Stowe Australia Pty Ltd v Sara Melody Kelly
[2013] ACTCA 18
•10 May 2013
STOWE AUSTRALIA PTY LTD v SARA MELODY KELLY
[2013] ACTCA 18 (10 May 2013)
APPEAL AND NEW TRIAL – WORKERS COMPENSATION – STATUTORY INTERPRETATION – Workers Compensation Act1951 (ACT) – legislative regime examined – whether meaning of “claim” in s 132 encompasses an entire claim not just a claim for weekly compensation – whether meaning of “claim” in s 132 restricted by other sections of the Act or Regulations – Master erred in finding s 132 was limited to providing a mechanism for an insurer to cease payments of weekly compensation – Appeal allowed
Legislation Act2001 (ACT), ss 139, 140, 142
Workers Compensation Act1951 (ACT), ss 4, 77, 116, 128, 129, 130, 131, 132, 134, 136, 137, 195, Pts 4.4, 4.5, 4.5, 6.2, sch 1
Workers Compensation Amendment Act2001 (ACT)
Workers Compensation Regulation2002 (ACT), ss 51, 99
Court Procedures Rules 2006 (ACT), r 3968
Barbaro v Leighton Contractors Pty Ltd (1979-80) 30 ALR 123
House v The King (1936) 55 CLR 499
Ogden Industries Pty Ltd v Lucas (1968) 118 CLR 32
Phillips v Wills Sales (Aust) Pty Ltd [1996] ACTSC 33
Stowe Australia Pty Ltd v Kelly [2012] ACTSC 34
ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
No. ACTCA 9 - 2012
No. SCA 17 of 2011
Judges: Burns, Cowdroy JJ, Nield AJ
Court of Appeal of the Australian Capital Territory
Date: 10 May 2013
IN THE SUPREME COURT OF THE ) No. ACTCA 9 - 2012
) No. SCA 17 of 2011
AUSTRALIAN CAPITAL TERRITORY )
)
COURT OF APPEAL )
ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
BETWEEN: STOWE AUSTRALIA PTY LTD
Appellant
AND:SARA MELODY KELLY
Respondent
ORDER
Judges: Burns, Cowdroy JJ, Nield AJ
Date: 10 May 2013
Place: Canberra
THE COURT ORDERS THAT:
The appeal be allowed and the orders of the Master set aside.
The appellant has leave to reject the respondent’s claim.
Subject to the appellant making an application for costs in writing within 10 days from today’s date, each party is to bear its own costs of the proceedings before the Magistrate, the Master and the Court of Appeal.
IN THE SUPREME COURT OF THE ) No. ACTCA 9 - 2012
) No. SCA 17 of 2011
AUSTRALIAN CAPITAL TERRITORY )
)
COURT OF APPEAL )
ON APPEAL FROM A SINGLE JUDGE OF THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
BETWEEN:STOWE AUSTRALIA PTY LTD
Appellant
AND:SARA MELODY KELLY
Respondent
Judges: Burns, Cowdroy JJ, Nield AJ
Date: 10 May 2013
Place: Canberra
REASONS FOR JUDGMENT
THE COURT:
In July 2007, the respondent worker injured her knee in the course of her employment with the appellant. She reported the injury to the appellant, but did not seek medical treatment or take any time off work. As a consequence, the appellant did not report this incident to the workers compensation insurer. On 26 October 2007, she again injured her knee in the course of her employment with the appellant. She completed a worker’s compensation claim form on 31 January 2008, although she had reported the injury to the appellant soon after it occurred.
On 26 March 2008, the workers compensation insurer wrote to the respondent advising her that “liability has been accepted for time lost from work”. From
26 March 2008 until 19 July 2010, payments of $338.67 in weekly compensation, for periods off work between June and August 2008, and $29,826.65 for medical treatment expenses were paid to, or on behalf of, the respondent. The last of the treatment expenses were incurred in March 2009.
THE MAGISTRATES COURT PROCEEDINGS
On 19 July 2010, the appellant’s lawyers, on instructions from the workers compensation insurer, filed an Application for Arbitration in the Magistrates Court seeking the leave of that court under s 132 of the Workers Compensation Act1951 (ACT) (the Act) to reject the respondent’s claim for compensation. The grounds for the application were that the respondent was no longer incapacitated for work and no longer required medical treatment, or, alternatively, that if the respondent was incapacitated for work, or required further medical treatment, it was not as a consequence of her employment with the appellant.
On or about 10 August 2010, the respondent filed an answer to the appellant’s application denying that the appellant was entitled to terminate her “compensation benefits” on the following grounds:
a)the respondent suffered an injury on 11 July 2007 and/or 26 October 2007 arising out of her employment with the appellant;
b)she continued to be incapacitated due to the injury;
c)she continued to require medical and other treatment in relation to the injury; and
d)she is a worker to whom the Act applies.
The Application for Arbitration proceeded to hearing before a Magistrate, as provided for by s 195 of the Act and reg 51 of the Workers Compensation Regulation2002 (ACT) (the Regulation). Before the Magistrate, the appellant relied upon reports dated 14 February 2009 and 9 March 2009 from Dr Garth Eaton, an occupational physician. The effect of these reports was that the respondent was no longer incapacitated for employment, or in need of medical treatment, by reason of the injury she sustained in the course of her employment with the appellant. A report from a clinical psychologist, Jeff Parsons, dated 11 March 2009 asserted that the respondent was psychologically fit to work fulltime. The authors of these reports were not required for cross-examination before the Magistrate, and the respondent did not adduce any medical evidence in the Application. As such, the opinions of Dr Eaton and Mr Parsons were unchallenged before the Magistrate.
Counsel then appearing for the respondent sought to meet the Application by submitting that, in the particular facts of the case, there was nothing remaining for the insurer to reject, and any order granting leave to the insurer to reject the claim under
s 132 of the Act would be akin to making a declaration, which counsel submitted the Magistrate had no power to make, citing the decision of Miles CJ in Phillips v Wills Sales (Aust) Pty Ltd [1996] ACTSC 33. The respondent submitted that for s 132 to have any application there must be an extant claim. She submitted that the evidence demonstrated that there was no such claim as she was not receiving payments for incapacity (weekly compensation), and had no outstanding claims for medical expenses. In accepting the submissions of the respondent, and refusing the Application, the Magistrate said:
My view is that, as I’ve said, that the original assertion that you have a compensatable [sic] case against an employer is merely an assertion of a right, that that right is then accepted by an employer. You then make claims against that right. Those claims are then assessed as being appropriate or inappropriate, and payment is made accordingly. So my view is that there is no claim for compensation on foot. Your right hasn’t been extinguished, but your claim is extinguished. Should a claim be now made you still require leave.
As we understand the reasons of the Magistrate, he interpreted the provisions of
s 132 as requiring that a claim be on foot before the provision can have any operation, and that in this case the respondent’s claim had been “extinguished”, leaving only a right to claim in the future with respect to any incapacity or medical expenses arising from the injury.
We have no doubt that the first proposition thus articulated, that s 132 can have no operation unless there is a claim on foot, is correct although we suspect that his Honour used the term “claim” as effectively being a demand for payment. However, his second proposition, that the respondent’s claim had been extinguished, is problematic. How had it been extinguished? The Magistrate did not address this question directly, but it may be inferred that he considered the claim to be extinguished because there was no current claim for payment for weekly compensation or medical expenses.
THE PROCEEDINGS BEFORE THE MASTER
The appellant appealed from the Magistrate’s decision on the grounds that the Magistrate erred in concluding that there was no matter or question to be arbitrated and in concluding that there was no “claim for compensation” for the purposes of
s 132(1) of the Act. The respondent cross-appealed against the Magistrate’s order that there be no order for costs of the Application for Arbitration on the grounds that the Magistrate erred in declining to award costs in favour of the respondent in accordance with r 3968 of the Court Procedures Rules 2006 (ACT).
In his decision given 9 March 2012 dismissing the appeal and allowing the cross-appeal the learned Master said (Stowe Australia Pty Ltd v Kelly [2012] ACTSC 34 at [53]–[57]):
It seems to me that the word “claim” in Pt 6.2 must ... be read as a reference to an entire claim arising out of an injury, not to every separate demand on an insurer for payment of a treatment account, or payment of compensation for a few days off work. Part 6.2 establishes a regime for acceptance and rejection of entire claims of that kind. It would be applicable, for example, where an insurer has reason to believe that the injury alleged by the worker did not happen at work, or that there was no injury and the claim has been fabricated. Disputes about payment of individual accounts would appear to me to come within the “matters and questions” which s 195 of the Act stipulates are to be settled by conciliation or arbitration in accordance with the regulations: that is, for practical purposes, by proceedings in the Magistrates Court.
Where a claim has been accepted by an insurer, and where the insurer has made payments, the procedure available under Pt 6.2 for rejecting a claim will apply, for example, where information becomes available to the insurer which gives rise to a suspicion that the claim should never have been accepted in the first place. In the present matter, there is no suggestion along those lines. The insurer does not argue that the original claim was flawed, or should have been rejected when first made.
It is reasonably clear that the procedure under Pt 6.2 is also intended by the legislature to be available to an insurer in circumstances where a worker has made a genuine claim (a year or more earlier) and is in receipt of weekly compensation but has made a complete recovery from his or her injuries. The rationale of s 132 is that an insurer in such circumstances is not permitted simply to cease payments of weekly compensation, but must first seek the leave of the court to do so. Strictly the insurer here is not seeking to reject the claim ab initio but only for the future. The purpose of the section is to provide a mechanism for the insurer to cease payments of weekly compensation, but only where the insurer can satisfy the court that it should be permitted to do so. That was not the situation in the application for leave which has given rise to the present appeal.
Effectively, the insurer went to the Magistrates Court seeking the authorisation of the court to close its file. Such authorisation is not available under the Act. If the respondent at some time in the future asserts that she needs medical treatment or time off work, and that the need is causally related to her injury at work, and approaches the insurer with a request or demand for payment of compensation in that regard, it will be open to the insurer to refuse to pay the compensation sought and to put causation in issue. It will be open to the respondent to invoke the procedures available under the Regulation. In the first instances she will need to ask a conciliator to help her reach agreement with the insurer about the dispute. If the conciliation is not successful, it will then be open to the respondent to make an application for arbitration by the Magistrates Court (assuming that there is no committee in existence): See Workers Compensation Regulation, ss 50, 51). But if the issue is decided against the worker, this will not necessarily mean the end of the claim for the insurer for all time. At some later time the applicant may require further time off to work or further treatment and may be able to satisfy the Magistrates Court of the requisite causal connection with the original injury. At least in theory, a point is never reached, following the acceptance of a claim, where the insurer can be certain that it will have no further liability, except where there is a communication under s 137 of the Act, a common law judgment or settlement which extinguishes the right to further compensation under the Act by virtue of s 184, or a valid rejection under Pt 6.2 of an entire claim ab initio.
It is of the essence of the workers’ compensation scheme that otherwise an insurer can never be certain whether a claim can be regarded as finalised or whether it is merely dormant. There are injuries which may cause further disability, and require further treatment, after a lengthy period of stability accompanied by full working capacity. Whether such treatment, and related incapacity for work, are or were caused by the original injury will be a question of fact to be determined on expert medical evidence if necessary, but the possibility remains open. In the absence of a rejection ab initio, a commutation or a common law judgment or settlement arising out of the incident which caused the original injury, an insurer can never be certain that a claim file will not need to be revived.
Based on these conclusions, the learned Master dismissed the appeal and ordered the appellant to pay the costs of the appeal. In addition, he expressed himself satisfied that the original Application for Arbitration was “misconceived and bound to fail” and that the Magistrate should have awarded costs to the respondent as the successful party. He allowed the cross-appeal and ordered the appellant to pay the respondent’s costs of the proceedings in the Magistrates Court.
THE PRESENT PROCEEDINGS
The appellant now appeals from the orders of the Master. The grounds of appeal set out in the Notice of Appeal are:
4.1His Honour erred in concluding (at [59]) that leave under section 132 of the Workers Compensation Act 1951 could only be given in circumstances where-
(a)an insurer was seeking leave to reject a claim ab initio; or,
(b)an insurer was seeking leave to cease continuing payments of weekly compensation.
4.2His Honour erred in finding (at [57]) that the insurer was effectively seeking authorisation to close its file.
4.3His Honour erred in failing to find that the issues to be determined by the Magistrate were those defined by the parties in their pleadings.
4.4His Honour erred in failing to find that it was open to the Magistrate to have granted leave to the insurer to reject the claims by the worker in relation to injuries alleged on 11 July 2007 and/or October 2007.
4.5His Honour erred in substituting the costs order made by the Magistrate with an order that the employer pay the workers costs in circumstances where-
(a)no submissions were made in support of the worker’s cross-appeal; and,
(b)no miscarriage of the discretion exercised by the Magistrate (having regard to the principles in House v The King) was asserted or demonstrated.
The Legislative Scheme
In 2002, the Act underwent a significant transformation, to which we will refer shortly. Where it is necessary to distinguish between the Act prior to this transformation and after, we will refer to the former as “the pre-2002 Act”, and the latter as “the post-2002 Act”.
Prior to 1 November 2004, the system for cessation of payments of weekly compensation was as described in Barbaro v Leighton Contractors Pty Ltd (1979-80) 30 ALR 123. The worker in that case was in receipt of weekly compensation under the Workers Compensation Ordinance 1951, as the Act then was. Paragraph 12 of the First Schedule to the Ordinance provided that “a weekly payment... payable under this ordinance may be varied or ended by agreement or by arbitration under this ordinance”. The employer unilaterally ceased payment of weekly compensation at which time the worker brought proceedings seeking an arbitration concerning the compensation payable to him. A Magistrate, acting as an arbitrator, found that the worker was not totally incapacitated, and he was not satisfied that the worker was partially incapacitated. His decision was upheld by a single judge of this Court on appeal. The Full Federal Court (Smithers, Connor and Franki JJ) held that the effect of paragraph 12 of the First Schedule was that once incapacity payments commenced under a liability pursuant to the Act it was not lawful for the employer to cease payments without either the agreement of the worker or an award by the court.
In 1994, the Act was amended. Section 26C was inserted which provided that an employer may, within 12 months after the day on which a claim for weekly compensation was lodged, terminate those payments by notice to the worker if the workers compensation insurer was of the opinion, based on reasonable grounds, that the worker was no longer entitled to receive the payments. Where it was sought to terminate weekly compensation payments outside the 12 month period specified in
s 26C, the employer was obliged by virtue of the provisions of s 26E to apply to the Magistrates Court for an order authorising “the employer to terminate the payments to the worker after a specified date”. The date specified by the Magistrates Court for payment to cease had to be at least eight weeks after the day on which the employer gave the worker notice of the employer’s intention to apply to the court for authority to terminate the weekly compensation payments.
At the time that ss 26C and 26E were inserted into the Act, paragraph 12 of the First Schedule was amended to read:
A weekly payment (other than a weekly repayment referred to in subparagraph (l) (a) (i)) payable under this Act may be varied or ended by agreement or by arbitration under this Act or ended in accordance with section 26C or 26E of this Act.
It appears to us that the principle enunciated in Barbaro v Leighton Contractors Pty Ltd remained applicable to the Act as amended in 1994. Once payments of weekly compensation under the Act were commenced, they could only be terminated by agreement or in accordance with a method set out in paragraph 12. In any event, it appears that there was no challenge to the continued applicability of those principles prior to the major reform of the Act in 2002.
The Act was substantially amended in 2002. In the post-2002 Act the equivalent of paragraph 12 of the former First Schedule is s 134, which provides:
134 Liability on claim not accepted or rejected
(1)If a worker makes a claim in relation to an injury for which compensation is payable under this Act, the insurer is liable to pay weekly compensation and compensation for costs in relation to the injury until the insurer rejects or settles the claim.
(2)A payment under this section may not be recovered by the insurer.
(3)However, the insurer is not liable to pay, and may recover from the employer, an amount that the employer is liable to pay under section 95 (What if employer does not give notice of injury within time?).
(4)Subsection (3) does not affect a self-insurer’s liability in relation to the claim.
The scheme of the post-2002 Act is reflected in s 134(l). Its provisions are engaged by an event, being a compensable injury to a worker arising out of, or in the course of, his or her employment: s 31. This section creates the general statutory basis for the entitlement of the worker to compensation, both for incapacity (weekly compensation) and for treatment expenses (Pt 4.5 compensation), and the obligation of the employer to pay compensation. This general entitlement is subject to exceptions: s 31(2), (3) and (4).
What distinguishes the post-2002 Act from the Act before the 2002 amendments is that s 134 makes an insurer liable to pay compensation from the date a claim is made until the insurer rejects or settles the claim, whereas previously an employer, or its insurer, had no obligation to pay compensation, either for incapacity or medical expenses, until the worker’s entitlement to compensation was proven. Of course an employer could, and often did, accept that the worker had an entitlement to compensation and made payments accordingly. This is what occurred in Barbaro v Leighton Contractors Pty Ltd. But if the employer did not accept the claim, the worker had to prove his or her entitlement to compensation through arbitration. The effect of s 134 of the Act is that the workers compensation insurer’s obligation to commence payment of compensation is triggered by the making of the claim. Section 116 of the Act provides that a worker who has an entitlement to compensation may claim compensation. A claim is made on the day that the claim is given to the employer, or the workers compensation insurer, whichever occurs first. Thereafter, the insurer is obliged to pay compensation, both weekly compensation and Pt 4.5 compensation, to the worker until it rejects or settles the claim.
In addition, the post-2002 Act differs from the pre-2002 Act by virtue of the fact that it has done away with the different processes for claiming compensation for incapacity and compensation for medical treatment. The Act now provides for a single claim, encompassing both incapacity (weekly compensation) and medical expenses (Pt 4.2 compensation); so that when the Act refers to a claim, it is a claim encompassing both a claim for weekly compensation and any claim for Pt 4.2 compensation, or a claim for any other form of compensation available under the Act.
After a claim is made it may be accepted or rejected by the workers compensation insurer. The following provisions of the post-2002 Act relevant to accepting or rejecting claims, as found in Pt 6.2 of the Act:
128 Claim accepted if not rejected within 28 days
(1)If, at the end of 28 days after the day the insurer receives a worker’s claim for compensation under this Act, the insurer has not rejected the claim –
(a)the insurer is taken to have accepted the claim; and
(b)any payment made by the insurer in relation to the claim is not recoverable.
(2)However, subsection (1) (b) does not apply to a payment made by the DI fund manager as insurer.
129Rejecting claims generally
(1)An insurer rejects a claim for compensation under this Act by written notice given to the worker and, unless the insurer is a self-insurer, the employer.
(2)The claim is taken to be rejected when the notice is receivable by the worker and, unless the insurer is a self-insurer, the employer.
(3)If the worker and employer do not receive the notice on the same day, the notice is taken to have been given on the day the notice is received by the last of them.
(4)The notice must include the reason the insurer is rejecting the claim.
(5)If the insurer rejects the claim 28 days or later after the claim is given to the insurer, the notice must include a statutory declaration explaining why the insurer is rejecting the claim.
NoteThe Statutory Declarations Act 1959 (Cwlth) applies to the making of statutory declarations under ACT laws (see that Act, s 5).
(6)For this section, a notice is taken not to contain the reason the insurer is rejecting the claim if it simply says the claim is being rejected for medical reasons without including the medical reasons.
130Rejecting claim within 28 days
(1)If the insurer rejects the worker’s claim within 28 days after the claim is given to the insurer, the insurer may –
(a)stop weekly compensation to the worker 2 weeks after the insurer rejects the claim; and
(b)stop payment of compensation mentioned under part 4.5 (Compensation for medical treatment, damage and other costs) for costs incurred 2 weeks or later after the insurer rejects the claim.
NoteFor how a claim is rejected, see s 129.
(2)However, the insurer is not entitled to reject the worker’s claim within 28 days after the claim is given to the insurer only on the ground that the insurer has not had time to adequately assess the claim.
131Rejecting claims after 28 days but within 1 year
If the insurer rejects the worker’s claim 28 days or later, but not later than 1 year, after the claim is given to the insurer, the insurer may –
(a)stop weekly compensation to the worker 8 weeks after the insurer rejects the claim; and
(b)stop payment of compensation mentioned under part 4.5 (Compensation for medical treatment, damage and other costs) for costs incurred 8 weeks or later after the claim is rejected.
NoteFor how a claim is rejected, see s 129.
132 Rejecting claims from 1 year
(1)An insurer may reject a worker’s claim for compensation 1 year or later after the claim is given to the insurer only with the leave of the Magistrates Court.
(2)If the Magistrates Court gives leave to the insurer to reject the worker’s claim for compensation –
(a)the insurer need not give the worker notice of the rejection if the worker, or the worker’s lawyer, is present when the court gives leave for the insurer to reject the claim; and
(b)the insurer may stop paying weekly compensation –
(i)on the day stated by the court in the order giving leave to the insurer to reject the claim; or
(ii)8 weeks after the worker gets notice of the rejection if no day is stated in the order.
(3) For this section, the worker gets notice of the rejection –
(a)if the worker is present when the court gives leave to the insurer to reject the claim – on the day the court gives leave; or
(b)when the worker receives notice of the rejection from the insurer.
NoteCourt approved termination is dealt with under the regulations.
Reguslation 99 of the Regulation is also relevant:
99 Court approved termination
(1)This section applies if an insurer intends to apply to the Magistrates Court under the Act, section 132 (Rejecting claims from 1 year) for leave to end payments of weekly compensation to a worker.
NoteAn insurer must apply to the Magistrates Court if the insurer wants to end payments of compensation 1 year or longer after the claim is made (see Act, s 132).
(2)The insurer must give the worker notice of the insurer’s intention to apply to the Magistrates Court for leave.
(3)The insurer must give a copy of a notice under subsection (2) to the DI fund manager as soon as practicable.
Maximum penalty: 5 penalty units.
(4)An offence against this section is a strict liability offence.
(5)If the Magistrates Court is satisfied that the worker is not entitled to receive weekly compensation, the court must give leave to the insurer to end payment of the compensation to the worker after a stated day that is at least 8 weeks after the day the insurer gave the worker notice under subsection (2).
The appellant’s submissions
Senior counsel for the appellant, Mr Crowe SC, submitted that the term “reject” in Pt 6.2 of the Act is intended to comprehend the full range of circumstances justifying avoidance of liability for compensation, including:
a)the initial denial of the claim on the basis that the essential conditions of liability under the Act were not met: for example, the requirements of ss 31 and 36B;
b)the denial of the claim based upon a disentitling event: see Pt 4.8;
c)the denial of the claim upon discovery that it was fraudulent in some respect; and
d)the denial of the claim from a particular point in time because of recovery from the injury.
Mr Crowe submitted that if s 132(l) was intended to operate with respect to liability for weekly incapacity payments only, that limitation would have been made explicit in the provision. There is, he says, “no logical reason why the scheme for rejection which comprehends both incapacity payments and Pt 4.5 compensation during the first year after the insurer receives the claim should suddenly be limited to liability for weekly incapacity payments after that year elapses”. The absence of any reference to Pt 4.5 compensation in s 132, Mr Crowe says, is not an indication that the section only applies to weekly compensation payments for incapacity, or that the section can only apply where such payments are continuing. Rather, the provisions in s 132 governing the date on which the insurer may cease payments of weekly compensation, allowing payments to continue for up to 8 weeks after the Magistrates Court gives leave to reject the claim, are beneficial provisions, which presumably allow the worker time to challenge the order granting leave, or to make arrangements to obtain some other form of income. There is no reason why this “beneficial extension” would extend to payment of treatment expenses, with the insurer’s liability for those expenses ceasing upon the insurer rejecting the claim with the leave of the Magistrates Court.
Mr Crowe also submits that reg 99 of the Regulation does not support the proposition that s 132 only applied where the worker is in receipt of weekly compensation, as the Master supposed, but is a procedural provision applying to a subset of applications to which an application under s 132 may relate. Regulation 99 cannot, in effect, add words of limitation to s 132(l) of the Act.
Alternatively, Mr Crowe submitted that the pleadings raised the question of whether the respondent had suffered a compensable injury on 11 July 2007, an issue that was not addressed by either the Magistrate or the Master.
Finally, Mr Crowe submitted that the Master erred in overturning the Magistrate’s costs order without identifying any error of the type referred to in House v The King (1936) 55 CLR 499.
The Respondent’s Submissions
Counsel for the respondent, Mr Sharwood, submitted that when a worker suffers a compensable injury, he or she gains a “vested interest” or right to compensation under the Act, against which claims may be made as they arise: see Ogden Industries Pty Ltd v Lucas (1968) 118 CLR 32. He submitted that the Magistrate was correct to find that a specific claim for payment may be “extinguished”, but not the right which vests in the worker by reason of him or her suffering a compensable injury. The Magistrate was therefore correct to dismiss the application under s 132 as there was no claim for payment on foot. Similarly, the Master had been correct to dismiss the appeal from the Magistrate on this issue.
Mr Sharwood submitted that the interpretation given to s 132 by the Master as limited to claims for weekly compensation was open to him. He pointed out that ss 130 and 131 of the Act, also dealing with the issue of rejection of claims, permit the insurer to “stop” payments of weekly compensation, thus implying that such payments are continuing. In addition, he pointed out that both ss 130 and 131 refer specifically to Pt 4.5 compensation, whereas s 132 makes no reference to it. Mr Sharwood submitted that s 132 does not deal with ending the vested right of a worker to compensation. That is dealt with elsewhere in the Act, for example, by commutation under s 137.
Mr Sharwood argued that s 134 operated so that the respondent had a right to future compensation, either for weekly compensation or Pt 4.5 compensation said to arise from her injury, but pointed out that the insurer could always seek leave to reject any such claim under s 132 at the time it is made.
With respect to the pleading issue, Mr Sharwood submitted that the proceedings before the Magistrate and the Master were conducted on the basis that the only issue was the true construction of s 132, and that there has never been a suggestion that the respondent was not injured.
Finally, Mr Sharwood submitted that the Master dealt appropriately with the issue of the costs order in the Magistrates Court.
EVALUATION
The respondent’s contention that s 134 is solely concerned with payments of weekly compensation, and only operates when weekly compensation payments are ongoing, is based in part on the text of the Act, as it has developed over time.
The respondent makes four points as to the text of the Act. First, that ss 130 and 131 on their face address both weekly compensation payments and payments of Pt 4.5 compensation, whereas s 132 does not specifically refer to Pt 4.5 compensation payments. Secondly, to the extent that ss 130, 131 and 132 all deal with the right to weekly compensation payments, they all permit (s 132 with the Court’s leave) the insurer to “stop” paying weekly compensation, implying that such payments must be ongoing. Thirdly, none of the sections deal with Pt 4.4 compensation or death benefits, presumably implying that the sections are not intended to address the cessation of all rights to payment under the Act. Finally, the respondent submits that s 132 does not deal with ending the vested right of the worker to compensation. This is dealt with elsewhere in the Act, with s 136(2) allowing for the commutation of “an existing right to compensation for a compensable injury”. It is significant, the respondent says, that the description in s 136(l) of what is commuted focuses on the injury, not on a claim.
The respondent’s historical analysis overlaps with the last of these four textual points, and concentrates on the historical distinction, referred to in Ogden Industries Pty Ltd v Lucas, between the continuing right to compensation and the obligation of the employer or insurer to pay individual amounts of compensation sought by the worker. The respondent expressed it in this way:
The Magistrate decided the matter before him with the analysis that a worker may assert a right to compensation as a result of an injury following which claims are (or might be) made against that right. The claims (against that right) are then assessed as being appropriate or inappropriate and payment made accordingly. The specific claim for a payment might be, to use his word, extinguished but not the right. He found that there was no claim for payment on foot and dismissed the application for leave.
In working out the meaning of an Act, including resolving an ambiguous or obscure provision of an Act, the interpretation that best achieves the purposes of the Act is to be preferred to any other interpretation: s 139(l) Legislation Act2001 (ACT). In working out the meaning of a provision, the provisions of the Act must be read in the context of the Act as a whole: Legislation Act s 140. Also, in working out the meaning of a provision, regard may be had to any explanatory statement for the bill that became the Act, and the presentation speech made to the Legislative Assembly during the passage of the bill that became the Act: Legislation Act, s 142, and Table 142.
The Act assumed its current form after the commencement of the provisions of the Workers Compensation Amendment Act2001 (ACT). The explanatory statement to the bill that became the Workers Compensation Amendment Act2001 is not helpful and casts no light on the legislative intention regarding the operation of section 132. Some slight assistance is gained by reference to the presentation speech of the relevant Minister, Mr Smyth:
Mr Speaker, when tabling the exposure draft legislation I commented that every jurisdiction in Australia and around the world constantly grapples with the competing objectives of workers compensation arrangements. On the one hand the arrangements must ensure that injured workers are property [sic] treated, supported and remunerated, while on the other hand the costs of the schemes need to be kept reasonable and affordable for business.
The comprehensive consultation process that the government has undertaken on the exposure draft legislation revealed that some further work was needed in the area of scheme cost. Insurers and business groups demonstrated that the many benefits that the new approach would bring could be quickly outweighed in several key areas, resulting in overall cost increases. At a time of rising costs, it was clear that changes were required.
Without altering the fundamental changes that the draft legislation flagged as the government’s intended reforms, we have modified the draft legislation in several key areas to address the matter of cost. I will now deal with the key changes.
From this we gather that the provisions governing the rejection of claims, including
s 132, are intended to assist insurers reduce the cost of administering the scheme of insurance under the Act. However, both the interpretation urged by the appellant and that urged by the respondent achieve that objective to a greater or lesser extent. As the proper interpretation of s 132 is not elucidated by the non-legislative context, it must be found within the text of the Act itself.
The respondent is correct to observe that both the Act in its current form and as it was pre-2002 vests in a worker a right to compensation where the worker suffers injury in the course of their employment. In both the current Act and the pre-2002 Act a worker possessed of that right may seek payment of weekly compensation for loss of earning capacity, as may occur from time to time, by reason of the injury, and may also seek payment of relevant medical expenses.
However, the pre-2002 Act dealt separately with the employer’s obligation to pay weekly compensation and compensation for relevant medical expenses. Once a claim for weekly compensation, or compensation for medical expenses, was received by an employer, it could either agree to pay or refuse to pay. If it refused to pay, the issue could proceed to arbitration. With respect to weekly compensation, where it was being paid, either by agreement or pursuant to an award after arbitration, the employer could only cease payment with the agreement of the worker or pursuant to an award: Barbaro v Leighton Contractors Pty Ltd. Where weekly compensation was terminated, either by agreement or award, a worker could claim further weekly payments should they subsequently again be incapacitated by reason of the compensable injury. As each claim for payment of weekly compensation for a period of incapacity was a separate “claim”, an application for arbitration seeking termination of weekly payments (in the absence of agreement to terminate) would only logically occur where payments were continuing. As it was open to the employer to reject any “claim” for medical expenses on a case by case basis, there was no need for the pre-2002 Act to address the issue of termination of these payments.
Amongst the significant amendments to the Act in 2002 was the introduction of the requirement that an injured worker lodge a “claim” for compensation. This single claim differed from the piecemeal process of making claims under the pre-2002 Act in that it encompassed all forms of compensation available under the Act. This claim exists as a procedural gateway linking the ongoing entitlement of the worker to the obligation of the insurer to pay such amounts as required by the Act.
It is, we think, clear that a worker’s entitlement to compensation under the current Act continues to vest in the worker from the time that it arises until the right itself is extinguished, for example by commutation: see s 136. In this way the current Act is similar to the pre-2002 Act. But does this require, or imply, that the claim must continue? To answer this question we must return to the text of the Act.
Each of sections 130, 131 and 132 permits an insurer to reject “the workers claim”. We agree with the Master’s observation that it is to be expected that the legislature intended the word “claim” to bear the same meaning in each of the provisions. We also agree that the term “claim”, as used in these sections, refers to an entire claim, that is, the single claim encompassing all the forms of compensation available under the Act. As the Master said (at [54]): “the word “claim” in Pt 6.2 must...be read as a reference to an entire claim arising out of an injury, not to every separate demand on an insurer for payment of a treatment account, or payment of compensation for a few days off work”. However, the Master then goes on to say with regard to s 132 (at [56]):
The purpose of the section is to provide a mechanism for the insurer to cease payments of weekly compensation, but only where it can satisfy the court that it should be permitted to do so.
With respect, these two propositions cannot stand together. If the term “claim” is used consistently throughout Pt 6.2, as meaning the workers entire claim, then, self evidently, the term will bear the same meaning in s 132. To suggest that s 132 is concerned only with the cessation of payments of weekly compensation of necessity imports a more restricted meaning into the term “claim” in that section than that which otherwise applies in Pt 6.2, being an entire claim.
What, then, is to be made of the fact that ss 130 and 131 specifically refer to the stopping of Pt 4.5 compensation as well as weekly compensation, whereas s 132 only refers to the stopping of weekly compensation? In our opinion, this simply reflects the different processes prescribed with respect to rejection of a claim in these provisions. Rejection of a claim under s 130 or s 131 is a unilateral act of the insurer. The legislature has prescribed conditions attaching to the insurer’s right to reject a claim unilaterally, both as regards the payment of weekly compensation and Pt 4.5 compensation. This effectively constitutes a safety net. What distinguishes the process of rejection under ss 130 and 131 from that under s 132 is not simply that a rejection of claim under s 132 can only be with the leave of the court. The other significant distinction lies in the giving of notice to the worker. There is no obligation on an insurer to give notice to a worker of an intention to reject a claim under ss 130 or 131. The insurer is entitled simply to reject the claim by giving appropriate notice to the worker. The claim is taken to be rejected when the worker receives the notice: s 129(2).
Where an insurer intends seeking leave to reject a claim under s 132 it has an obligation to give notice of that intention to the worker: reg 99 of the Regulation. The worker has an opportunity to seek medical treatment under the claim prior to the hearing of the application for leave to reject it. “Medical treatment” is defined in the Dictionary to the Act as meaning, amongst other things, “an examination, test or analysis, conducted by or under the direction, or at the request, of a doctor to diagnose an injury”. This definition encompasses medical attendances by a worker for the purpose of determining whether he or she has suffered an injury, or suffers from any incapacity, prior to the hearing of the application for leave to reject the claim under s 132. As such the worker has an opportunity prior to the hearing of the application to obtain appropriate medical evidence to oppose the application, with the cost of those medical attendances being borne by the insurer.
As such, there is no need for s 132 to address, as a separate question, the cessation of Pt 4.5 compensation. Sections 130 and 131 allow for a continuation of the insurer’s liability for Pt 4.5 compensation for a period of 8 weeks after the rejection of the claim to allow the worker to gather medical evidence to challenge the rejection of the claim, with the cost of medical attendances for that purpose being borne by the insurer during that 8 week period.
For these reasons, sections 130 and 131 make provision for the stopping of Pt 4.5 compensation, while s 132 does not. All of these sections provide for weekly compensation, potentially, to continue after the date on which the insurer rejects the claim as a safety net, ensuring that the worker’s income does not suddenly, and without notice, cease.
The fact that ss 130, 131 and 132 make provision for insurers to “stop” paying weekly compensation is not an indicator that the worker must be receiving weekly compensation before the sections can operate. These provisions are designed to deal with a wide range of factual circumstances. In some cases where a claim is rejected under one of these provisions the worker will be receiving weekly compensation while in other cases the worker will not. As such, the use of the phrases “stop weekly compensation”, and “stop paying weekly compensation” in these provisions does not indicate that they will only apply where weekly compensation payments are continuing.
The fact that none of these provisions specifically refer with Pt 4.4 compensation or death benefits under Pt 4.6 does not support the argument of the respondent. Compensation under Pt 4.4 is lump sum compensation for permanent injury based upon a table of maims in Sch 1 of the Act. As such, there would be no point in making specific reference to Pt 4.4 compensation in sections 130, 131 and 132.
Dependants of a deceased worker to whom benefits are payable under Pt 4.6 are entitled to:
a)a single lump sum of $150,000 (CPI indexed) to be divided between the dependants;
b)weekly compensation for each dependent child; and
c)funeral expenses: s 77 (2).
Both the lump sum payment and the funeral expenses are one-off payments, requiring no provision for cessation of payments. Weekly compensation payments continue while the person receiving it is a child: s 77(5). We see no reason why sections 130, 131 and 132 should be interpreted as not applying to a claim for compensation under which weekly compensation pursuant to Pt 4.6 is being paid, simply because Pt 4.6 is not specifically referred to in those sections. However, the reality is that the only thing that is likely to change after a claim for death benefits has been accepted is that the dependent children reach an age where they are no longer entitled to weekly benefits. Senior Counsel for the appellant submitted, correctly, that rejection of a claim based on the recovery of a worker does not terminate the insurer’s liability forever. In that regard, we agree with the Master’s analysis once a worker suffers a compensable injury, the worker has a continuing right to compensation under the Act until such time as the right itself is extinguished, for example by commutation.
A further claim may be made based on any aggravation, acceleration or recurrence of the original injury: s 4. Whilst the insurer will not, necessarily, be relieved of all future liability by rejection of a claim, it does relieve the insurer of the need to manage that particular claim, providing a greater degree of certainty to, and reducing the costs of, the insurer. In addition, in any future claim the onus will fall on the worker to establish an aggravation, acceleration or recurrence of their injury.
None of the matters raised by the respondent seem to us to suggest that s 132 is only concerned with granting leave to reject a claim for payment of weekly compensation where such payments are ongoing as at the date leave is granted. The plain wording of s 132, referring as it does to a “claim” suggests that the section is intended to encompass an entire claim, as is the case with sections 130 and 131. Sections 130(l) (a) and (b) and 131(a) and (b) do not restrict the ambit of those sections, but extend the liability of the insurer past the date of rejection of the claim, but only with regard to those forms of compensation specified. It is logical to read s 132(2)(b) in the same way.
For those reasons, we consider the Master erred in finding that s 132 was limited to providing a mechanism for an insurer to cease payments of weekly compensation.
ORDERS
The evidence before the Magistrate strongly supported the granting of leave. The evidence went beyond establishing that the respondent was no longer incapacitated (which seems to have been accepted when weekly compensation ceased) and established that she had recovered from her injury. The suggestion by Senior Counsel for the appellant that the Magistrate and the Master had failed to determine a matter in issue under the pleadings, being whether the respondent had suffered a compensable injury at all, was never argued by the appellant before the Magistrate or Master. If it were, in truth, an issue, it would suggest that these proceedings should be remitted to the Magistrates Court for determination of that issue. In the light of the way the matter was conducted before the Magistrate and the Master, however, we are satisfied that the appellant should not now be allowed to pursue this issue. We doubt that it is really in dispute in any event.
The appropriate orders are:
a)the appeal be allowed and the orders of the Master are set aside;
b)in lieu thereof, order that the appellant have leave to reject the respondent’s claim; and
c)subject to the appellant making an application for costs in writing within 10 days from today’s date, each party is to bear its own costs of the proceedings before the Magistrate, the Master and the Court of Appeal.
In the light of these orders it is unnecessary to consider the appellant’s appeal from the costs order made by the Master.
I certify that the preceding fifty nine (59) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.
Associate:
Date: 10 May 2013
Counsel for the Appellant: R L Crowe SC
Solicitor for the Appellant: Sparke Helmore Lawyers
Counsel for the Respondent: W Sharwood
Solicitor for the Respondent: Slater & Gordon Lawyers
Date of Hearing: 18 – 19 February 2013
Date of Judgment: 10 May 2013
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