GIO Workers Compensation (NSW) Limited v Bakarich Industries Pty Limited
[2007] NSWWCCPD 82
•20 March 2007
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:GIO Workers Compensation (NSW) Limited v Bakarich Industries Pty Limited & Ors [2007] NSWWCCPD 82
APPELLANT: GIO Workers Compensation (NSW) Limited
FIRST RESPONDENT: Bakarich Industries Pty Limited
SECOND RESPONDENT WorkCover Authority of NSW
THIRD RESPONDENT Vincenzo Russo
INSURER:GIO Workers Compensation (NSW) Limited
FILE NUMBER: WCC8910-04
DATE OF ARBITRATOR’S DECISION: 7 April 2006
DATE OF APPEAL DECISION: 20 March 2007
SUBJECT MATTER OF DECISION: Whether the First Respondent is entitled to be indemnified by the Appellant; the time for filing of appeal; procedural fairness; fresh evidence.
PRESIDENTIAL MEMBER: Acting Deputy President Deborah Moore
HEARING:On the papers
REPRESENTATION: Appellant: Abbott Tout
First Respondent: Self represented
Second Respondent: WorkCover Authority of New South Wales
Third Respondent: Villari & Co
ORDERS MADE ON APPEAL: 1. Time to appeal extended to 13 July 2006
2. The decision of the Arbitrator dated 7
April 2006 is revoked.
3. The matter is remitted to the Arbitrator
at first instance for redetermination of all issues.
4.Costs of the first arbitral proceedings reserved to the arbitration hearing on remitter.
5.Each party pay its own costs of the appeal.
BACKGROUND TO THE APPEAL
On 13 July 2006, GIO Workers Compensation (NSW) Limited (‘the Appellant Insurer’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against the decision by a Commission Arbitrator dated 7 April 2006.
The Respondents to the appeal are as follows:
First Respondent: Bakarich Industries Pty Limited (‘Bakarich’)
Second Respondent: WorkCover Authority of NSW (‘WorkCover’)
Third Respondent: Vincenzo Russo (‘Mr Russo’)
On 7 June 2004 Mr Russo filed an ‘Application to Resolve a Dispute’ in the Commission seeking lump sum compensation together with medical expenses as a result of hearing loss/industrial deafness he claimed to have sustained in the course of employment with Bakarich.
In his application, Mr Russo nominated the date of injury as 28 June 1985 and the date of notice of injury as 9 November 2001.
Due to a dispute as to whether or not Bakarich was insured at the relevant time by the Appellant Insurer, WorkCover was joined to the proceedings. In view of this dispute, at its request, the Appellant Insurer was joined as a separate party to the proceedings.
The parties attended a conciliation/arbitration hearing on 30 January 2006. All parties were represented except Bakarich. Bakarich had forwarded letters to the Commission dated 1 November 2005, 4 December 2005 and 6 January 2006.
On 7 April 2006 a ‘Certificate of Determination’ with an accompanying ‘Statement of Reasons’ was issued. In those proceedings, the parties were identified as follows:
Applicant: Vincenzo Russo
First Respondent: Bakarich Industries Pty Limited
Second Respondent: WorkCover Authority of NSW as administrator of uninsured liability and indemnity scheme.
Third Respondent: GIO Workers Compensation (NSW) Limited
The decision of the Arbitrator was as follows:
“1. That the Third Respondent/GIO is to indemnify the First Respondent/The Employer against its liability to pay workers compensation to the Applicant in respect of his injury of 28 June 1985 relating to industrial deafness.
2. Order as to costs reserved.”
On 13 July 2006 the Appellant filed an ‘Appeal Against Decision of Arbitrator’. One of the grounds of appeal was that the Arbitrator failed to make the contents of Bakarich’s letters to the Commission (identified in paragraph 6 above) available to the parties. Further, the Arbitrator’s reasons did not disclose the contents of the correspondence.
WorkCover filed a ‘Notice of Opposition’ to the appeal on 7 August 2006. The thrust of WorkCover’s submissions was twofold, firstly, that the appeal was out of time (a matter I will consider shortly) and secondly, that the Arbitrator’s decision at first instance was correct in law.
The appeal was allocated to me and after I considered the Appellant’s submissions, I formed a preliminary view that the parties were denied procedural fairness by not being provided with copies of correspondence from Bakarich to the Commission dated 1 November 2005, 4 December 2005 and 6 January 2006.
As a consequence of that view, I issued a direction on 1 December 2006 that the Commission forward copies of the said correspondence from Bakarich to all parties, and directed that the parties file any submissions in light of that correspondence or any other further issues raised by that material by the end of January 2007.
The Appellant Insurer filed submissions on 21 December 2006. Mr Russo advised the Commission that he did not intend filing submissions. No submissions were filed by WorkCover by the due date (31 January 2007). Attempts by the Commission to contact WorkCover were unsuccessful.
On 21 February 2007, I issued a further direction, noting the Appellant Insurer’s appearance in its own right and amending the naming of the parties in these proceedings as set out herein. I directed the Appellant Insurer and WorkCover to serve any submissions on Bakarich. Bakarich was directed to file and serve on all parties any submissions in relation to the appeal by 14 March 2007.
In a letter dated 26 February 2007, Bakarich made a number of submissions, not only relating to the issue of insurance but also challenging the deemed date of injury (28 June 1985) as apparently previously agreed to by some of the parties and determined by the Arbitrator.
The Commission confirmed that the letter from Bakarich to it dated 26 February 2007 was served on all parties.
WorkCover as Second Respondent has failed to comply with my direction dated 21 February 2007, and no further submissions have been filed.
In a second letter to the Commission also dated 26 February 2007, Bakarich added a further submission wherein it is claimed that an additional insurer, Vero Workers Compensation may be relevant to the proceedings. This is the first time this information has been available to the Commission, and it was not available to the Arbitrator.
Before dealing with the issues raised by both the Appellant Insurer and Bakarich in particular in their submissions, it is appropriate that I consider the question of leave to appeal.
LEAVE TO APPEAL
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the Workplace Injury Management & Workers Compensation Act 1998 (‘the 1998 Act’).
The amount at issue on appeal satisfies the threshold requirements of section 352(2)(a) of the 1998 Act. Since no amount of compensation was awarded, section 352(2)(b) does not apply (see Mawson v Fletchers International Exports Pty Limited [2002] NSWWCCPD 5).
Section 352(4) of the 1998 Act provides that an appeal can only be made within 28 days after the making of a decision appealed against. The Arbitrator’s decision was made on the date of the ‘Certificate of Determination’, namely 7 April 2006. (See Rule 16.2(2) of the Workers Compensation Commission Rules 2006 (‘the Rules’)), previously Rule 77(2) of the Workers Compensation Commission Rules 2003 (‘the 2003 Rules’).
The Appellant Insurer wrote to the Commission on 5 May 2006 enclosing its ‘Appeal Against Decision of Arbitrator’. That letter noted that the ‘Certificate of Determination’ was received on 11 April 2006. The Commission stamped the appeal document as having been received on 8 May 2006. The appeal document was signed by the solicitor for the Appellant Insurer on 5 May 2006. The Commission file indicates that the appeal application was also sent by facsimile to the Commission on 6 May 2005.
On 11 May 2006, the Registrar directed that the Appellant Insurer serve on all other parties a sealed copy of the Appeal Application and a copy of the direction by 19 May 2006. The Appellant Insurer was apparently also directed to file with the Commission a ‘Certificate of Service’ by 26 May 2006.
It appears that the Appellant Insurer failed to comply with this direction.
On 16 June 2006, the Registrar wrote to the Appellant stating that if a ‘Certificate of Service’ was not lodged within seven days of that letter, the Appeal Application would be struck out without further notice.
The Appellant Insurer forwarded a copy of the ‘Certificate of Service’ to the Commission under cover of a letter dated 22 June 2006, purportedly in compliance with the Registrar’s direction.
In a file note dated 7 July 2006, the Appeals Management Officer indicated that he had telephoned the Appellant Insurer’s solicitor to request that a ‘Certificate of Service’ be faxed to him. The Appellant’s solicitor replied indicating that the ‘Certificate of Service’ would be faxed but advising that she had noted that WorkCover had not been served “due to an administrative oversight on the part of her secretary”.
On 11 July 2006 the Commission wrote to the Appellant Insurer’s solicitors stating that the ‘Certificate of Service’ dated 22 June 2006 “… does not appear on the Commission’s file.” A further copy had been sent by facsimile by the Appellant Insurer’s solicitors to the Commission on 7 July 2006.
In the letter dated 11 July 2006, the Commission stated that:
“While I note that the Certificate satisfies service of the application … on Bakarich Industries Pty Limited, and the Applicant’s solicitors … on 16 May 2006, there is no evidence provided that service has been affected on WorkCover Authority of NSW, in accordance with the direction issued 11 May 2006.
The order issued 3 July 2006 remains as issued.”
By order dated 3 July 2006, the Registrar ordered that the Appellant Insurer’s appeal application be struck out because “the Appellant has not complied with this letter”. In essence, the Registrar determined that, because the Certificate of Service did not confirm that WorkCover had been served with the documents, the appeal proceedings were “… a nullity and should be struck out pursuant to Rule 6(4) of the (2003) Rules”.
On 5 July 2006 the Appellant Insurer’s solicitors wrote to the Registrar advising that a ‘Certificate of Service’ was forwarded to the Commission on 22 June 2006 and requesting that “… you rescind the order to strike out the appeal …”.
Copies of the ‘Certificate of Service’ and other relevant documents were sent by facsimile by the Appellant Insurer’s solicitor to the Commission under cover of facsimile dated 7 July 2006.
On 13 July 2006 the Appellant Insurer filed a further ‘Appeal Against Decision of Arbitrator’. In its ‘Notice of Opposition’ filed on 7 August 2006, WorkCover submitted that the appeal had been struck out by the Registrar on 3 July 2006, and should not be re-instated.
Subsequent directions from the Commission to the Appellant Insurer’s solicitors in relation to service of the ‘subsequent’ appeal appear to have been complied with.
In the appeal filed on 13 July 2006, the Appellant Insurer’s solicitor makes extensive submissions in relation to seeking an extension of time for filing the appeal. I will deal with these submissions shortly.
Extensions of time in which to bring an appeal in the Commission are governed by sub-rules (11) and (12) of Rule 16.2 of the Rules. Those sub-rules provide as follows:
“(11) The Commission constituted by a Presidential member may, if a party satisfies the Presidential member, in exceptional circumstances, that to lose the right to seek leave to appeal would work demonstrable and substantial injustice, by order extend the time for making an appeal.
(12) A party who seeks an extension of time is referred to in sub-rule (11) must:
(a) As soon as practicable give notice to the other parties of the intention to seek the extension, and
(b) Lodge and serve with the Application for Leave to Appeal an application for the extension of time, including full details of the arguments to be put in favour of granting the extension.”
I note that the 2003 Rules, which had application at the time of filing of both the initial and subsequent appeal, contain provisions (Rule 77) in identical terms to those currently found in sub-rules 16.2 (11) and (12) of the Rules.
In its submissions attached to the subsequent appeal, the Appellant Insurer advised that “due to an administrative oversight on our part, the second Respondent, the WorkCover Authority of NSW, was not served in accordance with the direction dated 11 May 2006.” The Appellant Insurer points out that the appeal was initially filed in time and was in compliance with all other relevant requirements.
The Appellant Insurer submits that:
“… A demonstrable and substantial injustice would be suffered by the insurer should it lose its right to appeal the decision of the [Arbitrator] … Review of the Commission’s file will reveal that this matter has had a rather long and contentious history. By way of brief summary, we note that the Applicant has lodged a claim for industrial deafness and the deemed date of injury, being the last date that the Applicant was employed by the Respondent, was 28 June1985.
GIO Workers Compensation was on risk between 21 March 1983 and 21 March 1985, that is GIO … were [sic] not the insurer as at 28 June 1985. The matter is complicated however by the acceptance by GIO … of a claim lodged by the Applicant relating to a separate injury in June 1985 for which GIO made a payment of $70,069.44. The WorkCover Authority has submitted that our client is estopped from denying that it was the relevant insurer at the time due to that previous payment and in the alternative, it has been alleged the workers compensation policy of insurance does not lapse and that a positive act must be performed by the insurer to bring the policy to an end.
The Arbitrator determined that at the date of injury, there was no policy of insurance in place between GIO and Bakarich Industries Pty Limited but nevertheless found that because the Appellant had made a representation to the contrary, it was estopped from denying the truth of representations to the effect that such a policy of insurance did exist, because Bakarich had acted to its detriment in reliance upon that representation …
The main ground of appeal is that the Arbitrator appears to have relied upon letters from Bakarich dated 1 November 2005, 4 December 2005 and 6 January 2006, copies of which were not supplied to us. The Arbitrator appears to have relied upon the contents of the correspondence in making the determination in favour of Bakarich on the question of indemnity.
We submit that this case has serious and significant repercussions for all insurers. It is a case that is relevant in terms of legal issues and principles and we would submit further, that it is of significant public interest.
For the above reasons, we respectfully request that leave be granted for an extension of time for service of the appeal.”
The question of extension of time for lodging an appeal was recently considered by Acting Deputy President Snell in Department of Corrective Services v Buxton [2007] NSWWCCPD 55 where he said as follows:
“23. Rule 16.2(11), like its predecessor in the 2003 Rules, does not set out the factors to be considered by a Presidential member, in exercising his or her discretion on an application to extend the time for making an appeal. The following passage of the judgment of McHugh J in Gallo v Dawson (1990) 93 ALR 479 (‘Gallo’) has frequently been helpful:
“The discretion to extend time is given for the sole purpose of enabling the court or justice to do justice between the parties: see Hughes v National Trustees Executors & Agency Co of Australasia Ltd [1978] VR 257 at 262. This means that the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time: see Avery v No 2 Public Service Appeal Board [1973] 2 NZLR 86 at 92; Jess v Scott (1986) 12 FCR 187 at 194-5; 70 ALR 185. When the application is for an extension of time in which to file an appeal, it is always necessary to consider the prospects of the applicant succeeding in the appeal: see Burns v Grigg [1967] VR 871 at 872; Hughes at 263-4, Mitchelson v Mitchelson (1979) 24 ALR 522 at 524. It is also necessary to bear in mind in such an application that, upon the expiry of the time for appealing, the respondent has “a vested right to retain the judgment” unless the application is granted: Vilenius v Heinegar (1962) 36 ALJR 200 at 201.” (at 480)
24. This passage has been applied on many occasions see Madafiglio v Arnotts Biscuits [2006] NSWWCCPD 36, and the cases cited therein”.
It appears that the only reason that the original appeal was rejected was for failure to serve a copy of the appeal on one of the parties, namely WorkCover. The appeal was however duly served on WorkCover who filed a ‘Notice of Opposition’ on 7 August 2006, such that its opportunity to be heard on appeal was not lost. However, I am required to consider whether, in all the circumstances, the Appellant Insurer’s explanation demonstrates “exceptional circumstances” exist that would warrant the granting of an extension of time.
The Appellant Insurer’s summary of the issues in dispute is accurate. As I indicated in my direction dated 1 December 2006, I had formed the preliminary view that the parties had been denied ‘procedural fairness’ by the Arbitrator’s failure to provide copies of or disclose the contents of the letters from Bakarich to the Commission to which I have referred.
This is the principal ground of appeal and in my view, constitutes “exceptional circumstances” within the meaning of the Rules.
Bakarich again wrote to the Commission on 26 February 2007 with detailed submissions many of which I would regard as “fresh evidence”. Moreover, in a subsequent letter to the Commission also dated 26 February 2007, Bakarich now claims that another insurance policy with Vero Workers Compensation was current at the time, and may well be relevant to the claim.
It is indeed unfortunate that all of this material was not made available by Bakarich at the time of the hearing before the Arbitrator. The same must be said of the earlier letters from Bakarich to the Commission to which I have referred.
Accordingly, I am satisfied that “exceptional circumstances” do exist in this particular case, and the appeal demonstrates reasonable prospects of success.
In the exercise of my discretion, I extend the time to filing of the appeal to 13 July 2006.
THE ISSUES ON APPEAL
I have already canvassed to some extent the issues raised on appeal. I do not propose to set out in detail the contents of the recent correspondence from Bakarich to the Commission nor indeed the contents of the earlier correspondence. What is clear from this material are two significant factors:
·There is considerable doubt as to whether the apparently “agreed” last day of employment was in fact 28 June 1985. Bakarich claims that “Mr Russo never even for a second returned to work at AB Ind after the initial claim in 1984.”
·The apparent existence of another insurance policy may well cover the relevant period although, of course, if the deemed date of injury is some time earlier than June 1985, it may well be that the Appellant Insurer is indeed the relevant insurer.
In summary, I confirm my preliminary view that the Arbitrator erred in law in denying the parties ‘procedural fairness’ with respect to the correspondence from Bakarich as set out in my direction dated 1 December 2006. The Appellant Insurer was, as it points out in its submissions, “… deprived of the opportunity to make submissions and the opportunity to lead evidence in response …”
As Deputy President Roche said in Paul Segaert Pty Limited t/as Lidco v Narayan [2006] NSWWCCPD 296:
“48.In In Re Minister for Immigration & Multicultural Affairs; ex parte Lam (2003) 214 CLR 1 (‘Lam’) the High Court discussed the manner in which procedural fairness cases are approached by the courts, and Gleeson CJ said (at 14, [37]):
“Fairness is not an abstract concept. It is essentially practical. Whether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice.”
49. In Muin v Refugee Tribunal [2002] HCA 30 (‘Muin’) Justice McHugh stated the requirement as follows at [123]:
“Natural justice requires that a person whose interests are likely to be affected by an exercise of power be given an opportunity to deal with matters adverse to his or her interests that the repository of the power proposes to take into account in exercising the power.”
In line with these authorities, it is impossible for me to properly exercise my functions on review of the Arbitrator’s decision and substitute a new decision.
In these circumstances, the appropriate course is to refer the matter back to the Arbitrator at first instance for redetermination of all issues.
DECISION
The following decision is made:
1. Time to appeal extended to 13 July 2006
2. The decision of the Arbitrator dated 7 April 2006 is revoked.
3.The matter is remitted to the Arbitrator at first instance for redetermination of all issues.
4.Costs of the first arbitral proceedings reserved to the arbitration hearing on remitter.
COSTS
The Arbitrator at first instance ordered that costs of the proceedings before him be reserved. Whilst the Appellant has been successful on appeal, it is not appropriate for me to order any party to pay the Appellant’s costs at this stage. It seems to me that much of the “long and contentious history” of this matter to which the Appellant Insurer refers could have been avoided by the participation in the proceedings of Bakarich or, at least, by the provision of its written material to the Commission to all other parties.
In all the circumstances, I consider that the appropriate order is that each party pay its own costs of the appeal. Costs of the proceedings before the Arbitrator at first instance should again be reserved pending the ultimate outcome of the proceedings.
Deborah Moore
Acting Deputy President
20 March 2007
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF DEBORAH MOORE, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
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