G L and v N Barber Pty Ltd v Ryan, Peter Vernie; Ryan, Peter Vernie v G L and v N Barber Pty Ltd

[1998] TASSC 87

87/1998

PARTIES:  G L & V N BARBER PTY LTD
  v
  RYAN, Peter Vernie

and
RYAN, Peter Vernie
v
G L & V N BARBER PTY LTD

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  APPELLATE
FILE NO/S:  LCA 5/1998

LCA 123/1997

DELIVERED:  21 July 1998
HEARING DATE/S:  18 June 1998
JUDGMENT OF:  Evans J

CATCHWORDS:

Workers Compensation - Assessment and amount of compensation - Adjustment of benefit and review of weekly payments - Suspension of payment for non-delivery of a certificate pursuant to Workers Compensation Act, s69(1), not a termination under s86(1) - Tribunal can only terminate or reduce a worker’s payment on an application under s88.

Viney v Roney Management Pty Ltd (1996) 6 Tas R 240; Gulf Industries Pty Ltd and MMI Insurances Ltd v Barnett (1996) 6 Tas R 142, applied.
Workers Compensation Act 1988 (Tas), ss69(1), 86(1)(a), 88(2).
Aust Dig Workers Compensation [227]

REPRESENTATION:

Counsel:
             G L & V N Barber Pty Ltd:  P L Jackson
             Peter Vernie Ryan:  B R McTaggart
Solicitors:
             G L & V N Barber Pty Ltd:  Griffits and Jackson
             Peter Vernie Ryan:  Jennings Elliott

Judgment category classification:
Court Computer Code:  
Judgment ID Number:  87/1998
Number of pages:  8

Serial No 87/1998

File Nos LCA 5/1998
LCA 123/1997

G L & V N BARBER PTY LTD v PETER VERNIE RYAN
and
PETER VERNIE RYAN v G L & V N BARBER PTY LTD

REASONS FOR JUDGMENT  EVANS J

21 July 1998

G L & V N Barber Pty Ltd ("the employer") and Peter Vernie Ryan ("the worker") have each appealed against a determination made by the Workers Rehabilitation and Compensation Tribunal on 15 December 1997, and orders giving effect to the determination.

The worker was injured in the course of his employment with the employer on 13 February 1995.  He made a claim for workers compensation which was accepted and weekly payments commenced.

On 11 November 1995, the employer, relying on a medical practitioner's certificate, purported to terminate the payment of weekly payments pursuant to the Workers Rehabilitation and Compensation Act 1988 ("the Act"), s86(1)(c). The worker referred the termination to the Tribunal. On 17 July 1996, the Tribunal found that the certificate upon which the employer relied did not satisfy the requirements of s86(1)(c) and ordered that the employer reinstate the payment of weekly payments to the worker in accordance with the Act from the date of the purported termination.

When the order was made, the employer only had a certificate of the worker's incapacity for work until 16 November 1995, so weekly payments were paid to that date.

On 24 July 1996, the worker obtained a certificate that he was totally incapacitated for work from 16 November 1995 until 24 August 1996. The certificate was provided to the employer on 30 July 1996. The employer made no payments on the basis of the certificate. On 7 August 1996, the worker issued a reference to the Tribunal under s42 of the Act, seeking an order that the employer pay him weekly payments of $770.27 gross from 16 November 1995.

The Tribunal's first hearing of the reference was on 12 February 1997.  The employer's counsel submitted that the worker's entitlement to compensation had been terminated by the suspension of his right to receive weekly payments during the period when no certificate of his incapacity had been provided and, accordingly, the onus was on the worker to re-establish his entitlement.  The learned Commissioner, after referring to authorities to which I will return, rejected this submission and foreshadowed ordering the payment of weekly payments, subject to hearing the parties on the calculation of the amount of the payments.

During subsequent hearings of the reference, the Tribunal received into evidence certificates of the worker's partial incapacity for work from 24 August 1996 until 10 November 1997.  The worker also gave evidence that:

(a)between 21 October 1996 and 16 May 1997, he had conducted his own wood supply business and earned an income, before tax, of $13,070; and,

(b)since May 1997, as a consequence of injuries suffered in a motor vehicle accident, he had received $448.50 a week disability payment from the Motor Accidents Insurance Board.  The amount of this payment had been reduced in October 1997 due to a calculation error.

The employer's counsel submitted to the Tribunal that in calculating the weekly payments to be made to the worker during the period of his partial incapacity, the Tribunal should:

(a)       take into account the worker's earnings from supplying wood;
(b)       take into account the disability payments the worker received from the MAIB; and,

(c)make an assessment of the amount the worker would have been able to earn in suitable employment or business based on his wood supply earnings, and take that amount into account.

The employer's counsel relied upon s69(1)(b) of the Act which follows:

"69¾(1)      Subject to this section, where total or partial incapacity for work results from an injury suffered by a worker and where the existence of such total or partial incapacity is supported by a certificate in a form approved by the Board signed by an accredited medical practitioner or accredited person, the compensation payable to him under this Act is, in addition to any lump sum that may be payable under section 71 or 72 in respect of that injury ¾

…

(b)     in the case of the partial incapacity of the worker for work, weekly rate payments for the period of that incapacity equal to the difference between the worker's normal weekly earnings and the amount that the worker is earning or would be able to earn in suitable employment or business during that period of incapacity."

The learned Commissioner accepted that the wood supply earnings should be taken into account. He refused to take into account the disability payments as he considered they were not weekly earnings for the purposes of s69(1)(b). He declined to make the requested assessment of what the worker would have been able to earn as he considered he had no power to do so. He calculated the worker's entitlement to weekly payments in the light of the above, and made an order for payment. Both parties have appealed.

Before me, the primary submission pressed on behalf of the employer was that the Tribunal erred in failing to find that the worker's entitlement to weekly compensation had been terminated by the suspension of his right to receive weekly payments during the period that no certificate was provided.  Had that finding been made, it would have been open to the Tribunal to review all aspects of the worker's claim, and the Tribunal would not have been confined to a consideration of the calculation of the amount due to the worker.  This outcome involves the following propositions:

1. that for the period from 16 November 1995 to 30 July 1996, the employer was not obliged to pay the worker weekly payments as the employer had not been provided with a certificate of the worker's incapacity as required by s69(1).

1. that the above cessation in the employer's obligation to pay weekly payments amounted to a termination of the worker's entitlement to compensation pursuant to the Act.

1. that following the termination of the worker's entitlement to compensation, upon him reviving his claim by the delivery of a certificate of his disability, the onus was on the worker to re-establish his entitlement to compensation.

No certificate, no right to payment

The first proposition accords with s69(1) of the Act and there is ample authority for it. The effect of a worker's failure to provide an appropriate certificate of incapacity was considered by Wright J in Pasminco Australia Ltd trading as Pasminco Metals - EZ v Simmons A50/1993.  The following passages from his decision at 8 are apposite:

"These considerations, whilst not conclusive in themselves, tend to support the view advanced by Mr Wilkins that the scheme of the present Act envisages that a worker receiving weekly payments in respect of a total or partial incapacity must be able to produce to his employer a medical certificate attesting thereto before any ongoing right to payment arises under the Act and that a termination of weekly payments on the basis of the absence of any such certificate does not constitute a subversion or avoidance of the provisions of s86.

… Nonetheless I have concluded that Mr Wilkins' argument is correct and unless a worker is willing and able to supply his employer with medical certificates covering the period in respect of which he claims weekly compensation, the employer is entitled to decline to make such payments in reliance upon the provisions of the Act, s69(1). The employer is not obliged to follow the course provided for in s86, or more specifically, s86(1)(c), before he can cease making weekly payments in such circumstances."

Zeeman J dealt with the same issue in Viney v Roney Management Pty Ltd (1996) 6 Tas R 240, at 245, as follows:

"Once a weekly payment has commenced it may not be terminated or diminished unless authorised by s86. Nevertheless, until a worker fails to present [clearly this should read 'until a worker presents'] a medical certificate in respect of a particular period the employer is not obliged to pay any weekly payment in respect of that period. The withholding of a payment in such circumstances does not amount to a termination of the weekly payment.  All that occurs is that the obligation to make the actual payment is left in abeyance until such time as the relevant medical certificate is presented."

In Muir v Dance 11/1997, at 3, Underwood J referred to the production of a medical certificate supporting the existence of the incapacity for the specified period as being:

"… in the nature of a condition precedent to entitlement to receipt of payments for that period."  (At 5.)

Following termination the onus of proof reverts to the worker

There is also ample authority for the third proposition. Once a worker's entitlement to compensation has been terminated in accordance with the provisions of the Act, the onus reverts to the worker to establish an entitlement to the resumption of weekly payments. The State of Tasmania (Tasmanian Ambulance Service) v Corba A126/1997, Slicer J at 5; Brambles Holdings Ltd t/as Brambles Shipping v Pincott A30/1994, Underwood J at 5.

Does a suspension of the obligation to pay amount to a termination?

The second proposition is central to the employer’s submission. In the absence of a certificate of the worker’s disability, the employer’s obligation to pay weekly payments is suspended. This proposition involves giving that suspension the force of a termination of the worker’s entitlement to receive weekly payments in accordance with the Act.

No authority was cited which supports this proposition.  Counsel for the employer argued that a suspension should be given the force of a termination to avoid injustice to an employer.  The asserted injustice arises when (as happened in this case) a worker provides his or her employer with a retrospective medical certificate following a period during which the worker's entitlement to payments has been suspended because of the lack of a current certificate.  The certificate is valid and effective and the worker can claim payments from the past date specified in the certificate (Muir v Dance (supra)).  If the suspension is given the force of a termination, the onus is on the worker to re-establish his or her entitlement to compensation and the employer can challenge that entitlement throughout the whole of the period covered by the certificate.  If the suspension is not given the force of a termination, the only means the employer has of challenging the worker's entitlement is to apply to the Tribunal.  This is said to be unfair because, on the hearing of the employer's application, the Tribunal may only make orders dealing with the worker's entitlement to receive payments after the date of the application.  It is asserted that no order may be made terminating or reducing the worker's entitlement to payments during the retrospective period of the certificate.

I was not referred to any authority for this restriction on the Tribunal's order making power. Arguably, such a restriction is a corollary of the axiom that a worker is entitled to receive weekly payments until they are lawfully terminated, pursuant to s86. I am uncertain about this, as s86 expressly recognises a determination of the Tribunal as a lawful basis for terminating or reducing payments.

The restriction is consistent with the constraints on the Tribunal when dealing with a worker's reference challenging an employer's unlawful termination of weekly payments.  In that situation, save for making the necessary mathematical calculations to give effect to its determination, the Tribunal is confined to ordering the payment of the unlawfully terminated payments.  It is not open to the Tribunal to conduct an inquiry into the worker's entitlement to payments since the date of the unlawful termination with a view to ordering the reduction or termination of the payments.  To do this would allow the employer to obtain an advantage from the unlawful termination, Viney v Roney Management Pty Ltd (supra) at 2. This reason for confining the Tribunal's power when dealing with a worker's reference of an unlawful termination has no application when the Tribunal is considering an employer's challenge to a worker's entitlement to receive weekly payments pursuant to a retrospective certificate of disability following the lawful suspension of the payments.

No provision in the Act restricts the Tribunal's order making power as contended. Section 61 does not impose any temporal limit on the period to be covered by orders. Clearly, when the Tribunal deals with an application as to an employer's failure to make weekly payments, the Tribunal has jurisdiction to make an order with effect from the date when the payments should have begun. That date will frequently be well prior to the date of the worker's application to the Tribunal.

I refrain from expressing a concluded view on whether the Tribunal can make orders terminating or reducing a worker's entitlement to receive weekly payments with effect from a date prior to the application to the Tribunal.  The point was not argued fully before me.  The point is not in issue between the parties in this case as the employer, upon receiving the worker's retrospective certificate of disability, did not apply to the Tribunal challenging the worker's entitlement.  Accordingly, for the purposes of dealing with the second proposition, I accept, without reaching a final view on the point, that the Tribunal may not make orders terminating or reducing a worker's entitlement to weekly payments during any period prior to the date of the application to the Tribunal.  On this basis, an employer could be significantly disadvantaged by a worker's delivery of a retrospective medical certificate of disability.

Whilst this disadvantage to employers would be overcome if a suspension was given the force of a termination, this could be most unfair to workers. Whenever a certificate was delivered subsequent to the expiration of the immediately prior certificate, the employer could refuse to pay weekly payments until the worker had re-established his or her entitlement under the Act. Workers are dependent upon medical practitioners for certificates of disability. The exigencies of medical practitioners' lives make it inevitable that, on occasions, there will be delays in the provision of certificates. Reimposing the obligation of establishing liability on a worker whenever there was a lapse in the provision of medical certificates would be a great hardship. If this was intended, it is to be expected that there would be a clear provision in the Act to this effect. There is not.

Section 86(1) of the Act details the circumstances in which employers may terminate the payment of weekly payments:

"86¾(1) Except in pursuance of a determination made by the Tribunal under section 88(2), an employer may, subject to this section, terminate or reduce a weekly payment made to a worker only where -

(a)       the payment is in respect of total incapacity and the worker has

returned to work;

(b)       the worker is in receipt of the weekly payment in respect of partial

incapacity and is receiving weekly earnings in excess of the amount upon which the amount of such weekly payment was determined;

(c)       an accredited medical practitioner who has examined the worker has

certified that, in his opinion, the worker has wholly recovered or substantially recovered, from the effects of the injury in respect of which the payment is being made or that the worker's incapacity is no longer due, wholly or substantially, to that injury;

(d)       a worker has failed or refused to undertake or participate in a

rehabilitation program or suitable alternative duties recommended by his employer; or

(e)       weekly payments made to the worker during a period of total

incapacity have reached the amount referred to in section 69(6)."

The section expressly confines the circumstances in which a worker's weekly payments can be terminated to those detailed in the section or a determination of the Tribunal. The circumstances do not include the non-delivery of an appropriate certificate of the worker's disability pursuant to the s69(1) of the Act. That this omission may expose an employer who receives a retrospective certificate of disability to injustice does not justify disregarding the clear effect of s86.

Whilst the suspension of a worker's right to receive weekly payments until an appropriate certificate is provided may, in broad terms, be described as a termination (an example is the passage from the decision of Wright J in Pasminco v Simmons (supra)), it does not equate with a termination of the worker's entitlement to receive weekly payments pursuant to the Act. As observed by Zeeman J in Viney v Roney (supra), the withholding of a payment pending the presentation of an appropriate medical certificate, "does not amount to a termination of the weekly payments. All that occurs is that the obligation to make the actual payment is left in abeyance until such time as the relevant medical certificate is presented." I reject the submission that the suspension of the worker's entitlement to receive weekly payments amounted to a termination of that entitlement in accordance with the provisions of the Act.

The consequences of the employer's refusal to resume the payment of weekly payments

In dealing with the consequences of the employer's refusal to pay the worker weekly payments following receipt of the retrospective certificate, the Tribunal relied upon the decisions of Zeeman J in Viney v Roney Management Pty Ltd (supra) and Gulf Industries Pty Ltd and MMI Insurances Ltd v Barnett (1996) 6 Tas R 142.

In Viney v Roney, the appellant worker had claimed and received weekly payments. The initial certificates certified that she was totally incapacitated for work. Subsequent certificates certified her to be partially incapacitated. Her employer paid her weekly payments of $359.15, regardless of whether the certificates certified a total or partial incapacity. The employer purported to suspend her entitlement to compensation in reliance on s85(6), claiming that she had refused to submit herself to an examination by a medical practitioner. The worker referred the suspension to the Tribunal pursuant to s42. The Tribunal found the suspension was unlawful and proceeded to consider whether the weekly payments should be at a rate other than that which had been made immediately before the suspension took effect. The Tribunal concluded that the appropriate rate was $181.27 and ordered that as from the date of the suspension, payments should be made at that rate. Zeeman J found that the Tribunal should have confined itself to holding that the suspension was unlawful and making any necessary consequential order. He said at 243 - 246:

"The Tribunal correctly determined that the suspension was unlawful.  That determination completely dealt with the matter or question referred, except that, for the purposes of making an order to give effect to its determination, it might have been required to quantify the arrears of compensation.  That quantification authorised the Tribunal to do no more than to ascertain what was being paid prior to the suspension and to make the necessary mathematical calculations based on that rate.  This conclusion accords with the principles which have led appellate courts in other jurisdictions to hold that, where an employer suspends a weekly payment by reason of a refusal of a worker to undergo a medical examination, the worker, on undergoing the required examination, is entitled to be paid the weekly payments which accrued during the period of the suspension (Metropolitan Water Sewerage and Drainage Board v Plekan (1959) SR (NSW) 91; Anastasopoulos v Nilsen Porcelain (Aust) Pty Ltd [1967] VR 827). Any other conclusion would have the potential to lead to injustice. It would enable an employer to quite unlawfully terminate or suspend a weekly payment and then expose a worker who referred such termination or suspension to the Tribunal to the risk of a termination or reduction of a weekly payment without the employer having taken the steps which the Act prescribes as the prerequisites to a termination or suspension.

…

The learned Commissioner considered that Pasminco Australia Ltd v Simmons A50/1993 was authority for the proposition that the respondent was entitled to reduce the payment without regard to the provisions of the Act, ss81(a)(5), 86 or 88 because the appellant had submitted certificates which certified to partial incapacity. With respect to the learned Commissioner that case is not authority for that proposition.

…

I do not consider that anything said in Pasminco Australia Ltd v Simmons (supra) provides authority for the proposition that where a worker who has been wholly incapacitated provides further certificates certifying to partial incapacity the employer is unilaterally entitled to reduce the weekly payment. Where a worker in receipt of a weekly payment in respect of an incapacity certified as being total incapacity subsequently submits a certificate of partial incapacity that worker is entitled to continue to receive a weekly payment at the same rate until such time as it is reduced in accordance with s86 (if that section is available) or the Tribunal makes an order to that effect pursuant to s88. On the hearing of a reference under s88 in such circumstances, the Tribunal is to have regard to the relevant provisions of s69. An application of those provisions may require a reduction of the weekly payment but that is not necessarily the case where a worker has regained some capacity for work but retains some incapacity."

In Gulf Industries Pty Ltd v Barnett (supra), Zeeman J dealt with an employer who had unsuccessfully sought to terminate its worker's entitlement to weekly payments by way of a s86(1)(c) notice. As to the consequences of the unlawful termination, Zeeman J said at 155:

"If an employer wishes to have a weekly payment reduced on the basis that total incapacity has ceased and there remains partial incapacity for work, then the employer should apply under s88. If an employer asserts that there no longer is any incapacity, it need not utilise s86 but may apply under s88, in which event the Tribunal would need to determine whether there is any incapacity and, if there is, whether it is total or partial incapacity. If an employer takes advantage of s86(1)(c), then it must accept that the consequence of a failure to satisfy the Tribunal that termination is justified will be that it is required to continue to make a weekly payment on the basis of total incapacity even though only partial incapacity remains."

Before me, the employer's counsel argued that these decisions did not apply in this case as they related to claims precipitated by an unlawful suspension or termination of weekly payments by an employer.  It was argued that in this case there had been no unlawful suspension or termination.

It is quite correct that the employer's suspension of payments during the period there was no certificate was lawful. The employer's refusal to make any payments following receipt of the retrospective certificate cannot be similarly categorised. Upon receiving that certificate, the employer was obliged to renew the payment of weekly payments. Its refusal to do so was an unlawful contravention of its obligation under the Act. In these circumstances, the Tribunal was bound to deal with the worker's application in accordance with the law as enunciated by Zeeman J.

The worker's reference was before the Tribunal on five different occasions between 25 June 1996 and 14 November 1997. Initially, the hearing related to the retrospective certificate of the worker's total incapacity to work until 24 August 1996. During the course of the hearing, certificates were provided to the effect that the worker was partially incapacitated for work from 24 August 1996 to 10 November 1997. The employer was not prompted to apply to the Tribunal under s88(2) to terminate or reduce the worker's entitlement:

(a)       by the receipt of the retrospective certificate of the worker's incapacity;
(b)       by the receipt of certificates of the worker's partial incapacity; or
(c)       upon ascertaining that the worker was conducting a wood supply business.

The employer appears to have failed to recognise the primacy which the courts have consistently given to s86 when construing the Act. Section 86 expressly provides that a worker's weekly payments can only be terminated or reduced pursuant to a determination of the Tribunal under s88(2), or as provided for in the section. It was not open to the Tribunal to consider s69(1)(b) for the purposes of reducing the worker's weekly payments until it had before it an application pursuant to s88. If the employer wanted to rely on the worker's performance of work in a wood supply business to obtain a reduction or termination of the weekly payments, the only course open to the employer was to apply to the Tribunal. Self-employment is not a "return to work" for the purposes of s86(1)(a). The meaning of that expression is dealt with in Atkinson v Nipper Cleaning Services Pty Ltd (Zeeman J) (1992) 1 Tas R 276, (Full Court) A105/1993. In the Full Court, Cox CJ said the following in relation to a challenge to a worker's entitlement to weekly payments on the basis of the worker's performance of paid work which could not be categorised as a "return to work":

"… where it is alleged that a worker is disentitled to weekly payment because his lack of incapacity is demonstrated by the undertaking of paid work, the appropriate means of obtaining a release from payment is a review under s88, save in circumstances which clearly merit the description of a return to work."

The employer may have been reluctant to apply to the Tribunal to review the worker's entitlements under s88, as, before doing so, it was necessary to resume paying weekly payments. Atkinson v Nipper Cleaning Services Pty Ltd, Zeeman J at 289 (supra) and Gulf Industries Pty Ltd v Barnett (supra) at 154. Whatever the reason, in the absence of an application from the employer under s88, all the Tribunal could do, consistent with Viney v Roney, was order the payment of the weekly payments.  To the extent that it was necessary to quantify the arrears, the Tribunal could do no more than establish the rate of the weekly payments by ascertaining what was being paid when the payments had ceased and calculating the arrears based on that rate.  Accordingly, in my view, the Tribunal correctly declined to make an assessment of what the worker would have been able to earn during the period of his partial incapacity in suitable employment or business.  For the same reason, the Tribunal should have declined to take evidence of the worker's earnings from supplying wood and refused to take them into account.

It follows that the employer's appeal should be dismissed and the worker's appeal allowed.

I make the following orders:

1. That the order made by the Workers Rehabilitation and Compensation Tribunal on 15 December 1997, be quashed.

1. That in lieu of that order it is ordered that the employer pay the worker weekly payments for the period from 16 November 1995 to 10 November 1997 at the rate of $770.27 per week.

I will hear counsel as to any consequential orders.