Hoek and MMA Offshore PTY LTD
[2018] AATA 1053
•6 April 2018
Hoek and MMA Offshore PTY LTD [2018] AATA 1053 (6 April 2018)
Division:GENERAL DIVISION
File Number(s): 2017/7130
Re:AARON HOEK
APPLICANT
AndMMA OFFSHORE PTY LTD
RESPONDENT
DECISION
Tribunal:Member C Edwardes
Date:06 April 2018
Place:Perth
Pursuant to subsection 41(2) of the Administrative Appeals Tribunal Act 1975, the Tribunal makes an order that the decision dated 15 September 2017, made by the Respondent’s insurer, Allianz Australia Insurance Limited:
(a)be stayed in so far as it suspends payment to the Applicant of rights to compensation between 27 March 2018 until the determination of the application for review or until further order;
(b)not be stayed for the period 15 September 2017 to 26 March 2018.
......[sgd]..................................................................
Member C Edwardes
CATCHWORDS
PRACTICE AND PROCEDURE – Stay Application – hardship to respondent resulting from refusal of stay considered – likely prospect of recovery of moneys by respondent’s insurer considered - prospects of success of applicant’s application for review of decision considered - Stay refused in respect of arrears – Stay granted in respect of ongoing payments.
LEGISLATION
Administrative Appeals Tribunal Act 1975 – ss 41(1), ss 41(2)
Seafarers Rehabilitation and Compensation Act 1992 - ss 49(1), ss 49(2), ss 49(3), ss 49(8), ss 50(1), ss 50(5), ss 50(6), s 76, ss 88(1)
CASES
Said and Secretary, Department of Social services [2014] AATA 439
Re Repatriation Commission and Albert Richard Groat [1985] AATA 335
Re Secretary, Department of Social Security and Collins (1999) 26 ALD 366
REASONS FOR DECISION
Member C Edwardes
06 April 2018
THE APPLICATION
The Tribunal is asked to determine whether the Applicant should be granted a stay order in relation to a decision made by the Respondent’s insurer, Allianz Australia Insurance Limited (Allianz). This decision was dated 15 September 2017 and suspended the Applicant’s weekly payments pursuant to subsection 50(5) of the Seafarers Rehabilitation and Compensation Act 1992 (SRCA). The decision rendered compensation not payable in respect of the suspension period (see subsection 50(6) of the SRCA).
The power to make a stay order can only apply in respect of decisions which are reviewable by the Tribunal. This decision is reviewable by the Tribunal pursuant to subsection 88(1) and section 76 of the SRCA.
BACKGROUND
On 14 May 2016 the Applicant suffered a lumbar spine injury whilst working on the Respondent’s vessel “Mermaid Sound.”
On 15 May 2016, the Applicant obtained a medical certificate with general practitioner Dr Richard Kain. Dr Kain certified the Applicant totally unfit to work (T3 8).
The Applicant completed a worker’s compensation claim form dated 23 June 2016 (T6 11). On 17 November 2016, the Respondent’s insurer, Allianz issued a determination accepting liability for the claim (T18 58).
On 15 September 2017, Allianz issued a notice to the Applicant, suspending his weekly payments pursuant to subsection 50(5) of the SRCA (T60 156 - 157).
On 30 November 2017 the Applicant lodged an application for review of the decision made by Allianz on 15 September 2017 (paragraph 6 of this decision). This hearing is scheduled to take place in a few months.
On 10 January 2018 the Applicant filed an application to the General Division of this Tribunal for an order under section 41(2) of the Administrative Appeals Tribunal Act 1975 (AAT Act) that the decision of Allianz be stayed.
The Applicant’s grounds for requesting the stay included:
The Applicant does not admit that:
1He was involved in a rehabilitation program as defined under the SRCA;
2The rehabilitation program was set up and compliant with sections 48-50 of the SCRA;
3He without reasonable excuse, did not undertake a rehabilitation program provided…
The matter was heard in Perth on 26 March 2018 and the Applicant was represented by Mr GT Stubbs, instructed by Lewis Blyth & Hooper and the Respondent by Ms Bettina Mangan, instructed by Hall & Wilcox Lawyers.
RELEVANT LEGISLATION AND PRINCIPLES
General principles
Sections 41(1) and (2) of AAT Act provide as follows:
(1) Subject to this section, the making of an application to the Tribunal for a review of a decision does not affect the operation of the decision or prevent the taking of action to implement the decision.
(2) The Tribunal may, on request being made, as prescribed, by a party to a proceeding before the Tribunal (in this section referred to as the relevant proceeding), if the Tribunal is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review, make such order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates or a part of that decision as the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.
As outlined by Deputy President Hotop in Said and Secretary, Department of Social Services [2014] AATA 439 (Said), “section 41(1) of the AAT Act provides that the making of an application to the Tribunal for review of a decision does not affect the operation or implementation of that decision. Subsection (2) of s 41, however, confers on the Tribunal a broad discretionary power to make an order staying the operation or implementation of the decision under review ‘as the Tribunal consider appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review,’ if the Tribunal ‘is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review.’”
Relevantly, paragraph 7 in Said further states:
[7] In considering whether to make an under under (sic) s 41(2) of the AAT Act in cases like the present, where the decision under review involves the cessation of payments of money to the person who has applied to the Tribunal for review of that decision and who has requested the Tribunal to make an order staying that decision, the Tribunal has customarily had particular regard to three main factors, namely:
· the degree of hardship (if any) which may be suffered by that person as a result of the refusal to make a stay order;
· in the event that the person’s application for review is unsuccessful, the likelihood of recovery (by the payer) of moneys paid to that person as a result of the making of a stay order; and
· the prospects of success of the person’s application for review.
The prospects of success of the person’s application for review
Section 49 of the SRCA states:
Assessment of capability of undertaking rehabilitation program
(1) If an employee suffers an injury that lasts, or is expected to last, 28 days, which results in an impairment or an incapacity for work, the employee's employer must, within 28 days after receiving notice of the injury, arrange for the assessment of the employee's capability of undertaking a rehabilitation program.
(2) An assessment must be made by:
(a)a legally qualified medical practitioner nominated by the employer; or
(b)a suitably qualified person (other than a medical practitioner) nominated by the employer; or
(c)a panel comprising legally qualified medical practitioners or other suitably qualified persons (or both) nominated by the employer.
(3) The employer may require the employee to undergo an examination by the person or panel of persons making the assessment.
…
(8) If an examination is carried out, the person or persons who carried out the examination must give the employer a written assessment of the employee's capability of undertaking a rehabilitation program, specifying, where appropriate, the kind of program which he or she is capable of undertaking and containing any other information relating to the provision of a rehabilitation program for the employee that the employer may require.
Section 50 of the SRCA states:
Provision of rehabilitation programs
(1) If an employee of an employer is assessed under section 49 as capable of undertaking a rehabilitation program, the employer must, after consulting the employee in relation to:
(a)the selection of an approved program provider; and
(b)the development of an appropriate rehabilitation program by an approved program provider;
make arrangements with an approved program provider for the provision of an appropriate rehabilitation program.
…
(5) If an employee, without reasonable excuse, does not undertake a rehabilitation program provided for the employee under this section, the employee's rights to compensation under this Act, and to institute or continue any proceedings under this Act in relation to compensation, are suspended until the employee starts to undertake the program.
(6) If an employee's right to compensation is suspended under subsection (5), compensation is not payable in respect of the period of the suspension.
Principles relating to granting a stay order
The Tribunal notes commentary in the decisions Re Repatriation Commission and Albert Richard Groat [1985] AATA 335 and Re Secretary, Department of Social Security and Collins (1991) 26 ALD 344. Deputy President Thompson stated in Re Repatriation Commission and Albert Richard Groat [1985] AATA 335 “section 41(2) of the AAT Act authorizes the making of an order staying or otherwise affecting the operation or implementation of either the whole or only a part of a decision under review.” Some further considerations in determining whether or not to grant a stay order of a decision in Re Secretary, Department of Social Security and Collins (1991) 26 ALD 344 included: if staying the operation of the reviewable decision could cause immediate and long term hardship and could render the review of the decision largely futile; if there was a real doubt, whether moneys could be recovered subsequent to the grant of the stay order and if it transpired that the moneys paid pursuant to the reviewable decision would be recoverable, whether that the recovery could worsen the payee’s financial situation.
Deputy President Forgie in Re Secretary, Department of Social Security and Collins (1991) 26 ALD 344 stated:
[24]…I am not prepared to treat the doubts expressed by the Commission [with regards to the ability to recover moneys] as completely unfounded. Particularly in respect of a substantial lump sum payment for arrears, the possible doubts as to recoverability may, I think, properly be weighed in the discretionary balance on the question of whether or not to grant a stay. In addition, of course, it will always be a relevant consideration whether, even if recoverable at law, moneys paid pending completion of the review will be recoverable…
With respect to ongoing payments, the same doubts as to recoverability apply. Notwithstanding that the moneys paid may possibly be irrecoverable; it is in my view necessary to balance that consideration against the hardship that may be imposed on the pensioner...
…
[28] Taking into account the interests of all persons who may be affected by the review of the decision, I consider that, to secure the effectiveness of the hearing, the order of the SSAT should be stayed only as to arrears of sickness benefit payable… but not with regards to on-going payments. I have reached the conclusion after taking into account what I regard as the considerable hardship which Mr Collins would suffer were the decision to be stayed in its entirety…
EVIDENCE
The Tribunal received the following evidence:
·Exhibit A1 – Witness statement of Mr Aaron Gary Hoek dated 16 February 2016;
·Exhibit A2 – Request for Stay Order dated 10 January 2018;
·Exhibit A3 – Applicant’s bundle of documents received 19 March 2018;
·Exhibit R1 – Respondent’s submissions in response to Request for Stay Order dated 2 March 2018.
Oral evidence was given by the Applicant in order to provide clarification and context to his witness statement (A1), dated 16 February 2018. The following paragraphs in A1 were clarified:
·Paragraph 6 – amended to specify that the 2 years of work consisted of ‘labouring’ and was ‘like a 2 year gap year.’
·Paragraph 9 – amended to specify that in this position the Applicant oversaw two seafood trucks and travelled to the North West of Australia. The Applicant specified that he oversaw the storage of seafood and drove trucks.
·Paragraph 12(c) – the Applicant stated that the bullet point reading ‘Calexa…’ should be substituted with ‘Palexia – 150 mg – slow release’
·Paragraph 14 – amended to specify that the Applicant did not work as a fisherman, but as a dockhand.
·Paragraph 46 – Applicant clarified with reference to ‘those men are HR representatives of the Respondent,’ that he had never met ‘those men’ before, and that, to his knowledge, ‘those men’ were HR representatives of MMA.
·Paragraph 47(b) – Applicant clarified that he would have phone call discussions with job interviews as well as meetings and conversations.
·Paragraph 60 – Paragraph 5 of Hall & Wilcox letter amended to delete ‘June’ and replace ‘June’ with ‘January.’
The Respondent was given the opportunity to cross-examine the Applicant but declined to do so.
The Tribunal has reviewed all of the material before it and is satisfied that all relevant evidence was before it, and that both parties were provided an opportunity to address the evidence, either orally or in writing. Relevant aspects of the evidence and material before the Tribunal will be analysed and referred to below.
CONSIDERATION
General principles on stay
Subsection 41(2) confers on the Tribunal a broad discretionary power to make an order staying the operation or implementation of the decision under review ‘as the Tribunal consider appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review,’ if the Tribunal ‘is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review.”
In determining whether to grant a stay, the Tribunal will consider three main factors:
· the degree of hardship (if any) which may be suffered by the Applicant as a result of the refusal to make a stay order;
· in the event that the person’s application for review is unsuccessful, the likelihood of recovery (by the payer) of moneys paid to that person as a result of the making of a stay order; and
· the prospects of success of the Applicant’s application for review.
These factors will be discussed in the following paragraphs.
The degree of hardship (if any) which may be suffered by the Applicant as a result of the refusal to make a stay order
The Tribunal notes paragraphs 61-71 of Exhibit A1. In particular, paragraph 61 states that at the time the Applicant’s compensation was cancelled he was in receipt of approximately $3,067.00 net per fortnight (A1 38).
The Tribunal also notes at paragraph 63 of A1 that as at September 2017 the Applicant and his partner entered into mortgage arrangements of approximately $880,000 requiring a monthly payment of approximately $4,500 (A1 38).
The Applicant’s partner’s income as at September 2017 and at present is noted to be $50,000 gross per annum. It is purported that she cannot fund the repayments for the mortgage specified in paragraph 25 of this decision from her earnings (A1 38).
The Applicant’s statement outlines that he has used approximately $24 000 in savings to fund the mortgage and has now only $6000 left (A1 39)
In his oral evidence, the Applicant refers to his witness statement (Exhibit A1), which sets out his financial position. The Applicant states that his only source of income has been stopped and he is “using, and fast running out of savings to fund his outgoings, including his mortgage.”
On page 39 of Exhibit A1, the Applicant outlines his statement of assets and liabilities as at 16 February 2018:
Assets:
Cash in bank - $4500.
A car - $35,000.
Furnishings and tools and fishing gear- $20,000.
Half share in 51A River Road - $500,000.
Liabilities:
Half share of mortgage on 51A River Road - $445,000.
Half share of credit card liability - $20,000.
Half share of outstanding rates - $550.
Personal loan with Westpac - $18,000.
Half share of loan from my parents - $2000.
Half share of loan from Hayley’s mum - $15,000.
The Applicant states that his partner is due to give birth on 1 October 2018 (A1 40).
Whilst the Respondent claims in their written and oral submissions that there is no evidence to support the Applicant’s claims of his financial hardships, and the Applicant does not provide corroborative documents to support these contentions (R1 4), the Tribunal considers that evidence of the Applicant’s hardship was provided to the Tribunal at the interlocutory hearing, together with the Applicant’s witness statement (A1). The Tribunal notes that the Respondent had the opportunity to test this evidence at the hearing, however declined to do so.
In the event that the Applicant’s application for review is unsuccessful, the likelihood of recovery (by the payer) of moneys paid to that person as a result of the making of a stay order
The Tribunal is aware of the Respondent’s position that is, there is real concern that the Applicant will be will be unable to repay payments made to him if the Applicant’s application for review is unsuccessful.
As similarly noted by Deputy President Forgie in Re Secretary, Department of Social Security and Collins (1991) 26 ALD 344 the Tribunal is not prepared to treat the doubts expressed by the Respondent as completely unfounded. The Tribunal notes that the Applicant must repay a substantial lump sum payment for arrears and ongoing payments if the application for review is unsuccessful. The Tribunal however also notes the immediate and long term financial hardship that the Applicant may face as a result of a refusal of a stay order.
In addressing the likelihood of recovery of moneys paid to the Applicant if the application for review is unsuccessful, the Applicant submits that he has the means to repay moneys as he has:
(a)Assets
(b)An entitlement to compensation once the suspension is lifted which is; ultimately only a matter of time and compliance once it is known what the Respondent says the Applicant must do to comply…
Having regard to the history and complex nature of the Applicant’s substantive application and his written and oral submissions in these interlocutory proceedings, it is clear that the ultimate determination of the Applicant’s application for review will depend on the evidence before the Tribunal in due course. The Tribunal will therefore not place substantive weight on point b) of the paragraph 34.
Relevant to point a) of paragraph 34, the Tribunal notes the outline of the Applicant’s statement of assets and liabilities as at 16 February 2018 (A1 39):
Assets:
Cash in bank - $4500.
A car - $35,000.
Furnishings and tools and fishing gear - $20,000.
Half share in 51A River Road - $500,000.
Liabilities:
Half share of mortgage on 51A River Road - $445,000.
Half share of credit card liability - $20,000.
Half share of outstanding rates - $550.
Personal loan with Westpac - $18,000.
Half share of loan from my parents - $2000
Half share of loan from Hayley’s mum – $15 000.
The Tribunal notes that it is not in the position to make a detailed analysis or assessment of the Applicant’s financial situation. The Tribunal notes however, that as of 16 February 2018, the Applicant had a total of $559 500 in assets and $500 500 in liabilities (A1 39).
Prospects of success of the person’s application for review
The Tribunal notes the Applicant’s oral submissions. The Applicant outlines section 49 of the SRCA:
Assessment of capability of undertaking rehabilitation program
(1) If an employee suffers an injury that lasts, or is expected to last, 28 days, which results in an impairment or an incapacity for work, the employee's employer must, within 28 days after receiving notice of the injury, arrange for the
assessment of the employee's capability of undertaking a rehabilitation program.
(Emphasis added)
(2) An assessment must be made by:
(a)a legally qualified medical practitioner nominated by the employer; or
(b)a suitably qualified person (other than a medical practitioner) nominated by the employer; or
(c)a panel comprising legally qualified medical practitioners or other suitably qualified persons (or both) nominated by the employer.
(Emphasis added)
(3) The employer may require the employee to undergo an examination by the person or panel of persons making the assessment.
…
(8) If an examination is carried out, the person or persons who carried out the examination must give the employer a written assessment of the employee's capability of undertaking a rehabilitation program, specifying, where appropriate, the kind of program which he or she is capable of undertaking and containing any other information relating to the provision of a rehabilitation program for the employee that the employer may require.
The Applicant also outlines subsection 50(1) of the SRCA:
Provision of rehabilitation programs
(1) If an employee of an employer is assessed under section 49 as capable of undertaking a rehabilitation program, the employer must, after consulting the employee in relation to:
(a)the selection of an approved program provider; and
(b)the development of an appropriate rehabilitation program by an approved program provider; make arrangements with an approved program provider for the provision of an appropriate rehabilitation program.
(Emphasis added)
…
(5) If an employee, without reasonable excuse, does not undertake a rehabilitation program provided for the employee under this section, the employee's rights to compensation under this Act, and to institute or continue any proceedings under this Act in relation to compensation, are suspended until the employee starts to undertake the program.
(6) If an employee's right to compensation is suspended under subsection (5), compensation is not payable in respect of the period of the suspension.
The Tribunal notes the Applicant’s contentions that the Respondent has not complied with requirements of sections 49 and 50 of the SRCA and hence the “so called rehabilitation program was not a rehabilitation program provided for the Applicant under section 50 and therefore section 50(5) of the SRCA has no application.”
In the Applicant’s oral submissions, the Applicant stated words to the effect of:
… even if it is the case that the Applicant was involved in a rehabilitation program as defined under the SRCA and the rehabilitation program was set up and compliant with sections 48-50 of the SRCA and he without reasonable excuse, did not undertake the rehabilitation program provided, the Applicant started to undertake the approved rehabilitation program effective from 21 September 2017 as evidenced by Zone Workplace Health Solutions progress reports of 1 October, 8 November, 4 & 18 December 2017... the Applicant was in substantial compliance with the ‘rehabilitation program’ and in particular had been undertaking substantial job search activities beyond attending the meetings that form the basis of the decision to suspect the Applicant’s entitlements…
The Tribunal considers Zone Workplace Health Solutions progress reports dated 2 October, 8 November and 6 December in T65, T66 and T68 respectively. The Applicant notes a letter written by Dr Quentin Malone to Dr Sam Irekpolo, dated 18 September 2018 (T62 159) stating “… I have advised Aaron today given his level of pain and disability, he does not have capacity to undertake any work or to seek employment…” The Applicant submits, and the Tribunal considers, even if it was the case that the Applicant was involved in a rehabilitation program as defined under the SRCA, he had a ‘reasonable excuse’ for his non-compliance after receiving and complying to the above letter from Dr Malone, dated 18 September 2018 (T62 159).
In relation to subsection 49(1) of the SRCA, the Tribunal notes the Respondent’s oral submissions that within 28 days of his injury, the Applicant was assessed by Dr Richard Kain (T3 8), and Dr Samuel Irekpolo’s assessment of the Applicant on 6 June 2017 (T45 124) provided a “catalyst for the Applicant to undertake a rehabilitation program.”
The Tribunal notes the Respondent’s written submissions that the Applicant was not and continues to be non-compliant with his vocational rehabilitation program pursuant to subsection 50(5) of the SRCA and the Applicant’s payments are suspended on this basis.
The Tribunal finds that there is no evidence in the T documents or otherwise to support the contention that:
·The Applicant’s employer within 28 days of receiving notice of the injury arranged for the assessment of the Applicant’s capability of undertaking a rehabilitation program;
·any such assessment was made by a panel, a medical practitioner or other qualified person;
·the employer required the Applicant to undergo an examination;
·a written assessment was produced;
·The Applicant’s employer provided consultation to the Applicant in relation to the selection of an approved program provider and the development of an appropriate program by an approved program provider.
CONCLUSION
In considering whether or not to grant the stay of the decision in question, the Tribunal has considered all the evidence before it and finds that Applicant satisfies criteria outlined in Said:
(a)The Tribunal finds that the Applicant may suffer a high degree of hardship as a result of the refusal to make a stay order;
(b)The Tribunal finds in the event that the Applicant’s application for review is unsuccessful, that there is a likelihood of recovery of moneys paid to the Applicant if the Tribunal limits a grant of the stay order to payments from 27 March 2018 until the determination of the application for review or under further order;
(c)Subsequent to a broad assessment of all the facts at hand and relevant legislation, the Applicant’s application for review, on its face, has a reasonable prospect of success.
The Tribunal is particularly mindful of the capacity of the Applicant to make repayments should the Applicant fail in his application for review. The Tribunal has taken into account the interests of all persons who may be affected by the review of the decision, particularly the hardship that the Applicant may face if the stay of Allianz’s decision is not granted, and the likelihood of recovery of monies if the application for review is unsuccessful.
ORDER
For the reasons outlined above, the Tribunal orders that, until the determination of the application for review or until further order:
(a)The decision of the Respondent’s insurer, Allianz Australia Insurance Limited, dated 15 September 2017 be stayed in so far as it suspends payment to the Applicant of rights to compensation pursuant to the SRCA from 27 March 2018 onwards;
(b)as regards to the period 15 September 2017 to 26 March 2018 the application for stay is refused.
I certify that the preceding 48 (forty - eight) paragraphs are a true copy of the reasons for the decision herein of Member C Edwardes
........[sgd]................................................................
Associate
Dated: 06 April 2018
Date of hearing: 26 March 2018 Counsel for the Applicant: GT Stubbs Solicitors for the Applicant: Lewis Blyth & Hooper Counsel for the Respondent: Bettina Mangan Solicitors for the Respondent: Hall & Wilcox Lawyers
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