Paul Lingard Constructions P/L v WorkCover Qld; National Bricklaying P/L v WorkCover Qld
[2004] QCA 468
•3 December 2004
SUPREME COURT OF QUEENSLAND
CITATION:
Paul Lingard Constructions P/L v WorkCover Qld & Anor; National Bricklaying P/L v WorkCover Qld & Anor [2004] QCA 468
PARTIES:
PAUL LINGARD CONSTRUCTIONS PTY LTD
ACN 074 975 367
(plaintiff/appellant)
v
WORKCOVER QUEENSLAND
(first defendant/first respondent)
Q-COMP
(second defendant/second respondent)NATIONAL BRICKLAYING PTY LTD
ACN 076 408 387
(plaintiff/appellant)
v
WORKCOVER QUEENSLAND
(first defendant/first respondent)
Q-COMP
(second defendant/second respondent)FILE NO/S:
Appeal No 6994 of 2004
Appeal No 6995 of 2004
SC No 4527 of 2004
SC No 4528 of 2004DIVISION:
Court of Appeal
PROCEEDING:
General Civil Appeals
ORIGINATING COURT:
Supreme Court at Brisbane
DELIVERED ON:
3 December 2004
DELIVERED AT:
Brisbane
HEARING DATE:
29 November 2004
JUDGES:
Williams and Jerrard JJA and Mackenzie J
Separate reasons for judgment of each member of the Court, each concurring as to the orders madeORDERS:
In each appeal:
Appeal allowed1.
Set aside the order of 19 July 2004 and in lieu thereof order that the statement of claim be struck out with leave to the plaintiff to deliver an amended statement of claim on or before 31 January 2005 and further order that the plaintiff pay the first defendant’s costs of and incidental to the application of 18 June 2004 to be assessed2.
Order that within 14 days of the filing of the amended statement of claim the first defendant apply to a judge of the Trial Division for directions enabling the issues raised by the amended statement of claim to be determined expeditiously3.
Order that the costs of the appellant and the first respondent of the appeal be reserved to the Trial Division judge determining the proceedings based on the amended statement of claim4.
Further order that in default of the filing and serving of an amended statement of claim on or before 31 January 2005 the appellant pay the first respondent’s costs of and incidental to the appeal5.
CATCHWORDS:
WORKERS’ COMPENSATION – INSURANCE OR LEVY – QUEENSLAND – where first respondent made default assessments of appellants’ liability for premiums – where appellants sought declarations that premiums claimed by first respondent were invalid – where that relief claimed pursuant to the “general law and/or pursuant to s 20(1) Judicial Review Act” – where learned primary judge ruled that relief pursuant to Judicial Review Act was inappropriate – where first respondent applied to have appellants’ claims and statements of claim struck out – where learned primary judge refused appellants’ applications for leave to replead the action and dismissed their actions – whether an appropriately amended statement of claim could provide a basis for a declaration that the assessments were unlawful – whether appellants should have been given the opportunity to replead their statements of claim
Judicial Review Act 1991 (Qld), s 20, s 21
WorkCover Queensland Act 1996 (Qld), s 52, s 58, s 62, s 403A, s 491
Workers’ Compensation and Rehabilitation Act 2003 (Qld), s 327, s 328Noosa Shire Council v T M Burke Estates Pty Ltd [2000] 1 Qd R 398, cited
COUNSEL:
K S Howe for the appellants
G A Thompson SC, with N Andreatidis, for the first respondent
P B O’Neill for the second respondentSOLICITORS:
Michael Sing Lawyers for the appellants
Corrs Chambers Westgarth for the first respondent
Q-Comp for the second respondent
WILLIAMS JA: Consequent upon default assessments purportedly made pursuant to s 62 of the WorkCover Queensland Act 1996 (“the Act”) the first respondent, WorkCover Queensland, demanded by letter dated 21 May 2004 that the appellant Paul Lingard Constructions Pty Ltd pay $243,060.17 and that the appellant National Bricklaying Pty Ltd pay $1,182,908.99. Each appellant responded by commencing an action on 25 May 2004 against the first respondent and Q-Comp, the second respondent. The principal relief claimed in each statement of claim was:
“1. A declaration that the premium claimed by the first named defendant is invalid and the plaintiff has no liability for the sum claimed in respect of the first named defendant.
2. Alternatively, a declaration that the outstanding premium has otherwise been assessed or determined inappropriately.”
Those claims were said to be made pursuant to the “general law and/or pursuant to Section 20(1) of the Judicial Review Act (1991)”.
In each action the first respondent applied summarily for the following orders:
“1. The claim and statement of claim filed herein be struck out;
2. The proceeding be dismissed;
3. In the alternative that there be judgment for the first defendantagainst the plaintiff”.
When the matter came at first instance before a judge of the Trial Division much of the argument centred on the submission that relief pursuant to the Judicial Review Act was inappropriate, essentially because adequate provision was made by the Act for a review of the default assessment made by the first respondent; reference in that regard was made to s 12 and s 13 of the Judicial Review Act. However senior counsel who then appeared for each of the appellants made it clear that declaratory relief was also sought pursuant to s 128 of the Supreme Court Act 1995; it was contended that the Supreme Court had inherent jurisdiction to declare unlawful a default assessment if it was made in bad faith or it was otherwise established that the assessment was ultra vires. On the hearing of the applications of the first respondent senior counsel for each appellant conceded that each appellant needed to re-plead its case. The final oral submission was:
“So that’s why, in my respectful submission, your Honour wouldn’t finally strike it out without giving the plaintiffs at least a further opportunity to replead their case.”
In written submissions at first instance the ultimate position taken by each appellant was that there “should be directions for delivery of a new and better particularised Statement of Claim with future directions for the further conduct of both proceedings.”
After setting out the factual background as then presented the learned judge at first instance noted that the principal ground on which the first respondent relied was that the claim could not be made pursuant to the Judicial Review Act. The learned judge after noting that the appellants maintained that in addition their claim was under the general law went on: “it is apparent from a reading of the pleading, that it does purport to be an application under section 20 of the Judicial Review Act in addition to a claim under the general law.” The reasons for judgment then concentrated on demonstrating that it was inappropriate to make the claim pursuant to the Judicial Review Act. That reasoning would appear to be correct and it was not seriously challenged on the hearing of the appeal. The reasons then went on:
“In my view the pleading as it is and as it might be amended does not disclose that it is under the general law rather than an application for judicial review. But should I be wrong about that, I should say that I would nevertheless be inclined to refuse to exercise the jurisdiction of the Court to consider it a matter which should be determined in this Court. The reasons for that are found in the decision of Justice Pincus in Noosa Shire Council v T M Burke Estates Pty Ltd [2000] 1 QdR 398 at [11].
...
It has been conceded by the plaintiff that the pleading as it currently exists is fatally flawed and would need to be repleaded if it were to satisfy the rules of pleading and disclose a course of action. That ... could be dealt with by giving leave to replead. But in the circumstances where I have held that the matter ought be dismissed, there is no merit in giving leave to replead.”
In consequence the order made in each case was that the plaintiff’s action be dismissed. It is from those orders that these appeals are brought.
When the matter was argued in this court reference was made by counsel for the appellants to a number of matters which, if established factually in proceedings, might provide a basis for a court concluding that the default assessments were made in bad faith or were otherwise ultra vires. It was submitted that such matters were implicit in the allegations made in the statement of claim filed 25 May 2004, but it was conceded that it was necessary to re-plead in order to make those allegations specifically and to relate them to the relief sought. Ultimately the most significant submission made by counsel for the appellants was that the learned judge at first instance erred in dismissing the proceedings rather than in each case striking out the statement of claim and giving leave to re-plead seeking relief under the general law.
This court is not in a position to make any finding on the matters raised in the course of submissions, nor would it be proper for this court to make any statement on the submissions which could be regarded as impliedly making a finding of fact. But it is necessary for this court to consider the broad ambit of the submissions on behalf of the appellants in order to determine whether there is a sufficient basis upon which to grant leave to re-plead.
It can be assumed for present purposes that the first respondent had reasonable grounds for suspecting that each appellant had not satisfied the obligation imposed on it by s 52 to ensure workers employed by it were insured pursuant to the provisions of the Act. It can also be assumed that each appellant did not co-operate with the first respondent in providing information which would enable the first respondent to set a premium pursuant to s 58 of the Act. Thus the first respondent had a statutory right to make a default assessment of premium with respect to each appellant. Section 62(3) provided that in making the default assessment the first respondent could have regard to:
“(a) the probable wages paid or to be paid by the employer during the period of insurance for which the default assessment is made; and
(b)the nature of the employer’s industry or business.”
The first respondent proceeded to make an assessment on the basis that the amount shown in the profit and loss statement for each company as the amount paid for “materials and sub-contractors” indicated the probable wages paid, and calculated the default premium accordingly. Each appellant sought a review of that assessment pursuant to s 491 of the Act. The response from the second respondent, purportedly acting as the “review unit”, was that the default assessment was incorrect and “WorkCover should now reassess the policy to reflect the correct amount of wages paid.” The first respondent then refused to reassess the default assessment. At that stage it was made clear that the default assessment was based on the assumption that 66% of materials and sub-contractors payments related to wages. That was confirmed in the letter of 30 April 2004 which purported to be the decision of the second respondent upon a further review after the refusal to reassess. The letter conveying that the decision was not before the learned judge at first instance but was marked Exhibit 1 on the hearing of the appeal.
The contention the appellants wish to advance is that the default assessments are so arbitrary that they must be regarded as made in bad faith. It was submitted that prima facie there was no attempt by the first respondent to have regard to the number of relevant workers or the amount paid to such workers as wages in determining the default assessments; that it was said demonstrated the arbitrariness of the assessments.
In order ultimately to succeed the appellants would have to establish that the making of the default assessments was so unreasonable that it amounted to exercising the power in bad faith. That would impose a very heavy onus on the appellants but it is not for this court at this stage to comment on the merits. It is sufficient to say that the appellants have demonstrated in argument in this court that an appropriately amended statement of claim could provide a basis for this court ultimately declaring that the assessments made were unlawful. The reasoning in Noosa Shire Council v T M Burke Estates Pty Ltd would not necessarily preclude the making of such a declaration.
Another argument advanced on behalf of the appellants related to the standing of the second respondent. Section 403A of the Act provided that WorkCover “must establish a review unit that is separate from WorkCover’s commercial insurance business” for the purpose of undertaking reviews under Chapter 9 Part 2 of the Act. At some time and by some means no party to the appeal could specify, it appears that, probably by the construction of a Chinese wall, WorkCover established a unit entitled Q-Comp. At material times Q-Comp was not a legal entity; upon the enactment of the Workers’ Compensation and Rehabilitation Act 2003, s 327 and s 328 thereof effectively created Q-Comp as a body corporate. But at material times for present purposes the identity of the persons shielded by the Chinese wall, and who had the responsibility for exercising the powers of review pursuant to Chapter 9 Part 2 of the Act, remained unclear. The letter which became Exhibit 1 in this court, and which purported to communicate the final decision of the review unit on 30 April 2004, was apparently signed by one Wayne Halfpapp, describing himself as Review Officer. Prima facie one does not know whether it was he or some other person who made the appropriate decision in the name of the second respondent. Indeed in the absence of any indication as to how and when and by whom the second respondent was constituted under the Act the appellants submit that they can contend that the purported review of the default assessment was a nullity. Their contention appears to be that it is arguable that the whole of the review process was a charade and there has been no proper review of their timely objection to the default assessment; if the decision-maker cannot be identified one cannot evaluate the process.
Again it is neither necessary nor desirable for this court to comment upon the validity of the argument. It is sufficient to say that if matters relating to the standing of the “review unit” for purposes of Chapter 9 Part 2 of the Act were properly pleaded there may well be a basis on which this court would have to consider the overall validity of the decision-making process in question.
Associated with issues relating to the status of the “review unit” is the question whether or not the appellants could have resorted to the appeal provisions contained in Chapter 9 Part 3 of the Act. If there was no valid determination by a “review unit” could there be an appeal under Part 3? Further, if the decision communicated on 30 April 2004 was effective, could the appellants have appealed pursuant to Part 3 because the decision of the “review authority” was well outside the time limits prescribed by the Act?
Against all of that background I have come to the conclusion that the appellants ought to have been given the opportunity of re-pleading their statements of claim. Of course, that should not include a claim for relief pursuant to the Judicial Review Act. In the light of submissions made in this court it is clear that rather than dismissing the actions the learned judge at first instance ought to have struck out the statements of claim and given the appellants leave to re-plead.
It is important that the issues sought to be raised by the appellants are determined expeditiously because that may impact upon the first respondent’s legal entitlement to make assessments and recover premiums with regard to the appellants. Counsel for the first respondent was troubled by the reference in s 60 of the Act to “the three preceding periods of insurance”. But it may well be that if no valid default assessment has been made default assessments could be made pursuant to s 62 with respect to any year.
Because of that consideration the amended statements of claim should be delivered on or before 31 January 2005, and within 14 days of the delivery of the amended statements of claim an application should be made by the first respondent to a judge of the Trial Division for directions enabling the issues raised by the amended statements of claim to be determined expeditiously.
The orders of the court in each appeal should therefore be:
1. Appeal allowed;
2. Set aside the order of 19 July 2004 and in lieu thereof order that the statement of claim be struck out with leave to the plaintiff to deliver an amended statement of claim on or before 31 January 2005 and further order that the plaintiff pay the first defendant’s costs of and incidental to the application of 18 June 2004 to be assessed.
3. That within 14 days of the filing of the amended statement of claim the first defendant apply to a judge of the Trial Division for directions enabling the issues raised by the amended statement of claim to be determined expeditiously.
4. Order that the costs of the appellant and the first respondent of the appeal be reserved to the Trial Division judge determining the proceedings based on the amended statement of claim.
5. Further order that in default of the filing and serving of an amended statement of claim on or before 31 January 2005 the appellant pay the first respondent’s costs of and incidental to the appeal.
6. There be no order as to costs with respect to the second respondent.
JERRARD JA: In this appeal I have had the advantage of reading the reasons for judgment of Williams JA and Mackenzie J and respectfully agree with those and the orders proposed by Williams JA, including that the appeals should be allowed only regarding the dismissal of the claims for a declaration other than in reliance on s 20 of the Judicial Review Act 1991. The appellant plaintiffs made little challenge on the appeal to the learned judge’s ruling with respect to s 12 and s 13 of the Judicial Review Act, namely that adequate provision, or provision, was made by a law, other than that Act, by which the appellants were entitled to seek a review of the matter by another court or tribunal.
The appellants did not seriously challenge that conclusion, which had resulted in the learned judge being appropriately satisfied that the applications, to the extent that they were for judicial review of the decisions of either the first or second respondent or both, should be dismissed. The appellants did not particularly rely on any ambiguity as to the status of Q-Comp to argue that adequate provision for review had not been made. It may be that the effect of s 592 of the Workers’ Compensation and Rehabilitation Act 2003, together with s 591, s 589, and the provisions of Chapter 7 Part 1 of that Act, establish a separate legal entity which on and from 1 July 2003 was responsible for conducting any relevant reviews of decisions made under the 1996 Act.
The passages from the reasons of the learned trial judge, quoted by Williams JA, show that the learned judge was satisfied that the pleadings did not disclose an application under the general law for a declaration. With the greatest respect, I differ from that view and agree with Williams JA. Senior Counsel for the plaintiffs made it clear to the learned trial judge that the plaintiffs’ cases were a claim that the default assessments were not authorised and were ultra vires, as well as an application for judicial review, albeit the former and important applications needed considerable amendment to the very promptly filed pleadings. The view of the learned trial judge that there were no claims for general declarations resulted in the decision that amendment of the pleadings would be irrelevant, because on that view the claims would remain as applications brought pursuant to the Judicial Review Act, and therefore subject to (inevitable) discretionary dismissal, because of the alternative review processes already provided.
The error by the learned trial judge was very understandable, both because of what the pleadings omitted – there were no pleaded allegations that the plaintiffs did not employ “workers” within the meaning of the legislation, that they had no liability for relevant premiums, that the assessments made were ultra vires the powers given by the legislation to the first defendant, that the amounts assessed were excessive or inaccurate for such liability as the plaintiffs actually had – and for what they contained. This was what appeared in paragraph 28 of the pleadings, as the grounds for the declarations sought “[a]t general law and/or pursuant to Section 20(1) of the Judicial Review Act”, whereby the pleadings simply listed seriatim each of the available grounds in that section on which an application for judicial review can be made by a person aggrieved.
The learned trial judge accordingly exercised the discretion to dismiss the plaintiffs’ claims rather than strike out the pleadings, the exercise of which discretion is the narrow ground on which these appeals are brought, without considering whether a repleaded claim under the general law could raise a fairly arguable case for a declaration in which it was appropriate to exercise the general jurisdiction of this court, not dependant upon judicial review.
I add that it seems to me that what the successful plaintiff would need to establish was that WorkCover had not had regard to the probable wages paid or to be paid by the plaintiff during the relevant period of insurance, thereby acting ultra vires s 62(3)(a). I agree the appeal should be allowed.
MACKENZIE J: I have read the reasons of Williams JA. I agree with what he has written and wish only to add further comment upon two matters.
The first is that the appellants wish to agitate one issue that is, in reality, that there has been no valid default assessment because the preconditions for making such an assessment have not been satisfied. Section 62(3) of the WorkCover Act 1996 (cf s 58(3) of the Workers’ Compensation and Rehabilitation Act 2003) permits WorkCover to have regard to the probable wages paid or to be paid by an employer during the relevant period of insurance for the purpose of making a default assessment. A focal point of the argument is whether, in forming the opinion required to be formed under s 62(2), the first respondent did not “have regard to the probable wages paid” by the appellants within the meaning of the provision when it applied a specific proportion of a sum collectively identified as wages and materials, in a context where it is alleged that the appellants had failed to provide, in a timely way, information enabling a more precise sum to be identified. The underlying proposition to be established seems to be that if it were to be made out that there was no reasonable basis for forming the opinion by having regard to that sum, there was no valid default assessment.
There is a legislative policy in the Act of non-adversarial resolution of disputes, referred to in s 488, and the requirement in s 500 that a person objecting to an amount of premium specified in a premium notice must pay the premium before an appeal to an Industrial Magistrate is filed. One would be reluctant to countenance subversion of this policy by a party seeking a declaration rather than using the procedures in the Act. Since a declaration is a discretionary remedy, an attempt to do so in a case where the procedures in the Act were applicable may fail for that reason.
However, the present case is one where it is alleged that no default assessment has been validly made because a precondition to making it, an opinion having regard, inter alia, to probable wages paid, has not been formed in compliance with the requirements of the Act. It is not one where there is a mere dispute as to amount of the premium, as for example, where an estimate of wages for a default assessment is subsequently shown to be factually wrong; nor one where, as a matter of fact, it is subsequently established that there were fewer workers than believed, or no “workers” because further information as to the nature of their employment was provided, leading to a “nil” assessment on review. In none of those examples has there been a failure to comply with the statutory provisions enlivening the right to make and issue a default assessment under the Act. In this context, only a case of alleged failure to enliven the power to make a valid assessment at all is of a kind that may leave the door open, in an appropriate case, for resort to seeking a declaration instead of resort to the ordinary processes of review under the Act.
The second matter upon which I wish to comment is that, as Williams JA has said, there is insufficient information in the record to make any comment on the validity of the review process and, in particular, information as to compliance with the requirements of s 403A of establishing a review unit that was separate from WorkCover’s commercial insurance business. According to s 403B, the review unit’s function was to undertake reviews under ch 9, Pt 2. It was provided by s 488 that one of the objects of ch 9, Pt 2 was “to provide for a review process separate from WorkCover’s commercial insurance business”. The emphasis on providing a process rather than an identifiable entity to carry out a review and the emphasis that the review process be separate only from WorkCover’s commercial insurance business suggests that the threshold for compliance with the requirements of the Act in this regard was not high, and that it might be achieved merely by administrative action by WorkCover itself.
I agree with the orders proposed by Williams JA.
0
0
3