pre–existing back condition. It indicates that a thoracic laminectomy was performed on the employee in 1976. It indicates that Mr. Binns, an orthopaedic surgeon, has seen the worker in relation to the alleged injury. Copies of the worker‘s report and of the employer’s report, of the medical certificates and of the accident report were annexed to the application. Counsel for the worker suggested that nothing in those documents could generate a degree of satisfaction within a commissioner that there was a dispute that was genuine in relation to the alleged injury.

   ... In my view there is at least a suspicion existing in the minds of the insurer and the employer that the injury which is said to have occurred was an injury that may be attributable to a pre–existing back condition. There is however, no evidence to that effect. Even if there were, I take the view that there is insufficient evidence before me to show that a genuine dispute exists as the worker‘s report and the employer’s report indicate that the employee reported that matter [sic] promptly following an incident at work.”

   17. On this appeal it was submitted on behalf of the appellants that the learned commissioner misdirected himself with respect to the meaning of the words ”genuine dispute“ in s.82(3)(b). That paragraph required the learned commissioner to consider whether a genuine dispute existed concerning the liability to pay compensation by way of weekly payments and if he did consider that such a dispute existed, he was obliged to determine that s.81(1) does not apply, i.e. the obligation to commence making weekly payments within the time prescribed after receipt of a claim for compensation.
   18. It is clear that the learned commissioner misdirected himself with respect to the meaning of the words, “a genuine dispute” in s.82(3)(b). As I said in Precise Timbers Pty. Ltd. v. F.A.I. General Insurance Co. Ltd. & Burgess, Full Court 701991, s.53 of the Workers Compensation Act 1971 (S.A.), appears to have been the provenance of s.81 of the Tasmanian Act. The South Australian section was considered in State of South Australia v. Wall (1980) 24 S.A.S.R. 189. At that time, s.53 provided, in substance that:

   1.    Weekly payments are to be commenced not later than a specified time after receipt of a claim.

   2.    An employer “who disputes his liability to pay compensation” may, within a specified period, make application to the court for an order that weekly payments not commence as provided by subs.(1).

   3.    The court may dismiss such application or, “if it considers there is a genuine dispute concerning the liability of the employer” to pay compensation, order that weekly payments not commence as provided by subs.(1).

   19. Cox J., with whose judgment the other members of the Full Court agreed, said at p.194:

   “Bearing in mind the policy of subs.(2), there is every good reason, in my opinion, for giving the words ‘genuine dispute’ a plain and uncomplicated meaning, and not reading into them more than the language of the subsection will reasonably bear. Requiring the Court to be satisfied that the dispute is a genuine one is a safeguard against allowing a colourable and insincere denial of liability to frustrate the policy underlying subs.(1). A less legitimate reason, however, for making things more difficult for the employer has been the interpreting of para.(b) of subs.(2) so as to require what has been called an ‘objective’ appraisal of the dispute by the Court with the result than an employer who genuinely disputes his liability might well be told that, notwithstanding his attitude, in the opinion of the Court a genuine dispute about liability does not exist. This kind of thinking has led the Court on occasions to make its own appraisal of the merits of the employer‘s case, whether as to the law or the facts, in order to determine whether they are sufficient to constitute a dispute within the meaning of the paragraph. No doubt a patently feeble legal argument, or an assertion of facts unsupported by evidence, would more readily disincline the Court to consider the dispute to be a genuine one, so far as the employer is concerned. Otherwise I should not expect the merits of the employer’s denial to have any bearing on the question before the Court. A right to make an application under subs.(2) is given to an employer ‘who disputes his liability to pay compensation’ and, apart from the introduction of the requirement of genuineness, I cannot think that there is any conceptual difference between the criterion upon which the employer may make his application under subs.(2), and the criterion by which the Court will in due course determine it under subs.(3). In short, if an employer disputes his liability, it follows that, except in the unlikely event of the worker abandoning his claim, a dispute will necessarily exist. So far as the nature of the dispute itself is concerned, it seems to me to require no more than a challenge or contest to the assertion of liability that the worker has made under subs.(1). Again, it must not be a frivolous dispute, or one made without adequate inquiry and consideration, or it will run the risk of not being considered by the Court to be genuine, but otherwise the section, in my opinion, does not look beyond the employer‘s declared attitude.”

   That passage was challenged in the Full Court of South Australia in Schilter v. Institute of Technology (No. 1) (1982) 31 S.A.S.R. 316. All three justices confirmed that it was a correct exposition of the law. So it is with respect to the words ”genuine dispute“ in the Tasmanian Act, s.81(3)(b). The learned commissioner misdirected himself in law in that he applied an objective test to his determination of whether a genuine dispute existed. He came to the conclusion there was not a genuine dispute on the basis there was insufficient medical evidence to sustain the claim that the alleged incapacity for work might not be causally related to a compensable injury or disease. The appropriate questions under s.81(3)(b) are does the employer in fact disputes liability, has the employer complied with the requirements of s.81(2) and is that dispute a genuine one, in the sense that it is not frivolous and arises after appropriate consideration and enquiry?

   20. However, I have reached the conclusion that the whole proceedings before the learned commissioner were a nullity in that the learned commissioner had no jurisdiction to make any determination pursuant to s.81(3). The learned commissioner commenced his written reasons as follows:

   “The employer in this case has applied pursuant to s.81 of the Workers Compensation Act 1988 (’the Act‘) for a determination that the provisions of that section be applied to suspend the obligation to pay weekly payments of compensation.”

   21. The employer neither made an application nor referred any matter to the commissioner. The application was made by the licensed insurer. Section 81(2) confers on the employer a right to refer “the matter” to the commissioner, provided the employer has notified the worker in writing that liability to pay compensation by way of weekly payments is disputed and informed the worker of the reasons for disputing that liability. In the present matter the employer did nothing. The licensed insurer notified the worker that there was a dispute and the reasons for it and the licensed insurer referred the matter to the commissioner. The licensed insurer had no statutory status to take either of these steps and consequently, the referral or “application” was incompetent. See F.A.I. General Insurance Co. Ltd. v. M.M.I.–C.M.I.Insurance Ltd. & Ors., Zeeman J. No.141992 at p.7. Of course, the licensed insurer could have exercised rights it may have had under a policy of insurance to take over conduct of a matter in the name of and on behalf of the employer but, this it did not purport to do. If the heading to the transcript of proceedings is correct, the employer did not appear at the hearing at all.
   22. Accordingly, there was no jurisdiction to make the order from which this appeal is brought. It is a nullity. The appeal will be allowed and the order of the learned commissioner made on 14 February 1992 will be set aside.