Wide Hanson Bros Pty Ltd v Zhen Xiu Cai
[2005] NSWWCCPD 93
•22 August 2005
WORKERS COMPENSATION COMMISSION
APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Wide Hanson Bros Pty Ltd v Zhen Xiu Cai [2005] NSWWCCPD 93
APPELLANT: Wide Hanson Bros Pty Ltd
RESPONDENT: Zhen Xiu Cai
INSURER:CGU Workers Compensation (NSW) Ltd
FILE NUMBER: WCC6516-04
DATE OF ARBITRATOR’S DECISION: 27 August 2004
DATE OF APPEAL DECISION: 22 August 2005
SUBJECT MATTER OF DECISION: Sections 151A and 151C of the Workers Compensation Act 1987; election to commence proceedings in the District Court; preclusion from commencing proceedings in the Workers Compensation Commission.
PRESIDENTIAL MEMBER: Acting Deputy President Robin Handley
HEARING:On the papers
REPRESENTATION: Appellant: Leitch Hasson Dent, Solicitors
Respondent: Keddies Litigation Lawyers
ORDERS MADE ON APPEAL: The decision of the Arbitrator, dated 27 August 2004, is revoked and the following decision is made in its place:
Mr Zhen Xiu Cai is precluded from commencing proceedings to recover compensation for permanent impairment and pain and suffering pursuant to sections 66 and 67 of the Workers Compensation Act 1987 by reason of his election to commence proceedings to recover damages in the District Court of NSW on 21 November 2001.
No order is made as to the costs of this appeal.
BACKGROUND TO THE APPEAL
On 23 September 2004, Wide Hanson Bros Pty Ltd (‘Wide Hanson’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) in respect of a decision dated 27 August 2004.
The Respondent to the Appeal is Zhen Xiu Cai. Mr Cai was born on 5 September 1971 and is aged nearly 34. He is married with one dependent child. From 1998, he was employed by Wide Hanson as a carpenter making furniture. On 12 July 2001, in the course of cutting a piece of wood, he injured his left hand on a rotating saw.
On 21 November 2001, Mr Cai filed a Statement of Claim in the District Court of NSW claiming damages in respect of the injury. The proceedings were ultimately discontinued in May 2004. On 23 April 2004, Mr Cai’s ‘Application to Resolve a Dispute’ was registered in the Commission in respect of his claim for compensation for permanent impairment and pain and suffering, amounting to $36,000, made pursuant to sections 66 and 67 of the Workers Compensation Act 1987 (‘the 1987 Act’). Wide Hanson’s ‘Reply’ was filed on 14 May 2004.
On 26 July 2004, the Arbitrator conducted a teleconference with the parties at which it was agreed that she should determine as a preliminary legal issue whether Mr Cai was precluded by section 151A of the 1987 Act from pursuing his claim for compensation under sections 66 and 67 of the 1987 Act by reason of the District Court proceedings he commenced on 21 November 2001.
On 25 August 2004, the Arbitrator conducted an arbitration hearing on this preliminary issue and, at the conclusion of the hearing, gave an ex tempore decision. Her determination is set out below.
THE DECISION UNDER REVIEW
The Certificate of Determination, dated 27 August 2004, records the Arbitrator’s orders as follows:
“1. That the Applicant may bring his claim before the Workers Compensation Commission there having been no election made under s151A.
2. The Respondent to pay the Applicant’s costs as agreed or assessed, this matter having been declared a complex matter.”
In her ex tempore statement of reasons given at the conclusion of the arbitration hearing, the Arbitrator found that Mr Cai had commenced proceedings in the District Court of NSW less than six months after he suffered an injury to his left hand, contrary to section 151C of the 1987 Act. She followed the decision of the President of the Commission in Robert William McQueeney v Raybreak Pty Ltd trading as Prospect Meats, Matter Number WCC2598-2002 (McQueeney) 6 May 2003 (unreported), and decided that because a condition precedent was unfulfilled – the elapse of six months since notice of the injury was given to the employer, Mr Cai’s proceedings in the District Court had not been validly commenced and were therefore a nullity. Thus, Mr Cai had not made an election pursuant to section 151A of the 1987 Act in effect at that time.
ISSUES IN DISPUTE
The issue in dispute in the appeal is a legal issue: whether Mr Cai is precluded from claiming compensation pursuant to sections 66 and 67 of the 1987 Act by reason of the former section 151A of the 1987 Act in effect at the time Mr Cai’s claim for damages was filed in the District Court on 21 November 2001.
Section 151A then stated relevantly:
“(2) A person to whom compensation is payable under this Act in respect of an injury is not entitled to both:
(a) permanent loss compensation in respect of the injury; and
(b) damages in respect of the injury from the employer liable to pay that compensation,
but is required to elect whether to claim that permanent loss compensation or those damages.
(3) The person makes that election (or is taken to have made that election):
(a) by commencing proceedings in a court to recover those damages or by accepting payment of those damages (in which case the person ceases to be entitled to permanent loss in respect of the injury); or
(b) by commencing proceedings in the Compensation Court to recover that permanent loss compensation or by accepting payment of that permanent loss compensation (in which case the person ceases to be entitled to recover damages in respect of the injury).”
Section 151C(1) of the 1987 Act states:
“(1) A person to whom compensation is payable under this Act is not entitled to commence court proceedings for damages in respect of the injury concerned against the employer liable to pay that compensation until 6 months have elapsed since notice of the injury was given to the employer.”
ON THE PAPERS REVIEW
Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) states:
“(6)If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by Wide Hanson that the appeal can be determined on the basis of these documents, Mr Cai’s solicitors being silent on this issue, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
Neither party sought to adduce fresh evidence.
LEAVE
Before proceeding to deal with an appeal, the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act. The Appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act. With regard to section 352(2), the amount of compensation ultimately at issue is the $36,000 claimed by Mr Cai for permanent impairment and pain and suffering that constitutes 100% of the amount sought by Mr Cai, which claim is the subject of the order made by the Arbitrator. Accordingly, I am satisfied that the section 352 threshold has been met, and I grant leave to appeal.
I note that Mr Cai’s solicitors contend that as the determination made by the Arbitrator has, in itself, no monetary value, the requirement in section 352(2)(a) that the amount of compensation at issue on the appeal must be at least $5000, is not met. However, as Wide Hanson points out in its submissions, referring to the decision of Deputy President Fleming in Fletchers International Exports Pty Ltd v Regan [2004] NSW WCC PD 7, at paragraph 27, in such matters one must have regard to whether the decision has a real capacity to put the amount of compensation claimed at issue. In Mr Cai’s case, that is clearly so.
SUBMISSIONS
Wide Hanson submits that the Arbitrator made an error of law by finding that the proceedings commenced by Mr Cai in the District Court were a nullity. On the contrary, Mr Cai’s filing a Statement of Claim for common law damages, notwithstanding that it was filed in contravention of the time threshold set out in section 151C of the 1987 Act, constituted an election pursuant to section 151A(3). Thus, Mr Cai is not entitled to lump sum compensation in respect of section 66 and section 67 benefits.
Wide Hanson submits that the decision of the NSW Court of Appeal in State of NSW v Connor [2003] NSWCA 200 should be followed: that once proceedings are commenced there will be an irrevocable election, whether or not the proceedings have a procedural defect and can be validly maintained.
Mr Cai’s solicitors appear to have believed, mistakenly, that Wide Hanson’s appeal was an application to refer a question of law to the President of the Commission, pursuant to section 351 of the 1998 Act. In fact, Wide Hanson’s appeal was an appeal against the decision of an Arbitrator made pursuant to section 352.
Mr Cai’s solicitors submit that he did not validly commence proceedings in the District Court on 21 November 2001 because the Statement of Claim was filed in breach of section 151C and, accordingly, did not comply with a condition precedent imposed by that section. Because the proceedings were invalid, there was no election pursuant to section 151A of the Act. Mr Cai’s solicitors submit that the decision of the President of the Commission in McQueeney should be followed:
“It is quite clear from the decision of Justice Sheahan, that where a statute imposes a condition precedent of a procedural nature, and that condition precedent is unfulfilled with the common law proceedings not commenced, then the contravention is a nullity. Once the proceedings are discontinued or dismissed, then there is no election under s151A, and it is therefore open to the worker to recover s66 and s67 lump sum compensation.”
DISCUSSION
As stated above, the issue in dispute is a legal one and there are no evidentiary issues to be determined. There is no dispute that on 21 November 2001, Mr Cai’s solicitors filed a Statement of Claim in the District Court of NSW claiming damages as a result of the injury suffered by Mr Cai on 12 July 2001 in the course of his employment with Wide Hanson. These proceedings were discontinued in May 2004.
The parties’ submissions have, essentially, been overtaken by the decision of the NSW Court of Appeal in Gordon. In my view, this decision is directly on point and binding on the Commission, as Deputy President Byron recognised in his recent decisions in Sandarousi v L & A Pressure Welding Pty Ltd [2005] NSW WCC PD 59 (‘Sandarousi’), and Mariorani v Ranieri & Giubega Pty Ltd t/as All Seasons Fruit Market [2005] NSW WCC PD 85 (‘Mariorani’), and as I stated in Thien Vu Huynh v Andison International Pty Ltd [2005] NSW WCC PD 86.
In Gordon, Mason P, with whom Sheller and Beazley JJA agreed, held (at paragraph 42) that section 151C(1) “is not a provision that spells incurable voidness upon non-compliant proceedings”. The subsection “does not erect a jurisdictional preclusion” (at paragraph 50). Rather, it is “a condition precedent of a procedural nature that must be satisfied prior to the commencement of proceedings” (paragraph 36). It is impossible to infer that Parliament would have intended that invalidity or nullity would be the consequence of non-compliance (paragraph 44).
Deputy President Byron has analysed the decision and other relevant case law in greater depth in Sandarousi and Mariorani, and there is no utility in my repeating such an analysis here.
Thus, the District Court proceedings commenced by Mr Cai were not null and void and of no legal effect. By commencing those proceedings, Mr Cai elected to seek damages in respect of the injury from the employer, and was consequently precluded by section 151A of the 1987 Act then in effect, from pursuing a claim for permanent loss compensation in the Workers Compensation Commission.
In conclusion, the Arbitrator made an error of law when she decided that Mr Cai had not made an election pursuant to section 151A of the 1987 Act in effect at the time he commenced District Court proceedings against Wide Hanson by lodging a Statement of Claim on 21 November 2001. The Arbitrator’s decision must therefore be revoked.
DECISION
The decision of the Arbitrator dated 27 August 2004 is revoked and the following decision is made in its place:
Mr Zhen Xiu Cai is precluded from commencing proceedings to recover compensation for permanent impairment and pain and suffering pursuant to sections 66 and 67 of the Workers Compensation Act 1987 by reason of his election to commence proceedings to recover damages in the District Court of NSW on 21 November 2001.
COSTS
No order is made as to the costs of this appeal.
Robin Handley
Acting Deputy President
22 August 2005
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF ROBIN HANDLEY, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
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