Orana House Inc v Starcevic
[2005] WASCA 183
•22 SEPTEMBER 2005
ORANA HOUSE INC -v- STARCEVIC [2005] WASCA 183
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2005] WASCA 183 | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | FUL:100/2004 | 13 JUNE 2005 | |
| Coram: | STEYTLER P WHEELER JA ROBERTS-SMITH JA | 22/09/05 | |
| 14 | Judgment Part: | 1 of 1 | |
| Result: | Appeal dismissed | ||
| A | |||
| PDF Version |
| Parties: | ORANA HOUSE INC SLAVICA STARCEVIC |
Catchwords: | Workers' compensation Entitlement to lump sum compensation under Sch 2 Workers' Compensation and Rehabilitation Act 1981 Whether entitlement exists after worker has registered an election to retain right to damages at common law |
Legislation: | Workers' Compensation and Injury Management Act 1981 (WA), s 18, s 24, s 24B, s 25, s 67, s 68, s 93E(3), s 93E(4), s 93E(8), Sch 1, Sch 2 Workers' Compensation and Injury Management Regulations 1982 (WA), reg 4 Workers' Compensation and Rehabilitation Act 1981 (WA), s 24, s 24B, s 93E(8) Workers' Compensation Act 1912-1975 (WA), s 7(3) |
Case References: | Chalmers v Conaust WA Pty Ltd, unreported; CM-31/01; 8 August 2001 Geraldton Building Co Pty Ltd v May (1976) 136 CLR 379 Geraldton Building Co Pty Ltd v May (1977) 136 CLR 379 New South Wales Associated Blue-Metal Quarries Ltd v Federal Commissioner of Taxation (1956) 94 CLR 509 Abraham v Lee & Sons (1988) 8 WCR (WA) 13 Bird v The Commonwealth (1988) 165 CLR 1 Hatton v Great Boulder Gold Mines Pty Ltd [1981] WAR 349 Hewitt v Benale Pty Ltd; WMC Resources Ltd v Koljibabic (2002) 27 WAR 91 Moyle v Minister for Works [1979] WAR 183 Munro v Department of Fisheries & Wildlife [1978] WAR 1 Wilson v Wilson's Tile Works Pty Ltd (1960) 104 CLR 328 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : ORANA HOUSE INC -v- STARCEVIC [2005] WASCA 183 CORAM : STEYTLER P
- WHEELER JA
ROBERTS-SMITH JA
- Appellant
AND
SLAVICA STARCEVIC
Respondent
ON APPEAL FROM:
Jurisdiction : COMPENSATION MAGISTRATE'S COURT
Coram : MS P M HOGAN CM
File No : CM 195 of 2003
Catchwords:
Workers' compensation - Entitlement to lump sum compensation under Sch 2 Workers' Compensation and Rehabilitation Act 1981 - Whether entitlement exists after worker has registered an election to retain right to damages at common law
(Page 2)
Legislation:
Workers' Compensation and Injury Management Act 1981 (WA), s 18, s 24, s 24B, s 25, s 67, s 68, s 93E(3), s 93E(4), s 93E(8), Sch 1, Sch 2
Workers' Compensation and Injury Management Regulations 1982 (WA), reg 4
Workers' Compensation and Rehabilitation Act 1981 (WA), s 24, s 24B, s 93E(8)
Workers' Compensation Act 1912-1975 (WA), s 7(3)
Result:
Appeal dismissed
Category: A
Representation:
Counsel:
Appellant : Mr P E Jarman
Respondent : Mr S Melville
Solicitors:
Appellant : Jarman McKenna
Respondent : Chapmans
(Page 3)
Case(s) referred to in judgment(s):
Chalmers v Conaust WA Pty Ltd, unreported; CM-31/01; 8 August 2001
Geraldton Building Co Pty Ltd v May (1976) 136 CLR 379
New South Wales Associated Blue-Metal Quarries Ltd v Federal Commissioner of Taxation (1956) 94 CLR 509
Case(s) also cited:
Abraham v Lee & Sons (1988) 8 WCR (WA) 13
Bird v The Commonwealth (1988) 165 CLR 1
Hatton v Great Boulder Gold Mines Pty Ltd [1981] WAR 349
Hewitt v Benale Pty Ltd; WMC Resources Ltd v Koljibabic (2002) 27 WAR 91
Moyle v Minister for Works [1979] WAR 183
Munro v Department of Fisheries & Wildlife [1978] WAR 1
Wilson v Wilson's Tile Works Pty Ltd (1960) 104 CLR 328
(Page 4)
1 STEYTLER P: As appears from the judgment of Roberts-Smith JA, the issue raised by this appeal can be shortly stated. It is whether, once a worker has made an election under s 93E(3)(b) of the Workers' Compensation and Injury Management Act 1981 (WA) ("the Act"), it is open to that worker to make an election under s 24 of the Act so as to entitle the worker to a lump sum payment provided for in Sch 2 of the Act ("Sch 2 payment").
2 Division 2 of Pt IV of the Act provides for constraints on awards of common law damages. Section 93E(3), which forms part of that division, provides that damages can only be awarded if:
"(a) it is agreed or determined that the degree of disability [suffered by the worker] is not less than 30% and that agreement or determination is recorded in accordance with the regulations [a reference to the Workers' Compensation and Injury Management Regulations 1982]; or
(b) the worker has a significant disability and elects, in the prescribed manner, to retain the right to seek damages and the election is registered in accordance with the regulations."
3 A "significant disability" is defined in s 93E(4) to be a degree of disability which is agreed or determined to be not less than 16 per cent, where that agreement or determination is recorded in accordance with the regulations.
4 There is nothing in the Act which prevents an injured worker whose degree of disability is agreed or determined to be 30 per cent or more from seeking to recover common law damages (if the agreement or determination has been recorded in accordance with the regulations) while still continuing to receive weekly compensation payments under the Act pursuant to s 18 thereof read with Sch 1 (s 18 provides that, if a disability of a worker occurs, the employer shall, subject to the Act, be liable to pay compensation in accordance with Sch 1). However, the same is not true in the case of a less severely injured worker who has made an election under s 93E(3)(b). That is because s 93E(8) provides that, subject to subs (9) and (11) (which are not presently material):
"… if an election has been made under subsection (3)(b) compensation under this Act is not payable in respect of the disability … in relation to any period after the day on which the
(Page 5)
- election is registered or any expenses incurred during such a period."
5 The appellant contends that a Sch 2 payment is "compensation under … [the] Act" in respect of a disability, just as weekly payments of compensation are. It also contends that, once an election under s 93E(3)(b) has been registered, no such payment can be made to a worker as the payment will necessarily be one of compensation in respect of the disability in relation to a period after the day on which the s 93E(3)(b) election has been registered and hence prohibited by s 93E(8).
6 This last contention requires some analysis of the nature of a Sch 2 payment. The appellant is right to describe it as a payment of compensation. However, it is compensation of a kind different from that provided for by s 18 and Sch 1. Schedule 1 covers a range of circumstances, but is primarily concerned with compensation for total or partial incapacity for work, with the compensation being calculated by reference to the degree and duration of the incapacity. In the case of a partial or total incapacity for work resulting from a disability a worker can receive weekly payments under s 18 and Sch 1 regardless of whether the injury giving rise to the incapacity is permanent. The focus, in such a case, is on the incapacity rather than upon the nature of the injury. However, the effect of Sch 2, read with s 25 of the Act, is that a Sch 2 payment is payable only by way of compensation for a permanent injury. The focus, there, is on the nature of the injury rather than on any resulting incapacity.
7 Moreover, a worker can receive weekly payments under s 18 and Sch 1 and then, in a case in which the injury giving rise to the incapacity is permanent, make an election under s 24 to receive a Sch 2 payment in addition to the payments already received. The election has no impact on the payments already received but brings to an end an entitlement to future weekly payments of compensation and expenses. This is the effect of s 24B(1) of the Act, which requires the worker to make the election by signing a prescribed form, when read with reg 4 and Form 1 of the Workers' Compensation and Injury Management Regulations 1982. Regulation 4 provides that the form of election referred to in s 24B is (except in the case of noise-induced hearing loss) to be Form 1, which, in turn, provides for an acknowledgment by the worker that, after registration of an agreement to pay, or the making of the award of, compensation under Sch 2:
(Page 6)
- "(1) … [The worker] shall have no further entitlement to compensation under the Act for weekly payments arising out of … [the] disability;
(2) … [The worker] shall have no further entitlement in respect of that disability subsequent to the date of … [the] election, to payment of expenses under clauses 9, 17, 18 and 19 of Schedule 1 …;
(3) … [The worker] shall have no entitlement to further moneys upon any increase to the prescribed amount for … [the] percentage loss of the part or faculty of the body the subject of … [the] election."
8 It is plain that an election under s 24 is not a redemption of the weekly payments made under s 18 and Sch 1, as to which see ss 67 and 68 of the Act and see, also, Geraldton Building Co Pty Ltd v May (1976) 136 CLR 379 at 394, per Gibbs J, decided in respect of the former provisions of s 7(3) of the Workers' Compensation Act 1912 - 1975 (WA) (which are relevantly similar to the provisions of s 24 of the current Act). Also, as Gibbs J pointed out in May (ibid):
"… from a practical point of view the worker is not called upon to choose between the weekly payments and the additional amount for expenses on the one hand and the sum payable under the Second Schedule on the other, but between receiving the latter sum immediately, with the result that the other benefits cease to be payable, and continuing to receive the weekly payments and the additional payment for expenses, with the consequence that payment under the Second Schedule is postponed."
9 It seems to me to be apparent from all of this that a Sch 2 payment, while amounting to compensation under the Act, is not compensation which is payable in respect of a disability "in relation to any period". This last phrase seems to me to be apposite to weekly payments made in accordance with Sch 1 pursuant to s 18 of the Act, but not to a lump sum Sch 2 payment made by way of compensation for a permanent injury in circumstances in which that compensation is not calculated by reference to any period of incapacity for work and in which, as I have said, it is not, in any sense, a redemption of the weekly payments payable under s 18 and Sch 1. It follows, from this conclusion, that the making of an election
(Page 7)
- under s 93E(3)(b) does not preclude the subsequent receipt of a Sch 2 payment.
10 The appeal should consequently be dismissed.
11 WHEELER JA: I have had the advantage of reading in draft the reasons for decision of Roberts-Smith JA. I agree with those reasons and have nothing to add.
12 ROBERTS-SMITH JA: This is an appeal against the decision of her Honour Compensation Magistrate Hogan who dismissed an appeal against the decision of Review Officer Brash who ordered the appellant to pay the respondent a lump sum under Sch 2 of the Workers' Compensation and Rehabilitation Act 1981 (WA) ("the Act") (now known as the Workers' Compensation and Injury Management Act 1981 (WA)). The facts are not in dispute. They are as follows.
13 The respondent made a claim for payment of workers' compensation arising from disabilities claimed to have been sustained to her left knee and lower back during the course of her employment with the appellant on 9 September 2001 ("accident").
14 Liability for the respondent's claim was accepted on the appellant's behalf in respect of the alleged back disability by its insurer on 7 November 2001 pursuant to s 57A(3)(a) of the Act.
15 By a Form 22 application filed at the Conciliation & Review Directorate ("Directorate") on 19 March 2002, the respondent sought a determination of degree of disability resulting from the accident of not less than 16 per cent.
16 The parties could not reach agreement and the Form 22 application proceeded to a review hearing before Review Officer McCloskey on 2 August 2002.
17 On 27 June 2003, Review Officer McCloskey made a bare determination that the respondent's degree of disability was "not less than 16%".
18 On 1 July 2003, the Director recorded the determination of Review Officer McCloskey pursuant to reg 19L of the Workers' Compensation and Rehabilitation Regulations 1982 (WA) ("Regulations") (now known as the Workers' Compensation and Injury Management Regulations 1982 (WA)).
(Page 8)
19 On 25 July 2003, the respondent filed a Form 25 Election to Retain the Right to Seek Damages, which was registered by the Director with effect from 15 July 2003.
20 On 25 July 2003, the respondent also filed a Form 1 Election for Schedule 2 Injuries dated 15 July 2003, in reliance upon Review Officer McCloskey's determination. It is unclear whether the Form 1 was lodged before or after the Form 25. The Form 1 contained an acknowledgement by the respondent in the following terms, that after registration of the agreement made pursuant to s 24B(4)(a):
"(1) I shall have no further entitlement to compensation under the Act for weekly payments arising out of that disability;
(2) I shall have no further entitlement in respect of that disability subsequent to the date of this election, to payment of expenses under clauses 9, 17, 18 and 19 of Schedule 1 (that is, in general terms, medical or surgical, dental, physiotherapy or chiropractic advice or treatment, first aid and ambulance expenses, medical requisites, charges or attendance and treatment by way of rehabilitation, charges for hospital treatment and maintenance, cost of artificial aids and travelling expenses);
(3) I shall have no entitlement to further moneys upon any increase to the prescribed amount for this percentage loss or faculty of the body the subject of this election."
21 By a Form 1 application filed at the Directorate on 20 August 2003, the respondent sought an order requiring payment of her alleged Sch 2 entitlement, annexing the Form 1 Election for Schedule 2 Injuries and a report prepared by Dr R J Warner dated 13 March 2002.
22 The application proceeded to a review hearing before Review Officer Brash on 29 October 2003. On 12 November 2003, the Review Officer ordered the appellant to pay the respondent a lump sum payment under Sch 2 of the Act of $13,623.66.
23 On 11 December 2003, a notice of appeal was filed on behalf of the appellant, submitting that Review Officer Brash had erred in law in that he determined that the appellant was obliged to pay the respondent a lump sum payment under Sch 2 of the Act raising four grounds of appeal.
(Page 9)
24 Her Honour discussed the timing of the filing of the Form 1 election and the Form 25 election. She said that on the basis of handwritten entries, it might have been concluded that the Form 1 election was lodged before the Form 25 election, but she did not make a finding about this because she considered the time of receipt of the Form 1 election was irrelevant.
25 Her Honour explained that Pt IV of the Act provides for civil proceedings in addition to, or independent of, the Act. In this case the respondent was assessed as having a degree of disability of not less than 16 per cent, defined by s 93E(4) as a "significant disability". The Act provides that where a worker has a significant disability, he or she may elect to retain the right to seek common law damages: see s 93E(3)(b). However, s 93E(8) provides:
"Subject to subsections (9) and (11), if an election has been made under subsection (3)(b) compensation under this Act is not payable in respect of the disability, or any recurrence, aggravation or acceleration of it, in relation to any period after the day on which the election is registered or any expenses incurred during such a period." (My emphasis)
26 The phrase "compensation under this Act", which appears in the subsection, clearly encompasses Sch 2 payments. However, the issue raised by this appeal is whether a Sch 2 payment is compensation payable "in relation to any period after the day on which the [Form 25] election is registered".
27 The grounds of appeal are that her Honour:
"1 Wrongly followed and/or failed to distinguish the decision of the Compensation Magistrate's Court in Chalmers v Conaust WA Pty Ltd (unreported, CM-31/01).
2 Wrongly interpreted s.93E(8) of the Act in accordance with its terms and the legislative intent in:
(a) Having properly found that lump sum compensation calculated in accordance with Schedule 2 of the Act does not become payable until after an election in accordance with section 24(1) of the Act and compliance with all of the provisions on section 24B of the Act, wrongly found that compensation in the form of a lump
(Page 10)
- sum payment under Schedule 2 of the Act is 'payable' after registration of an election to retain the right to an award of damages under s.93E(3)(b) of the Act.
- (b) Finding that compensation in the form of a lump sum payment under Schedule 2 of the Act is not compensation payable 'in respect of a period after the day on which the [s.93E(3)(b)] election' is registered and is thus payable after registration of an election to retain the right to an award of damages under s.93E(3)(b) of the Act.
(c) Finding that lump sum compensation calculated in accordance with Schedule 2 of the Act has no relationship to liability for or the extent of weekly payments that might be payable in the future or any period at all, when by electing to receive such lump sum compensation a [sic] injured worker gives up all of his or her future entitlements to compensation for all periods in the future irrespective of how calculated.
(d) Wrongly finding that the reference to the word 'period' in section 93E(8) effectively excluded lump sum compensation calculated in accordance with Schedule 2 of the Act from the effect of the prohibition provided for in that sub-section.
(e) Failing to find that an election for lump sum compensation calculated in accordance with Schedule 2 of the Act is an election to forgo compensation under the Act for all periods in the future and that, as a result, any compensation that otherwise might be payable under such an election would be caught within the terms of prohibition in section 93E(8) of the Act."
28 This issue was considered by a Compensation Magistrate in Chalmers v Conaust WA Pty Ltd, unreported; CM-31/01; 8 August 2001. In that case, Cockram CM had determined that a Sch 2 payment is not compensation payable in respect to any period, but rather compensation paid with respect to a specified injury or injuries.
(Page 11)
29 Her Honour cited the following passage from the decision in Chalmers:
"[22] Had it been the intention of the Legislature that an election under s.93E(3)(b) would bring to an end a worker's right to all and any compensation payable under the Act (including compensation payable as a result of an election as provided by s.24B) the words 'in relation to any period' would not have, I would have thought, been required. Section 93E(8) could relevantly have read: '.. compensation under this Act is not payable in respect of the disability … after the day on which the election is registered …' The addition of the words 'in relation to any period' therefore, in my opinion, add a factor for consideration when determining what compensation payable under the Act is affected by an election under s.93E(3)(b)."
30 Her Honour rejected a submission by counsel for Orana House that by the phrase "in relation to any period" Parliament intended to save a worker's right to compensation in respect of periods on or before, but not after, the day on which a s 93E(8) election was made.
31 Her Honour referred to Geraldton Building Co Pty Ltd v May (1976) 136 CLR 379 and set out the following passage from the judgment of Gibbs J at 394, that the legislative provisions:
"… appear to be intended to give a worker the right to receive weekly payments during incapacity, partial or total, as well as the sum fixed by the Second Schedule, provided that the total does not exceed the "prescribed amount". In addition he may receive medical, hospital and the like expenses. The election brings to an end his right to receive the weekly payments and the additional payment for expenses. The election is in no sense a redemption of the weekly payments, and from a practical point of view the worker is not called upon to choose between the weekly payments and the additional amount for expenses on the one hand and the sum payable under the Second Schedule on the other, but between receiving the latter sum immediately, with the result that the other benefits cease to be payable, and continuing to receive the weekly payments and the additional payment for expenses, with the consequence that payment under the Second Schedule is postponed. It is not easy to see why it
(Page 12)
- should have been thought desirable to give a worker this choice, and a consideration of the subject matter and objects of the legislation does not provide much assistance …" (Emphasis added by her Honour)
32 Hogan CM further quoted with approval the reasons of Cockram CM in Chalmers, referring to the dictionary meaning of "period" and holding that as the term was not defined in the Act, its context did not suggest that it should be construed other than by reference to its ordinary dictionary meaning (citing New South Wales Associated Blue-Metal Quarries Ltd v Federal Commissioner of Taxation (1956) 94 CLR 509, 512). She referred to the view formed by his Honour as a consequence, that compensation paid under s 24 is not compensation paid "in relation to any period" but is compensation paid in relation to specific injuries; and the reference to "period" in s 93E(8) is more appropriately a reference to compensation paid under the Act in the form of weekly payments.
33 Relevantly, her Honour then went on to note that entitlement to a Sch 2 payment is dependent upon the worker's ability to establish a permanent injury listed in that schedule. An incapacity for work is not a prerequisite for a Sch 2 payment, whereas such an incapacity (whether partial or total) is a prerequisite for establishing an entitlement to weekly payments. She noted further that once it is agreed or a determination is made as to permanent injury, the calculation of the amount payable has nothing to do with the extent to which weekly payments would have been likely to continue; it is determined solely by the particular degree of loss in the relevant body part or function. Finally, her Honour observed that whilst a Sch 2 amount is not payable unless and until a worker makes election on a Form 1 (and all the provisions of s 24B are satisfied), the liability to make the payment bears no relationship to any period at all, let alone to any period after the day on which a Form 25 election is registered. Her Honour therefore concluded that the requirement that the compensation be payable in relation to any "period" effectively excluded Sch 2 compensation from the compensation referred to in that section.
34 Her Honour's reasoning is persuasive and I consider it to be correct.
35 Counsel for the applicant accepted that a lump sum payment under Sch 2 is compensation in relation to an injury, rather than for loss of capacity to work. His proposition, shortly put, was that once a worker has made a Form 25 Election to Retain the Right to Seek Damages (and the election is registered), they forfeit any right to make a Form 1 election for a Sch 2 lump sum payment, because a Sch 2 payment is "compensation
(Page 13)
- under the Act" within the meaning of s 93E(8). The proposition then advanced is that the words "in relation to any period …" refer to the period after registration.
36 That, however, cannot be right, if the words are read with those following. The phrase is "in relation to any period after the day on which the election is registered …". "Period" is relevantly defined in the "Macquarie Dictionary" 2nd Revised Ed at 1267 as: "any specified division or portion of time".
37 In the context then, the words "any period" can only mean any specified division or portion of time occurring at any time after registration - and the words become redundant if read in the way contended for by the appellant.
38 It was further submitted that the words "in relation to any period …" should be construed as having the purpose of preserving entitlements to payment of compensation which may have accrued before the day on which the election is registered, but not afterwards. That submission had been put to the Compensation Magistrate and rejected by her. It was submitted these accrued entitlements could be a Sch 2 lump sum payment, a redemption amount under s 67 or could more likely be weekly payments, liability to make which had accrued but which had not in fact been paid.
39 I do not accept this submission. It is, in effect, the same submission as that which I have rejected above - namely, that "period" means the time after which the election is registered.
40 As counsel for the respondent submitted, the lump sum entitlement for personal injury is conceptually very different to an entitlement to weekly payments for incapacity. A worker may have a lump sum entitlement for permanent loss of function of a little finger, pursuant to the provisions of Sch 2, yet have no entitlement to weekly payments of compensation pursuant to the provisions of cl 7 of Sch 1, because they have returned to work earning as much in wages as they would otherwise have been entitled to, had they been in receipt of weekly payments of compensation in lieu of wages. Conversely, there may be concurrent entitlements to weekly payments and a second schedule lump sum.
41 I further accept the submission that the fact that a lump sum entitlement pursuant to the second schedule bears no relationship to an ongoing entitlement to weekly payments is further demonstrated in the Act provides a mechanism for redeeming an entitlement to weekly
(Page 14)
- payments. That mechanism is contained in s 67 and s 68 of the Act, which provide clearly that the entitlement to redeem future weekly payments is dependent upon permanent total or partial incapacity and that the method of calculating the lump sum pursuant to s 68 is done on quite a different basis than that used to ascertain the lump sum entitlement pursuant to the second schedule - and which, as I have observed above, does not depend in any way on incapacity to work.
42 The clear intent of the legislature was that by electing for common law damages, a worker would be giving up their rights to weekly payments and statutory allowances.
43 However, the legislative intent that an election for a Sch 2 payment was to be in respect of injury, not incapacity to work, as her Honour found, is also clear. For that reason, and because (as counsel for the appellant agreed) a Sch 2 payment is not (and does not include) a redemption of weekly payments, it is not one which is made "in relation to any period" occurring after the day on which the election is registered.
44 Her Honour's reasons and conclusions were correct. I would accordingly dismiss the appeal.
0
6
4