Kettle v Forestry Tasmania
[2002] TASSC 94
•12 November 2002
[2002] TASSC 94
CITATION: Kettle v Forestry Tasmania [2002] TASSC 94
PARTIES: KETTLE, Mark Ian
v
FORESTRY TASMANIA
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO/S: 482/2002
DELIVERED ON: 12 November 2002
DELIVERED AT: Hobart
HEARING DATES: 11 October 2002
JUDGMENT OF: Slicer J
CATCHWORDS:
Workers Compensation - Proceedings to obtain compensation - Determination of claim - Procedure before hearing - Receipt of weekly payments - Disputed entitlement by employer - Cessation of weekly payments - Claim for common law damages - Election to claim common law damages disputed.
Workers Rehabilitation and Compensation Act 1988 (Tas), s138AB.
Blacklow v Attorney-General A7/1994; Smith v Commonwealth Oil Refineries Ltd (1938) 60 CLR 141; Rogers v Schulz (1921) 21 SR(NSW) 731, considered.
Aust Dig Workers Compensation [146]
REPRESENTATION:
Counsel:
Applicant/Defendant: J R McDonald
Respondent/Plaintiff: C J Gunson
Solicitors:
Applicant/Defendant: Forestry Tasmania
Respondent/Plaintiff: Phillips Taglieri
Judgment Number: [2002] TASSC 94
Number of Paragraphs: 25
Serial No 94/2002
File No 482/2002
MARK IAN KETTLE v FORESTRY TASMANIA
REASONS FOR JUDGMENT SLICER J
12 November 2002
This application concerns the effect of receipt of moneys by an employee paid by an employer which has disputed entitlement of the right of that worker to claim common law damages independent of preconditions specified by the Workers Rehabilitation and Compensation Act 1988 ("the Act"), s138AB.
On 8 May 2002, the respondent, in accordance with the Act, s32, lodged a claim, in standard form, with his employer giving notice of an injury said to have occurred in the course of his employment with the applicant on 8 April 2002. The injury, said to have "… aris(en) out of and in the course of … employment", was one which, if established by virtue of the Act, s25, made the "employer … liable to pay compensation in accordance with [the] Act".
The applicant having received the notice and accompanying medical certificate commenced making weekly payments to the respondent in accordance with the requirements of the Act, s81, and concurrently disputed "liability to pay compensation by way of weekly payments" and referred the matter to the Tribunal in the manner provided for by the Act, s81A.
On 12 June 2002, the Tribunal determined the reference and made an order by consent, as permitted by the Act, s61, in the following terms:
"I consider that a genuine dispute exists with regard to the employer's liability to pay compensation by way of weekly payments and the cost of any benefits payable under Division 2 of Part VI in respect of the claim for compensation the subject of this referral, and I order that compensation by way of weekly payments and the cost of any benefits payable under Division 2 of Part VI is not to be paid to the worker by the employer."
That course was permitted by the Act, s81A(2). The applicant ceased to make weekly payments on 13 June 2002.
On 22 August 2002, the respondent commenced, by writ issued out of this Court, a claim against the applicant:
"… for damages for personal injuries suffered by the plaintiff in the course of his employment with the defendant and caused by the negligence, breach of contract and/or breach of statutory duty of the defendant, its officers, servants or agents at Scottsdale in Tasmania on or about 8 April 2002 together with costs to be taxed."
The respondent entered a conditional appearance, denying the jurisdiction of this Court and/or disputing the validity of the writ on the grounds:
"1 that pursuant to Part X Division 2 of the Workers Rehabilitation and Compensation Act1988 and particularly section 138AB the Plaintiff, prior to commencing proceedings in this Court, must lodge with the Workers Rehabilitation and Compensation Tribunal an election to claim damages;
2 the Plaintiff has not lodged such election;
3 that having been paid compensation under the provisions of the Workers Rehabilitation and Compensation Act1988 the Plaintiff is not permitted to pursue a claim for damages without having complied with that Act and the Plaintiff has not so complied."
The applicant, pursuant to the Supreme Court Rules 2000, r168(4), made application to set the writ aside.
In 2001 the Act was amended (by Act 99 of 2000) to restrict the basis on which a worker could seek an award for damages independently of the Act, PtX, Div2 relevantly provides:
"138AA ¾ (1) This Division applies to the awarding of damages against an employer independently of this Act in respect of an injury suffered by a worker if ¾
(a) the injury was caused by the negligence or other tort of, or a breach of contract by, the worker's employer; and
(b) compensation has been paid or is payable in respect of the injury under this Act or would have been paid or be payable but for section 25(2).
(2) This Division applies even if the damages resulting from the negligence or other tort of the worker's employer are sought to be recovered in an action for breach of contract or other action.
138AB ¾ (1) Before commencing proceedings in court for an award of damages, a worker who intends to seek damages against his or her employer must lodge with the Tribunal an election to claim damages.
(2) A worker is not to make an election unless the degree of his or her permanent impairment is agreed by the worker and the employer, or determined by the Tribunal, to be a percentage of the whole person of not less than 30%.
…(5) An election is to be lodged within 2 years after the date on which weekly payments first became payable under this Act."
The respondent contends that the precondition that "compensation has been paid or is payable" stated in s138AA(1)(b) does not relate to payments made pursuant to s81A(1) where an employer contends that a "genuine dispute exists" and either the employee takes no further action or the Tribunal determines that such is the case and orders that compensation not be paid. Since the immediate payments are designed to protect the worker until the question of dispute is determined, the payments do not constitute compensation within the meaning of s138AA. Relevant to the respondent's argument is the statutory scheme which makes non-payment of the "interim" payments an offence (s81A(2)) rather than "enforceable" on the part of the worker (see Zeeman J in G L & V N Barber Pty Ltd v Ryan (1999) 8 Tas R 308; Thompson v Cooee Point Abattoirs Pty Ltd [2002] TASSC 41. Counsel expressed the proposition in the following terms, namely:
"… in the absence of an admission of liability by an employer that it is liable to pay compensation pursuant to the Act, s25 or being deemed liable by virtue of the Act, s81AB, weekly payments made by an employer do not constitute compensation for the purposes of ss138AA and 138AB(1)."
Statutory scheme and interpretation
The Tribunal determined that a genuine dispute existed and ordered that "compensation by way of weekly payments and the cost of any benefits payable … not be paid". A referral by an employer under s81A may be determined by the Registrar (s81A(2A)) who, in turn, is required to advise the Tribunal of his or her determination (s81A(2B)) which, in turn, may make an order giving effect to that determination (s81A(2C)), although it appears to retain an unfettered discretion (s81A(3)). A decision adverse to the employer "is not to be taken into account by the Tribunal in any other proceedings under [the] Act" (s81A(4)). A decision adverse to the worker (or presumably one made by consent if the existence of a genuine dispute is conceded) in no way inhibits referral of the claim to the Tribunal in accordance with the Act, s42. The pre-condition of notice, without disputation, gives rise to deemed acceptance of liability and entitlement (s81AB). The provisions of s81A are procedural, rather than substantive in nature and in no way impact on the validity of the claim for compensation.
In this case, the respondent contends that given the determination that a genuine dispute exists, there exists no claim for compensation unless and until he invokes the procedure afforded by s42, and accordingly, that payments made until then are "provisional" or "interim" only (Blacklow v Attorney-General A7/1994), and intended to prevent hardship until the appropriate procedural rights have been afforded. The effect of the scheme was analysed by Zeeman J in Blacklow (supra), when he stated, at 6:
"Where a matter is referred under that subsection, the Commissioner is required to determine whether the employer is liable to continue to pay compensation and questions of whether there is a genuine dispute and whether compensation ought to continue to be paid by reason of the existence or non–existence of a genuine dispute do not arise. If an employer does not take the steps required by s81A(1) within fourteen days of receipt of the claim for compensation, then the employer is required to commence making weekly payments by virtue of s81. Once an employer has commenced making weekly payments, then the payments are to continue until such time as the Act authorises their cessation or the Commissioner authorises that they cease after having determined that there is no continuing liability."
But "a claim" for compensation within the meaning of s42 differs from an entitlement to compensation provided for by s25. The scheme is one based on certification and procedural steps which provide for different methods of resolution of the issue of entitlement. An injury gives rise to an entitlement to compensation which, subject to the preconditions of notice (ss32 and 35) and certification (s34) requires payment (s81AB). Disputation does not entitle an employer to withhold payment pending a preliminary determination as to whether such disputation is genuine (s81A).
A finding on the existence or otherwise of genuine disputation might result in continued payment (s81A(3)(a) and (b)) or cessation (s81A(3)(c) and (d)), which in turn permit a reference of the claim to the Tribunal (s42). Compensation, whilst not defined by the Act, includes weekly payments based on salary or wages (ss66, 70 and 81B), medical and other services (PtVI, Div2) or a lump sum payment in the event of death (s67) or permanent impairment (ss71 and 72). All payments can be regarded as compensation for the occurrence of a claimed injury. Part X prescribes the manner in which concurrent rights to compensation and damages are to be dealt with. Part X, Div2, limits entitlement to damages to injuries caused by tort or breach of contract by an employer suffered by a worker who has received, or is entitled to receive, compensation under the Act. A worker having given notice to an employer, having received payment of money, would be a person coming within the scheme of the legislation.
That conclusion alone does not resolve the issue. Parliament has sought to limit the rights of a citizen to seek redress according to law. (Thompson v Armstrong & Royce (1950) 81 CLR 585; Wilson v Wilson's Tile Works (1960) 104 CLR 328.)
The Act does not define the term "compensation". The entitlement to or obligation to pay compensation stated in s25 encompasses all forms of payments referred to in the Act. The term "claim for compensation" is expressed by s3 in the widest terms since it includes "any matter or question arising in connection with or incidental to such a claim". Section 32 requires that a notice of injury (s33) and claim for compensation (s34) with respect to that injury are preconditions to entitlement. In the circumstances of this case, the respondent notified his supervisor on 9 April 2002 of an event occurring on 8 April 2002 which gave rise to an injury manifested on the following day. The form completed and served on 8 May 2002 was accompanied by a medical certificate of the treating medical practitioner and constituted a "claim for compensation" within the meaning of s34. The document completed is headed "Workers Claim for Compensation". The employer's report dated 10 May 2002 is likewise entitled "Workers Claim for Compensation" and contains details of the "normal weekly earnings" and "average hours usually worked per week". The Act, PtVII, Div1, provides for "Payment of Compensation and Related Matters". For the purposes of that division, s80A states that:
"… a claim for compensation is a claim for compensation by a worker against an employer in respect of an injury for which the worker has not previously made a claim for compensation against that or any other employer."
Section 81 requires an employer who has received a claim for compensation and where the worker's first pay day after receipt of that claim:
"(a) is not later than 14 days after the receipt of that claim, the employer must ¾
(i)if it is reasonably practicable to do so, commence making weekly payments to the worker on the first pay day; or
(ii)in any other case, commence making weekly payments to the worker not later than 14 days after receipt by the employer of the worker's claim for compensation; or
(b) is later than 14 days after the receipt of that claim, the employer must commence making weekly payments of compensation on that pay day.
(2) An employer who fails to comply with subsection (1) is guilty of an offence.
(3) Weekly payments payable under this section are payable from the date on which the claim for compensation was given to the employer under section 34."
The term "weekly payments" is used consistently with identical expressions connoting a form of compensation. Such payments are not recoverable "from the worker by the employer" (s81AA(1)(c)) and are not to be construed as "an admission of liability" (s81AA(1)(a)). Section 81A refers to disputation of liability "to pay compensation by way of weekly payments". In Blacklow (supra), Zeeman J indirectly referred to the equivalence of the terms when he said, at 5:
"Liability is to be determined, if a party seeks to have it determined, in proceedings other than a reference under s81A(1). If upon a determination of liability it transpires that the effect of an order under s81A(3)(c) is that a worker has not been paid compensation to which he is entitled then such compensation must then be paid. Conversely, if upon such a determination it transpires that the effect of an order under s81A(3)(a) is that the worker has been paid compensation to which he was not entitled the worker is required to repay such compensation pursuant to the Act, s149."
Part X, Div1, titled "Concurrent Rights to Compensation and Damages", relevantly provides:
"132 ¾ In this Part, unless the contrary intention appears ¾
'compensation', used in relation to an injury, means any compensation or any such expenses as are referred to in section 75 payable in respect of that injury under this Act;"
Reference to the Act, s75, in that definition is to the term "expenses" and does not govern the word "compensation".
Section 138AA refers to a circumstance where "compensation has been paid or is payable in respect of the injury under [the] Act".
The payment of weekly payments, albeit with notification of disputation, does not deprive those payments of the characterisation of compensation. An ex gratia payment made by an employer has been held not to constitute a payment of compensation as referred to in the Workers Compensation Act 1958 (Vic), s28. (See reference to Fowler v Australian Tessalated Tile Co [1993] 1 WCBD (Vic) 173 cited in Workers Compensation Victoria, Boyes v O'Loghlan, Butterworths 1980, par2684), whilst payments made directly to others for services provided for the benefit of the worker have been held to amount to the payment of compensation to that worker (James S Adams v State Rivers & Water Supply Commission [1960] VR 542; Beattie v Szabo [1962] VR 401). However, payment made by an insurance company of "sustenance moneys" to a worker pending resolution of the issue of entitlement has been held to constitute compensation enabling the employer to plead payment of such (Rogers v Schulz (1921) 21 SR(NSW) 731). There is authority for the proposition that the issue of whether the payment amounts to compensation is a question of fact (Huckle v London County Council (1910) 26 LTR 580, Times Law Review, cf Symonds v Ivanhoe Gold Corporation Ltd (1904) 7 WALR 69) which involves a subjective argument of whether the worker understood and assented to the payment as being one in the nature of compensation (Beattie v Szabo (supra)). In the event that, as a matter of fact, the payment constitutes compensation, then as a matter of law an employer is entitled to rely on that finding as a statutory bar (Smith v Commonwealth Oil Refineries Ltd (1938) 60 CLR 141). In that case, the High Court held that the receipt of weekly sums amounted to compensation even though the full amount which the worker was entitled to receive had not yet been paid. (See also Reid v Stevenson (1928) SC 799.)
The Tasmanian legislation does not permit a subjective approach or require assent (Symonds v Ivanhoe (supra)) and the payment of "interim" weekly sums is required by law (s81). Payment cannot be regarded as "ex gratia" in nature. The language used by Parliament gives effect to the statutory scheme.
There remains a further reason why the application ought succeed. The finding that there exists a genuine dispute and the order that further payments not be made does not mean that compensation is not payable. That question can only be answered following the hearing of any reference made pursuant to the Act, s42.
This decision is confined to the circumstances of this case. It is not necessary to consider a circumstance where an action for damages is commenced by a worker who has decided not to have recourse to the Act or who, not having received payments, has had a s42 reference determined adversely. Nor does this decision require consideration of the import of the words "payable but for section 25(2)" appearing in s138AA(b).
Purpose and consequence
Both parties sought recourse to these terms as an aid to interpretation.
The applicant contended that the intention of Parliament was that all workers be treated alike, and relied on the following statements by the relevant Minister in the Second Reading Speech:
"The new provisions will restrict access to common law to serious injuries where the level of permanent impairment is at least 30 per cent;
…The restriction on access to common law is necessary to be able to provide long-term support for all workers who need it. In recent years every other State has either removed or severely restricted access to common law. The simple fact is that you cannot have an affordable system unless there is some control over access to common law. The impairment threshold of 30 per cent is the same as that recently introduced in Victoria by the Bracks Labor Government.
Workers unable to access common law will be able to seek a lump sum settlement of their statutory entitlement or continue to receive weekly payments for up to ten years. The right to redeem weekly benefits was removed in 1995.
The bill also makes provision for the commencement of weekly payments on a without-prejudice basis following receipt of a new claim for compensation. This was recommended by the JSC [Joint Select Committee] as a way of reducing the level of disputation and maintaining income support for workers whilst information is gathered. The current legislation forces an employer to dispute liability in order to provide more time to investigate the claim. The legislation will enable an employer to recover payments in certain circumstances including fraud and gross negligence. This proposal has been developed in consultation with the TTLC and TCCI.
…Although the JSC did not recommend adoption of this model, it did make one very important recommendation in respect to the design of the benefit model.
'There is no compelling argument to retain unlimited access to common law so long as workers and their dependants are provided with alternative fair and reasonable statutory entitlements from an extended no-fault scheme and limited common law rights'."
The extracts are useful in the understanding of the general purpose of the statutory scheme but do not significantly assist in the interpretation of the specific provisions.
The respondent referred to consequence, specifically to the possibility that a person, significantly and permanently impaired, paid "interim" weekly payments, whose claim is defeated because of insufficiency of notice (s32(1)(b)) is precluded from both compensation and damages because of the operation of the Act, ss138AA and 138AB. That perceived consequence might be a matter for future judicial consideration or Parliamentary redress, but has not impacted on this adjudication, which is confined to the particular circumstances of this case.
Conclusion
The respondent is required to make an election, in accordance with the Act, s138AB, before he may "commence proceedings in Court for an award of damages". The application is granted. Counsel are invited to make submissions as to the terms of the final or any consequential orders.
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