NSW Maritime Authority (in the interests of Allianz Australia Insurance Limited Treasury Managed Fund) v Louis Sweeney by his Executrix and Beneficiary Elaine Joan Sweeney
[2010] NSWWCCPD 9
•25 January 2010
| WORKERS COMPENSATION COMMISSION | |||||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | |||||||
| CITATION: | NSW Maritime Authority (in the interests of Allianz Australia Insurance Limited Treasury Managed Fund) v Louis Sweeney by his Executrix and Beneficiary Elaine Joan Sweeney [2010] NSWWCCPD 9 | ||||||
| APPELLANT: | NSW Maritime Authority (in the interests of Allianz Australia Insurance Limited Treasury Managed Fund) | ||||||
| RESPONDENT: | Louis Sweeney by his Executrix and Beneficiary Elaine Joan Sweeney | ||||||
| INSURERS: | 1. Government Insurance Office (GIO) (on risk from 3 November 1969 to 30 June 1989) | ||||||
| 2. Self Insurer (on risk from 1 July 1989 to 30 June 1995) | |||||||
| 3. Allianz Australia Workers Compensation (NSW) Limited (on risk from 1 July 1995 to 30 June 1997) | |||||||
| 4. Allianz Australia Insurance Limited Treasury Managed Fund (on risk from 1 July 1997 to date) | |||||||
| FILE NUMBER: | A1-3395/09 | ||||||
| ARBITRATOR: | Ms S Duncombe | ||||||
| DATE OF ARBITRATOR’S DECISION: | 30 July 2009 | ||||||
| DATE OF APPEAL DECISION: | 25 January 2010 | ||||||
| SUBJECT MATTER OF DECISION: | Section 16 Workers Compensation Act 1987; deemed date of injury; section 18(1) Workers Compensation Act 1987; liability of insurer to indemnify employer. | ||||||
| PRESIDENTIAL MEMBER: | Deputy President Kevin O’Grady | ||||||
| HEARING: | On the papers | ||||||
| REPRESENTATION: | Appellant: | Hicksons (Allianz Australia Insurance Limited Treasury Managed Fund) | |||||
| Respondents: | Whitelaw McDonald | ||||||
| Rankin Nathan (Self insurer) | |||||||
| Moray & Agnew (Government Insurance Office (GIO)) Hicksons (Allianz Australia Workers Compensation (NSW) Limited) | |||||||
| ORDERS MADE ON APPEAL: | Paragraphs 3 and 4 of the Arbitrator’s determination dated 30 July 2009 are revoked and the following orders are made in their place: | ||||||
| “3. That the respondent as self insurer pay any compensation payable to the applicant. | |||||||
| 4. That the respondent as self insurer pay the applicant’s costs as agreed or assessed.” | |||||||
| NSW Maritime Authority, in its interests as a self insurer, is to pay the costs of the appeal incurred by the Estate and by each insurer that has appeared. | |||||||
BACKGROUND TO THE APPEAL
The late Louis Sweeney (‘the deceased’) was employed by NSW Maritime Authority (‘the employer’) in its various guises as a plant operator between November 1969 and 21 February 1990 at which time he retired. His work involved a lot of shovelling, other arduous physical activity and he was required to climb and work upon uneven surfaces. It is common ground that the duties performed by the deceased throughout his period of employment aggravated, accelerated or exacerbated underlying disease suffered by him.
The deceased last attended work on an unspecified date in October 1989 following which he underwent surgery to his right hip. No relevant claim in respect of workers compensation benefits was made by the deceased against his employer until 17 June 2008 at which time a claim for lump sums was forwarded to the employer by his solicitors. The injuries alleged involved both shoulders, both hips and the deceased’s back.
In July 2008 the employer advised the solicitors acting on behalf of the deceased that the claim had been referred to those insurers who had issued relevant policies during the period of the deceased’s employment and thereafter. That correspondence included advice that the employer had been a self insurer between 1 July 1989 and 30 June 1995. Liability was subsequently declined by the insurers and the employer.
The deceased died on 6 November 2008 following which the claim under section 66 of the Workers Compensation Act 1987 (‘the 1987 Act’) in respect of lump sums was pursued on behalf of the Estate by his widow Elaine Joan Sweeney (‘the Estate’). An Application to Resolve a Dispute (‘ARD’) was filed with the Workers Compensation Commission (‘the Commission’) on 4 May 2009. Replies to that application were filed on behalf of three insurers and the employer.
The dispute came before an arbitrator for conciliation/arbitration on 8 July 2009 at which time the Estate, the employer and the insurers were each represented by counsel. The matter proceeded to hearing and the Arbitrator reserved her decision. A Certificate of Determination issued on 30 July 2009.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, accompanied by a Statement of Reasons (‘Reasons’), records the Arbitrator’s orders as follows:
“1. That Mr Sweeney suffered an injury to his left and right upper extremities, left and right lower extremities and lumbar spine arising out of or in the course of his employment with the Respondent as a result of the nature and conditions of that employment and that the deemed date of injury is the date of claim, 17 June 2008.
2. That the Application be referred to an Approved Medical Specialist for an assessment of impairment On the Papers as follows:
Date of injury: Deemed 17 June 2008
Body parts: left and right upper extremities, left and right lower extremities, lumbar spine
Method of assessment: Whole Person Impairment
Evidence: Application and annexures; Replies and annexures (three).3. That the Respondent in the interests of Allianz Australia Workers Compensation (NSW) Limited (sic Allianz Australia Insurance Limited Treasury Managed Fund) pay any compensation payable to the Applicant.
4. That the Respondent in the interests of Allianz Australia Workers Compensation (NSW) Limited (sic Allianz Australia Insurance Limited Treasury Managed Fund) pay the Applicant’s costs as agreed or assessed.
A brief statement is attached to this determination setting out the Commission's reasons for the determination.”
An Application seeking leave to appeal against the decision of the Arbitrator was filed on behalf of the employer in the interests of Allianz Australia Insurance Limited Treasury Managed Fund (‘the Treasury Fund’) on 27 August 2009.
ISSUES IN DISPUTE
The issues in dispute on this appeal concern questions as to whether the Arbitrator has erred in the following respects:
(i) determining that the deemed date of injury was 17 June 2008, being the date of claim;
(ii) determining that Allianz Australia Insurance Limited Treasury Fund was to pay any compensation payable and costs;
(iii) the manner of construction and application of section 18(1) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’);
(iv) failing to find that the deemed date of injury was on or before 9 October 1989 or 21 February 1990 or some other earlier date, and
(v) failing to give proper and sufficient reasons for her determination.
The issues as enumerated above have been taken from the Treasury Fund’s written submissions which have been provided in support of its application seeking leave to bring this appeal.
ON THE PAPERS REVIEW
Section 354(6) of the 1998 Act provides:
“(6) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submissions by the parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
LEAVE
There is no dispute between the parties concerning threshold requirements as prescribed by section 352 of the 1998 Act.
The appeal having been lodged within the time prescribed by that section and the fact that the monetary threshold prescribed by that section has been met, together with a consideration of the arguments raised on appeal, lead me to conclude that it is appropriate that leave be granted to proceed with the appeal and I so order.
EVIDENCE
The documentary evidence relied upon by the parties is as noted at [17] of the Arbitrator’s Reasons. There was no oral evidence taken before the Arbitrator. The proceedings were recorded and a transcript has been produced (‘transcript’), copies of which have been provided to the parties. That transcript records the submissions put on behalf of each party.
The greater proportion of documents presented in evidence comprises medical reports that had been prepared by those practitioners who had treated the deceased and those who had been qualified to provide an opinion for the purposes of the litigation. It was noted by the Arbitrator at [35] of her Reasons that agreement had been reached among the parties that “… all injuries to all body parts the subject of this claim were in the nature of aggravations of diseases to each of those body parts. There was no dispute that there was an injury or that employment was a substantial contributing factor (even though these issues are raised in the section 74 notices).” In the circumstances it is unnecessary to attempt a summary of the detail contained in the medical evidence. The histories as recorded by the various practitioners whose reports are in evidence are, in some respects, relevant to the issues which have been raised on this appeal. A summary of relevant historical matters appears below.
Correspondence which was in evidence reveals that the relevant chronology concerning insurance of the employer was as follows:
3 November 1969 - 30 June 1989 Government Insurance Office (‘GIO’)
1 July 1989 - 30 June 1995 Self Insurer (‘the self insurer’)
1July 1995 - 30 June 1997 Allianz Workers Compensation (NSW) Limited (‘Allianz’)
1 July 1997 and thereafter Allianz Australia Insurance Ltd Treasury Managed Fund (‘Treasury Fund’).
Each insurer and the self insurer appeared before the Arbitrator and have put submissions on this appeal.
The deceased underwent three separate corrective surgical procedures to his right hip, the last of which was carried out in October of 1989. As noted above, it was at that time that the deceased last worked. In April of 1991 the deceased underwent surgery to his left hip. Subsequently, in 1997, the deceased underwent intensive treatment including surgical intervention by reason of an infection which he suffered at the site of the earlier right hip replacement.
The evidence establishes that the deceased retired from the workforce in February 1990. There is no evidence that any claim for weekly benefits in respect of any incapacity had been made by him at any time. There is evidence, which had been tendered on behalf of the self insurer, that the deceased had reported an injury to his right shoulder to Dr Furey in 1976. The Reply filed on behalf of the self insurer also includes copies of medical certificates which indicate that the deceased had an absence from work in December 1988 by reason of low back pain and also in May of 1989 by reason of hip disability and other medical problems. Those certificates do not contain any notation concerning a relationship between his work and the need for time off. A number of reports of Dr Laird, Orthopaedic Surgeon, dated between February 1988 and May 1995 concerning management and operative treatment of the hip disabilities were in evidence.
There were in evidence copies of two compensation claim forms signed by the deceased. Each form was dated 13 June 2008. One form was headed “Worker’s Compensation Claim” and the other was headed “Permanent Impairment Claim”. Each document contained a notation that the date of injury was 21 February 1990. It is stated in each form that such date was a “deemed” date of injury. Both forms included a description of injury as having resulted from the nature and conditions of employment between 3 November 1969 and 21 February 1990. The latter form contained reference to “aggravation of diseases of gradual onset”. The disease was identified as being “arthritis”, and reference is made to “Section 16 of the Act”. The second of those forms was accompanied by a report from Dr B Bracken, dated 21 May 2008, in which the quantum of the claim brought pursuant to section 66 of the 1987 Act had been assessed.
THE ARBITRATOR’S DECISION
The Arbitrator, having noted the concessions made by the representatives of the self insurer and the insurers concerning injury, made a formal finding (at [36]) “ ... that the conditions of employment aggravated underlying degenerative disease conditions in each of the body parts the subject of this claim, namely his hips, shoulders and back.”
The Arbitrator proceeded to address the terms of section 16 of the 1987 Act and noted that it was common ground that the deceased had not worked since 21 February 1990, the date of his retirement. It was also noted that the deceased had not “physically worked” since some time before the date of surgery which was carried out in October 1989. The Arbitrator further noted that the deceased did not claim weekly compensation at any time since his retirement and that it was common ground that he did not make a claim pursuant to section 66 of the 1987 Act until 17 June 2008.
The Arbitrator between [39] and [42] considered those authorities relevant to the proper construction and application of the provisions of section 16 of the 1987 Act. Particular attention was given by the Arbitrator to those authorities which have addressed the meaning of the term “incapacity” as it appears in that section. Attention was also given to those authorities that have addressed the manner in which the deemed date of injury is to be ascertained.
The Arbitrator proceeded to reiterate that the deceased had not applied for weekly compensation in respect of any period of incapacity as a result of any injury and that the relevant claim as appears in claim forms noted at [20] above had been made, following an assessment by Dr Bracken, through his solicitors on 17 June 2008. Having regard to those facts the Arbitrator concluded that, following proper application of the provisions of section 16, the deemed date of the deceased’s injury was the date of claim namely 17 June 2008. The Arbitrator acknowledged the curious result, given that the date determined is one 18 years after his retirement.
With respect to the legislative requirements concerning notice of injury, the Arbitrator noted that, given her determination that the deemed date of injury was 17 June 2008, the parties had each conceded that there was “ ... no issue in respect of the notice being given within the time frame as prescribed by the Act.” (at [46]).
Having determined those matters summarised the Arbitrator proceeded to address the question as to which of those parties represented before the Commission was liable to pay any compensation that may be found payable following an appropriate assessment by an Approved Medical Specialist (‘AMS’) in accordance with the provisions of Part 7 of the 1998 Act. Her factual findings required consideration of the relevance or otherwise of the provisions of section 18(1) of the 1987 Act. That provision had been the subject of submissions during the course of the hearing. The section makes special insurance provisions relating to occupational diseases where the employer has become liable to pay compensation under section 16 and the injury is deemed to have happened after the worker ceased to be employed by the employer. The Arbitrator determined that, having regard to the fact that the employer was self insured immediately before the deceased ceased to be employed by it, the provisions of section 18 could “have no operation” (at [49]). The Arbitrator stated (at [50]) “The result is that the deemed date of injury, being 17 June 2008, puts the injury within the period of risk for Allianz. It is that insurer that is responsible for the payment of any compensation due to the estate of Mr Sweeney.” That conclusion was reached following a consideration of relevant authority.
Allianz is identified more specifically in the Certificate of Determination as being “Allianz Australia Workers Compensation (NSW) Limited”. It is plain that the Arbitrator has made a ‘slip’ in identifying the insurer. On this appeal it is agreed that the correct identity of the insurer on risk at that time was “Allianz Australia Insurance Limited Treasury Managed Fund” (‘Treasury Fund’). The Arbitrator proceeded to make the orders as set forth in [6] above.
SUBMISSIONS, DISCUSSION AND FINDINGS
This appeal has been brought by the employer in the interests of the Treasury Fund. That insurer was mis-described in the Certificate of Determination. The need for any correction of the terms of that Certificate may be addressed once the merits of the appeal have been considered. As noted above, that insurer’s period of risk commenced 1 July 1997 and the policy issued to the employer was current as at the deemed date of injury as found by the Arbitrator.
The grounds of appeal raised by the Appellant assert error on the part of the Arbitrator in ordering that the Treasury Fund “pay any compensation payable to [the deceased] and [the deceased’s] costs.” The submissions in support of this appeal deal firstly with suggested error of the Arbitrator concerning the proper construction and application of section 18(1) of the 1987 Act. The relevance or otherwise of that section can only be addressed once a finding has been made concerning the correctness or otherwise of the Arbitrator’s finding as to the deemed date of injury. The finding on that latter question is also challenged on this appeal. In the circumstances I consider it appropriate to deal firstly with those arguments raised concerning the finding by the Arbitrator that injury was deemed to have occurred on 17 June 2008.
Deemed Date of Injury
There is agreement that the subject injury is one to which section 16 of the 1987 Act applies. In such a case the date of injury is to be determined by reference to section 16(1)(a) which provides:
“16(1)(a) the injury shall, for the purposes of this act, be deemed to have happened
(i)at the time of the worker’s death or incapacity; or
(ii)if death or incapacity has not resulted from injury - at the time the worker makes a claim for compensation with respect to the injury; ...”
In the course of submissions before the Arbitrator the Treasury Fund adopted argument put by counsel appearing on behalf of the GIO that “… the deemed date of injury with respect to a claim for lump sum compensation is the date the worker last worked in causative employment. That causative employment was in February 1990.” The Treasury Fund, following that adoption, asserted that the relevant date would be 9 October 1989 or February 1990 (T.5).
On this appeal the Treasury Fund makes reference in the course of submissions to the evidence of Dr Bracken, the certificates of Dr Hamidi, the certificate of Dr Furey and the evidence of Dr Laird in support of an argument that there was evidence before the Commission of “incapacity” within the meaning of section 16(1)(a)(i) of the 1987 Act. It follows, it is argued, that such evidence would support a finding of deemed injury at 10 October 1989 (or 21 February 1990) or on a date earlier. The Treasury Fund proceeds to argue that those authorities upon which the Arbitrator relied could, on their facts, be distinguished from the present.
Counsel appearing on behalf of the self insurer before the Arbitrator summarised the medical evidence and sought to highlight those periods during which the deceased took time off from work by reason of pain and disability in various parts of his body. Whilst those submissions suggest that the deceased had, in a relative sense, been incapacitated at various times before he finished work, it is clear that the self insurer’s primary submission was that on the facts, and having regard to relevant authority, the deemed date of injury should be found to be 17 June 2008, that is the date of claim (transcript p13, 9-19).
On this appeal the self insurer submits that the Arbitrator was correct in her determination that the deemed date was 17 June 2008. The self insurer proceeds to argue that once a deemed date of injury has been determined “the relevant insurer (or self insurer) on risk at that time becomes liable to pay the relevant amount of compensation”. Reference is made to the terms of the policy which is prescribed by the statute (a copy of which is attached to the submissions) and argument concerning the insurer’s obligation to indemnify is addressed.
The self insurer advances an argument, in the alternative, that should the Arbitrator’s determination as to deemed date of injury be found to be erroneous and that incapacity of the deceased becomes relevant, “ such incapacity should date from a date in 1979 from which time the worker was incapacitated for work for about eight weeks following the worker’s first hip surgery carried out by Dr Chapman.”
Submissions on this appeal presented on behalf of GIO seek to refute those arguments advanced by the Treasury Fund founded upon the suggested relevance of “incapacity” as it appears in section 16(1)(a)(i). Reference is made to the authorities cited by the Arbitrator which, it is impliedly suggested, have been correctly applied by her when reaching a conclusion as to the appropriate deemed date of injury.
The Estate, in submissions both before the Arbitrator and on this appeal, advanced argument that, having regard to all relevant circumstances and the authorities, a proper determination of the deemed date of injury would be the date of claim, namely 17 June 2008.
The Arbitrator relied upon a number of authorities when reaching her conclusion as to the deemed date of injury. Those authorities included GIO Workers Compensation (NSW) Ltd v GIO General Ltd (1995) 12 NSWCCR 187 (‘GIO’); Alto Ford Pty Ltd v Antaw (1999) 18 NSWCCR 246 (‘Antaw’); Gow v Patrick Stevedores No.2 Pty Ltd (2002) 24 NSWCCR 626 (‘Gow’) and Stone v Stannard Brothers Launch Services Pty Ltd (2004) 1 DDCR 701 (‘Stone’). Consideration of those authorities led the Arbitrator to conclude that “incapacity” as it appears in section 16 “must relate to what is being claimed” and that application of the provisions of section 16 to given facts may lead to a determination of a different date of injury (deemed) in respect of a claim for weekly benefits and one concerning a claim for lump sums [at 39].
In GIO the Court of Appeal was concerned with the proper construction of section 15 of the 1987 Act, in particular the provision therein relating to determination of date of injury which is in terms similar to that found in section 16. The worker had developed a melanoma on his face following exposure to sunlight in the course of his employment. In 1983 the melanoma was removed. In 1993 the worker died, the cause of death being related to development of a tumour which was related to the facial melanoma. Death benefits pursuant to the 1987 Act (section 25) were claimed by the worker’s widow against the employer. The Court rejected the employer’s argument that the deemed date of injury should be determined by reference to the deceased worker’s incapacity which was experienced in 1983. It was held by the Court that, on a dependant’s claim, the injury should be deemed to have happened at the time of death. It was stated by Sheller JA (with whom Clarke and Priestley JJ A agreed)(at 196B) that ‘incapacity’ as it appears in section 15(1)(a)(i) “is a reference to the incapacity for which compensation is claimed” and later “ if on a worker’s claim, the injury is deemed to have happened at the time of incapacity and the employer liable to compensate is the employer at the time, or who last employed the worker before that time, it follows logically and sensibly that, on a dependant’s claim, if death results from the injury and the employer liable to compensate is the employer at that time, or who last employed the worker before that time, the injury should be deemed to have happened at the time of death. In neither case does it matter that there were earlier periods of incapacity resulting from the injury.” (at 196E).
In Antaw a worker suffered a frank injury in the course of his employment as a motor mechanic with the appellant in 1976 when a foreign body lodged in his left eye. He was then incapacitated and paid compensation benefits. In 1978 he was paid lump sum compensation pursuant to the Workers Compensation Act 1926 (‘the 1926 Act’) in respect of a 10 per cent loss of sight of the left eye. The worker left the appellant’s employ in approximately 1985. He subsequently worked in his trade with at least six employers. By 1992 the worker was experiencing difficulties performing his trade and in that year had further surgical treatment of his left eye. In April 1996 he ceased full-time work. The claim was brought against the appellant in respect of weekly payments and lump sums. The latter head of claim, in respect of a further 40% loss of sight in the left eye, was brought pursuant to sections 66 and 67 of the 1987 Act. Reliance was placed upon the provisions of section 15 of the 1987 Act.
The worker was awarded weekly compensation and lump sums as claimed. A finding was made by the judge determining the dispute that incapacity had occurred in 1992 and such date was the deemed date of injury (section 15(1)(i)) with respect to the claim for weekly benefits. Her Honour found that the deemed date of injury with respect to the lump sum claim was 29 July 1996, the date when such claim was made. It was from this decision that the appellant appealed.
Whilst the Court of Appeal found error with respect to Her Honour’s approach to the question concerning the identity of the employer responsible to pay compensation, her Honour’s reasoning when determining the dates of injury was expressly approved by Sheller J A with whom Meagher JA and Cole A-JA agreed. In the course of his reasons Sheller J A stated (at [25]):
“… as the evidence shows, by 1996 there was a further 40 per cent loss of vision since a lump sum award was made in 1978. Her Honour fixed the date of injury on the basis contemplated by s 15(1)(a)(ii) that incapacity had not resulted from that additional loss of vision and accordingly the appropriate time was the time that the respondent made his claim for compensation with respect to the injury. I can see no error in this approach, which accords with the terms of s 15. Accordingly, in my opinion, this ground of appeal fails.”
The decisions in GIO and Antaw were considered by the Court of Appeal in the matter of Stone. The appellant worker in Stone had worked on the waterfront between 1961 and 1985 at which time he ceased work by reason of a back disability and was awarded compensation. During his employment on the waterfront he had developed, following exposure at work, ‘sunspots’ which required removal from time to time. When he required treatment he took time off work. After he ceased work the worker continued with treatment of the sunspots having them either burnt off or surgically removed. In 2001 he made a claim for lump sums in respect of facial and bodily disfigurement. That claim was amended in 2003. Burke A-J, at first instance, found that it was probable that the worker had been incapacitated as a consequence of the sunspots and the need for treatment prior to 30 June 1987. Injury was found to have occurred at that time. In those circumstances compensation was assessed having regard to entitlement prescribed by the 1926 Act.
On appeal the Court upheld the worker’s challenge to that finding. Hodgson J A (with whom Mason P agreed) considered the Court’s decision in GIO and stated “ ... the decision in GIO shows that one must relate the question of the time of death or incapacity under s16(1)(a)(i) to what is being claimed. Where, as in GIO itself, what is being considered is not a worker’s claim based on incapacity, but a dependant’s claim based on death, the fact that there was incapacity prior to the worker’s death is irrelevant. The relevant time for the purposes of s16(1)(a)(i) is the time of death.” (at [36]). His Honour then made brief reference to the decision of the Court in P&O Berkeley Challenge v Alfonzo (2000) 49 NSWLR 481 (‘Berkeley Challenge’) following which his Honour noted the nature of the claims in respect of facial and bodily disfigurement and concluded (at (38]):
“Each such loss or injury was the disfigurement assessed by Dr Lobel on 5 March 2003, and included in the amended claim on 10 June 2003; and thus could not have caused incapacity prior to 30 June 1987: in my opinion, this plainly follows from Antaw (at 254 [18]). For that reason, in my opinion the primary judge did make an error of law, and the appeal must be upheld.”
In the present case I am of the opinion that the Arbitrator has correctly construed, as found between [37] and [44] of Reasons, the provisions of section 16 of the 1987 Act and that her conclusion that “…the deemed date of injury for all claims pursuant to s.66 of the 1987 Act made by Mr Sweeney is the date of claim, namely 17 June 2008” is correct.
The impairment claim in the present matter is that as assessed by Dr Bracken on 20 May 2008. In the matter of Stone Handley JA agreed in the orders as proposed by the majority. His Honour’s reasons, whilst obiter, are of assistance in the present matter. It was stated by his Honour (at [7]):
“The evident purpose of s16(1)(a) is to fix a precise date for a s16 injury. Where the worker claims or could claim weekly compensation for incapacity, the section enables this to be done. Where the worker suffers gradually increasing incapacity but makes no claim for weekly compensation the section cannot do this.”
The Treasury Fund’s argument, which relies upon medical evidence as a basis to infer ‘incapacity’ in a relevant sense, must be rejected. Firstly, as was mentioned in passing in Stone (per Hodgson J A at [17]), Burke A-J considered that in circumstances where an aggravation of a disease continues until cessation of employment, any suggested incapacity whilst employed would be of no relevance to the determination of a deemed date of injury with respect to the impairment claim. That view was not disputed by either party to those proceedings. Secondly, as stated by Handley JA in Stone (at [10]) “ Even if s16(1)(a)(i) was capable of operating in this case to fix a date for the worker’s incapacity injury, we should nevertheless follow the (Antaw) case where this Court specifically held that s 16(1) could fix different dates for incapacity and impairment injuries and, in the latter case the relevant date was the date of the claim.”
Having regard to the decision in Antaw section 16 operates, as found by the Arbitrator, to deem the date of injury in the present matter as being that of the date of claim.
Both the Treasury Fund and GIO have argued that the deemed date of injury and hence the liability to pay compensation is, having regard to section 16(1)(b), to be determined with reference to the date the deceased last worked ‘in causative employment’. That subsection provides:
“(b) compensation is payable by the employer who last employed the worker in employment that was a substantial contributing factor to the aggravation, acceleration, exacerbation or deterioration.”
Upon the assumption that section 16(1)(b) has application to the present facts, that is that it has work to do in circumstances where there is but one relevant employer, that subsection makes clear that the compensation is payable by the employer. There is nothing surprising about that however the question remains, given the finding as to deemed date of injury as must be determined by application of section 16(1)(a), who as between the employer (as self insurer or otherwise) and the Treasury Fund (or other insurer) is liable to pay the compensation? That question is addressed by application of section 18(1) of the 1987 Act.
Application of Section 18(1) of the 1987 Act
Upon the assumption that the employer’s liability has arisen under section 16(1)(b) as discussed in [50] above, and that the time at which the injury is deemed to have happened is at a time after the deceased ceased to be employed by it (section 16(1)(a)(ii)), regard must be had to section 18(1) of the 1987 Act. Application of section 18(1) is for the sole purpose of determining whether any insurer or which of two or more insurers is liable under a policy of insurance in respect of that compensation. That sub-section provides :
“18(1) if an employer has become liable under section 15(1)(b) or 16(1)(b) to pay compensation to a worker in respect of an injury and the time at which the injury is deemed to have happened is after the worker ceased to be employed by the employer, the liability of the employer is, despite sections 15 and 16, taken to have arisen immediately before the worker ceased to be employed by the employer. This subsection operates only for the purpose of determining whether any insurer or which of 2 or more insurers is liable under a policy of insurance in respect of that compensation.”
The Arbitrator has addressed the question of the relevance of section 18(1) between [47] and [50] of Reasons. Following a consideration of relevant authority she concluded that by reason of the fact that the employer was a self insurer at the time immediately before the deceased ceased to be employed, section 18 “can have no operation”. That conclusion was reached following a consideration of the decisions in Paunovic v Email Ltd [2002] 23 NSWCCR 589 (‘Paunovic’) and Johnson & Johnson Pty Ltd v Manufacturers Mutual Insurance Ltd [2000] NSWSC 155 (‘Johnson’).
Following a consideration of the decisions of Johnson and Paunovic together with the submissions of the parties, in particular those of the self insurer, I have concluded that the Arbitrator has erred in concluding that section 18 has no application to the present facts. That section, by its own terms, has limited operation. The purpose is stated to be for determination of “…whether any insurer or which of 2 or more insurers is liable under a policy of insurance in respect of that compensation.” (my emphasis). In the circumstances the Arbitrator’s decision requires review.
In the matter of Johnson, Young J (as he then was), considered the construction and proper application of the provisions of section 151AB of the 1987 Act in its then form. The purpose of that section is to be found in subsection (1) which, at that time, provided:
“(1) If an employer is liable independently of this Act for damages for an occupational disease contracted by a worker, the following provisions have effect for the purpose of identifying from among a number of insurers under policies of insurance obtained by the employer for different periods which insurer or insurers is liable to indemnify the employer for the full amount of the damages or which is liable to pay the full amount of damages to the worker (without any right to a contribution from those other insurers)...”.
The section then provided that, in particular circumstances which were set forth, liability is deemed to arise at a particular time. The facts in Johnson concerned an employer (the plaintiff) who was a self insurer at a relevant time. His Honour, following a review of relevant authority, concluded that “ a self insurer is not an insurer under s151AB. It follows that when one goes down to s151AB(2)(b), the plaintiff is not the insurer in respect of the employer’s liability and is not a responsible insurer.”
In the matter of Paunovic Johns J was considering the relevance or otherwise of section 18 of the 1987 Act in circumstances where at, it seems, a relevant time the employer was a self insurer. His Honour made reference, in the course of an addendum to his decision, to the decision of Johnson following which he made the following observation [at 51] “ it is my view that when s 18 of the 1987 Act refers to insurers ‘liable under a policy of insurance’ it refers to insurers who had issued policies of insurance. Because a self insurer does not issue a policy of insurance, this section also makes clear two distinct entities: employer and the insurer. For the reasons expressed by Young J, it is also my view that a self insurer is not an insurer under the provisions of s 18 of the 1987 Act.”
His Honour then made reference to the decision of Burke J in Di Giovanni v Smorgon Arc Pty Ltd (1992) 8 NSWCCR 582 (‘Di Giovanni’) and appears to have adopted the view there expressed that section 18 operates “for the purpose of determining which of two or more insurers is liable under a policy of insurance in respect of that compensation.”(at [54]). Whilst that is undoubtedly part of the purpose for the passage of the section, I respectfully consider that that view as expressed places an unwarranted limitation upon the operation of the section.
I have earlier (at [53]) attempted to highlight the purpose of section 18. The deemed date of injury has been found to be one 18 years after the deceased’s employment with the employer was terminated. That is a circumstance, in my view, that was intended to be addressed by section 18. The question is raised as to whether any insurer should be liable to indemnify the employer in respect of its liability to pay compensation to the Estate. This question was raised by counsel appearing on behalf of the Treasury Fund during the course of submissions before the Arbitrator (T18 34-48). The answer to that question is provided by the operation of section 18. The liability under section 16, having arisen at a time after the worker ceased to be employed by the employer, is to be taken to have arisen immediately before the worker ceased to be employed by the employer. On the present facts section 18 operates to deem that the employer’s liability had arisen in the year 1990 at which time the employer was a self insurer. The fact that the employer at that time was a self insurer does not, in my view, prevent application of the section to obtain the limited purpose for which it was enacted. Its enactment , and that of its legislative predecessor section 18(6A) of the former Act, was intended to overcome that which was demonstrated in State Coal Mines Control Authority v Government Insurance Office (1964) 65 SR (NSW) 258 (‘State Coal Mines’). There, as a consequence of the operation of the ‘disease’ provisions and the construction of the terms of the policy of insurance, an employer was left without indemnity.
I am fortified in my view as to the application of section 18 having regard to the distinction which may be drawn between its wordage and that of section 151AB as it was at the time relevant to the judgement of Young J in Johnson. The wording was found by his Honour “…to preclude liability in the concept that the self insurer be an insurer, because the self insurer does not issue a policy of insurance and the section makes it clear that there are two distinct entities: (a) the employer: and (b) the insurers.” (at [27]). The latter section plainly provides for the identification of the insurer or insurers, being among a number of relevant insurers, liable to indemnify an employer in those circumstances addressed by the section (see MMI Insurance Compensation (NSW) Ltd v Baker & Others (1997) 41 NSWLR 289 per Gleeson CJ at 294 E-G). Section 18 has a similar purpose however it extends, as I have attempted to outline above, to a determination as to whether any insurer is liable in respect of the subject compensation. The operation of section 18 is not defeated by reason of the fact that at a relevant time the employer was a self insurer. Its operation, as put on behalf of the Treasury Fund, has the result that no insurer is liable. The employer (self insurer) must meet the liability.
I note in passing that the position of a self insurer was touched upon by Yeldham J in Wunderlich Ltd v Manufacturers Mutual Insurance Ltd (1981) 2 NSWLR 678 (‘Wunderlich’) where the court considered the proper construction and application of the provisions of section 18(6B) of the former Act. The object of that provision, as stated by his Honour (at 684) was “to crystallize the time at which the liability of an insurer (or a self insurer) for a particular type of injury is deemed to arise.” Whilst the wordage of the section addressed by his Honour differed with that of section 18(1), the construction placed upon section 18(6B) by the court in Wunderlich stood, in his Honour’s view, notwithstanding the absence of a policy and where the employer is a self insurer (at 685). His Honour had earlier expressed his view (at 683-684) that, whilst the section did not contain the words “for the purpose of determining whether any insurer or which of two or more insurers is liable under a contract of insurance or indemnity” as appeared in section 18(6A) of the former Act (which addressed liability for compensation payments), it had that meaning. Those words are the very words appearing in the section here in question. The difficulty of reconciling the views expressed in Wunderlich by his Honour with those of Young J in Johnson has been acknowledged by Curtis J in Di Cecco v Mercantile mutual Insurance (Workers Compensation)Ltd (2002) 23 NSWCCR 143 (at [42]). However, as noted by Curtis J, nothing said by Young J in his judgment is inconsistent with a literal application of the provision there considered.
It is for these reasons I reject the self insurer’s submissions at [2.7 (a) and (d)] which are founded upon the decisions in Johnson and Paunovic. The self insurer also relies upon the decision of Geraghty J in Gow v Patrick Stevedores No 2 Pty Ltd (2002) 24 NSWCCR 626 (‘Gow’). It is correct that His Honour in Gow found that the proper application of section 16 of the 1987 Act had the consequence that the deemed date of injury on those facts with which he was dealing was a date 10 years after the worker’s retirement from his employment. In that matter there was no suggestion of any relevant incapacity hence the provisions of section 16(1)(a)(ii) applied for the purpose of determining the deemed date of injury (that is, the date of claim). The fundamental distinction between those matters addressed in Gow and the present matter is that in Gow the relevance of section 18 was never raised. It may be inferred that the factual circumstances in Gow, including those concerning insurance of the employer, were such that section 18 had no relevance.
The self insurer submits further at [2.7 (g)] that the question of liability to indemnify is to be determined having regard to the terms of the policy held by the employer as at the date of claim. Leaving aside the question of the appropriateness or otherwise of the Commission embarking upon questions of construction of the terms of the policy for the purpose of resolving a dispute as to indemnity, once the factual circumstances bring the provisions of section 18 into operation, the self insurer’s submissions can have no validity. It follows that I reject the self insurer’s submissions founded upon the wording of the policy.
Section 18 operates for the strictly limited purpose as discussed above and the Estate’s entitlement pursuant to section 66 of the 1987 Act is to be determined by reference to the deemed date of injury as found by the Arbitrator.
It may be seen that, following a review on the merits, I conclude that the appeal should succeed. The Arbitrator’s decision requires amendment as appears below.
DECISION
Paragraphs 1 and 2 of the Arbitrator’s determination are confirmed. Paragraphs 3 and 4 of the Arbitrator’s determination dated 30 July 2009 are revoked and the following orders are made in their place:
“3. That the respondent as self insurer pay any compensation payable to the applicant.
4. That the respondent as self insurer pay the applicant’s costs as agreed or assessed.”
COSTS
NSW Maritime Authority, in its interests as a self insurer, is to pay the costs of the appeal incurred by the Estate and by each insurer that has appeared.
Kevin O’Grady
Deputy President
25 January 2010
I, EMMA LETHBRIDGE-GILL, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF KEVIN O’GRADY, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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