Wilk v Hillcrest Health (Ruling No 2)
[2011] VSC 146
•8 April 2011
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
S CI 2009 8864
| LUCINA WILK | Plaintiff |
| v | |
| HILLCREST HEALTH CENTRE PTY LTD | First Defendant |
| and | |
| DR NIHAD MINAS | Second Defendant |
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JUDGE: | WILLIAMS J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 5 April 2011 | |
DATE OF RULING: | 8 April 2011 | |
DATE OF REASONS: | 13 April 2011 | |
CASE MAY BE CITED AS: | Wilk v Hillcrest Health & Anor (Ruling No 2) | |
MEDIUM NEUTRAL CITATION: | [2011] VSC 146 | |
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ACCIDENT COMPENSATION – Proposed proceeding against one defendant – Serious injury certificate issued under s 134AB(16)(a) Accident Compensation Act 1985 - Proceedings issued against two defendants – Effect of service under s 134AB(5A) Accident Compensation Act 1985 on second defendant.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr P Jewell SC and Mr M Ruddle | Clark Toop & Taylor |
| For the First Defendant | Mr R Stanley QC and Ms H Donmez | Thomson Playford Cutlers |
| For the Second Defendant | Mr S McCredie | Tien Tran Solicitors |
HER HONOUR:
The proceeding
The plaintiff, Ms Wilk, has brought a proceeding against the first defendant, ‘Hillcrest’, and the second defendant, its director and shareholder, Dr Nihad Minas, claiming damages for negligence and assault. She alleges that Dr Minas assaulted her on about 9 September 2002. She has made a claim for compensation in respect of her injury under the Accident Compensation Act 1985 (‘the Act’).
Ms Wilk alleges that Dr Minas raised his hand to her and threatened her both verbally and physically. She claims that she injured herself when she fell backwards into a pigeon hole cupboard, striking her right shoulder. She says that she suffered resulting physical injury to her right shoulder, post-traumatic stress disorder, depression and anxiety. She maintains that Hillcrest is both directly liable to her in its capacity as her employer and vicariously liable for the behaviour of Dr Minas.
The preliminary question
On the first day of the trial, counsel for Dr Minas raised a preliminary issue as to whether Ms Wilk was entitled to commence proceedings against him. He contends that she was barred from doing so because she did not comply with the implicit substantive requirement of sub-s 134AB(5A) of the Act that she should serve Dr Minas with copies of her claim under s 104B and her application under sub-s 134AB(4) before the sub-s (4) application had been determined by the Victorian WorkCover Authority (‘the Authority’).
In para 7 of his defence filed on 18 December 2009, Dr Minas alleges that:
… the Plaintiff is barred from bringing these proceedings against him because the Plaintiff has failed to comply with section 134AB(5A) of the Accident Compensation Act 1985 (‘the Act’) and not been granted leave to bring proceedings against the Second Defendant pursuant to the Act.
When asked whether he was submitting both that the proceeding was barred because Dr Minas had not been properly served and because Ms Wilk had not obtained leave to bring the proceeding under sub-s 134AB, counsel for Dr Minas said that there was but one issue, expressed in two different ways, in the defence.
I have already advised the parties of my decision that Ms Wilk’s proceeding is not barred. These are my reasons.
The facts in their statutory context
There were stated facts agreed for the purposes of the application. I will refer to them in the context of the statutory process for making claims for compensation and for bringing proceedings under the Act.
Background
It is first of all common ground that Ms Wilk was employed as a medical practice manager by Hillcrest. Dr Minas was a director and shareholder of Hillcrest throughout her employment period and up to 19 March 2007. Dr Minas worked at the Hillcrest Health Centre at all relevant times, as did Dr Arthur Papagelis and Dr Michael Willis and other doctors including Dr Minas’s wife, Dr Shatha Minas.
In October 2002, Dr Minas and Dr Shatha Minas instructed solicitors, A B Natoli Pty, to send a letter dated 14 October 2002 to Dr Minas’s co-directors and or fellow shareholders, Dr Papagelis, Dr Willis and Mrs Tracey Ann Willis. The letter complained about matters to do with the way the practice was run. The two doctors alleged that they were not being appropriately consulted in relation to decisions made, in particular, by Dr Papagelis and Dr Willis. The solicitors advised that Dr Minas and his wife had received a formal notice of allegations by Ms Wilk against Dr Minas and that he would respond formally to them.
Section 134AB(1) of the Act prevents a worker from recovering damages in respect of an injury arising out of, or in the course of, or due to the nature of employment on or after 20 October 1999 except, relevantly, if the worker is permitted to commence proceedings by or in accordance with the section.
Section 134AB(2) goes on to provide that a worker may recover damages in respect of a ‘serious injury’ which arose on or after 20 October 1999. A ‘serious injury’ is defined in sub-s 134AB(37) and its meaning is further explained in sub-s (38).
Section 134AB then requires a number of hurdles to be surmounted before the worker can ‘bring’[1] or ‘commence’[2] proceedings in accordance with s 134AB.
[1]Sub-sections (3) and (16).
[2]Sub-section (12).
First of all, sub-s 134AB(3) requires that the worker’s degree of impairment ‘resulting from the [compensable] injury’ has been assessed under s 104B and that the worker has accepted that assessment. (The s 104B provisions relate to a process applying to claims for compensation by a worker under s 98C or 98E. That process involves a worker and the Authority or self-insurer.)
It is agreed that Ms Wilk served ‘an impairment claim pursuant to s 104B’ on the Authority and that she accepted the Authority’s determination as to her degree of impairment on about 8 August 2008.
According to sub-s 134AB(15), if Ms Wilk’s degree of impairment as a result of her compensable injury had been assessed at 30 per centum or more, her injury would have been deemed the ‘serious injury’ required for her to recover damages under sub-s (2). There is no issue in the preliminary application as to whether or not Ms Wilk’s injury did have the requisite connection with her employment, although Dr Minas’s defence denies her allegations that she was acting in the course and scope of her employment at material times.
There is a further statutory hurdle to the commencement of proceedings, even if an injury is deemed to be ‘serious’ under sub-s (15). Sub-section (3) not only requires that the determination under s 104B has been made and accepted, but it also obliges Ms Wilk to make an application under sub-s (4) for an advice from the Authority under sub-s (7). The requisite advice is as to whether she has a deemed serious injury or, if not, whether the Authority will issue a certificate consenting to her commencing proceedings under sub-s (16)(a).
That sub-section is in these terms:
(16)If the assessment under section 104B of the degree of impairment of the worker as a result of the injury is less than 30 per centum, the person may not bring proceedings for the recovery of damages in respect of the injury unless-
(a)the Authority or self-insurer –
(i)is satisfied that the injury is a serious injury; and
(ii)issues to the worker a certificate in writing consenting to the bringing of the proceedings;
Sub-section (21) provides that, if a worker makes an application under sub-s (4) ‘in respect of an injury’, they must not make a further application under the subsection ‘in respect of that injury’.
In this case, on about 19 December 2008, Ms Wilk made her application under
sub-s (4). She followed the directions in sub-s (5) and procedural directions in Ministerial Directions made under ss 20C and 134AF of the Act. She attached to her claim form a proposed statement of claim naming Hillcrest as her employer and the sole defendant to her claim. She claimed to have suffered an injury when threatened by Dr Minas, as a result of Hillcrest’s negligence and breach of its duty of care to her. Many of the particulars of negligence on the part of Hillcrest appear to be premised on Hillcrest having control over Dr Minas in the workplace. She sought damages.
On about 16 April 2009, the Authority was satisfied that the injury referred to in Ms Wilk’s sub-s (4) application was a serious injury and it issued her with a serious injury certificate under sub-s (16)(a). It is an agreed fact that the Authority issued the certificate consenting to her bringing proceedings ‘with knowledge that it was suggested by [Dr Minas] that the events involving [Ms] Wilk on 9.9.02 were part of a ‘put up’ allegation to expel [Dr Minas] from the Medical Practice’.[3]
[3]Agreed statement of facts para [7].
Even if the Authority or self-insurer advises the worker under sub-s (7) that it will issue a certificate consenting to the bringing of proceedings for the recovery of damages in respect of the injury, there are further steps to be taken before the worker is permitted to commence proceedings under sub-s (12). That sub-section requires the worker to hold a conference with the Authority or the self-insurer and to go through a process involving statutory offers and counter-offers for the settlement or compromise of the claim. That process has consequences in terms of the date for commencement of the proceeding.
In mid 2009, Hillcrest advised Ms Wilk that it would contend that Dr Minas was not its employee and that, in any event, it was not vicariously liable for his criminal acts.
Sub-section 134AB(5A) requires service of copies of any s 104B claim and application under sub-s 134AB(4) as follows:
(5A)A copy of any claim under section 104B referred to in subsection (3) and of an application under subsection (4) must be served on each person against whom the applicant claims to have a cause of action.
Ms Wilk served a copy of her claim under s 104B and her application under
sub-s 134AB(4) on Dr Minas on about 4 August 2009.
Counsel for Dr Minas argues that Ms Wilk did not comply with her service obligation under sub-s 5A because she did not serve the application upon him before the Authority made its determination that she had a serious injury and that it would issue a certificate consenting to her bringing proceedings. Counsel maintains that the period in which Ms Wilk was required to serve Dr Minas under sub-s (4) was that during which she was still ‘the applicant’, in the sense that her sub-s (4) application had not been dealt with by the Authority.
Ms Wilk commenced this proceeding against both Hillcrest and Dr Minas as defendants by a generally endorsed writ filed on 11 September 2009. She states her claim as one for damages for injury, loss and damage resulting from the negligence and breach of duty of the two defendants. In an amended statement of claim dated 7 March 2011, she also includes an additional allegation of assault against Dr Minas.
Submissions
Citing Project Blue SkyvAustralian Broadcasting Authority,[4] counsel for Dr Minas argues that it was a statutory purpose of the insertion of sub-s 134AB(5A) that failure to comply with sub-s (5A) would result in the barring of a proceeding. That was because Parliament intended to give a possible defendant to the proposed proceeding the opportunity to influence the outcome of the sub-s (4) application by making submissions and providing information which might be relevant to it to the Authority or self-insurer, despite there being no prescribed process for a hearing of the sub-s (4) application or for such provision of information.
[4](1998) 194 CLR 355, 389-90 {93]-[94] (McHugh, Gummow, Kirby and Hayne JJ).
Dr Minas acknowledges that the Explanatory Memorandum relating to the amending legislation states these reasons for the insertion of sub-s (5A):
This amendment is necessary to ensure that third parties to potential proceedings are put on notice of the matter and are not disadvantaged by the suspension of the limitation period provided for in clause 9.[5]
[5]This clause 9 inserted s 134ABA which suspends the limitation period whilst the processes under s 104B and sub-s 134AB(3) take place.
Counsel for Dr Minas nevertheless contends that the stated objectives in the Explanatory Memorandum include the additional purpose for which he argues. He argues that that purpose is evident from the use of the phrase ‘put on notice’.
Counsel said that he did not know whether input is ever made by third parties in practice. He submits that, notwithstanding the Ministerial Directions and the sub-s (5) requirements as to the material to be provided to the Authority by the applicant, the Authority would be entitled to take into account information acquired from any other source, including a third party. He argues that the entitlement of a third party to influence the outcome of the application is evident from the ability of the Authority to take into account the view of, for example a non-party doctor in a medical report it considers.
Senior counsel for Ms Wilk responds that the statutory purpose of sub-s (5A) is that stated in the Explanatory Memorandum, citing the Court of Appeal’s reference to it in Eastern Australia Airlines Pty Ltd v McLennan.[6]
[6][2009] VSCA 293, [12] (Dodds-Streeton JA, Byrne JA agreeing).
Counsel for Dr Minas argues that the Court should infer that service under
sub-s (5A) is to be effected before the Authority considers a worker’s application under sub-s (4). This is because the sub-s (5A) refers to a person whom the ‘applicant’ claims to have a cause of action. He argues that a worker will only be ‘an applicant’ before their application has been dealt with; he relies upon the references to a ‘worker’ in other sub-sections like sub-s (10) which refers to a worker who has received an advice sought in the sub-s (4) application.
Counsel for Dr Minas also argues that the purpose of the statutory scheme is to have before the Authority or self –insurer all material which might be relevant to the claim in the subsequent proceeding against all defendants.
Senior counsel for Ms Wilk, on the other hand, relies upon the absence of any time specifications in sub-s (5A), contrasting the sub-section with those in which time limits are prescribed and statutory consequences attached to non-compliance or compliance in the statutory scheme. He argues for a construction which permits the commencement of a proceeding against an additional defendant after the completion of the process under sub-s (4). He points out the injustice that would follow if Dr Minas’s argument were accepted and a potential defendant not contemplated by the prospective plaintiff applicant could rely upon sub-s (5A) to escape liability. He gives the example of the situation in which a plaintiff discovers, after their sub-s (4) application is dealt with, that the manufacturer of a defective chair is responsible for their compensable injury.
Counsel for Ms Wilk argue that she has complied with the requirements of sub-s (5A), as it should be construed. She has complied by serving the prescribed documents on Dr Minas, after identifying him as a person against whom she then claimed to have a cause of action. Counsel for Ms Wilk and counsel for Hillcrest maintain that it is apparent from the proposed statement of claim provided to the Authority that, at the time of Ms Wilk’s sub-s (4) application, Hillcrest was the only such person or entity.
Assuming the success of his submission about the proper interpretation of sub-s (5A), Dr Minas contends that the consequence of non-compliance is that the decision of the Authority to issue a certificate under sub-s (16)(a) is invalid. Counsel submits that this follows from the s 138A provision that s 134AB contains matters of substantive, as opposed to procedural, law.
Counsel for Ms Wilk respond that what is significant is the absence of any statutory consequence linking non-compliance with sub-s (5A) and certification under sub-s 16(a). They submit that leave to commence proceedings is given generally under sub-s 16(a).
Neither counsel for Dr Minas nor counsel for the other parties have encountered a case in which non-compliance with sub-s (5A) has prevented an additional defendant from being joined after the issue of a sub-s (16)(a) certificate. Senior counsel for Hillcrest informs the Court his instructions are that the Authority’s experience is the same. He also submits that joinder of defendants after the commencement of a proceeding is not uncommon.
It is common ground that the ‘gateway process’ under s 134AB must be gone through before any proceeding for damages in respect of the alleged injury even though the prospective defendant is not an employer.[7]
[7]See Martin v Bailey [2009] VSCA 263 [17] – [19] (Maxwell P), [42] (Redlich JA).
Conclusions
I am not persuaded that Ms Wilk failed to comply with sub-s (5A) by not serving copies of her claim under s 104B and her application under sub-s 134AB(4) before the Authority advised her of its intention to grant a serious injury certificate under sub-s 16(a).
There is no time requirement specified in sub-s (5A) and the reference to the ‘applicant’ does not introduce one. Although counsel for Dr Minas relied upon the references to a ‘worker’ in other subsections of s 134AB, a person who has made an application which has not been dealt with in sub-s (6) and sub-s (9) is also called a ‘worker’ and not an ‘applicant’. The word ‘applicant’ is apt to identify a person who has made an application, even after it has been dealt with, and does not imply the suggested time limit for service under sub-s (5A).
Further, s 134AB imposes numerous time requirements with statutory consequences and it is significant that there are none in sub-s (5A). It would also be improbable that, absent an express provision to that effect, sub-s (5A) would be intended to take away Ms Wilk’s right to bring proceedings against a person whom she did not claim to have a cause of action at the relevant time.
Further, the statutory purpose of giving notice of the suspension of the limitation period under s 134ABA, described in the Explanatory Memorandum, can be achieved without the time limit for which Dr Minas contends.
Even if it were possible to make another application under sub-s (4) (given the terms of sub-s (21)) it would be unlikely that it would have been a statutory purpose that, if a plaintiff wished to add a defendant at the time of issuing the proceeding, they would be obliged to make fresh application and go through the whole process relating to the claim as between the worker and employer. There is no prescribed procedure under which a third party can make submissions to or put material before the Authority or self-insurer considering the application under sub-s (4).
I am not persuaded by the argument that a third party not served with the application might lose the opportunity to ‘influence’ its outcome. Any ‘influence’ of the authors of medical or other reports or material put before the Authority arises not because they have some input in relation to the process, but rather in the context of their views having been relied upon by one of the parties to the process supplying material in accordance with the procedure under s 134AB.
I am fortified in reaching my conclusions by the fact that Batt JA accepted the parties’ agreement in State of Victoria v Robertson[8] that a plaintiff who had satisfied the prerequisites under s 135A of the Act did not need to do so again before being entitled to an order adding another defendant.[9]
[8](2000) 1VR 465 (469).
[9]The statutory regime under s 135A is similar to that under s 134AB and relates to compensable injuries occurring before 12 November 1997.
I am not satisfied that Ms Wilk failed to comply with sub-s (5A) by failing to serve Dr Minas before she did in August 2009. I am not persuaded that he was a person against whom she claimed to have a cause of action at the time of her sub-s (4) application, given that the proposed statement of claim accompanying her application showed her employer, Hillcrest, as the sole defendant.
Dr Minas does not rely upon anything other than alleged non-compliance with the service requirements of sub-s (5A) to contend that the serious injury certificate issued under sub-s 16(a) to Ms Wilk does not cover the proceeding against him. As I reject his argument that there has been non-compliance with that sub-section, I have refused his application.
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