Matilda Women's Refuge Inc v Canavan
[2000] VSC 133
•13 April 2000
SUPREME COURT OF VICTORIA
COMMON LAW DIVISION
Not Restricted
No. 7358 of 1999
| MATILDA WOMEN’S REFUGE INC. and CGU WORKERS’ COMPENSATION (VICTORIA) LIMITED | Appellants |
| V | |
| KATHLEEN CANAVAN | Respondent |
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JUDGE: | Balmford, J. | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 22 March 2000 | |
DATE OF JUDGMENT: | 13 April 2000 | |
CASE MAY BE CITED AS: | Matilda Women’s Refuge v Canavan | |
MEDIA NEUTRAL CITATION: | [2000] VSC 133 | |
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Workers’ Compensation – Appeal from Magistrates’ Court – Termination of weekly payments – Application of incorrect test invalidated ground one of Termination Notice - Effect of such invalidity on other grounds of termination.
Accident Compensation Act 1985 (Reprint No.2); s.82(1)
Accident Compensation Act 1985 (Reprint No.9); ss 82(1), 93, 93B, 114(2)(b)
Drobis v Victorian WorkCover Authority & Anor (1994) VACR 73-382
Legione v Hateley (1983) 152 CLR 406
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APPEARANCES: | Counsel | Solicitors |
For the Appellants | Mr AW Sandbach | Gadens Lawyers |
| For the Respondent | Mr M O’Loghlen QC with Mr I Fehring | Holding Redlich |
HER HONOUR:
This proceeding is an appeal pursuant to section 109 of the Magistrates’ Court Act 1989, which provides that a party to a civil proceeding in the Magistrates’ Court may appeal to this Court, on a question of law, from a final order of the Magistrates’ Court in that proceeding. The final order the subject of the appeal was made on 7 October 1999 by the Magistrates’ Court at Melbourne to the effect that there be judgment for the plaintiff and that the defendant pay the plaintiff’s costs on Magistrates’ Court Scale E.
By Order made on 28 October 1999 Master Wheeler found that the questions of law shown by the appellant to be raised by the appeal were:
(a)Whether the learned Magistrate erred in holding that the Termination Notice dated 5 January 1999, given pursuant to section 114 of the Accident Compensation Act 1985 was not valid as it contained (inter alia) one invalid ground?
(b)Did the Magistrate err in failing to consider the effect of the grounds in the Notice –“2. You (the worker) are no longer incapacitated for work”, “3. You (the worker) do not have a serious injury”?
(c)Whether, in failing to consider the grounds that the worker was no longer incapacitated and did not have a serious injury did the learned Magistrate err in holding the Termination Notice “void ab initio” (it having been conceded that an incorrect test had been applied when it was suggested that the worker’s employment was no longer a “significant contributing factor” to the claimed injury.)?
The facts in this matter are set out in the uncontradicted affidavit of Mr Fox, solicitor for the appellants, and the exhibits thereto. Before 5 February 1999 the respondent had been incapacitated for work as a consequence of an injury incurred during the course of her employment with the first appellant. On that basis she had been receiving weekly payments of compensation under the Accident Compensation Act 1985 (“the Act”). Those payments were terminated with effect from 5 February 1999 by the service of a termination notice by the secondnamed appellant pursuant to section 114(2)(b) of the Act (“the Notice”). The respondent brought proceedings in the Magistrates’ Court claiming weekly payments of compensation from 5 February 1999 to date and continuing, together with medical and like expenses.
The matter came on for hearing on 16 September 1999 for the Magistrate to determine as a preliminary point whether the Notice was a valid notice within the meaning of the Act. No oral evidence was given. Submissions were made by counsel for the respondent and the appellants respectively.
The relevant portions of section 114 of the Act read at all relevant times:
114. (2)In addition to other grounds under this Act for termination or alteration of weekly payments, the authorised insurer, Authority or a self-insurer¾
.. .
(b)may terminate weekly payments on the ground that¾
.. .
(ii)the worker is not, or is no longer entitled to weekly payments;
.. .
(4)A termination . . . of weekly payments on the grounds specified in sub-section . . . has effect¾
(a)only if written notice in accordance with sub-section (10) is given;
.. .
(10) A notice must¾
(a) be given to the worker; and
(b) state the reasons for giving the notice; and
(c) state¾
(i)in the case of termination, when weekly payments will be stopped;
The Notice was written on the letterhead of the secondnamed appellant and was dated 5 January 1999 and addressed to the respondent. The relevant portion of the document reads:
CLAIM NO: 10 91 134723
EMPLOYER: Matilda Women’s Refuge
DATE OF INJURY: 01/11/91This is a notice under Section 114(2)(b) of the Accident Compensation Act 1985 that CGU Insurance Australia Limited, as agent for the Victorian WorkCover Authority will terminate your weekly payments of compensation and medical and like expenses on the 5 February 1998 [sic]. After considering all available information NZI Insurance Australia Limited has determined that you are not or are no longer entitled to weekly payments because:
1your employment is not or is no longer a significant contributing factor to the claimed injury.
2you are no longer incapacitated for work.
3you do not have a serious injury.
Attached is a statement which sets out the reasons for the decision. Please read both documents carefully.
No issue was made of the obvious error in the date of termination.
Entitlement to weekly payments of compensation derives initially from sections 82(1) and 93 of the Act. Prior to the coming into operation of section 11 of the Accident Compensation (WorkCover) Act 1992 on 1 December 1992, those provisions read:
82.(1)If there is caused to a worker an injury arising out of or in the course of any employment the worker shall be entitled to compensation in accordance with this Act.
93.If a worker’s incapacity for work results from, or is materially contributed to by, an injury which entitles the worker to compensation, the compensation shall be in the form of weekly payments subject to and in accordance with this Part.
From 1 December 1992, section 82(1) has read:
82.(1)If there is caused to a worker an injury arising out of or in the course of any employment and if the worker’s employment was a significant contributing factor the worker shall be entitled to compensation in accordance with this Act.
Thus where the injury was caused before 1 December 1992, weekly payments were available to a worker whose incapacity resulted from or was “materially contributed to by” an injury arising out of or in the course of the employment. Where the injury was caused on or after that date, there is now the additional requirement that the employment be “a significant contributing factor” before weekly payments are available.
It is apparent from the heading to the Notice that the injury giving rise to the respondent’s incapacity occurred before 1 December 1992. That being so, the appropriate test for entitlement to weekly payments was only whether her employment “materially contributed” to those injuries in terms of section 93, not whether the employment was also a “significant contributing factor” thereto in terms of section 82(1). In his Reasons for Decision the Magistrate said:
Ms Halpen [sic] who appeared on behalf of the defendants conceded that the termination notice applied the wrong test in determining whether or not the plaintiff was entitled to weekly payments. The test applied was of “significant contributing factor” instead of “material contribution”. This mistake came about because the defendants did not realise that the injury occurred pre-December 1992 and as a consequence they had applied the post December 1992 test.
After considering other issues raised before him, the Magistrate concluded:
The mere fact that the termination notice complied with the provisions of s.49(1) however, does not overcome what I regard to be the fundamental flaw in the notice, namely, that the insurer reached its decision by applying the wrong test.
Ms Halpen submitted that the application of the incorrect test did not invalidate the notice given pursuant to s.114(10). In support of this contention she drew the Court’s attention to a decision of Judge Rendit of the County Court in Drobis v Victorian WorkCover Authority & Anor (1994) VACR 73-382 where His Honour said “. . . as I consider that as long as there is one ground permitted by the Act in the notice, then such ground is sufficient for the notice to comply with sections 111A and 112, even though the notice may contain a ground or grounds that do not comply with the statutory requirements”.
I disagree, where the decision maker has reached a decision based on the application of an incorrect principle, the decision is void ab initio. That being the case the termination notice was invalid, and the plaintiff is therefore entitled to weekly payments from the 5th February 1999.
Sections 111A and 112, at the time of the decision in Drobis, corresponded to the relevant provisions of section 114 as they now stand.
The issue before me, expressed in different ways in the questions in the Master’s Order, is whether the Notice was valid, given the concession by counsel which is set out in paragraph 10 above.
Mr Sandbach, for the appellants, submitted that counsel for the respondent had conceded only that ground one of the Notice was invalid. It was submitted that, as a matter of logic, if three separate grounds were given for the Notice, the fact that one ground was invalid did not detract from the efficacy or validity of the other two. The Notice was supportable on either of the other two grounds. For authority for that proposition as a matter of law, Mr Sandbach relied on the passage from the judgment of Judge Rendit in Drobis, cited by the Magistrate in paragraph 11 above , and the passage set out below from the judgment of Gibbs CJ and Murphy J in Legione v Hateley (1983) 152 CLR 406 at 418-9:
. . . it was submitted that the notice of rescission erroneously claimed too much and was therefore ineffective. . . . the notice therefore specified a non-existent default as well as a real default. However, in Green v Somerville (1979) 141 CLR 594, Mason J, with whom Murphy and Aickin JJ agreed, held that a notice which required the party to whom it was given, under threat of rescission, to rectify two alleged defaults when under the contract only one of those defaults provided a foundation for rescission, was not invalidated by the presence of the additional unauthorized requirement (pp 607, 612). Barwick CJ and Wilson J took a different view (pp 600, 613). The decision in that case accords with that of Gowans J in Gair v Smith [1964] VR 814. We did not consider it appropriate to allow this question, so recently decided in this Court, to be reopened. This submission therefore fails.
Each of the two authorities referred to by Gibbs CJ and Murphy J related to a notice of rescission under a contract of sale, as did Legione v Hateley itself. Mr Sandbach submitted that a notice of rescission was distinguishable from a notice under section 114. A notice of rescission required action from the recipient, in the absence of which the contract would be rescinded. On the other hand, he submitted, the purpose of a notice of termination under section 114 was simply to identify the grounds on which the insurer considered that the worker was no longer entitled to weekly payments of compensation. Accordingly, the principle enunciated by Gibbs CJ and Murphy J was even more appropriate in the context of a notice of termination. Legione v Hateley was thus authority, in Mr Sandbach’s submission, for the proposition that only one valid ground was needed to establish a valid notice of termination under section 114, despite the insurer’s having sought to rely on another ground which was invalid.
Mr O’Loghlen, for the respondent, submitted that Mr Sandbach’s submission proceeded on the unjustified assumption that grounds two and three of the Notice were valid, which was not the case. It was apparent from the use of the expression “determining whether or not the plaintiff was entitled to weekly payments” in the paragraph from His Worship’s Reasons, cited in paragraph 10 above, that the concession of counsel applied to all three grounds. All three grounds were invalid, it was submitted, because they were based on the application of the incorrect principle; that is, the test of “significant contributing factor” rather than the test of “materially contributed”.
This, he submitted, was because all three grounds depended ultimately on the relevant test for entitlement, which turned, as explained above, on the ascertainment of the correct date of the injury. He relied on sections 93 and 93B(5) respectively as indicating that each of the concepts “incapacity for work” and “serious injury” depended upon the concept of an injury entitling the worker to compensation. Accordingly, if the decisions expressed in grounds two and three of the Notice were based on an incorrect assumption as to the date of the injury, leading to the application of the wrong test, then these grounds were invalid for the same reason as ground one.
It does not appear to me that section 93 makes “incapacity for work” dependent on the concept of “an injury which entitles the worker to compensation”. “Incapacity for work” is not a statutorily defined concept, but is rather an attribute of the worker, the presence of which is to be ascertained according to the ordinary meaning of the words used (the definition of “incapacity” in section 5 of the Act is inclusive, not exhaustive). The existence in the worker of incapacity for work is a prerequisite to compensation under section 93; but the expression is not dependent on the section, or indeed on the Act, for its meaning. Even if it were not so, as Mr Sandbach pointed out, the absence of incapacity for work, which is ground two in the Notice, need not relate to a compensable injury. If the worker is not incapacitated for work, then she is not entitled to compensation under section 93, and it is not necessary to consider any other component of the statutory prerequisites for compensation.
Thus that submission fails specifically insofar as it relates to ground two.
In any case, there is no transcript before me of the hearing before the Magistrate, and accordingly no record of the words used by Ms Halpin in making the concession described. It is not appropriate to construe the reasons for decision of a Magistrate as though they were an Act of Parliament. Having said that, the words used in the passage from His Worship’s reasons cited in paragraph 10 above are “the termination notice applied the wrong test” rather than “the insurer applied the wrong test”. That, to me, is an indication that the concession made by counsel related to ground one, in which the Notice employs the expression “significant contributing factor”, rather than to the thought process of the officers of the insurer in deciding that on each of the three grounds the respondent was no longer entitled to weekly payments.
I note that at the commencement of his reasons the Magistrate sets out the grounds on which it was submitted for the plaintiff that the Notice was defective, and states that leave was given to amend the statement of claim to include those grounds. The ground to which this appeal relates is expressed in the terms:
The termination notice uses the test of “significant contributing factor” which was inappropriate for the injury.
Again, the reference is to the use of the expression “significant contributing factor” in the Notice, where it appears only in ground one. It is not a reference to the use of that concept in the decision-making process which led to the enunciation of grounds two and three.
In his conclusion the Magistrate refers to the finding of Judge Rendit in Drobis that so long as there is one ground permitted by the Act in the notice, then the notice is sufficient. He goes on to say that he disagrees with that finding (see paragraph 11 above). Mr O’Loghlen submitted that his disagreement was with the submission of counsel set out at the beginning of the paragraph, not with the finding of Judge Rendit. The submission of counsel there referred to was, he submitted, that the application of the incorrect test in making the decision that each of the three grounds justified the termination of weekly payments did not invalidate the Notice.
Given that the finding of Judge Rendit is expressed as having been relied upon by counsel in support of her contention, it is difficult to maintain Mr O’Loghlen’s submission as to the nature of the submission made by Ms Halpin. She must have been contending in terms of that finding of Judge Rendit. In my view, the Magistrate must be taken to have been expressing disagreement with the finding of Judge Rendit, the words of which immediately precede his expression of disagreement. That being so, he must be taken to have found that only ground one was conceded to be invalid, and that that invalid ground invalidated the whole Notice, so that the Notice was not an effective exercise of the power conferred on the insurer by section 114 of the Act. That was the finding of the Magistrate, which was a finding of law.
Having considered the matter, I accept the submissions of Mr Sandbach and accordingly I find the answer to each of the questions in the Order of the Master to be Yes. Counsel may wish to make submissions as to the appropriate orders to be made as a result of that finding.
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