The State of Western Australia (Department of Education) v Leek
[2014] WADC 10
•3 FEBRUARY 2014
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: THE STATE OF WESTERN AUSTRALIA (DEPARTMENT OF EDUCATION) -v- LEEK [2014] WADC 10
CORAM: STAUDE DCJ
HEARD: 15 JANUARY 2014
DELIVERED : 3 FEBRUARY 2014
FILE NO/S: APP 63 of 2012
BETWEEN: THE STATE OF WESTERN AUSTRALIA (DEPARTMENT OF EDUCATION)
Appellant
AND
TERESA ELAINE LEEK
Respondent
ON APPEAL FROM:
Jurisdiction : WORKERS' COMPENSATION ARBITRATION SERVICE (WA)
Coram :REGISTRAR S MELVILLE
Citation :A3697
Catchwords:
Workers compensation - Appeal - Section 60 application for suspension of weekly payments - Whether arbitrator erred in law in finding that employer did not genuinely dispute liability - Whether failure to mitigate loss may ground a genuine dispute - Whether s 60 application appropriate
Legislation:
District Court Rules 2008 s 53(6)
Workers Compensation and Injury Management Act 1981
Workers Compensation and Injury Management Arbitration Rules 2011
Result:
Leave to appeal granted. Appeal allowed. Order of arbitrator set aside. Order for suspension of weekly payments from 2 July 2013
Representation:
Counsel:
Appellant: Mr D Burton
Respondent: No appearance
Solicitors:
Appellant: SRB Legal
Respondent: Not applicable
Case(s) referred to in judgment(s):
Adams v The Roman Catholic Archbishop of Perth [2002] WADC 28
Airlite Cleaning Pty Ltd v Bosevski (CM-115/2)
Aitken v Goodyear Tyre Rubber Aust Ltd (1945) 46 SR (NSW) 20
Australian Broadcasting Tribunal v Bond (1990) 170 CLR 353
BHP Billiton Iron Ore Pty Ltd v Brady [2008] WASCA 250
Commercial Industries v Stegic (Unreported, WASCA, Library No 9052, 13 September 1991)
Conway v Dom UIE Pty Ltd (CM21‑98)
Department of Education v Kenworthy (1990) 3 WAR 1
Farrah Constructions Pty Ltd v Say‑Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89
Fazlic v Milingimbi Community Inc [1982] HCA 3; (1982) 38 ALR 424
McNair v Press Offshore Ltd (1997) 17 WAR 191
Mikaric v Oshton Pty Ltd (CM 27-95)
Mitchell v Canal Rocks Beach Resort [2002] WASCA 331
Mokta v Metro Meats International Ltd [2004] WADC 78
O'Brien v Barminco Investments Pty Ltd [2005] WADC 63
Pacific Industrial Co v Jakovljevic [2008] WASCA 60
Plenty v Argus [1975] WAR 155
Schilter v South Australian Institute of Technology (No 1) (1982) 31 SASR 316
State of South Australia v Wall (1980) 24 SASR 189
Summit Homes v Lucev (1996) 16 WAR 566
Taylor v Star Broken Meats (Unreported, WASCA, Library No 920434, 26 August 1992)
Viro v R [1978] HCA 9; (1978) 141 CLR 88
STAUDE DCJ:
Introduction
This is an appeal from a decision of the registrar of the Workers Compensation Arbitration Service acting as an arbitrator pursuant to s 182ZP(3)(d) of the Workers Compensation and Injury Management Act 1981 (the Act). The appeal is from the decision of the registrar to dismiss an application by the appellant (employer) pursuant to s 60 of the Act for an order that weekly payments of compensation be suspended on the grounds that there is a genuine dispute as to the employer's liability to pay compensation or as to the amount of compensation to be paid.
The appeal is brought pursuant to s 247. Leave to appeal is required. Leave may not be granted unless, relevantly, there is a question of law involved. It is well established that where a question of law is involved, the whole of the decision appealed from is open to review, not merely the question of law, and that the appeal court is required to conduct a real review: Pacific Industrial Co v Jakovljevic [2008] WASCA 60. An error of mixed law and fact is an error of law: BHP Billiton Iron Ore Pty Ltd v Brady [2008] WASCA 250 [3]. A decision does not involve a question of law unless the error is material to the decision: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 353.
The grounds disclose a number of questions of law as to the test to be applied in determining, for the purposes of a s 60 application, whether there is a genuine dispute, and whether s 60 affords a proper remedy to the employer in the circumstances of this case. I am satisfied that the correctness of the decision turns on those questions. Leave should be granted.
By s 249(7)(a) this court may affirm, vary, or quash the decision appealed against, or substitute, and make in addition, any decision that should have been made in the first instance.
Respondent not a party
The respondent (worker) is not legally represented. She did not file a Form 8 (notice of respondent's intention) although she was given the pro forma when she was served with the appeal notice on 27 August 2013: affidavit of service of Beverley Anne Ward sworn 28 August 2013.
At a case management hearing on 10 September 2013 (of which notice was given in the appeal notice) the worker did not appear. It was ordered that the hearing be adjourned to 24 September and that the employer serve the worker with the order. The court file bears an annotation (presumably made by the registrar's associate) to the effect that the worker had been waiting outside the court and did not appreciate that she was required to come in. The annotation states that the worker was informed of the orders made. I am informed by the employer's solicitors by letter dated 15 January 2014 that a letter was sent to the worker on 12 September 2013 informing her of the adjournment.
There was no appearance by the worker at the case management hearing on 24 September 2013. On that occasion it was ordered that the appeal be listed for hearing on 15 January 2014. Although it was unnecessary for them to do so, the employer's solicitors personally served the worker (by courier on 13 January 2014) with a letter confirming the date of the hearing and enclosing the employer's outline of submissions, list of authorities and list of orders wanted and the appeal book.
The worker having failed to lodge a Form 8, District Court Rules 2005 r 53(6) applies. The worker is not entitled to take part and is not a party to the appeal for the purposes of the rules.
I note, incidentally, that the worker's failure to file a Form 8 and her failure to appear at the hearing of the appeal are consistent with her conduct in relation to the application for arbitration. She did not attend for a conciliation conference and did not lodge a reply to the application as required by r 27 of the Workers Compensation and Injury Management Arbitration Rules 2011 (WCIMA Rules). I also note, in this regard, that the worker did not respond to the employer's earlier application for an order pursuant to s 156B that she participate in vocational rehabilitation which was dismissed by order dated 18 June 2012.
I am satisfied that the respondent does not wish to be heard in relation to the appeal. Rule 53(6) provides that if a respondent does not file a Form 8, the respondent is not entitled to take part or be heard in the appeal and is not a party to the appeal for the purposes of these rules. I am satisfied that no Form 8 has been filed.
There is, therefore, no contradictor in this appeal. The court in the circumstances ought to be circumspect in its consideration of the appellant's submissions. In doing so, I am mindful of the fact the issue in this appeal is whether the learned registrar was correct to find that the employer did not genuinely dispute its liability to pay compensation and that, accordingly, no decision in this appeal is capable of finally determining a worker's rights in this regard. It is an interlocutory matter.
Grounds
The notice of appeal raises four issues of law, which, expressed as propositions, are the grounds of the appeal. Slightly paraphrased, they are:
1.The learned registrar erred in law by finding that there was not a genuine dispute for the purposes of s 60.
2.The learned arbitrator erred in law in holding that the doctrine of mitigation of loss did not apply so as to give rise to an issue as to whether there was a genuine dispute by reason of the worker's failure to participate in the rehabilitation and injury management process prescribed by the Act.
3.The learned arbitrator erred in law in holding that the doctrine of precedent (stare decisis) did not require him to follow the decisions of compensation magistrates or the Dispute Resolution Directorate.
4.The learned arbitrator erred in law in holding that the appellant could not bring an application under s 60 to suspend weekly payments without having first exhausted all alternative statutory remedies against the worker.
The expanded grounds pleaded in the annexure to the appeal notice are prolix and argumentative. There is no need to repeat them. Ground 1, as I have paraphrased it above, reflects pleaded grounds 1, 2, 7 and 8; ground 2 reflects pleaded grounds 3 and 4; ground 3 reflects pleaded ground 5; and ground 4 reflects pleaded grounds 6, 9 and 10.
As these reasons will show, the real issue is whether a genuine dispute as to liability to pay compensation or as to the proper amount of compensation is established by the evidence in support of the application.
History of claim
The worker sustained an injury to her lumbar spine during the course of her employment as a primary school cleaner on 17 June 2011. The injury occurred as a result of throwing a bag of rubbish into a skip bin. As a result of her injury the plaintiff was incapacitated and made a claim for workers compensation. The worker gave her address as 16 Fortunella Grove, Seville Grove. Liability was admitted and weekly payments commenced.
The first medical certificate of the worker's general practitioner Dr Michelle Skellern dated 30 June 2011 indicated unfitness for work for one week due to pain in the right knee, right lower back and right hip.
Dr Paul Roche, radiologist, reported on 1 July 2011 that in the lumbar spine there was a grade 1 anterolisthesis at L4/5.
At the request of the employer, the worker was reviewed by an occupational physician, Dr Roger Lai, on 8 September 2011. In his report dated 11 September 2011 Dr Lai stated that the worker gave a history of mild midline low back ache for several years, untreated. The worker also had a history of depression for three years unrelated to work. There had been no sick leave required and the condition was well controlled.
The worker's pre-existing history of mild intermittent midline low back ache was consistent with lower lumbar spine degeneration identified on CT scan. He considered that she suffered a fresh injury on 17 June 2011 while putting rubbish into a bin. The history and findings were consistent with a right L3/4 disc protrusion with associated referred pain to the groin and knee and minimal nerve root irritation. The worker's symptoms had been mild with little improvement over two months. He considered a neurosurgical review was appropriate but he expected that non‑operative treatment would be advised.
Dr Lai noted that although there was a prior history of low back ache, there was no prior history of referred right limb pain. He considered that the worker's condition was consistent with having suffered an injury to her right L3/4 disc. Her pre‑existing lumbar spine and disc degeneration increased the risk of a spontaneous disc protrusion, but he could not say when this may have occurred if the incident at work had not. He recommended neurosurgical review, exercise in the form of walking and Panadol for symptomatic relief. He did not consider the worker required a gym programme or physiotherapy. He considered on the history that there had been mild improvement since the date of injury in that initial burning/numbness had resolved.
He expressed the view that the worker was not totally unfit for work. She reported little difficulty with walking, standing and sitting. She did not have a limp. Her working capacity was subject to restrictions. She could lift up to 5 kg. She should avoid repetitive twisting, bending and sustained stooping, she should not mop or wear a vac pack. She was capable of working four hours per day, five days per week initially.
In his view she should return to work on a graduated basis working half days initially doing administrative work, dusting and wiping for a period of four weeks on a supernumerary basis. She would be able to graduate to her normal working hours over six weeks but should avoid using a vac pack and emptying bins. Depending on progress, a normal duty trial could be undertaken in three to six months. He felt it was too early to tell whether she would be able to return to her pre‑injury duties in an unrestricted manner.
Dr Lai observed that the worker, at age 59, had significant degenerative change in the back and may find it difficult to tolerate pre‑injury duties. If she were unable to attempt a normal work duty trial within six months, then he did not expect that she would be able to return to her pre-injury work.
On 3 November 2011 the employer wrote to the worker's general practitioner, Dr Skellern, requesting her authorisation of vocational rehabilitation. Dr Skellern was asked if vocational rehabilitation was required to support Ms Teresa Leek to return to normal duties. She answered yes. She was asked if she approved of the employer referring the worker to IMS Organisational Consultancy. She answered yes.
The employer then wrote to the worker on 7 November 2011 indicating that it had referred her to IMS for rehabilitation and informing her that she had the right to choose her own rehabilitation provider pursuant to the provisions of the Act. The letter also stated that the worker's general practitioner had been consulted and given her approval for the referral.
On 11 November 2011 the employer received a progress medical certificate from Dr Skellern indicating total unfitness for work from 16 November 2011 to 31 December 2011 inclusive. The certificate indicated that the worker had been referred for hydrotherapy and for review by Mr John Liddell, neurosurgeon. No reference was made to any rehabilitation programme.
On 18 November 2011, the employer received copies of Mr Liddell's reports to Dr Skellern dated 4 October and 21 October 2011. In a further report of 3 November 2011 Mr Liddell stated that he was given a prior history of back ache for which the worker had not sought medical treatment or had time off work. On the date of the incident she felt a click in her back whilst putting rubbish into a bin. She had pain in her right groin radiating down the lateral aspect of her thigh to the anterior aspect of her knee. She continued to work but eventually consulted her general practitioner and had been off work since that time.
She had weakness in her right leg but no paraesthesia or numbness. Her pain was aggravated by prolonged sitting and jarring. Physical examination was unremarkable. On CT scan there was evidence of grade 1 degenerative spondylosis of L4 on L5 associated with a mild postero‑lateral and lateral disc protrusion on the right at L3/4. Subsequent CT imaging revealed evidence of moderately severe degenerative changes/disc space narrowing at L4/5 where she had grade 1 anterolisthesis of L4/ 5 along with a mild but significant degree of instability at that level.
Lumbosacral MRI scan revealed similar changes associated with a moderately severe degree of central canal stenosis at the L4/5 level together with a mild degree of foraminal stenosis on the right, but no compromise of the L4 nerve root. There was a relatively small intra‑foraminal disc herniation on the left at L4/5, and a small but significant intra-foraminal disc herniation on the right at L3/4.
Mr Liddell thought that symptoms could be relieved by decompression at L4/5, and fusion. Although she was unfit to work as a cleaner, she was capable of performing modified duties, at least on a part‑time basis. He considered that it would not be unreasonable for her to participate in a return to work programme.
In his opinion the precise cause of her ongoing symptoms was unclear, but there was evidence to implicate the L4/5 level where there was grade 1 anterolisthesis and a mild but significant degree of instability. He stated:
Because of that instability I would quite likely recommend an interbody fusion procedure if she were to consider surgery. However, at the age of 59, I'd encourage her to consider some lifestyle changes – for example, giving up work (at least as a cleaner) before consideration of surgical intervention.
In answer to a question by the employer's insurer regarding Dr Lai's recommendation of a graduated return to work, Mr Liddell stated:
I believe that Mrs Leek would quite likely be capable of performing modified duties – at least on a part-time basis, and I believe that it would not be unreasonable for her to participate in a return to work programme.
He was asked, 'If you are of the opinion Mrs Leek is still totally unfit for work, please explain why she is totally unfit and when you anticipate her to have a capacity to return to work of some sort and participate in a return to work programme?', Mr Liddell answered, 'N/A' (not applicable).
The employer appointed IMS Organisational Consulting, a rehabilitation service provider, to facilitate the worker's return to work. On 17 November 2011 IMS wrote to the worker requesting that she contact Mr Adam Lillee, an injury management consultant, to arrange an appointment to discuss vocational rehabilitation.
On 15 December 2011 Mr Lillee made an initial assessment report based on an interview with the worker at her home (Fortunella Grove, to where he addressed the worker's copy of the report) on 29 November 2011. In that report he indicated that an assessment of the physical demands of the worker's pre‑accident duties would be undertaken near the beginning of the 2012 school year if appropriate. Options available for restricted duties would be discussed at the time with a view to a graduated return to work programme if medically indicated. The report also noted that the worker was to be reviewed by Mr Liddell on 16 January 2012. Mr Lillee proposed to contact the worker after that time to discuss Mr Liddell's recommendations.
On 15 December 2011 Mr Lillee wrote to the worker stating that he had tried unsuccessfully to contact her by telephone and requesting that she contact him. Mr Lillee wrote to the worker again on 29 December 2011 asking her to contact him. On 6 January 2012 Mr Lillee wrote to the worker requesting that she contact him as soon as possible. He indicated that he needed to speak with her to see how she was progressing and to get an updated contact telephone number.
On 25 January 2012 Mr Lillee wrote to the worker noting that she was to have seen Mr Liddell on 16 January 2012. He wished to inquire of her how the review went and what Mr Liddell had advised in terms of her injury and rehabilitation. The worker did not respond to any of this correspondence.
On 30 January 2012 the employer's insurer, RiskCover, wrote to the worker stating that it had been informed by Mr Lillee of his difficulty in making contact with the worker to organise vocational rehabilitation. The letter stated:
Our office would like to remind you that as liability has been accepted on your claim you are obligated under the Workers Compensation and Injury Management Act 1981 to participate in vocational rehabilitation. Failure to do so may affect your ongoing entitlements to workers compensation. We would appreciate it if you would please contact Adam Lillee …
As a consequence of the worker's failure to respond to Mr Lillee's letters, the employer made an application for conciliation on 13 February 2012. The employer sought an order pursuant to s 156B that the worker participate in vocational rehabilitation and that weekly payments be discontinued, reduced or suspended. The application stated that the dispute had arisen by reason of the worker not responding to the rehabilitation service provider.
The respondent did not attend the conciliation conference on 15 March 2012. Attempts to contact the respondent for the purposes of the conciliation conference were unsuccessful. The employer applied for arbitration. The Act provides:
156B. Arbitrators' powers as to return to work programs
(1)The employer of a worker, or a worker, may apply for an order of an arbitrator requiring the worker to participate in a return to work program.
(2)The arbitrator may require the worker to participate in a return to work program if satisfied that —
(a)a return to work program is required under section 155C(1) to be established for the worker; and
(b)the worker, without reasonable excuse, refuses or has failed to participate in a return to work program; and
(c)the establishment, content and implementation of the return to work program are, or will be, in accordance with the code.
(3)The arbitrator may require the worker to participate in a return to work program other than that proposed by or on behalf of a party to the application.
The employer's s 156B application was heard by Registrar Melville on the papers. The decision is dated 18 June 2012. Notwithstanding that r 27 of the WCIMA Rules requires a respondent to lodge a reply within 14 days (r 27) and that r 28(1) provides that where a party does not lodge a reply the application may be determined as if that party did not oppose any part of the application, the learned registrar found as follows:
I conclude that the worker has failed to participate in a return to work programme. On the evidence I find that she has not replied to numerous letters addressed to her from 15 December 2011 to 30 January 2012, all of which were addressed to her last known place of residence. These failures together with the worker's failure to file a reply in this application lead me to this conclusion.
However, I am not satisfied there is no reasonable excuse. In my mind the employer carries, at least, the ultimate onus of persuasion that there is no such excuse. The evidence that a L4/5 decompression fusion procedure was planned for the new year leaves considerable doubts. If this procedure has taken place then the associated hospitalisation and recovery period could well constitute a reasonable excuse of failure to participate in a return to work programme.
If it is wrong for me to take this view on those facts I should have, as a matter of law, found there was no reasonable excuse for failure to participate in the programme, such a finding would only activate the discretion reposed in me by the use of the word 'may require' in section 156B(2) and I would not exercise my discretion to order participation in the return to work programme until I knew more about the current treatment the worker is undergoing and in particular the current position regarding surgery.
Although it is not a matter that arises for my determination, the conclusion of the learned registrar does in my view raise a real question as to whether, in circumstances where the application was unopposed and there was no evidence to suggest that the worker had any excuse for not participating in rehabilitation, the employer was required to do any more in order to prove as a fact that the worker had no reasonable excuse for not doing so. That fact was a matter of inference. There was no evidence that surgery was planned, nor any evidence to suggest that it had been performed.
A related question, again not one for my determination, is whether, in the face of evidence from Dr Skillern, Dr Lai and Mr Liddell that vocational rehabilitation was appropriate, it was reasonable not to order the worker to participate. There was no evidence of the worker's medical condition other than that to which I have referred.
Rule 28(2) confers a discretion on an arbitrator, where an application is unopposed, to make any order that the arbitrator thinks fit. The discretion is to be exercised judicially, i.e. in accordance with applicable principles: see Summit Homes v Lucev (1996) 16 WAR 566, 569, and McNair v Press Offshore Ltd (1997) 17 WAR 191, 198, with respect to a review officer's duty to act judicially.
The employer's insurer, RiskCover, received a surveillance report dated 12 April 2012 which detailed observations made of the worker on 29 March, 3 April and 5 April 2012 (AB 134). On each occasion she was observed to drive her motor vehicle and to do shopping in an apparently unrestricted manner. She was observed to be living at Fortunella Grove.
IMS closed its rehabilitation file on 11 June 2012. The closure report stated that no contact had been made with the worker since the initial interview on 29 November 2011 (AB 96).
On 20 June 2012 RiskCover wrote to Mr Liddell enquiring whether he had seen the worker since 4 October 2011 (AB 123). He replied on 26 June 2012 stated that he had arranged to review her on 16 January 2012 but she did not attend. He had no further information to provide (AB 92).
RiskCover wrote to the worker's general practitioner, Dr Skellern, on 20 June 2012 and again on 1 August 2012 requesting information. Dr Skellern appears not to have replied to either letter.
On 9 July 2012 and 1 August 2012 RiskCover wrote to the worker requesting whether she had undergone surgery as recommended by Mr Liddell, but obtained no reply. Of course, liability for the claim having been accepted, the worker was entitled to payment of her medical and other treatment expenses. It would have been a reasonable inference to draw from the absence of medical treatment accounts that the worker had not had any further treatment.
A further surveillance report was obtained from Centauri Group dated 12 November 2012 (AB 141). The worker was observed on 3, 5 and 6 November 2012, once again driving a motor vehicle and attending shops without apparent physical restriction. Surveillance was commenced at the worker's given address of 16 Fortunella Grove, Seville Grove. Neither she, nor her vehicle was observed. Surveillance was then carried out at 9 Little John Road, Armadale where she appeared to be living.
On 12 November 2012 the employer wrote to the worker indicating that numerous attempts had been made to discuss her recovery and to assist her return to work, and also noting that no current progress medical certificate had been provided by her (AB 129). A request was made to contact the workers compensation officer of the employer before 30 November 2012. This letter was copied to Dr Skellern. It was sent to the worker at 9 Little John Road, Armadale where the worker had been observed one week before. The letter was returned marked 'Return to sender, unclaimed' (AB 130).
On 21 November 2012, 17 months after notification of the claim and over 13 months since the worker had been examined by Dr Lai and Mr Liddell, RiskCover sent a letter to the worker at her Fortunella Grove address notifying her of an appointment for review by Dr Lai on 6 December 2012. Attached to the letter were copies of relevant provisions of the Act relating to the obligation to attend for medical examination (AB 131). There was no evidence that the letter was not received. The worker did not attend the appointment.
According to a report from Centauri Group dated 14 December 2012 (AB 146) an investigator interviewed the worker and was informed as follows:
1.She has not been in contact with anyone because she has been too stressed by the fact her son has been committed to a mental ward and the recent murder of a nephew.
2.She has not been having any treatment and is just trying to take things easy.
3.When she is feeling better mentally, she will be willing to participate in the rehabilitation process, however cannot think of anything like that at the moment.
The report did not state where the interview took place.
The application before the arbitrator
The employer sought an order for suspension of weekly payments pursuant to s 60. According to a conciliation service certificate of outcome a conciliation conference was listed on 4 February 2013. The worker failed to attend. Attempts to contact her by telephone were unsuccessful. The conciliation was concluded on the basis that there was minimal chance of any agreement being reached. An order for suspension of weekly payment for 12 weeks was made (AB 44).
The employer then made an application for arbitration filed 28 February 2013 in which it sought an order that weekly payments be suspended on the grounds that there was a genuine dispute for the purposes of s 60 (AB 35).
The application annexed grounds for discontinuance as follows (AB 41):
Pursuant to s 60 of the Act, the employer genuinely disputes it is liable to continue to make weekly payments of compensation.
The employer considers that the worker has continually refused to participate in rehabilitation and/or return to work programmes in which case the worker is failing to mitigate her loss as she is lawfully required to do. In the circumstances, the nature and extent of the worker's capacity is unable to be distilled.
Further, the worker failed to attend an appointment with Dr Roger Lai, occupational physician, on 6 December 2012. In these circumstances, the employer is also unable to ascertain the worker's current medical capacity for work.
Further, and in the alternative, the employer says that there has been a break in the causal chain between the worker's injury and any ongoing incapacity she has by reason of unrelated psychological issues involving her son being committed to a mental ward and the recent murder of a nephew.
The dispute is not amenable to review by s 61 of the Act given the true capacity is unable to be distilled.
The employer's application was supported by a statement of Charles Dawud, team leader, workers compensation unit, Department of Education. He stated that the worker had failed to participate in the rehabilitation and injury management process and had failed to attend an appointment made for review by Dr Roger Lai. Accordingly, the employer was unable to ascertain the nature and extent of her capacity to work. His statement annexed a number of evidential documents to most of which I have referred.
The application for arbitration was personally served on the worker at 9 Little John Road, Armadale on 9 March 2013 (AB 34). The worker did not lodge a reply as required by r 27.
A directions hearing was listed on 4 April 2013. The worker did not attend. The registrar ordered that the employer file a certificate of service and submissions and that the application be determined on the papers.
Grounds for dispute
As I read the employer's application and its submissions, the employer contended firstly that the worker had failed to participate in rehabilitation of which both her specialist Mr Liddell and the employer's rehabilitation specialist approved. She had been interviewed by Mr Lillee in November 2011, but had failed to respond to any subsequent approaches and had remained out of contact with the rehabilitation provider, being inaccessible even by telephone.
Next, the employer pointed to the failure of the worker in December 2012 to attend an appointment with Dr Lai whom she had seen previously at the employer's request in September 2011.
The employer also produced evidence of a statement by the worker to an investigator in December 2012, some 18 months after the incident of injury, that she had not been in contact with anyone in relation to her claim because she had been too stressed and that she would be willing to participate in rehabilitation when she felt better. The inference sought to be drawn from that evidence is that it was by reason of stress due to other events, and not her injury, that the worker was incapacitated for work and that, but for unrelated stress, she would be fit at least for rehabilitation.
On the basis of these three features of the case, the employer contended that there were grounds to dispute the worker's incapacity and put in issue its liability to pay compensation. The employer contended that the worker had failed to mitigate her loss and that her conduct prevented a proper assessment being made of her capacity for work.
Registrar's decision
The learned registrar held that the dispute raised by the employer was not genuine. Dealing firstly with the failure of the worker to oppose the application, the learned registrar, without reference to r 28, held at [2]:
The failure to lodge a reply does not necessarily mean that a default judgment can be entered. There are many reasons why the matter needs to be considered having regard to the merits of the application and the evidence filed in support. These reasons include the need for an arbitrator to satisfy him or herself that he or she has jurisdiction and, having regard to the need to act according to equity, good conscious and the substantial merits of the case, that an applicant is not getting a favourable decision in circumstances where the application is misconceived due to error of law or significant error of fact, particularly bearing in mind the remedial nature of the Worker's Compensation and Injury Management Act 1981 and its purpose stated in s 3(d) which is to compensation and rehabilitate injured workers.
The learned registrar referred to the grounds of the application and the statement of evidence of Mr Darwud. In relation to s 60 the learned registrar held that the discretion to order the payments be suspended, discontinued or reduced was enlivened by a genuine dispute as to liability to pay compensation and the grounds of the dispute. The arbitrator was required to be satisfied that the grounds were not frivolous.
As to what is meant by a 'genuine dispute', reference was made to Taylor v Star Broken Meats (Unreported, WASCA, Library No 920434, 26 August 1992), Commercial Industries vStegic (Unreported, WASCA, Library No 9052, 13 September 1991) and State of South Australia v Wall (1980) 24 SASR 189. The learned registrar stated [16]:
In my view, a dispute raised by an employer based on a legal argument that is not only feeble but is demonstrably misconceived must be regarded as based on grounds that are frivolous for the purposes of an application under s 60 or otherwise be on the question of whether the dispute can be regarded as genuine, irrespective of any subjective belief by an employer or its authorised agents.
The learned registrar went on to observe the employer's liability to make payments of compensation for incapacity resulting from injury was created by s 18 which requires the employer to pay compensation in accordance with sch 1. Clause 7(1) and cl 7(2) prescribe weekly payments where the total or partial injury incapacity results from the injury. ('Injury' means, relevantly, a personal injury by accident arising out of or in the course of the employment, or whilst the worker is acting under the employer's instructions: s 5.)
Dealing firstly with the employer's contention that the chain of causation of injury in this case may have been broken by the intervention of other factors contributing to incapacity, namely the worker's admission that she had been stressed by family matters (so as to give rise to a dispute as to liability), the learned registrar held that the employer's proposition was speculative and did not, in any event, eliminate the injury as a cause of incapacity.
With respect to the worker's failure to attend for medical review by Dr Lai on 6 December 2012, the learned registrar noted that s 64 and s 65 imposed an obligation on a worker to submit to examination by a medical practitioner as required by the employer. Section 72A provided that weekly payments could be suspended by order of an arbitrator if a worker did not comply with s 64 or s 65. Section 72A prohibited an arbitrator from making an order to suspend weekly payments if the worker satisfied the arbitrator that there was a reasonable excuse for refusing or failing to submit to medical examination.
The learned registrar found that it was not open to the employer to dispute liability to make weekly payments on the basis of a failure to submit to medical examination. As I understand the learned registrar's reasons, s 72A provided a discrete remedy in the event of a failure of a worker to submit to medical examination. Such failure could not, therefore, ground a s 60 application.
The learned registrar otherwise held as a matter of fact that there was no evidence to support the conclusion that the worker was aware that a medical review had been arranged. In the opinion of the learned registrar, the evidence suggested that the letter informing her of the appointment with Dr Lai was sent to an address at which the employer knew the worker no longer resided.
With respect to the employer's contention that the worker had failed to mitigate by not engaging in rehabilitation, the learned registrar stated at [34] that the employer fundamentally misconceived the relationship between failure to mitigate and causation. The registrar understood the employer's position to be that the failure to mitigate served to sever the chain of causation between injury and incapacity.
As I read the employer's grounds, they do not conflate those notions, as the learned registrar suggested. The grounds clearly state that by failing to participate in rehabilitation the worker failed to mitigate her loss and, further, as a consequence of that failure, her alleged incapacity could not be determined.
The learned registrar acknowledged that in Fazlic v Milingimbi Community Inc [1982] HCA 3; (1982) 38 ALR 424, the High Court, after distinguishing the concepts of failure to mitigate and causation in relation to unreasonable refusal of medical treatment, held that the rule relating to unreasonable refusal gives effect to the obligation to take reasonable steps to mitigate damage. The High Court observed at [17] that the doctrine of mitigation of loss was illustrated by cases drawn from the area of workers' compensation, and the doctrine permitted 'of the same considerations being applied in the area of workers' compensation as are applied habitually in tort where personal injuries cases are in question'.
At [37] the learned registrar observed that cl 7(2) of the First Schedule permitted weekly payments to be ceased or reduced where a worker's incapacity is partial, such that he or she is able to earn an income in suitable alternative employment, but has not done so. Reference was made to Conway v Dom UIE Pty Ltd (CM21‑98), where the compensation magistrate held that the words in cl 7(2) 'able to earn in suitable employment' can be read as placing on a worker a duty to mitigate the economic effects of the disability, following Aitken v Goodyear Tyre Rubber Aust Ltd (1945) 46 SR (NSW) 20. He also referred at [40] to Mikaric v Oshton Pty Ltd (CM 27-95), where the compensation magistrate held that the doctrine of mitigation of loss imposed an obligation to obtain medical treatment. At [38], however, the learned registrar held:
It is difficult to see how common law notions relating to failure to mitigate damages or loss suffered as a result of injury can displace a statutory requirement to pay compensation where incapacity results from injury. The only way it can be one is to contrive it so as to argue failure to mitigate breaks the causal chain, an argument refuted in Fazlicby the High Court.
In Fazlic the High Court made it clear that the duty to mitigate applied to workers’ compensation cases and that it was on this basis, not on the basis of a break in the chain of causation, that the rule as to unreasonable refusal to undergo treatment existed.
The registrar then went on in [39]:
It is my view that decisions of the compensation magistrate and, to the extent that there may be any relevant decisions, of the Commissioner of the Dispute Resolution Directorate, are of persuasive authority only and are not binding on me. The binding nature of precedent has its origins in the doctrine of stare decisis which requires a court lower in a particular jurisdictional hierarchy to follow a decision of the court higher in that hierarchy, only where that higher court is exercising appellate jurisdiction: see Favelle Mort Ltd v Murray (1976) 131 CLR 580, 591 and Business World Computers Pty Ltd v Australian Telecommunications Commission (1988) 82 ALR 49, 504. No appeal lies from my decision to a compensation magistrate or to the commissioner of the dispute resolution directorate, all those bodies having been abolished by the repeal of the relevant legislation giving rise to their existence.
It is not clear to which decisions he was referring or what significance he gave to the distinction drawn between binding and persuasive authority. The decisions of the compensation magistrates referred to by the learned registrar followed higher court authority.
The learned registrar observed at [41] that the employer carried the burden of proving that, had the worker sought to mitigate (in this case by participating in rehabilitation), the loss caused by the injury would have been reduced to the point that the worker would not be entitled to weekly payments. His view was that the employer had to show that the worker would have no entitlement to weekly payments. He found that the evidence in support of the application offered no compelling grounds for concluding that the employer held any belief that this was the case.
At [42] the learned registrar summarised his conclusion as follows:
Further, it is my view that in essence the applicant's application can be summarised in a few short sentences. They are that the applicant does not know what the current position is regarding the worker's capacity for work. Therefore, it disputes liability to make weekly payments for incapacity.
To my mind that is another way of saying 'we have no basis for disputing liability because we cannot get any evidence'. This way of putting it, to my mind, becomes even more compelling when considered against the background of his application, namely that the employer accepted liability for injury and has been making weekly payments of compensation as a result of the injury. There is no evidence that anything has changed that could cause the applicant to alter its views on this.
In my view the employer's declared attitude, manifested by the statements of Mr Dawud, are based on feeble legal arguments and I am not satisfied there is a genuine dispute as to liability to make weekly payments. Further, and possibly more importantly, I am not satisfied as to the grounds of the dispute as I am, by s 60, required to be. To put it another way, I find the grounds advanced to explain Mr Dawud's belief are unsatisfactory in so far as the grounds purport to support a belief that the matters complained of can result in a liability to make payments being removed. There are numerous avenues open to the employer to obtain evidence as to the employer's level of incapacity. It can seek an order that the worker engage in a return to work programme pursuant to s 156B. This might involve, amongst other things, some form of vocational assessment. It can also have the worker reviewed by a medical practitioner, such as an occupational physician, which a view may shed light on, and provide evidence of, the worker's capacity. Should the worker fail to submit to, refuse or obstruct the examination, the employer may seek an order that her payments be suspended.
Lastly, if I am also wrong on this point, I would not exercise my discretion under s 60(2) to discontinue payments in the absence of the employer having first exhausted its remedies, after a purposeful attempt to do so, under s 64 or s 65 or s 156B.
Principles
The leading decision is State of South Australia v Wall, which was affirmed in Schilter v South Australian Institute of Technology (No 1) (1982) 31 SASR 316 and has been followed by the Full Court of the Supreme Court of this State in Commercial Industries v Stegic and Taylor v Star Broken Meats. The principles may be summarised as follows:
1.The words 'genuine dispute' should be given a plain and uncomplicated meaning: State of South Australia v Wall (194) (Cox J).
2.The requirement that a dispute be genuine is a safeguard against an insincere denial of liability which would frustrate the legislative policy: State of South Australia v Wall (194).
3.The employer must show that it sincerely and seriously disputes the worker's claim: State of South Australia v Wall (198); Taylor v Star Broken Meats (19).
4.The sincerity and seriousness of the employer's attitude is a matter to be established on the materials as a whole: Taylor v Star Broken Meats (19) (Owen J).
5.It is not necessary for an employer to file an affidavit reciting that the claim is seriously and sincerely disputed. It is sufficient if that appears as a reasonable inference from the materials: Taylor v Star Broken Meat, (19).
6.An objective appraisal of the merits dispute is not required, but a dispute may not be found to be genuine if it is frivolous, made without adequate inquiry, or based on a patently feeble legal argument or on unsupported factual assertions: State of South Australia v Wall (194); Commercial Industries v Stegic (7) (Malcolm CJ).
7.In examining the genuineness of a dispute it may be relevant to consider the opportunity the employer has had to investigate the claim: State of South Australia v Wall (198).
8.The application of s 60 is not confined to the employer's initial liability to pay compensation, but can apply to a dispute as to ongoing liability which arises from changing circumstances and where the dispute is not amenable to review under s 61: Taylor v Star Broken Meats (16).
In Airlite Cleaning Pty Ltd v Bosevski (CM-115/2) the compensation magistrate held, on the authority of Taylor v Star Broken Meats, that where there is a genuine dispute as to the level of incapacity arising following the payment of compensation it is open to an employer to bring an application pursuant to s 60 of the Act: [41].
In that case there was material before the review officer revealing the employer's difficulty in assessing the worker's level of incapacity. For this reason the issue was not amenable to resolution pursuant to s 62. The fact that the employer had also filed a s 61 application was not fatal to the s 60 application for the reason that the issue raised by the latter might impede the resolution of the former.
It is clear from the authorities that to ground a s 60 application, an employer is required to show that it genuinely, that is, sincerely and seriously, disputes its liability or the amount of compensation to be paid. The existence of a genuine dispute is to be determined having regard to all of the material filed in support. A genuine dispute is one that is based on adequate consideration and enquiry and not made on frivolous grounds.
The question of whether there is a genuine dispute is to be determined on the materials as a whole. Accordingly, the learned registrar was required to give consideration to the combined effect of the employer's contentions. In my view an employer may point to a number of features of the claim which, looked at in isolation, may have less significance than when they are considered together in the context of the history of the matter.
Nothing in s 60 restricts the nature of the dispute which grounds its application, other than that it is a dispute as to the liability to pay compensation or as to the proper amount to be paid. In Taylor v Star Broken Meats Owen J spoke of s 60 operating so as to fill a lacuna in the statutory scheme. Section 60 permitted the suspension of weekly payments in situations to which s 61 and s 62 did not apply. His Honour gave two examples of such situations, but went on to say that he was not to be taken as closing off the area of operation of s 60: (14).
Despite many amendments to the Act since Taylor was decided the policy of the scheme respect to weekly payments is still as Owen J described it. Once weekly payments are commenced, an employer is not permitted to reduce or discontinue them except as authorised by the Act. His Honour held that s 60 was not limited to matters going to the heart of the employer's liability to make weekly payments, that is, liability ab initio, but was, nevertheless, limited in operation to situations not covered by s 61 and s 62: (16). This was consistent with the scheme as it was described by Nicholson J (Malcolm J agreeing) in Department of Education v Kenworthy (1990) 3 WAR 1, 17.
Resolution
It is clear that the learned registrar focused on the merits of the employer's grounds, rather than on whether there was a genuine dispute as to liability or quantum. Consequently, the learned registrar purported to determine, not whether the employer's contentions grounded a genuine dispute, but whether they were likely to be made out as facts which would disentitle the worker to compensation.
The threshold set by the learned registrar was too high and not in accordance with established authorities on the construction and application of s 60. These authorities, to which I have referred, make it clear that the arbitrator does not look behind the declared attitude of the employer provided it is sincere and serious and that the grounds of the dispute are not frivolous.
The evidence, which is uncontradicted, shows that from late November 2011 for a period of over one year prior to the commencement of the application the worker was both uncommunicative and uncooperative with respect to her claim. The employer was frustrated by her conduct in its attempts to discharge the obligation imposed by s 155C(1) to ensure that a return to work programme was established.
The significance of this obligation is demonstrated by reference to s 155C(3) which imposes a penalty on an employer who fails to ensure that the establishment content and implementation of a return to work programme are in accordance with the code of practice (injury management) issued pursuant to s 155A. Notably, one of the purposes of the Act is to establish a worker's compensation scheme dealing not only with compensation payable in respect of injury, but also the management of worker's injuries in a manner directed at enabling injured workers to return to work: s 3(a).
In Mitchell v Canal Rocks Beach Resort [2002] WASCA 331 [54], Roberts‑Smith J held:
Public policy dictates that where persons have been injured in the workplace, they should make all reasonable efforts to obtain gainful employment again. This is reflected in s 3(b) of the Act which indicates that one of the purposes of the Act is to promote rehabilitation to enable the worker to achieve that goal.
The learned registrar, with respect, erred also in concluding that the employer's dispute was based on feeble legal arguments which he considered to be misconceived.
The argument put in support of the s 60 application was that by failing to participate in rehabilitation provided by the employer the worker had failed to mitigate her loss (not that the chain of causation between injury and capacity was broken).
The employer had attempted to discharge its obligation to the worker, but was prevented from doing so by the worker's refusal to communicate or cooperate, even, as I have noted, to the point of not providing information as to her current telephone number and address.
It was open, in my view, to the employer to raise a dispute as to liability on the basis that the worker's entitlement was put in issue by her failure to mitigate. There is no authority for the proposition, stated by the learned registrar at that a failure to mitigate is not proved unless the employer can show that, but for the failure the worker would have no entitlement to compensation at all.
In cases of unreasonable refusal of medical treatment the onus of proving a failure to mitigate is discharged if it is established on the balance of probabilities that the plaintiff acted unreasonably in refusing to submit to treatment. It is not necessary to prove that the treatment would have been successful and that if the treatment had been undergone the incapacity would have been reduced. The onus may be discharged even if it cannot be shown that the treatment would have reduced the incapacity: Plenty v Argus [1975] WAR 155. The same principle I would apply to the unreasonable failure to participate in rehabilitation, following Fazlic as to the applicability of the doctrine to workers' compensation.
With respect to the employer's contention that the worker had failed to attend an appointment for a medical examination, the learned registrar purported to decide this point summarily in circumstances where no issue had been taken by the worker with respect to that contention, of which she had notice. Whilst the evidence may have given rise to a question as to where the worker was residing when she was notified of the appointment, the letter notifying her of the appointment was sent to her address as stated on the worker's compensation form. That address had not been changed by the worker. The information obtained by the employer that the worker may have been living at another address was obtained incidentally, and correspondence to the worker at that address had been returned unclaimed.
In my respectful view the learned registrar misdirected himself by deciding, as a matter of fact, that the employer's dispute in relation to this aspect of the claim was not genuine. The employer was not seeking an order pursuant to s 72A that the worker submit to examination, but was relying on her failure as a ground on which to dispute its liability. Treated as such, her failure to attend, or to ensure that the employer had her current address for injury management purposes, was evidence of the employer's inability to assess the worker's condition for the purpose of establishing and implementing a return to work programme.
The learned registrar also decided that the employer was not genuine in contending that the worker may have been incapacitated by a condition other than her work injury in June 2011. The evidence giving rise to the employer's belief was in the form of admissions made to an investigator to the effect that she was unwell due to emotional or psychological stress and would participate in a return to work programme when she was better. These admissions were obtained more than one year after contact had ceased to respond to communications from the employer, its insurer and rehabilitation service provider. Again, I observe that the worker was given notice of this contention and did not dispute it.
Section 60 does not require the employer to prove a fact which would disentitle the worker to compensation, but to demonstrate that it genuinely disputes its liability. The effect of a s 60 order suspending weekly payments in the face of a genuine dispute is to shift the onus to the worker to prove her entitlement to compensation. It is, as I have pointed out, interlocutory in nature.
The factual contentions of the employer demonstrated that by reason of the worker's failure to mitigate the employer was not in a position to assess the worker's capacity for work and therefore not in a position to accept ongoing liability to pay compensation.
A s 60 application was open to the employer in this case because applications pursuant to s 61 or s 62 were not.
The employer was not in a position to satisfy the requirements of s 61(1) by showing that the worker had returned to work or that a medical practitioner had certified that the worker had a total or partial incapacity for work or that the incapacity was no longer a result of the injury. That is because the worker had not submitted to medical examination.
Similarly, with respect to s 62, the employer was not in a position to apply for review of weekly payments because it could not prove the worker's medical condition or level of incapacity (if any) by reason of her failure to communicate and cooperate with the employer with respect to injury management.
The employer was unable to serve a s 61 notice and did not have the updated medical evidence to pursue a s 62 application as there was no current medical evidence to demonstrate the worker's 'past or present condition'.
Having failed before the learned registrar to obtain an order pursuant to s 156B that the worker participate in a return to work programme, it was open to the employer, in my view, to 'roll up', as it were, its contentions about the worker's conduct with a view to putting her to proof of her entitlement to compensation. In this way, it seems to me, s 60 may operate to fill the lacuna identified by Owen J in Taylor.
The three factual contentions of the employer taken together grounded a dispute as to its liability. That dispute was taken sincerely and genuinely. The grounds were not frivolous or misconceived. The dispute had a factual basis on the evidence. Accordingly, the learned registrar erred in law and fact in finding to the contrary that the dispute was not genuine.
As to the learned registrar's remarks about the doctrine of precedent, which are challenged in the third ground (as I have cast it), it may be that on a strict interpretation of the authorities cited therein a tribunal is not bound to follow a decision of a higher tribunal in a judicial hierarchy which has been abolished. This was the case with respect to the relationship between the High Court of Australia and the Privy Council to which appeals from the High Court were abolished: Viro v R [1978] HCA 9; (1978) 141 CLR 88.
The question is how decisions of compensation magistrates and the commissioners who succeeded them in the history of the legislative scheme should be treated. From 1993 to 2005 compensation magistrates heard appeals from decisions of review officers of the former Conciliation and Review Directorate. From 2005 to 2011 commissioners of the Dispute Resolution Directorate heard appeals from decisions of arbitrators. Now appeals lie from the Workers' Compensation Arbitration Service to this court. From decisions of compensations magistrates, commissioners and judges of this court parties have been able to appeal to the Full Court of the Supreme Court or the Court of Appeal and from there to the High Court with special leave.
In Viro [129] Stephen J held:
The first duty of a court is to administer justice according to law. However in the case of an inferior court operating within a system where the doctrine of precedent applies, the existence of authority binding upon it determines what it must understand to be the law. It must accept the law to be as that precedent authority has declared it to be, whatever may be its own inclinations in the matter. The sanction implicit in the doctrine of precedent is simple and effective: if an inferior court fails to observe the doctrine the superior court will correct its decision on appeal. Thus the existence of an appeal is inherent in and essential to the doctrine.
In my view the learned registrar did not err in law in holding that the decisions of compensation magistrates and commissioners of the Dispute Resolution Directorate were persuasive but not binding. But as the High Court held in Farah Constructions Pty Ltd v Say‑Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89, lower courts must not depart from long established authority or seriously considered dicta of a majority of a higher court. As between judges of the same court or courts of equivalent standing, a judge should not diverge from an earlier decision unless satisfied that it is clearly wrong. This is the principle of comity. Hence, in Adams v The Roman Catholic Archbishop of Perth [2002] WADC 28 Nisbet DCJ, having been invited to decide that the decision of HH Jackson DCJ in Mokta v Metro Meats International Ltd [2004] WADC 78 should not be followed, said:
It was submitted that as a judge of an intermediate court I was not bound by decisions of other members of the court. It is true that the doctrine of stare decisis does not apply to make the decisions in Mokta binding on me: see the discussion in Babaniares v Lutony Fashions Pty Ltd [1987] HCA 19. While the decision in Mokta is not of long-standing and neither is the statutory provision construction of which in Mokta is here challenged, I would not depart from it unless I was convinced it was plainly wrong. Particularly in the workers' compensation jurisdiction is it important that there be a uniformity of approach: Walsh v Commonwealth of Australia (1998) 155 ALR 182.
These statements in Adams were followed and adopted in O'Brien v Barminco Investments Pty Ltd & Anor [2005] WADC 63. Commissioner Stavrianou observed that it was important that there be uniformity and predictability of case law in the workers' compensation jurisdiction.
In my view the short answer is that whilst, strictly speaking, the learned registrar was not bound by decisions of tribunals which had been abolished, those decisions were persuasive to the degree that they should not have been departed from unless the learned registrar was satisfied that they were wrongly decided. The learned registrar did not come to that conclusion. The reasons do not disclose why the learned registrar did not follow the decisions which held that a worker's failure to mitigate is a ground on which an employer may dispute liability.
Conclusion
For the reasons I have given I consider that the learned registrar erred in law in deciding that the employer did not genuinely dispute its liability to pay compensation. I would therefore allow the appeal and set aside the order of the learned registrar dismissing the employer's s 60 application.
By s 249(7) I am empowered to make any decision that should have been made in the first instance. Being satisfied that a genuine dispute does exist, I would order that weekly payments be suspended from the date on which that order ought to have been made, namely, 2 July 2013, until such time as an order for weekly payments is made by an arbitrator on the application of the worker.
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