Victorian WorkCover Authority v IR Cootes Pty Ltd - [2001] VSCA 85

SUPREME COURT OF VICTORIA

COURT OF APPEAL

No. 7492 of 1999

VICTORIAN WORKCOVER AUTHORITY
	Appellant
v.
I. R. COOTES PTY. LTD.
	Respondent

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JUDGES:	WINNEKE, A.C.J., PHILLIPS and CHARLES, JJ.A.
WHERE HELD:	MELBOURNE
DATE OF HEARING:	19 February 2001
DATE OF JUDGMENT:	6 June 2001
MEDIUM NEUTRAL CITATION:	[2001] VSCA 85

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Accident compensation – Worker’s compensation – Compulsory insurance by employer with “authorised insurer” – Statutory scheme – Calculation of premiums – Dependent upon industry classification – Employer distributing petroleum products from suppliers to retail outlets – Whether “wholesaling” or “freight transport” – Whether classification accorded by insurer correct – Whether open to insurer to alter given classification – Effect of notice by insurer that classification altered and premiums increased for past years and current year – Accident Compensation (WorkCover Insurance) Act 1993 ss. 7, 9, 17, 26, Premiums Orders 93/94, 94/95, 95/96.

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APPEARANCES:	Counsel	Solicitors
For the Appellant	Mr. D. Habersberger QC and Mr. M.F. Fleming	Gadens Lawyers
For the Respondent	Mr. R.R.S. Tracey QC and Mr. S.W. Stuckey	Riordan & Partners

WINNEKE, A.C.J.:

From 1985, when the Accident Compensation Act 1985 (Vic) (the “ACA”) became law, until 1993, when the Accident Compensation (Work Cover Insurance) Act 1993 (the “WCIA”) was introduced, employers such as I.R. Cootes Pty. Ltd. (the respondent) were required to pay an “accident compensation levy” to the then Accident Compensation Commission (the “ACC”) in accordance with Part VII of the ACA or, following the introduction of the Accident Compensation (Work Cover) Act 1992 (Act No.67 of 1992), to the Victorian Work Cover Fund maintained by the Victoria Work Cover Authority (the “VWA”). It was by means of such levies that the workers’ compensation scheme in this State was funded. The amount of levy payable by an employer depended, in part, upon the “industry classification” assigned to the employer. The respondent was at all relevant times an employer. In 1985 it registered as a relevant employer by completing a “registration form” dated 27 June 1985. In its application for registration it described the main activity undertaken by it at its premises at 6-8 Pascal Road, Seaford as “Distribution of Petroleum Products” and described “the major type of goods ... to which the main activity relates” as “LPG, petrol, bitumen”. In accordance with regulations passed pursuant to the ACA, the ACC assigned to the respondent an “industry classification” in accordance with which its annual levy was calculated. The “classification” so assigned, and noted upon the registration application, was “F4741J” which the regulations disclosed was the classification given to a “Petroleum Products wholesaler”. Thereafter, until 30 June 1993, the respondent paid its annual levy to the ACC and VWA in accordance with statements rendered on the basis of this classification.

As from 1 July 1993, the scheme for the payment of levies by employers changed. It was replaced by a scheme of regulated accident compensation insurance instituted by the WCIA. Thereafter the payment of levies, formerly calculated by reference to…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2001] VSCA 85
Decision Date: 6 June 2001

CaseChat Overview and Summary

The Victorian WorkCover Authority sought a declaration from the court that an insurance company had acted within its rights when it altered the classification of an employer's industry, resulting in a significant increase in premiums. The employer, IR Cootes Pty Ltd, distributed petroleum products from suppliers to retail outlets. The classification of the employer's industry determined the premiums payable under the statutory accident compensation scheme. The insurer had initially classified the employer as a "wholesaler," but later reclassified it as a "freight transporter." This reclassification resulted in a substantial increase in premiums. The employer challenged the insurer's right to alter the classification and the retrospective application of the increased premiums.

The court considered whether the insurer had the authority to change the classification of the employer's industry and whether the classification accorded by the insurer was correct. The court examined the relevant statutory provisions and the regulations made under the Accident Compensation (WorkCover Insurance) Act 1993. The court noted that the classification of the employer's industry was a matter for the insurer, but that the insurer's decision must be reasonable and not arbitrary. The court also considered the effect of the insurer's notice that the classification had been altered and the premiums increased for past years and the current year.

The court found that the insurer had the authority to alter the classification of the employer's industry, and that the classification accorded by the insurer was reasonable. The court held that the insurer was entitled to increase the premiums retrospectively, and that the employer was liable for the increased premiums. The court noted that the employer had not challenged the accuracy of the insurer's calculations of the premiums, and that the employer's argument that the classification should not have been altered was without merit. The court made a declaration that the insurer had acted within its rights when it altered the classification of the employer's industry and increased the premiums.

Orders