MacGinnes and Residual Assco Group Limited (Compensation)

[2018] AATA 1248

MacGinnes and Residual Assco Group Limited (Compensation) [2018] AATA 1248 (7 May 2018)

Division:GENERAL DIVISION 

File Number:           2017/2434

Re:Marie MacGinnes

APPLICANT

Residual Assco Group LimitedAnd  

RESPONDENT

File Number:           2017/2435

Re:Marie MacGinnes  

APPLICANT

Australian River Co LimitedAnd  

RESPONDENT

File Number:2017/2436           

Re:Marie MacGinnes  

APPLICANT

Toll (PRK) Tasmania Pty LtdAnd  

RESPONDENT

AND

File Number:2017/4417           

Re:Marie MacGinnes  

APPLICANT

Seacare AuthorityAnd  

RESPONDENT

DECISION

Tribunal:Deputy President K Bean

Date:7 May 2018

Place:Adelaide

1.The Tribunal has jurisdiction in application 2017/2436, but not in applications 2017/2434, 2017/2435 or 2017/4417.

2.Applications 2017/2434, 2017/2435 and 2017/4417 are dismissed for lack of jurisdiction.

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Deputy President K Bean 

CATCHWORDS

WORKERS’ COMPENSATION – Seafarers – Jurisdiction – Respirable asbestos fibres – Whether there has been a default event – Whether reviewable decisions are deemed to have been made – Whether there can be proper service of a claim on a deregistered company – Whether re‑registration of company can retrospectively validate service of a claim – Whether time limit to apply for reconsideration applies with respect to deemed decisions – Where Minister has made a declaration under the Act – Where the Seacare Authority is acting as the Seacare Fund – Whether time limits to make determinations and issue reconsiderations apply to the Seacare Authority.

LEGISLATION

Seafarers Rehabilitation and Compensation Act 1992, ss 3, 4, 29, 30, 72, 75, 77, 78, 79, 81, 100

Australian River Co Limited Act 2015, s 2(2), Sch 1

Administrative Appeals Tribunal Act 1975, s 25

CASES

CGU Workers Compensation (NSW) Ltd v Rockwall Interiors Pty Ltd [2006] NSWSC 690; (2006) 201 FLR 296

REASONS FOR DECISION

Deputy President K Bean

7 May 2018

1. The applicant, Mrs MacGinnes, is the spouse of the late William Evans MacGinnes, who died on 5 November 2014 at the age of 85 years. It is not in dispute that Mr MacGinnes worked as a Chief Petty Officer, Boatswain, for about 40 years and Mrs MacGinnes claims he served on ships that had “respirable asbestos fibres”.[1]

   [1] Applicant’s Submissions concerning jurisdiction, dated 7 August 2017 [8].

2. In February 2016, Mrs MacGinnes made a claim for compensation in respect of the death of her husband pursuant to the Seafarers Rehabilitation and Compensation Act 1992 (the Act). The relevant claim form was sent to the following four employers:

   (a)Australian River Co Limited (Australian River Co);

   (b)Toll (PRK) Tasmania Pty Ltd (Toll);

   (c)Residual Assco Group Limited (Residual Assco); and

   (d)Howard Smith Limited.

3. In addition, the claim form was also sent to the Seacare Authority (the Authority).

4. By letter dated 22 February 2016, the Authority acknowledged receipt of Mrs MacGinnes’ claim for compensation. Solicitors for Howard Smith Limited also acknowledged receipt of the claim and sought further information.

5. Having received no communications from Residual Assco, Australian River Co, or Toll and no further communications from the Authority, by letters dated 14 December 2016, Mrs MacGinnes’ solicitors sought reconsideration of what they described as a ‘deemed’ denial of liability pursuant to ss 29 and 30 of the Act.

6. On 10 January 2017, solicitors for Australian River Co and Toll acknowledged receipt of the request for reconsideration but also asserted that the “30 day period provided for the requesting of a reconsideration has also expired (see s 78(3)) with the result that the determinations under s 72(5) disallowing the claims are the operative determinations which finalise any such claims that your client has made”.

7. On 15 February 2017, Mrs MacGinnes lodged applications with the Tribunal seeking review of the deemed denial of liability for her claim on reconsideration by Residual Assco, Australian River Co and Toll. In July 2017, she lodged a further application seeking review of “the deemed reviewable decision by the Seacare Fund” (the Fund).

8. Each of the respondents has put in issue the Tribunal’s jurisdiction with respect to Mrs MacGinnes’ applications, and all parties agree that this is the first issue which must be resolved by the Tribunal.

   ISSUES

9. In the circumstances which have arisen, there are a number of issues which potentially need to be addressed in order to determine whether the Tribunal has jurisdiction with respect to any or all of Mrs MacGinnes’ applications. Based on the submissions of the parties, the issues are:

   (a)Whether, in respect of Residual Assco or Australian River Co, there has been a “default event” such that “the seafarer … is taken to be employed by the Fund” pursuant to s 4(3) of the Act;

   (b)In respect of any company which has not suffered a default event, whether reviewable decisions are deemed to have been made by that company, such that the Tribunal has jurisdiction in any or all of the relevant applications; and

   (c)In respect of any company in relation to which a default event has occurred, whether a reviewable decision has been made by the Fund or is deemed to have been made by the Fund such that the Tribunal has jurisdiction.

   HAS THERE BEEN A RELEVANT DEFAULT EVENT?

10. Section 3 of the Act defines “default event” as follows:

    default event, in relation to an employer, happens when:

    (a)    the employer:

    (i)     becomes bankrupt or insolvent; or

    (ii)    applies to take the benefit of any law for the relief of insolvents; or

    (iii)     compounds with the employer’s creditors for their benefit; or

    (iv)    if the employer is a body corporate—is being wound‑up; or

    (v)    if the employer is a body corporate—ceases to exist; or

    (vi)    no longer engages in trade or commerce in Australia; and

    (b)    the employer is unable to meet the employer’s liabilities under this Act.

11. Section 4(3) further provides that:

    4      Employees

    …

    (3)If a default event occurs in relation to the employer of a seafarer or of a company trainee, then, for the purposes of this Act, the seafarer or company trainee is taken to be employed by the Fund.

    Australian River Co

12. The solicitors for Australian River Co have provided an extract from the database of the Australian Securities & Investments Commission dated 10 July 2017 which indicates that Australian River Co Limited was registered on 1 July 1989 and deregistered on 15 July 2015. My attention has also been directed to the Australian River Co Limited Act 2015, which provided for the transfer of any assets and outstanding liabilities of Australian River Co to the Commonwealth, in preparation for Australian River Co’s deregistration. Section 2(2) of Sch 1 of the Australian River Co Limited Act provided that at the “transfer time” (24 April 2015) the assets and liabilities of Australia River Co “ceased to be assets and liabilities of [Australian River Co] and became assets and liabilities of the Commonwealth” and “[t]he Commonwealth becomes the successor in law in relation to those assets and liabilities”.

13. The Authority contends that, even though Australian River Co ceased to exist before Mrs MacGinnes’ claim was made, by reason of the Australian River Co Limited Act, it cannot be said that Australian River Co is “unable to meet the employer’s liability under this Act” and consequently the second limb of the definition of “default event” is not satisfied. In my view, however, once Australian River Co ceased to exist as a legal entity, it was no longer able to meet its liabilities under the Seafarers Act.

14. I note that para (b) of the definition of “default event” will not necessarily be met whenever one of the events set out in para (a) occurs. For example, if an employer no longer engaged in trade or commerce in Australia, it would not necessarily follow that it was unable to meet its liabilities under the Act. However, in my view, it is untenable to conclude that a company which has ceased to exist retains the capacity to meet its liabilities under the Act. The fact the relevant company may have held a relevant policy of insurance does not change this position, and I note there is provision made in the Act for the Fund to be subrogated to all of an actual employer’s rights and remedies in relation to a policy of insurance or indemnity.[2]

    [2]     See s 129.

15. It follows that, in my view, a default event has occurred in respect of Australian River Co with the result that, in respect of the relevant period of employment, Mr MacGinnes is taken to have been employed by the Fund, any claim lies against the Fund and the Tribunal’s jurisdiction is not engaged in Application 2017/2435. I also note that, as Australian River Co did not exist in February 2016, no valid claim for compensation was made against it.

16. As a Ministerial Declaration has been made pursuant to s 100 of the Act that the Authority is to have the Fund’s functions, powers and obligations under the Act, I note that in this context the Authority is the Fund.

17. For completeness, I acknowledge that on 9 March 2018, the solicitors for the Authority provided a copy of a contract between Australian River Co Limited and ASP Ship Management Pty Limited dated 23 April 2015. In essence, that contract provides for a new management services contract to come into existence between ASP Ship Management Pty Limited and the Commonwealth following the deregistration of Australian River Co. In other words, the effect of the contract was to substitute the Commonwealth for Australian River Co as the contracting party with respect to ongoing management services from ASP Ship Management. In my view, the existence of this contract has no bearing on my analysis as set out above.

18. I also acknowledge the subsequent email of 29 March 2018 sent by the solicitors for the Authority, advising that the contract had expired and was not renewed, and that a Team with the Department of Finance were “actively managing this body of work”. I note that none of the other parties have contested the information provided, which in any event also does not affect my analysis.

    Residual Assco

19. The position with respect to Residual Assco is more complex.

20. The material before me indicates that Residual Assco was deregistered with effect from 30 October 2013. However, an application was subsequently made to the Supreme Court of Victoria and in March 2016 an order was made by the Court to restore the company to the Register.[3] I understand this application was made to the Court for the purposes of a common law action initially brought by Mr MacGinnes seeking damages at common law. I understand the purpose of the application was to potentially engage and call upon the workers’ compensation insurance which had been held by Residual Assco. It is my understanding that Residual Assco currently remains on the Register under External Administration.

    [3]     Affidavit of Grace Wilson, dated 16 February 2016, Exhibit “GW‑6”.

21. In the circumstances, one of the issues for me is whether the fact that Residual Assco ceased to exist from 30 October 2013 is sufficient to support a conclusion that a default event has occurred, potentially invoking s 4(3), notwithstanding that the company subsequently came back into existence and is currently registered. There is also a prior question relating to service of Mrs MacGinnes’ claim on Residual Assco.

22. With respect to the question of service of the claim, it is clear in my view that service cannot have been effected on Residual Assco while it did not exist.[4] Therefore, no claim for compensation has been made against Residual Assco, and the Tribunal cannot have jurisdiction with respect to any deemed decision of Residual Assco. However, that leaves the question of whether there has been a default event, noting that a claim for compensation was also served on the Fund.

    [4]     CGU Workers Compensation (NSW) Ltd v Rockwall Interiors Pty Ltd [2006] NSWSC 690; (2006) 201 FLR 296, 300 [15]‑[16] (Barrett J).

23. This is not an easy question. However, I have come to the conclusion that the definition of “default event” in s 3 of the Act is a provision of the kind which is sometimes described as “presently speaking”. It would be an odd result, in my view, if, once a default event had occurred, for example, where an employer no longer engaged in trade or commerce in Australia and was unable to meet its liabilities, but that position subsequently changed, and the employer once again engaged in trade or commerce in Australia and became solvent once more, that the employer would escape the Act by virtue of the fact that, potentially for a short period of time, they did not engage in trade or commerce in Australia and were unable to meet their liabilities. Similarly, it would be an odd result if the fact of a company having been previously deregistered had the result that it escaped liability under the Act, despite being currently registered and holding relevant insurance. This would also sit uncomfortably with the applicable corporations law, which essentially provides that re‑registration of a company brings that company back to life for all purposes and, subject to certain exceptions, has the effect of deeming the company’s registration and existence to have been continuous.

24. In these circumstances, I have concluded that for my purposes a default event is not currently operative in relation to Residual Assco, as the company continues to exist and on the material before me it also appears to hold relevant insurance. As indicated above however, I have concluded that the Tribunal does not have jurisdiction with respect to Application 2017/2434 as no claim has been made against Residual Assco and its re‑registration is not effective to retrospectively validate service which occurred while the company was not registered.[5]

    [5]     CGU Workers Compensation, 300 [16].

25. For completeness, I note there is no suggestion of a default event having occurred in relation to Toll.

    IS THERE A REVIEWABLE DECISION IN MATTER 2017/2436 (THE TOLL MATTER)?

26. Toll has submitted that there is no reviewable decision in this matter, essentially because of a delay by Mrs MacGinnis in requesting reconsideration of a deemed determination denying liability.

27. Toll relies in particular on the terms of ss 72 and 77‑79 of the Act, which relevantly provide as follows:

    72    Time limit for determining claims relating to death

    (1)An employer must determine its liability in relation to a claim for compensation under Division 2 of Part 2 by the later of the following times:

    (a)the end of the period of 60 days after the day on which the employer receives the claim;

    (b)if, at the written request of the employer, the Authority, by written notice served on the employer, allows a further period or further periods for the determination of the liability—the end of that period or those periods, as the case may be.

    …

    (5)If the employer has not determined the claim by the end of the period allowed by this section, the employer is taken to have made a decision, at the end of that period, disallowing the claim.

    …

    77       Determinations to be notified in writing

    (1)As soon as practicable after an employer makes a determination, the employer must cause to be served on the claimant a notice in writing setting out:

    (a)    the terms of the determination; and

    (b)    the reasons for the determination; and

    (c)a statement to the effect that the claimant may, if dissatisfied with the determination, request a reconsideration of the determination under subsection 78(2).

    …

    78    Reconsiderations of determinations

    …

    (2)A claimant may, by notice in writing given to an employer, request the employer to reconsider a determination made by the employer.

    (3)A request for reconsideration of a determination must:

    (a)    set out the reasons for the request; and

    (b)be given to the employer within 30 days after the day on which the determination first came to the notice of the claimant, or within such further period (if any) as the employer, either before or after the end of that 30 day period, allows.

    …

    (6)After an employer reconsiders a determination, the employer must make a decision affirming or revoking the determination or varying the determination in such manner as the employer thinks fit.

    …

    79    Time limit for reconsideration of determinations

    (1)If a claimant requests an employer to reconsider a determination made by the employer, the employer must reconsider the determination before the later of the following times:

    (a)    the end of the period of 60 days after the employer receives the request;

    (b)if, at the written request of the employer, the Authority, by written notice served on the employer, allows a further period or further periods for the determination of the liability—the end of that period or those periods, as the case may be.

    …

    (6)If the employer has not determined the claim by the end of the period allowed by this section, the employer is taken to have made a decision, at the end of that period, disallowing the claim.

28. Relevantly, s 25 of the Administrative Appeals Tribunal Act 1975 (the AAT Act) also provides:

    25    Tribunal may review certain decisions

    …

    Failure of decision‑maker to meet deadline

    (5)For the purposes of an enactment that makes provision in accordance with this section for the making of applications to the Tribunal for review of decisions, a failure by a person to do an act or thing within the period prescribed by that enactment, or by another enactment having effect under that enactment, as the period within which that person is required or permitted to do that act or thing shall be deemed to constitute the making of a decision by that person at the expiration of that period not to do that act or thing.

29. Toll does not dispute that Mrs MacGinnes’ claim was served on Toll on or about 16 February 2016 and no determination was made by Toll in relation to it such that, pursuant to s 72(5), Toll was taken or deemed to have made a decision disallowing the claim by on or about 16 April 2016.

30. However, Toll then points to the requirement in s 79 that a claimant must request a reconsideration within 30 days after the day on which the determination first came to the notice of the claimant, or within such further period as the employer allows. Toll contends that, given a deemed determination came into existence on or about 16 April 2016, Mrs MacGinnes was required to request a reconsideration within a further 30 days, or request for an extension of time to seek reconsideration, which was not done.

31. In my view, however, the 30‑day time limit imposed by s 78(3) contemplates an actual determination by the employer and is not intended to apply to a “deemed” determination. I do not accept that the Act evinces an intention that in the absence of any determination having been made, a claimant is required to calculate the day on which a deemed determination has arisen and then make any request for reconsideration within a further 30‑day period. What the Act contemplates is that an employer will make a determination in writing giving reasons for the decision which has been reached, and any request for reconsideration will be made in light of the employer’s actual decision. Any delay by the employer in making the determination would not deprive the determination of effect and clearly the time limit for a claimant to request reconsideration will run from the actual date of any determination made by the employer.

32. In my view, clearer words would have been needed to give these provisions the effect of potentially barring a claimant from seeking reconsideration if they failed to appreciate that a determination was deemed to have been made within 60 days of their claim being submitted to the employer, and/or failed to seek reconsideration within a further 30 days. If it had been the intention of the legislature to impose a time limit for seeking reconsideration of a deemed determination, this could easily have been specified in the Act. In the absence of any such provision, I have concluded that the time limit provided for in s 78(3)(b) does not apply to a deemed determination.

1. In any event, in my view, if an extension of time was required then the request for reconsideration made by Mrs MacGinnes on 14 December 2016[6] should have been construed by Toll as incorporating a request for an extension of time which it was obliged to determine. As it failed to do so, even if s 78(3)(b) did apply to the applicant, the extension of time issue would be within the Tribunal’s jurisdiction.

   [6]     T‑documents in application no. 2017/2436, T4/18.

2. In summary, as there was no time limit within which Mrs MacGinnes was required to request a reconsideration of the deemed determination, it follows that Mrs MacGinnes’ request for reconsideration on 14 December 2016 was valid. Toll’s failure to make a reconsideration decision resulted in a deemed decision denying the claim pursuant to s 79(6) 60 days later, that is, on approximately 14 February 2017.

3. For completeness, I note Toll’s lawyer sent an email to Mrs MacGinnes’ solicitors on 11 January 2017, however this did not amount to a request of a kind which had any impact on the applicable time limit provided for in s 79 of the Act.

4. It follows that, in my view, Mrs MacGinnes’ application to the Tribunal received on 15 February 2017 related to a reviewable reconsideration decision which was deemed to have been made prior to that date. Accordingly, that application was validly made and the Tribunal has jurisdiction with respect to this application.

   HAS A REVIEWABLE DECISION BEEN MADE IN APPLICATION 2017/4417 (THE SEACARE MATTER)?

5. As I have indicated above, a default event occurred in relation to Australian River Co on 15 July 2015 and the Fund (which is currently the Authority) is taken to be the employer for the purposes of Mrs MacGinnes’ claim against Australian River Co.

6. As I have recounted above, in February 2016, Mrs MacGinnes’ claim for compensation was forwarded to the Authority and acknowledged by them. However, to date, no determination or reconsideration decision has been made by the Authority, as the Authority has taken the view that there has not been any relevant default event.

7. In the context of this application, the solicitors for the Authority have also drawn my attention to the particular position of the Authority acting as the Fund in relation to the time limits imposed by the Act. Through its solicitors, the Authority has pointed to the fact that on 10 April 2002, a declaration was made by the relevant Minister under s 100 of the Act declaring that the Authority was to have the Fund’s functions, powers and obligations under the Act. The Authority has further pointed out that this has implications for the application of time limits specified in the Act to the Authority.

8. In particular, the two sections of the Act which provide time limits for determining claims and also provide for deemed decisions, that is, ss 72 and 78, do not apply to the Authority where a declaration has been made under s 100. That is the effect of s 75 and s 81.

9. It appears to be the case that if no declaration had been made, the time limits would apply to the Fund. However, when the Authority is acting as the Fund pursuant to a s 100 declaration, it is not subject to the time limits which apply to making determinations and issuing reconsiderations under the Act. This has the further consequence that the Authority cannot be “deemed” to have made a determination or reconsideration decision either under the terms of the Act itself or by s 25(5) of the AAT Act.

10. It follows that with respect to the Seacare matter, there is no actual or deemed determination and no actual or deemed reconsideration decision and it follows that there is no reviewable decision which would give the Tribunal jurisdiction. It further follows that, in my view, in the absence of a reviewable decision, the Tribunal does not have jurisdiction in this matter.

    DECISION

11. The Tribunal has jurisdiction in application 2017/2436, but not in applications 2017/2434, 2017/2435 or 2017/4417.

12. Applications 2017/2434, 2017/2435 and 2017/4417 are dismissed for lack of jurisdiction.

I certify that the preceding 44 (forty‑four) paragraphs are a true copy of the reasons for the decision herein of Deputy President K Bean

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Associate

Dated: 7 May 2018

Date of hearing:	17 November 2017
Date final submissions received:	15 December 2017
Counsel for Applicant:	Mr M Carey
Solicitors for the Applicant:	Slater & Gordon Lawyers
Advocate for the Respondent - 2017/2434	Mr D Anderson
Advocate for the Respondent - 2017/2435 and 2017/2436	Mr A Highfield
Solicitors for the Respondent:	HWL Ebsworth Lawyers
Counsel for Respondent - 2017/4417	Mr M Hawker
Solicitors for the Respondent	Sparke Helmore Lawyers