Mallee Transport Logistics Pty Ltd v VWA
[2014] VSC 572
•13 NOVEMBER 2014
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S CI 2012 4452, 4453, & 4472
| MALLEE TRANSPORT LOGISTICS PTY LTD MENINDEE PTY LTD SWAN HILL ACCOUNTING SERVICES PTY LTD | Plaintiffs |
| v | |
| THE VICTORIAN WORKCOVER AUTHORITY | Defendant |
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JUDGE: | DIXON J |
WHERE HELD: | MELBOURNE |
DATE OF HEARING: | 12 NOVEMBER 2014 |
DATE OF RULING: | 13 NOVEMBER 2014 |
CASE MAY BE CITED AS: | MALLEE TRANSPORT LOGISTICS PTY LTD & ORS v VWA |
MEDIUM NEUTRAL CITATION: | [2014] VSC 572 |
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STATUTORY INTERPRETATION - Accident Compensation (WorkCover Insurance) Act 1993 – Part 2A – Provisions permitting internal merits review and appeal de novo to the Supreme Court in respect of premium adjustment - Commenced 1 July 2010 – Whether applicable to premium review for 2009/2010 policy period – Proceeding concerns review of premium for the periods 2009/2010, 2010/2011, and 2011/2012 – Construction of commencement and transitional provisions – ss 27, 28, 28A, 28B, 33, 35, 36F, 36J, 36K, 36L, 36M, 78(2), 87, Part 2A, Accident Compensation (WorkCover Insurance) Act 1993, s 11(1), 14 Interpretation of Legislation Act 1984.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff in 4452 & 4453 of 2012. | Mr T. Murphy QC with Ms C.E. Currie | MST Lawyers |
| For the Plaintiff in 4427 of 2012. | Mr F O’Loughlin of counsel | Sofra Solicitors |
| For the Defendant | Mr J.J. Gleeson QC with Ms G.F. Gray and Ms R.L. Enbom of counsel, | Corrs Chambers Westgarth |
HIS HONOUR:
The VWA raised a preliminary issue about the court’s jurisdiction to entertain this application in so far as it concerns premium review for the first policy period in issue, being the calendar year ending 30 June 2010. Although eminently suitable for preliminary determination under r 47.04 of the Supreme Court (General Civil Procedure) Rules 2005, the issue was only recently drawn to the attention of the VWA by its counsel. It was raised at the outset of a 5-7 day trial and this ruling may have implications for the immediate continuation of the trial.
The issue turns on the construction of the statute under which the plaintiffs appeal. I will commence with a review of the applicable statutory provisions, the Accident Compensation (WorkCover Insurance) Act1993 that was relevantly amended from 1 July 2010.
Prior to 1 July 2010, the provisions in respect of premium review, and which prima facie in respect of the 2009/2010 premium year applied were:
27 Review of premium
(1)The Authority may, in its absolute discretion, review the amount calculated as a premium in respect of one or more policy periods.
(2)In conducting the review, the Authority may have regard to any matter relevant to the determination or calculation of the premium.
(3)If, in the course of a review under this section, the Authority determines that, in respect of any of the policy periods to which the review relates, there has been an adjustment to the premium which the Authority was not authorised to make, the Authority must discontinue that review and conduct a review under section 28A as if an application under section 22A had been made.
(4)If the Authority makes a determination under subsection (3) it must, by notice in writing, advise the employer of that determination.
28 Adjustment of premium after review
(1)This section applies if, as the result of a review of a premium under section 22 or 27, the Authority is of the opinion that the amount calculated as the premium was not, or is not, calculated in accordance with the relevant premiums order.
(2)The Authority must, by notice in writing to the employer, adjust the amount of the premium so that the amount is the amount calculated in accordance with the relevant premiums order.
(3)In the case of a review under section 28A, an adjustment under this section may only relate to—
(a) in the case of an application under section 22 or 22A—
(i)the policy period current at the date on which the application is made;
(ii)any of the 4 completed policy periods before that period;
(iii)any other completed policy period if there is, or was, fraud on the part of the employer or of any person acting, or apparently acting, on the employer's behalf;
(b)in the case of a review in which the Authority has made a determination under section 27(3)—
(i)the policy period current at the date of the notice under section 27(4);
(ii)any of the 4 completed policy periods before that date;
(iii)any other completed policy period if there is, or was, fraud on the part of the employer or of any person acting, or apparently acting, on the employer's behalf.
28A Review of premium in certain circumstances
(1) This section applies if—
(a)an employer makes an application under section 22A and the Authority was not authorised to adjust the premium in respect of which the application relates, at the time the Authority made the adjustment; or
(b)the Authority has made a determination under section 22(4) or 27(3).
(2)The Authority may review the amount calculated as a premium in respect of premium for—
(a)in the case of a determination under section 22(4) or an application under section 22A—
(i)the policy period current at the date on which the application is made;
(ii)any of the 4 completed policy periods before that period;
(b)in the case of a determination under section 27(3)—
(i)the policy period current at the date of the notice under section 27(4);
(ii)any of the 4 completed policy periods before that date.
(3)In conducting the review, the Authority may have regard to any matter relevant to the determination or calculation of the premium.
(4)In this section premium has the same meaning as in section 22(3).
28B Adjustment of premium after section 28A review
(1)After conducting a review under section 28A, the Authority must determine—
(a)the reviewed assessment amount for the relevant period; and
(b) the total premium payment; and
(c) any deficit amount or excess amount.
(2) The Authority must, by notice in writing to the employer—
(a) specify—
(i)the amount determined to be the reviewed assessment amount and the total premium payment; and
(ii)whether there is a deficit amount or an excess amount; and
(b)adjust the amount of the premium so that the amount is the reviewed assessment amount.
(3) In this section—
deficit amount means the amount by which the reviewed assessment amount exceeds the total premium payment;
excess amount means the amount by which the total premium payment exceeds the reviewed assessment amount;
premium has the same meaning as in section 22(3);
relevant period means the total period specified in section 28A(2)(a) or 28A(2)(b);
reviewed assessment amount means the sum of the amounts which should have been calculated for each applicable premium order for the relevant period;
total premium payment means the total amount paid as premium during the relevant period.
As Osborn J observed in United Petroleum Pty Ltd & Anor v Victorian WorkCover Authority; Emu (Aust) Pty Ltd v Victorian WorkCover Authority,[1] beyond these provisions there was, immediately prior to amendments made in 2010, no statutory mechanism for the resolution of a dispute concerning the premium payable by an employer. Disputes about premiums were resolved by the Court in actions brought at common law and, in limited circumstances, by way of judicial review.[2]
[1][2011] VSC 570, [55].
[2]For example, SBA Foods Pty Ltd v VWA [2001] VSC 276, Victorian WorkCover Authority v IR Cootes [2001] VSCA 85, Somerville Retail Services Pty Ltd v Victorian WorkCover Authority [2011] VSCA 166.
A review, conducted by Peter Hanks QC for the Victorian Government,[3] recommended that a procedure for merits based review be introduced. The Act was amended on the basis of the Hanks review in 2010. By Part 10 Div. 2 of the Accident Compensation Amendment Act 2010,[4] s 109 repealed ss 27, 28, 28A and 28B of the Accident Compensation (WorkCover Insurance) Act1993 and s 114 inserted a new Part 2A headed ‘Part 2A—Premium Review’. The following provisions of Part 2A are relevant for present purposes.
[3]Peter Hanks QC, Accident Compensation Act Review, Final Report (2008), 11.201-11.204.
[4]No. 9 of 2010.
First, s 33 created a right to an internal merits review.
33 Employer may apply for review of premium under this Part
(1)An employer may apply to the Authority for a review under this Part in respect of—
…
(b)premium as specified in a notice of adjusted premium served under section 21, 23(4), 26(4) or 36M; or
…
(2)On receiving an application in respect of a matter specified in subsection (1), the Authority must—
(a)review the premium, default penalty or estimated future claim cost; or
(b)decide not to review the premium, default penalty or estimated future claim cost—
in accordance with this Part.
36F Determination of review
(1)The Authority must, after reviewing an application under section 33—
(a)confirm the premium, default penalty or estimated future claim cost; or
(b)adjust the premium, default penalty or estimated future claim cost.
(2)Subject to subsection (3)[5], the Authority is only entitled to recover the amount of any increased premium resulting from an adjustment under subsection (1) if the premium relates to one or more of the following—
[5]Not presently relevant.
(a)the policy period current at the date of the application for review under section 33;
(b)any of the 4 completed policy periods before that period;
…
(4)Subject to subsection (5),[6] if the Authority makes an adjustment under subsection (1) that results in an employer recovering premium the recovery is limited to—
(a)the policy period current at the date of the application for review under section 33;
(b)any of the 4 completed policy periods before that period.
…
[6]Not presently relevant.
The former s 27 was re-enacted.
36L Premium review by Authority at its discretion
(1)The Authority may, in its absolute discretion, review the amount calculated as premium in respect of one or more policy periods.
(2)In conducting the review, the Authority may have regard to any matter relevant to the determination or calculation of the premium.
36M Adjustment of premium after review
(1)This section applies if, as the result of a review of a premium under section 36L, the Authority is of the opinion that the amount calculated as the premium was not, or is not, calculated in accordance with the relevant premiums order.
(2)The Authority must, by notice in writing to the employer, adjust the amount of the premium so that the amount is the amount calculated in accordance with the relevant premiums order.
Further, dissatisfied employers gained a right of appeal to the Supreme Court that is an appeal de novo, a fresh hearing that entitles the employer to ventilate the matter anew before the Supreme Court exercising original jurisdiction upon the law and evidence applicable at the date of the hearing.[7]
[7]United Petroleum Pty Ltd & Anor v Victorian WorkCover Authority; Emu (Aust) Pty Ltd v Victorian WorkCover Authority [2011] VSC 570 (10 November 2011), [81].
36J Appeals
(1)Despite anything to the contrary in section 39(1) of the Accident Compensation Act 1985, if an employer—
(a)is not satisfied with a determination made by the Authority under section 36F (including a deemed determination under section 36I); or
(b)has received notice that the Authority has decided not to conduct a review under section 36B—
the employer may appeal against that determination or decision to the Supreme Court.
(2)An appeal under subsection (1), other than an appeal made in respect of a deemed determination under section 36I, must be made within 60 days of the employer receiving notice of the Authority's determination or decision.
(3)An appeal made in respect of a deemed determination under section 36I must be made within 60 days of the determination being deemed to have been made.
36K Hearing of appeal by Supreme Court
(1)On the hearing of an appeal by the Supreme Court, the Court may make any order it thinks fit and may by order confirm, reduce, increase or vary the premium.
(2)The costs of an appeal are in the discretion of the Supreme Court.
Mostly, premiums are set annually on a policy year that begins at 4:00 pm on 30 June and ends at 4:00 pm 30 June of the following year. The definition of ‘policy period’ in s 3 of the Accident Compensation (WorkCover Insurance) Act1993 is:
policy period means the period of 12 months or such lesser period as may be fixed by the Authority ending at 4 p.m. on 30 June in any year;
The discretion in the Authority to set a lesser period might be exercised in respect of an entity that was not relevantly conducting a business or employing workers for the whole period of 12 months.
The previous procedures for resolving disputes about premium review were excluded by a privative clause in the Act and for its application ‘proceedings’ was broadly defined.[8]
[8]See s 32, Accident Compensation (WorkCover Insurance) Act1993.
35 Review only as permitted under this Act
Proceedings in respect of any question concerning a notice of premium or purported premium or the amount of premium payable or purportedly payable by an employer must not be brought, whether against the Authority or otherwise except as provided in this Part.
Part 2A came into force on 1 July 2010,[9] 8 hours after the end of the 2009/2010 policy period and was in force at all material times when notices were given, reviews applied for and determined, and appeals lodged, as I will later demonstrate.
[9]Section 2(8), Accident Compensation Amendment Act 2010.
The savings and transitional provisions of the Act are found in Part 7 and the amending Act inserted a new Division 2. Relevantly, s 78(2) provided, both before and after the amending legislation that nothing in Part 7 Div 2 limits or otherwise affects the operation of the Interpretation of Legislation Act1984. Where an Act or a provision of an Act is repealed, in the absence of a contrary intention s 14 of that Act preserves, inter alia:
(a)the previous operation of an Act or provision or anything duly done or suffered under that Act or provision;
(b)any right, privilege, obligation or liability acquired, accrued or incurred under that Act or provision;
(c)any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, or liability;
and any such investigation, legal proceeding or remedy may be instituted, continued or enforced as if that Act or provision had not been repealed or amended.
However, it was s 87 that lay at the heart of the argument. It initially read, in 2010, as follows:
87 Part 2A (Premium review)
Part 2A, as inserted by section 114 of the amending Act, applies to notices
of premiumspecified in section 33 served in respect of the premium year commencing in 2010.
The tracked changes show the amendments made later in 2010.[10] The section was amended again[11] and before its repeal,[12] it read:
[10]Section 149, Transport Accident and Accident Compensation Legislation Amendment Act2010 (No 80 of 2010).
[11]Section 647, Workplace Injury Rehabilitation and Compensation Act 2013 (No 67 of 2013).
[12]Repealed on 1 July 2014 by s 623(1), Workplace Injury Rehabilitation and Compensation Act 2013.
87 Part 2A (Premium review)
Part 2A, as inserted by section 114 of the amending Act, applies to notices specified in section 33, whether issued before, on or after 1 July 2014, in respect of a policy period ending at 4 p.m. on 30 June in 2011, 2012, 2013 or 2014.
The VWA submitted that the plaintiffs’ claims were made under Part 2A and those claims were based on a notice under s 33 of the Act requesting a review in respect of, inter alia, the 2009/2010 policy period. The VWA contended that the Part 2A procedure was not available to permit an appeal of a determination on a review in respect of that policy period. The VWA contended that the plaintiffs cannot appeal, by the procedure that came into force after that policy period ended, the determination made by the VWA on a review initiated under s 33 in respect of the 2009/2010 policy period. The plaintiffs’ remedy, unless otherwise lost, lies in the former procedures noted by Osborn J in United Petroleum and the plaintiff cannot maintain this proceeding for an appeal de novo by this court of a premium review for the 2009/2010 policy period.
The VWA submitted that on its proper construction, the Act confined the plaintiffs to the former remedies in respect of the 2009/2010 policy period and that the new review procedure applied prospectively from when it came into force on 1 July 2010. Section 87 is properly understood as dealing with a timing anomaly. Absent that section, it might have been thought that the 2010/2011 policy period was not captured because that premium year started on the day before the Act came into force. The WVA submitted that the operative feature of the transitional provision was the date of commencement of ‘the premium year’. I note that when subsequently amended the operative feature that defined the application of Part 2A became specific policy periods, but I do not think that this change depreciates the thrust of the VWA’s submission. It submitted that s 87 put beyond doubt that Part 2A applied to the 2010/2011 policy period. Its application to other policy periods is determined by the commencement and transitional provisions. The operation of the Act is not determined by the date when the notice for review is issued, it is the premium year or policy period that is the operative consideration.
The VWA contended that the legislature’s intention was clear and in any event, it has revisited the section twice since its enactment. In its current form, s 87 defines the operation of Part 2A as limited to s 33 notices in respect of the premium years ending on 30 June 2011–30 June 2014. On each occasion when the section has been reconsidered, the legislature has defined the application of Part 2A by reference to premium year or policy period.
As I have noted, the Act was repealed on 1 July 2014 and a different statutory scheme now operates.
The plaintiffs submitted that the privative s 35 was instructive in ascertaining the proper construction of the Act and was supported by other provisions. The period for review under s 33 was limited by s 36(1)(d) to 60 days and s 36A(4) prevented review of the discretion in the Authority to extend time granted by s 36A(1). The regime introduced by Part 2A for internal review with rights of appeal was the only procedure now available. The plaintiffs’ contended that when these provisions became operative all extant or accrued rights were lost. The discretionary review power in the Authority under the repealed s 27 found expression in ss 36L and 36M both located in Part 2A and thus reviewable under s 33, but the capacity to challenge the Authority’s review, for example by prerogative writ has been proscribed. The plaintiffs’ contended that s 35 proscribed rights that had accrued prior to 1 July 2010 were now lost if the application of Part 2A was limited in the manner contended for by the VWA.
The relevant circumstances here, in the plaintiffs’ submission, have all occurred since 1 July 2010. An investigation by way of an audit commenced after 1 July 2010 and resulted in decisions under s 36L, in respect of three policy periods, to adjust premiums. Those decisions were reviewed under s 33 and the Authority determined to confirm, under s 36F, the premiums, and default penalties, as adjusted and imposed. The plaintiffs submitted that such determinations, once made under s 36F, may be appealed to the Supreme Court under s 36J. All of the factors that enliven the court’s jurisdiction to entertain an appeal have occurred after Part 2A came into force. Thus, the plaintiffs’ are employers that are not satisfied with a determination made by the Authority under s 36F and, as such, are entitled to appeal against that determination. It cannot be the case that there was a right of review under s 33 that was determined by the Authority under s 36F in respect of the 2009/2010 year, that cannot be appealed under s 36J because Part 2A must apply each step in the process introduced by Part 2A that was not previously available to an employer.
The plaintiff’s submitted that s 87 was a strange provision, nonsensical if read literally. Its operative function may have been to avoid doubt about the application of Part 2A to the 2010/2011 premium year, but it could not be construed as precluding the court from hearing appeals in respect of premiums for the 2011/2012 or later years and did not, by its plain words, preclude the court from hearing an appeal in respect of a premium adjustment for the 2009/2010 year. That construction is necessitated to avoid an absurdity flowing from the effect of the privative s 35 of the Act. Phraseology such as ‘served on the employer on or after the commencement date’[13] could have been used but was not. Thus, the plaintiffs contended that a wording that removed any possible doubt arising from the commencement of the 2010/2011 year before the Act came into force said nothing about the broader applicability of Part 2A to prior policy periods.
[13]Eg section 86 in respect of s 31A which is found in Part 2 of the Act.
The plaintiffs contended if s 87 is construed as the VWA submitted, employers are deprived of rights that accrued in relation to premium years ending prior to 30 June 2010. That construction of legislation, which was designed to create rights to a merits review and an appeal to this court, as is evident from the extrinsic materials surrounding the amendment, is inconsistent with the legislative purpose. The subsequent amendment of s 87 later in 2010 and 2013 could not be taken into account to construe the section to limit the application of Part 2A unless it was very clear, and it is not, that the later legislation was intended to clarify the earlier legislation. The plaintiffs submitted that in 2013, the legislature used another formulation of the section to make clear as to how the legislation is to operate from 2014. The legislature on two occasions has not seen any need to clarify the expression of s 87.
I reject the VWA’s preliminary objection to the court entertaining the appeal in respect of the 2009/2010 year for the following reasons. The right of appeal is determined by s 36J and in order to exercise that right the appellant/plaintiffs must be employers that are not satisfied with a determination made by the Authority under s 36F. Taking the determination in respect of Swan Hill Accounting Services Pty Ltd (SHAS) as the example, the evidence will be that a Premium Compliance Audit decision was made on 22 December 2011 that assessed SHAS as indebted to the Authority in the sum of $397,482.57 for adjusted premium and $198,741.29 in penalties, totalling $596,223.86 for the policy periods from 2009/2010 to 2011/2012. SHAS was an employer in the 2009/2010 policy period and Mr Baldwin stated in his affidavit that SHAS was not satisfied with the Premium Review Decision. It must be the case that the review, in so far as it included the 2009/2010 policy period was applied for pursuant to s 33 of the Act and carried out and determined under s 36F. The jurisdictional facts for the exercise of the right of appeal under s 36J will be made out. I reject the application and will continue to entertain the appeal in respect of the 2009/2010 policy period.
However, having regard to the nature of an appeal under s 36J, it may be desirable that I say a little more about the contentions that each party advanced. First, s 87 is properly construed as avoiding doubt about the application of Part 2A to the premium year that commenced 8 hours prior to the commencement of the Act,[14] which is the 2010/2011 policy period. As the VWA correctly submitted, the determinative factor identified in s 87 for the application of Part 2A is the premium year or policy period. On first principles, Part 2A applies to premium years or policy periods that commence after the Act comes into force and s 87 was intended to deal with the uncertainty of a premium period commencing 8 hours before the Act came into force.
[14]See s 11(1) of the Interpretation of Legislation Act 1984.
Secondly, I do not accept the plaintiffs submission that rights to dispute a premium adjustment by judicial review or common law action were lost when the privative section came into force. That section only affects rights accruing after 1 July 2010 and s 78(2) of the Act and s 14 of the Interpretation of Legislation Act operate to preserve right accrued as at 30 July 2010 which can be enforced in the manner previously adopted, unless lost for some other reason. This legislative intention is consistently reflected through the further amendment of s 87 until its repeal.
Thirdly, the VWA’s point may have been properly taken when it made its decision following the audit to vary the plaintiff’s premiums for the 2009/2010 policy period. Consistently with what it now contends, the Authority might have determined to review the amount calculated as the proper premium for the 2009/2010 policy period under s 27 of the Act and might have informed the plaintiffs that it had done so. Perhaps, the dispute would have taken a different course. Moreover, when the plaintiffs applied under s 33 for review of its determination, in respect of the 2009/2010 policy period, the VWA ought to have refused to entertain the review because, for precisely the reasons that it now advances against the existence of a right of appeal to this court, there was no right to review under s 33 of the Act. On this occasion, the proper construction of the Act on the question of its application to the 2009/2010 policy period required the conclusion that the plaintiff had no right to an internal merits review under s 33. It is premature to determine whether these points relevantly arise for determination or remain good on this appeal. They were not argued on the preliminary application and I am not expressing any concluded view.
Fourthly, there may be an alternative explanation for the original decision of the Authority being taken under s 36L and s 36M rather than s 27. Again, I am not expressing any concluded view in the discussion that follows as this particular point was not argued and may remain open in the proceeding. Although the words ‘one or more policy periods ‘ in s 36L are, at first blush, referable to policy periods to which Part 2A is applicable, what is plain is that the Authority’s discretion is exercisable in respect of multiple policy periods, as here occurred. The subject reviews resulted in a notice adjusting the premium with a claim to adjusted premium, in respect of each plaintiff, as a single sum, as least as it was reported to that plaintiff, for the three periods combined. Two of the policy periods in that review were plainly policy periods to which Part 2A applied. For that reason that decision arguably was reviewable under s 33(1)(b). The authority has taken no point that it was not reviewable under that section. It has in fact reviewed it. That review was determined under s 36F, and a question may arise about the construction of the phrase ‘the premium, default penalty or estimated future claim cost’. However, s 36F permits the authority to recover the amount of any increased premium resulting from an adjustment on review if the premium relates to one or more of the policy period current at the date of the application for review under s 33 or any of the four completed policy periods before that period.
I will hear from counsel whether having regard to these observations, any opportunity is sought to reconsider the issues that are being raised for determination on this appeal.
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