Woolcock v Bant and Babel
[2005] WASCA 80
•29 APRIL 2005
WOOLCOCK -v- BANT & BABEL [2005] WASCA 80
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2005] WASCA 80 | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | FUL:186/2003 | 2 MARCH 2005 | |
| Coram: | STEYTLER P WHEELER JA MCLURE JA | 29/04/05 | |
| 14 | Judgment Part: | 1 of 1 | |
| Result: | Appeal allowed Decision of Compensation Magistrate set aside | ||
| A | |||
| PDF Version |
| Parties: | ROYCE PHILLIP WOOLCOCK BANT & BABEL |
Catchwords: | Workers' compensation Worker employed by partnership Partnership dissolved Whether medical certificate required by s 57A(1)(b) of Workers' Compensation and Injury Management Act 1981 (WA) could be served on employer's insurer on behalf of the employer Construction of s 57A and s 173 of Workers' Compensation and Injury Management Act 1981 (WA) |
Legislation: | Workers' Compensation and Injury Management Act 1981 (WA), s 5, s 18, s 57A, s 64(1), s 160, s 173 Workers' Compensation Act 1912 (NSW) |
Case References: | Deming No 456 Pty Ltd v Brisbane Unit Development Corporation Pty Ltd (1983) 155 CLR 129 Turner v Kowloon Holdings Pty Ltd [2003] WASCA 276 Wesfarmers Insurance Ltd v Cotter (1990) 1 WAR 493 Esber v Commonwealth (1992) 174 CLR 430 Glover-Jackson v G & M Construction Pty Ltd, unreported; SCt of WA; Library No 930231; 22 March 1993 HB Brady Company Pty Ltd v Pilcher, unreported; Compensation Magistrate's Court (Hogan PM); No CM131/01; 6 February 2002 Matkovic v Galant Holdings Pty Ltd, unreported; Compensation Magistrate's Court (Heath SA); No CM42/96; 2 August 1996 Motor Trade Association of WA v Bourke, unreported; Workers' Compensation Board; No C29/90; 15 February 1990 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : WOOLCOCK -v- BANT & BABEL [2005] WASCA 80 CORAM : STEYTLER P
- WHEELER JA
MCLURE JA
- Appellant
AND
BANT & BABEL
Respondent
ON APPEAL FROM:
Jurisdiction : COMPENSATION MAGISTRATE'S COURT
Coram : HOGAN PM
File No : CM 184 of 2002
Catchwords:
Workers' compensation - Worker employed by partnership - Partnership dissolved - Whether medical certificate required by s 57A(1)(b) of Workers' Compensation and Injury Management Act 1981 (WA) could be served on
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employer's insurer on behalf of the employer - Construction of s 57A and s 173 of Workers' Compensation and Injury Management Act 1981 (WA)
Legislation:
Workers' Compensation and Injury Management Act 1981 (WA), s 5, s 18, s 57A, s 64(1), s 160, s 173
Workers' Compensation Act 1912 (NSW)
Result:
Appeal allowed
Decision of Compensation Magistrate set aside
Category: A
Representation:
Counsel:
Appellant : Mr B L Nugawela
Respondent : Mr M W Schwikkard
Solicitors:
Appellant : CLP Lawyers
Respondent : Jackson McDonald
Case(s) referred to in judgment(s):
Deming No 456 Pty Ltd v Brisbane Unit Development Corporation Pty Ltd (1983) 155 CLR 129
Turner v Kowloon Holdings Pty Ltd [2003] WASCA 276
Wesfarmers Insurance Ltd v Cotter (1990) 1 WAR 493
Case(s) also cited:
Esber v Commonwealth (1992) 174 CLR 430
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Glover-Jackson v G & M Construction Pty Ltd, unreported; SCt of WA; Library No 930231; 22 March 1993
HB Brady Company Pty Ltd v Pilcher, unreported; Compensation Magistrate's Court (Hogan PM); No CM131/01; 6 February 2002
Matkovic v Galant Holdings Pty Ltd, unreported; Compensation Magistrate's Court (Heath SA); No CM42/96; 2 August 1996
Motor Trade Association of WA v Bourke, unreported; Workers' Compensation Board; No C29/90; 15 February 1990
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1 STEYTLER P: This appeal against the decision of a Compensation Magistrate raises questions of construction concerning ss 57A and 173 of the Workers' Compensation and Injury Management Act 1981 (WA) ("the Act").
The issue before the Review Officer
2 On 22 February 2000 the appellant was employed by a partnership comprising four people who traded as furniture removalists under the name Bant & Babel ("the partnership"). On that day, he injured his back in the course of his employment. He worked on light duties until 29 May 2000 when he was given notice, upon the basis that the partnership was to be dissolved following the death of two of the partners. The partnership ceased to operate on 4 July 2000. Prior to that, on 14 June 2000, a new business known as "Bant's Removal and Storage" commenced operations from the same premises. That business was operated by a company, Liam Pty Ltd. One of the partners of the former partnership was a director of that company. The appellant was not employed in the new business.
3 The appellant claimed compensation in respect of his injury. On 13 February 2002 his solicitors served a number of medical certificates and a medical report upon the partnership's workers' compensation insurer. Those documents were received by the insurer on 18 February 2002. On 20 February 2002 the appellant posted to the Conciliation and Review Directorate, WorkCover WA, a Form 1 application seeking weekly payments of compensation and statutory allowances. He heard nothing from the insurer following upon its receipt of the medical certificates and report and, accordingly, sought from a Review Officer a determination that the insurer had breached s 57A(3) of the Act and that s 57A(5) was consequently applicable. I will set out, in full, the relevant provisions of s 57A:
"Claims procedure - insured employer
(1) This section applies where -
(a) a claim for compensation by way of weekly payments for total or partial incapacity has been made on an employer in accordance with section 84I(1)(b) [which requires that the claim be made within 12 months from the occurrence of the disability]; and
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- (b) the worker suffering the disability has served on the employer a certificate signed by a medical practitioner -
(i) in or to the effect of the form prescribed containing substantially the information sought in the form; or
(ii) to the effect that the worker is unfit for work because of a recurrence of a disability in respect of which a certificate as referred to in subparagraph (i) has previously been served,
and the employer is indemnified by a policy of insurance against his liability to pay the compensation claimed.
- (2) Where, in the circumstances mentioned in subsection (1), an employer fails to make a claim under and in accordance with his policy of insurance before the expiration of 3 full working days of his insurer [sic] after the day on which the circumstances mentioned in subsection (1) arose or, where the making of a claim within that time would not be reasonably practicable, as soon as reasonably practicable thereafter, the insurer may, in a Local Court, sue and recover from the employer, as a debt due, any amount that, under the policy of insurance, he is liable to pay by way of indemnity in respect of the first 3 working days for which weekly payments are claimed by the worker.
(3) Upon an employer making a claim as mentioned in subsection (2), the insurer shall, before the expiration of 14 days after the claim was made by the employer -
(a) notify the worker to whom the claim relates and the employer that liability is accepted in respect of the weekly payments claimed;
(b) subject to section 75, notify the employer and the worker that liability is disputed in respect of all or any of the weekly payments claimed and of the reasons why it is disputed, subject to the insurer
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- not being prejudiced in any subsequent proceedings relating to the claim by the reasons stated in the notice; or
- (c) notify the Director, the employer and the worker that a decision as to whether or not liability is to be accepted in respect of the weekly payments claimed is not able to be made within the time allowed by this subsection and of the reasons why the decision is not able to be so made,
- and that notification shall be in or to the effect of the form prescribed containing substantially the information required.
(3a) If within 10 days after the Director is notified under subsection 3(c) that a decision is not able to be made, the insurer has not -
(a) notified the worker to whom the claim relates, the employer and the Director that liability is accepted in respect of the weekly payments claimed; or
(b) subject to section 75, notified the employer, the worker and the Director that liability is disputed in respect of all or any of the weekly payments claimed and of the reasons why it is disputed,
the claim by the worker shall be deemed to be disputed.
(4) …
(5) Where an insurer fails to comply with subsection (3) in respect of a claim for weekly payments under this Act, the worker who made the claim is, by force of this subsection, entitled to the weekly payments claimed and the insurer is liable to indemnify the employer in respect of those weekly payments, but either the employer or the insurer may apply to the Directorate for a determination under subsection (6).
(6) On an application under subsection (5) the Directorate may determine the entitlement that the worker would
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- have but for the operation of subsection (5), and thereupon the entitlement of the worker is as so determined by the Directorate but without affecting his entitlement under subsection (5) in respect of the period before that determination.
- (7) An employer shall make the first of the weekly payments as soon as practicable after -
(a) he is notified that the insurer accepts the claim or the time prescribed by subsection (3) expires without the employer having received any notification as required by that subsection from the insurer; and
(b) the worker has complied with the requirements of section 84I or, on an application made under section 58, the Directorate has ordered the commencement of weekly payments under this subsection notwithstanding that those requirements have not been complied with,
and subsequent weekly payments shall be made on the employer’s usual pay days.
(8) …".
4 The respondent submitted to the Review Officer that, because the medical certificates and report had only ever been served on the insurer, and not on the partnership as the appellant's employer, s 57A(1)(b) had not been complied with and, accordingly, ss 57A(2) and (3) never became operative.
5 In response the appellant contended, in reliance upon s 173 of the Act, that, because the partnership had ceased to carry on business or even to exist, he was able to serve the medical certificates on the insurer rather than the employer. Section 173 reads as follows:
"(1) Where during the currency of a contract between an employer and an insurer in respect of the employer's liability under this Act to a worker the employer dies, or in the case of a corporation has commenced to be, or is, wound up, ceases to exist or the employer cannot be found or no longer resides in Australia or in a Territory
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- within Australia or has ceased to carry on the business, or business of the kind, to which that contract related, then in any such circumstance -
- (a) the worker has the same rights and remedies against the insurer; and
(b) the insurer has, to the extent of his liability under the contract, the same liability to the worker and the same rights and remedies in respect of the liability,
- that the employer otherwise would have had under the contract.
(2) Where, under subsection (1), the liability of the insurer of an employer is less than that which the liability of the employer to the worker would have been, the worker may proceed for the balance against the employer, or in the bankruptcy or liquidation of the employer, or against the personal representative of the employer."
The Review Officer's Decision
6 The Review Officer found that there could be no doubt that the respondent had ceased to carry on the business to which its contract of insurance related but held that "service of the documentation on the insurer was not service upon the employer for the purposes of s57A(1)(b) because s173 of the Act does not operate to allow service upon the insurer of the s57A(1)(b)(ii) certificate". He said that s 173 could not be read in such a way as to overcome the appellant's difficulty that s 57A(3) was "concerned with the employer making a claim against its insurer" and that a worker could not, by the operation of s 173, "stand in the shoes" of the employer.
7 The Review Officer also found that, because the operation of s 173(1) of the Act was premised on "the employer's liability under this Act to a worker", there was no basis for it to operate in this case, the respondent not having been shown to be liable to the appellant. He said that the purpose of s 173 "has always been accepted as [that of] allowing the worker to pursue against an insurer the rights of the employer, rather than the worker pursuing the issue of the employer's liability to the worker against the insurer directly …". He went on to say:
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- "If this were not the case it would not be necessary as it is, for a worker to have a deregistered company restored to the register in order to commence proceedings against that company. A worker could simply proceed directly against the insurer. Further it would seem to me that there would also be no reason to include the legal personal representatives of a deceased employer in the definition of employer as s 173 includes in its list of scenarios the situation where an employer dies."
8 The Review Officer consequently found that there had been no breach of s 57A. He went on, in November 2002, to make a decision on the substantive application.
The Decision of the Compensation Magistrate
9 The appellant appealed to the Compensation Magistrate, who dismissed the appeal.
10 The Compensation Magistrate said, as regards s 57A, that the word "employer", in subs (1)(b), could not be read as including "employer's insurer", when read in its context and having regard, in particular, for the provisions of subs (3) and (5). She said that the submissions which had been advanced on behalf of the appellant were effectively that the provision of the medical certificates and report by the worker directly to the insurer amounted both to notification of a recurrence of a disability and also to a claim by the employer upon its insurance policy and that to enable the section to be so read would be to override the plain meaning of the word "employer" as it appears in s 57A. She also said that s 57A(5) was a penal provision and that, if there was any ambiguity (she did not think that there was), it should be "resolved in favour of the most lenient construction": Deming No 456 Pty Ltd v Brisbane Unit Development Corporation Pty Ltd (1983) 155 CLR 129 at 145, per Mason, Deane and Dawson JJ.
11 The Compensation Magistrate then went on to consider the provisions of s 173. She found that the Review Officer had correctly construed that section. She consequently dismissed the appeal.
The Grounds of Appeal
12 There are two grounds of appeal, as follows:
"1. The learned Compensation Magistrate erred in law in concluding that s57A(5) of the Act was conditioned upon the worker serving his or her claim upon the employer in
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- circumstances where the employer no longer existed and where the insurer had (effectively) accepted service of the claim on the former employer's behalf.
- 2. The learned Compensation Magistrate erred in concluding that for s.173 to be applicable, there had to be an established liability to pay compensation. The learned Magistrate ought to have concluded that the word 'liability' in s.173(1) of the Act includes a liability that is inchoate or contingent."
The Preliminary Point
13 Before these grounds could be dealt with, counsel for the respondent raised a preliminary point. He contended that, even if it be accepted that service upon the insurer was permitted in the circumstances of this case, the appellant, by lodging his Form 1 application on 22 February 2002 (on which date it was apparently received by the Directorate), before the 14-day period set by s 57A(3) had expired, effectively created a dispute, thereby rendering "the operation of s.57A(3) otiose". This, he said, had the result that there was no need for the respondent to comply with that section. He submitted that there was consequently no basis upon which the Review Officer could have decided that the appellant had breached s 57A(3).
14 This point was raised on behalf of the respondent for the first time some two weeks in advance of the hearing of the appeal. It was not raised before the Review Officer or before the Compensation Magistrate.
15 Counsel for the appellant submitted that it is now too late for the respondent to raise the point (which was not the subject of a notice of contention). He said, firstly, that, had the point been raised before the Review Officer, the appellant could then have discontinued his existing application and filed a further Form 1 application. He submitted that, by that time, the respondent's omission to comply with s 57A(3) would still have been unremedied and would by then have been irremediable, as the time in question runs from the date of the making of the claim and not from the date of lodgment of the Form 1 application. He said that there was no evidence to suggest that the respondent would have acted any differently had the Form 1 not been filed when it was.
16 By way of an alternative submission, counsel for the appellant contended that the appellant might have submitted to the Review Officer that, on the proper construction of s 57A(3) of the Act, the respondent's
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- obligation to give one of the notifications there provided for to the appellant was unaffected by the filing of the Form 1. If that submission was accepted, he said, it would follow that, because the 14 day period had elapsed without the respondent having made any of the notifications provided for by s 57A(3) by the time the matter was heard by the Review Officer, the provisions of s 57A(5) could have been applied by the Review Officer.
17 In my opinion it is now too late for the respondent to raise its preliminary point. It could, and should, have been raised before the Review Officer. Had that been done, the appellant might have taken the steps identified by his counsel and the points now raised on behalf of the appellant, whatever their merit, might then have been agitated and determined. Instead, as I have said, the respondent's preliminary point was never raised and nor was it raised in the course of the appeal to the Compensation Magistrate.
18 Given the manner in which the respondent has conducted its case, over a substantial period of time, I would refuse it leave to now raise the point.
Construction of Sections 57A and 173
19 That brings me to the questions of construction concerning ss 57A and 173 of the Act.
20 Subsection 57A(1) deals with a situation in which the employer is indemnified by a policy of insurance against liability to pay compensation. Subsection (2) deals with the rights, as between the employer and the insurer, in a case in which the employer, being the subject of a claim for compensation and having been served by the worker with the required medical certificate, fails to make a claim under the policy within the stipulated time. Subsection (3) requires the insurer, upon an employer making a claim under subs (2), to notify each of the employer and the worker of the matters respectively stipulated. These provisions quite plainly distinguish between the employer and the insurer and there is consequently no substance to the contention, advanced on behalf of the appellant, that, under s 57A, service of the medical certificate can, in any case, be effected on either the employer or the insurer, as "the employer's agent". I should add that, because there is nothing ambiguous about the plain wording of s 57A, it is unnecessary to consider whether or not s 57A(5) should be characterised as penal for the purpose of construing the section.
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21 I should also add, before leaving the issue of the proper construction of s 57A, that we referred in that regard to Turner v Kowloon Holdings Pty Ltd [2003] WASCA 276. There, the Court, by a majority, held that, in s 64(1) of the Act (which provides for the obligation of a worker to submit himself for medical examination "if so required by the employer"), the word "employer" encompasses the employer's insurer which was, in that respect, subrogated to the rights of the employer: see at [46] and [66], and cf Pullin J, in dissent, at [69] and [70]. However, that case seems to me to shed no light on the construction of s 57A which, unlike s 64(1), draws a clear distinction between the employer and the insurer for the purposes of its application.
22 That leaves the question whether s 173(1) of the Act is applicable.
23 There are two limbs to that subsection. Both apply to a situation in which, during the currency of a contract of insurance between the employer and the insurer, the employer dies (or in the case of a corporation, is wound up), ceases to exist, cannot be found, no longer resides in Australia or has ceased to carry on the business (or business of the kind) to which the contract related.
24 Under the first limb, the worker has, in any such circumstance, the same rights and remedies against the insurer as the employer would have had under the contract of insurance. That limb gives rise to no difficulty.
25 Under the second limb, in any of the circumstances posited the insurer has (to the extent of its liability under the policy) "the same liability to the worker and the same rights and remedies in respect of the liability, that the employer otherwise would have had under the contract". This limb is more problematical in that it is difficult to see what liability to the worker an employer could have had under a contract of insurance which, it might be assumed, is there for the purpose of indemnifying the employer in respect of "the full amount of his liability to pay compensation under … [the] Act to any worker employed by him …": s 160(1). It consequently seems that there is a deficiency in the drafting of the section and that the intention of the legislature must be ascertained otherwise than by means of a literal construction.
26 The purpose of the section is that of giving to the worker a remedy in circumstances in which an employer is liable to a worker for the payment of workers' compensation (I take that to be a reference to liability under s 18 of the Act, which arises when "a disability of a worker occurs"), but the employer, for one or other of the reasons posited, cannot or will not
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- meet that liability. That being so, it seems to me that the second limb of subs (1)(b) must have been intended to place the insurer in the shoes of the employer as regards its liability to the worker, but only to the extent of the insurer's liability to the employer under the contract of insurance, and that the reference to liability "under the contract" (the quoted words being those which appear at the end of s 173(1)) should consequently be read, for the purposes of that limb, as referring to the liability insured against. It follows that, in a case such as this, in which the worker cannot serve on the employer the certificate referred to in s 57A(1)(b), the worker is, by means of s 173(1), able to serve that certificate on the insurer and the insurer is, for the purposes of s 57A, deemed by s 173(1) to have received a claim from the employer for the purposes of s 57A(3) and hence for the purposes of ss 57A(5) and (6) of the Act.
27 That this is the preferable construction of s 173(1) seems to me to be supported by the fact that there would otherwise be no mechanism by which a worker in the appellant's situation could pursue a claim for compensation under the Act in circumstances in which it was impossible for him to serve on the employer the certificate mentioned in s 57A(1)(b). I very much doubt that that could have been the intention of the legislature.
28 The Review Officer, in arriving at the contrary conclusion, was, as I have said, influenced, first, by the fact that the definition of "employer" in s 5 of the Act includes the legal representative of a deceased employer and, second, by what he took to be the fact that it is necessary for a deregistered company to be restored to the register in order to commence proceedings against it. As to the first of those points, the fact that the legal representative of a deceased employer has been included within the definition of "employer" (and hence been made liable to pay workers' compensation) seems to me to be irrelevant to the proper construction of s 173(1). The existence of that particular source of redress does not detract from my understanding of the purpose of s 173(1) and, hence, from my preferred construction of that section, notwithstanding that the death of the employer is one of the circumstances giving rise to its operation. As to the second point, I do not consider that it is necessary for a deregistered company to be restored to the register in order for proceedings to be commenced against it where the company had, at the relevant time, a policy of insurance in respect of its liability to pay workers' compensation. Rather, that seems to be one of the situations intended to be addressed by s 173(1), by giving to the worker the right to proceed directly against the insurer rather than requiring him or her to
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- undertake the inconvenient (and pointless) course of having the company restored to the register.
29 I should mention, before leaving this issue of the proper construction of s 173(1), that counsel for the respondent, in supporting the judgments of the Review Officer and the Compensation Magistrate, referred us to comments made, obiter, by Rowland J in Wesfarmers Insurance Ltd v Cotter (1990) 1 WAR 493. In that case his Honour said, at 505 - 506, that the Act does not make the liability of the insurer to the worker match that of the employer to the worker and that the nearest the Act came to giving rights to the worker was in s 173(2), which, he said, gave the worker a right in quite restricted circumstances to proceed against the insurer. However, those comments were made in the course of contrasting s 173 of the Act to s 19(3)(1) of the Workers' Compensation Act 1912 (NSW), in a context in which the question to be decided was whether or not the extent of an insurer's liability under an insurance contract could, under the Act, be less than the scope of the employer's liability to the worker. The Court held that, unlike the position which prevailed in New South Wales, there was, in Western Australia, no obligation on an insurer to provide a contract of insurance to an employer other than the one requested by the employer (as to which see s 160 of the Act) and that, as a consequence, the insurer's obligation to indemnify is determined by the contract of insurance. The comments relied upon by counsel for the respondents are consequently of no assistance in this different context.
Conclusion
30 It follows that I would allow the appeal and set aside the decision of the Compensation Magistrate delivered on 21 May 2003. I would hear further from the parties as to the other orders which should consequently be made.
31 WHEELER JA: I have had the advantage of reading in draft the reasons for decision of Steytler P. I agree with those reasons and have nothing to add.
32 MCLURE JA: I agree with Steytler P.
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