Perfetto v Moorabbin Cabinets

[2020] VMC 32

IN THE MAGISTRATES COURT OF VICTORIA

AT MELBOURNE

L10871713

GABRIELLE PERFETTO	Plaintiff
v
MOORABBIN CABINETS PTY LTD	Defendant

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MAGISTRATE:	Magistrate B R Wright
WHERE HELD:	Melbourne
DATE OF HEARING:	26 November 2020
DATE OF DECISION:	15 December 2020
CASE MAY BE CITED AS:	Perfetto v Moorabbin Cabinets
MEDIUM NEUTRAL CITATION:	[2020] VMC 032

REASONS FOR DECISION

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Catchwords: Workers Compensation – Rejection of Claim – Pre-Employment Health Declaration – Alleged Non-Disclosure of Previous Injury – Required Wording in Pre-Employment Notice to Worker - Effect on Claim – Workplace Injury Rehabilitation and Compensation Act 2013 s.41.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr A Ingram QC and Mr P Haddad	Maurice Blackburn Lawyers
For the Defendant	Mr C Miles	Russell Kennedy

HIS HONOUR: 

1Pursuant to the Workplace Injury Rehabilitation and Compensation Act2013 (“the Act”), Mr Perfetto seeks weekly payments of compensation and reasonable medical and life expenses as a consequence particularly of an incident on or at 19 June 2019 when he allegedly injured his back.  At the time, he was working as a cabinet joinery installer for Moorabbin Cabinets (“the defendant”). 

2In two Notices of Rejection of his worker's compensation claim dated
9 November 2019 and 25 March 2020 (“the rejection notices”), Allianz, the authorised agent of the defendant, stated: -

'Whilst it is acknowledged that you have been diagnosed with aggravation of your back condition and medical opinion supports that this was contributed to by your employment, Allianz had [sic] determined to reject your claim.' 

3Rather, his claim was rejected pursuant to s.41 of the Act on the basis of alleged failure to disclose information requested in a notice dated 12 April 2018 (“the pre-employment health declaration”). That provision involves a pre-employment notice being given by an employer or prospective employer to a worker, requiring the disclosure of required information relating to any pre-existing injury or disease.

4Section 41 of the Act reads as follows:-

(1)  Subsection (2) applies if it is proved that, before commencing employment with the employer –

(a)  a worker had a pre-existing injury or disease of which the worker was aware; and

(b)  the employer in writing –

(i) advised the worker as to the nature of the proposed employment; and

(ii) requested the worker to disclose all pre-existing injuries and diseases suffered by the worker of which the worker was aware and could reasonably expected to foresee could be affected by the nature of the proposed employment; and

(iii) advised the worker that subsection (2) will apply to a failure to make such a disclosure or the making of a false or misleading disclosure; and

(iv) advised the worker as to the effect of subsection (2) on the worker's entitlement to compensation and;

(c)  the worker failed to make such a disclosure or made a false or misleading disclosure.  

(2) If this subsection applies, any reoccurrence, aggravation, acceleration, exacerbation or deterioration of the pre-existing injury or disease arising out of or in the course of or due to the nature of employment with the employer, does not entitle the worker to compensation under the Act.'

5In its Defence, Moorabbin Cabinets states in paragraph 16 :-

'(a) the Plaintiff failed to disclose to the Defendant in writing a pre-existing injury before starting employment pursuant to s.41(1);

(b) the Plaintiff's injury is a recurrent aggravation, acceleration, exacerbation or deterioration of a pre-existing injury of disease and is therefore not entitled to compensation under the Act, pursuant to s.41(2) due to his failure to disclose the injury.'

6More particularly, in the rejection notices, Allianz sets out that in the
pre-employment health declaration Mr Perfetto denied any circumstances regarding his health or capacity that would interfere in his ability to perform the duties of the position with Moorabbin Cabinets.  More importantly, he replied 'No' to a question asking of any existing injury or condition that could be affected by the nature of the proposed employment. 

7In the rejection notices, Allianz stated that Mr. Perfetto was examined by an independent medical examiner, Dr Long, on 25 October 2019. According to the rejection notices, he had told Dr Long of a history of previous episodes of back pain over a period of many years. It had been noted that there was a degenerative process on the MRI which would predate his recent date of injury. “You were not experiencing any particular episodes of back pain over a period of many years.” The rejection notices then went on to reject his workers compensation claim pursuant to s.41 of the Act.

8In a Reply to the Defence filed on the date of hearing, Mr. Perfetto's solicitors raised a number of issues relating to the pre-employment health declaration.  More particularly, para. 3 of the Reply pleaded.

'(c), the Defendant failed, contrary to s.41(1)(b)(iii) of the Act, to advise in that s.41(2) would apply to a failure to make a disclosure or the making of a false and misleading disclosure;

(d), the Defendant failed, contrary to s.41(1)(b)(iv) of the Act, to advise him as to the effect of s.41(2) on his entitlement to compensation.'

9The proceedings were listed for hearing before me on 26 November 2020. 
It was agreed that Mr. Ingram QC could proceed with a threshold point relating to the pre-employment health declaration given by Moorabbin Cabinets. It was submitted that this document did not comply with the Act or the effect of s.41(2) on any entitlement to compensation.

10In the pre-employment health declaration given to Mr Perfetto, there were two paragraphs on the first page as follows:-

'Failure to make a disclosure, or the making of a false and misleading disclosure, may disentitle you to compensation pursuant to the Workplace Injury Rehabilitation and Compensation Act2013 should you suffer any recurrence, aggravation, acceleration, exacerbation or deterioration of a pre-existing injury or disease arising from employment with Moorabbin Cabinets Pty Ltd and Moorabbin Cabinets Vic Pty Ltd.

Moorabbin Cabinets Pty Ltd & Moorabbin Cabinets Vic Pty Ltd may rely upon any failure to disclose in accordance with the provisions of the Workplace Injury Rehabilitation and Compensation Act 2013 as grounds for denying compensation.' (emphases added)

11Senior counsel emphasized the words 'may disentitle' and 'may rely' in those paragraphs, which he said made the pre-employment health declaration
non-compliant with s.41 and thus unable to be relied upon by way of defence to Mr. Perfetto's workers compensation claim. It was submitted that the words should have set out the use of mandatory language, whereby he would not be entitled to compensation pursuant to s.41(2) of the Act.

12He referred to Project BlueSky v Broadcasting Authority (1998) 194 CLR 355 at [69-71] in which the High Court stated that conflicting provisions should be reconciled as far as possible. Paragraphs 69 and 71 read:-

'[69]  The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute.  The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole." In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that, 'The context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed.'  Thus, the process of construction must always begin by examining the context of the provision that is being construed’.

'[71]  Furthermore, a court construing a statutory provision must strive to give meaning to every word of the provision…….'

13Counsel also referred to Alcan (NT) Alumina v Commissioner of Territory Revenue (2009) 239 CLR 27 at [47] in which the High Court stated :-

'This court has stated on many occasions that the task of statutory interpretation must begin with a consideration of the text itself…...  Historical consideration and extrinsic materials cannot be relied upon to displace the clear meaning of the text….  The language which has actually been employed in the text of legislation is the surest guide to legislative intention….The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision…, in particular the mischief it is seeking to remedy.'

14In Commissioner of Taxation v Consolidated Media Holdings (2012) 250 CLR 503 at [39] the High Court said :-

'This court has stated on many occasions that the task of statutory construction must begin with a consideration of the (statutory) text.  So must the task of statutory construction end.  The statutory text must be considered in its context.' 

15Overall, he submitted that it is necessary to consider what the employer must advise in the pre-employment health declaration. The employer, in this case, had failed to advise that s.41(2) would apply to any failure to disclose and the consequential effect on any entitlement to compensation. It used the discretionary words 'may disentitle' and 'may rely upon' rather than the mandatory non-entitlement set out in s.41(2). This was not consistent with the Act and especially the other parts of s.41.

16He quoted an extract from Pearce on Statutory Interpretation, 9th Edition, at paragraphs 4.11 referring to two decisions of Australian Leisure v Director of Liquor Licensing and SZTAL v Minister of Immigration.  The extract from Pearce states:-

'Hall J in Australian Leisure and Hospitality Group Pty Ltd v Director of Liquor Licensing [2012] WASC 463 at [22] said, "If it is intended that a word in a statute will be used in a specific way that may not accord with ordinary usage, such an intention is generally reflected in a definition in a statute. Absent such a definition, the ordinary meaning should prevail, unless there is something in the context to suggest that another meaning is intended. ‘

Edelman J in SZTAL v Minister for Immigration and Border Protection [2017] HCA 34 at paragraph 94 said, "Where a statute employs a term in its ordinary sense, there can be no warrant for the extension of the meaning beyond its ordinary sense."

17Section 41(1)(b)(iii) states that in the pre-employment notice the employer is required to advise that s.41(2) ‘will apply to a failure to make such a disclosure or the making of a false or misleading disclosure’. Section 41(2) states that consequentially such a non-compliance with the other provisions of s.41 ‘does not entitle the worker to compensation.' (emphases added)

18These provisions in s.41 do not convey any discretion in the circumstances. The employer in this case told the worker that the effect of such a failure to comply was discretionary. In those circumstances, as the employer had not complied with s.41, it could not rely on that provision in its Defence and therefore cannot succeed in that defence. That completes senior counsel's submissions.

19Counsel for the Defendant submitted that this was not a case of the rejection notices being invalid for reasons set out in such cases as FAI v Brewster [1999] VSC 388, a decision of Mr Justice T Smith, as to which I will go into later.  He submitted that, at best, opposing counsel's argument really went to a matter of evidence.  The use of the discretionary word 'may' by the employer puts a worker or potential worker on guard.  It conveys that the consequences of a failure are dependent on the gravity of such failure. 

20The word 'may' is used in the context of s.41(1)(b)(ii) referring to pre-existing injuries and diseases that 'could reasonably expected (by the worker) to foresee could be affected by the nature of the proposed employment. (emphases added)  The word 'could' is equivocal.  If a worker discloses everything, there is obviously no problem.  In his submission the employer decides whether it employs a person and in what position and on what terms.  For example, a disclosure of a past minor ankle strain may not disentitle a worker to compensation. 

21If the employer had used the word 'will' it could deceive a worker into not even making a claim.  On receipt of the signed pre-employment health declaration, an employer could decide to dismiss the worker or modify the terms of the employment.  In the present case, Mr Perfetto should go into evidence as to what he knew of any pre-existing injury or disease and as to what he thought the consequences of non-disclosure would mean.

22Counsel submitted that it is appropriate for the employer to use the word 'may'.  If Mr Perfetto gave evidence that he believed that the use of the word 'may' meant it was optional to disclose the truth, then a court could consider that. 
Mr Perfetto should go into evidence as to what he understood by the word 'may' in meeting the requirements of s.41.

23In his reply, senior counsel for Mr Perfetto submitted that the legislature has issued a command.  It says nothing about what a worker thinks.  The employer had failed to comply with both commands in order to claim protection against Mr Perfetto's claim.  Simply, the legislative command has not been complied with.  That completes my summary of both counsels' submissions. 

24In this case, I substantially agree with the submissions of senior counsel for the plaintiff.  Counsel for the defendant referred to the judgement of Smith J in FAI v Brewster [1999] VSC 388.  In that case, Mr Justice Smith upheld a decision of a magistrate that a notice of rejection of a claim under the Accident Compensation Act 1985 was invalid and that there was a deemed acceptance of the claim. The reason for the invalidity was the fact that the notice 'grossly misrepresented' the opinion of the doctor on whose opinion the decision to reject the claim was based.

25Strictly speaking, the present case does not involve the rejection notices in themselves, but rather the lack of material or proper material to support the decision underlying the Notices.  It is more like the situation referred to by His Honour in Lloyd v Victoria WorkCover Authority (County Court, unreported, Judge Just, delivered 15 February 1994 at p.8). 

26The real issue is whether there was proper material to support the decision leading to the issue of the rejection notices in this case.  Senior counsel for
Mr Perfetto submits that if the pre-employment health declaration does not comply with s.41 then any decision to issue the rejection notices, and the notices themselves, are invalid.

27Section 41 is one of a number of relatively recently introduced policy provisions into workers compensation legislation, where an otherwise genuine and valid claim is disallowed because of a specific and rigid disentitling provision. I am referring to such other provisions as the management action defence in work stress claims (s.40(1) of the Act) and where weekly payments may cease and determine for all time on the failure to make reasonable efforts to return to work in suitable employment (s.116(8) of the Act).

28There are very similar, if not identical, provisions in the Accident CompensationAct 1985. In Petridis v Kraft [1999] VCC 32 at p.19 Judge Rendit ruled that because of the consequences of the 'cease and determine' provision, any return to work plan must be strictly construed against an employer. He similarly ruled in De Vincentis v Ianco and Lagreca [1998] VCC 47 that 'If an authorised insurer seeks to call into effect s.93B(4) (the "cease and determine" provision), then the authorised insurer (self-insurer) must strictly prove the facts which bring s.93B(4) into play.' 

29In Cox v TCC [2000] VCC 42 Judge Lewis also stated the defendant has the burden of proof in such cases, which I believe is not controversial.

30In Di Vincentis, Judge Rendit made further comments as to the cease and determine provision in s.93B(4) at pp.12-13 as follows :- 

'That means he will have lost for all time his entitlement to receive weekly payments, no matter what the circumstances may be in the future - a most draconian provision and, in the absence of due warning of its existence and of its consequences, a veritable hidden trap for the unwary.  In my view, it behoves any authorised insurer to bring this provision and its effect on the injured worker's future entitlement to weekly compensation to the attention of an injured worker, otherwise not to do so would ambush the injured worker.  One is told that the present scheme is a fair one. If this be so, then it should be administered fairly to all concerned.’ 

31Similar comment could be made with regard to an employer giving a worker, or potential worker, a pre-employment health declaration and relying upon the answers to disentitle an otherwise valid and genuine claim using s.41 of the present Act.

32With respect, I agree with Judge Rendit as to the need by the Victorian WorkCover Authority (“VWA”) and/or the employer to bring the effect of such serious consequences clearly and in detail to a worker beforehand. 

33Counsel for the defendant did not dispute that the relevant provision in s.41 is mandatory, but rather defended the use of the word 'may' in the pre-employment health declaration as appropriate. To my mind, the employer did not, pursuant to s.41(b)(iv) properly advise Mr Perfetto in that notice as to the effect of s.41(2) on any entitlement to compensation. I believe that such use of the word 'may' masks the seriousness of the questions asked and the effect of any potential reply.

34I refer to counsel’s example of the sprained ankle. An apparent recovery from a minor strain may well be an example of a case that the worker would not include in those circumstances with serious consequences if the ankle was strained again in later employment. I believe that the fatal and final consequences of non-compliance with s.41, together with the requirement that the defendant has the burden of proof in this matter, are important in this case. Similarly, such a Notice relied upon by an employer should be strictly construed as to ensure compliance with s.41.

35As counsel for the defendant points out, a minor breach or a minor past injury may be disregarded by the employer or the VWA. A worker does not know that when filling in such a declaration pursuant to s.41. The final and onerous requirements of non-compliance with s.41 should strictly be pointed out to a worker in the draft declaration itself if it is open to an employer or the VWA to rely upon s.41 in disentitling a worker's claim for compensation.

36I seek counsels’ assistance as to appropriate Orders. 

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