WorkCover Authority of New South Wales (on behalf of the Workers Compensation Nominal Insurer) v Sadler
[2009] NSWWCCPD 127
•9 October 2009
| WORKERS COMPENSATION COMMISSION | ||||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | ||||||
| CITATION: | WorkCover Authority of New South Wales (on behalf of the Workers Compensation Nominal Insurer) v Sadler [2009] NSWWCCPD 127 | |||||
| APPELLANT: | WorkCover Authority of New South Wales (on behalf of the Workers Compensation Nominal Insurer) | |||||
| RESPONDENT: | Maureen Kay Sadler | |||||
| INSURER: | Workers Compensation Nominal Insurer | |||||
| FILE NUMBER: | A1-1711/09 | |||||
| ARBITRATOR: | Mr P Theobald | |||||
| DATE OF ARBITRATOR’S DECISION: | 27 May 2009 | |||||
| DATE OF APPEAL DECISION: | 9 October 2009 | |||||
| SUBJECT MATTER OF DECISION: | Proof of non-insurance; proof of a negative; Nominal Insurer as model litigant | |||||
| PRESIDENTIAL MEMBER: | Deputy President Kevin O’Grady | |||||
| REPRESENTATION: | Appellant: | Phillips Fox | ||||
| Respondent: | Whitelaw McDonald | |||||
| ORDERS MADE ON APPEAL: | 1. Paragraph one of the Arbitrator’s determination dated 27 May 2009 is revoked and the following determination is made: | |||||
| “(1) The Employer North Coast Area Health Service (formerly Hastings District Hospital) was not insured as required by the Workers Compensation Act 1926 at the time of Maureen Kay Sadler’s injury.” | ||||||
| 2. Paragraphs two, three and four of the Arbitrator’s determination are confirmed. | ||||||
| 3. The Arbitrator’s determination is amended to include the following order: | ||||||
| “(5) That the WorkCover Authority of New South Wales, acting for the Workers Compensation Nominal Insurer, pay to the Applicant, Maureen Kay Sadler the compensation and costs awarded against the North Coast Area Health Service from the Workers Compensation Insurance Fund established pursuant to section 154D of the Workers Compensation Act 1987.” | ||||||
| 4. The WorkCover Authority of New South Wales, acting for the Workers Compensation Nominal Insurer, is to pay Maureen Kay Sadler’s costs of this appeal. | ||||||
BACKGROUND
Maureen Kay Sadler was employed as an enrolled nurse by Hastings District Hospital (now known as North Coast Area Health Service -‘the Hospital’) between 26 February 1973 and 2 November 1973. Ms Sadler alleges that, on an unspecified date, she received an injury to her back and her legs whilst lifting a heavy patient in the course of her employment at the Hospital. Ms Sadler reported that incident to Sister Morton and received treatment from a medical practitioner who was on duty at the hospital.
Ms Sadler lost considerable time from work and her employment with the hospital came to an end following discussions with Matron Bailey.
Ms Sadler has suffered very considerable pain and disability as a result of the alleged work injury and has undergone numerous surgical procedures. That treatment includes laminectomy and discectomy at the L4/5 level in 1977, laminectomy and discectomy at L5/S1 level in 1978, a double level anterior spinal fusion in 1980 which was followed by a second procedure being a posterior fusion in the same year. In 1998 Ms Sadler underwent surgery for removal of a pedicle screw.
It appears from the evidence that Ms Sadler sought advice as to her rights to workers compensation benefits in 2003. At that time her former solicitors made enquiries concerning the period during which Ms Sadler was employed by the Hospital, and details of its workers compensation insurance policy. In January 2004 those solicitors were informed by the Mid North Coast Area Health Service of details concerning Ms Sadler’s period of employment.
In January 2006 Ms Sadler’s present solicitors wrote to North Coast Area Health Service, the successor to the Hospital, giving notice of a claim by her in respect of lump sum compensation pursuant to section 16 of the Workers Compensation Act 1926 (‘the 1926 Act’, now repealed) together with medical and hospital expenses. That notice included a request made pursuant to section 232 of the Workplace Injury Management And Workers Compensation Act 1998 (‘the 1998 Act’) for particulars of the relevant workers compensation insurer. That request for information was the first made on behalf of Ms Sadler by her current solicitors. The North Coast Area Health Service has since that time failed to provide the information requested of them.
Extensive enquiries were conducted on behalf of Ms Sadler in an attempt to identify the insurer of the Hospital during her period of employment. Those efforts have been fruitless.
Proceedings were commenced on 5 March 2009 on behalf of Ms Sadler in the Workers Compensation Commission (‘the Commission’) by the filing of an application seeking orders against Hastings District Hospital (now known as North Coast Area Health Service), first respondent, and Workers Compensation Nominal Insurer c/- WorkCover Authority of New South Wales (‘the Authority), second respondent. That application came before an Arbitrator for conciliation/arbitration on 6 May 2009 at which time the matter proceeded to hearing. The parties were represented by counsel, Ms Elizabeth Wood appearing for Ms Sadler and Mr Doak of counsel appeared on behalf of both first and second respondents. The Arbitrator reserved his decision and a Certificate of Determination issued on 27 May 2009. That Certificate was accompanied by a Statement of Reasons (‘Reasons’) which included findings in favour of Ms Sadler.
On 25 June 2009 an application seeking leave to appeal against the Arbitrator’s decision was filed on behalf of both respondents. Documentation before the Commission received since from Messrs DLA Phillips Fox, solicitors for each of the respondents to the original application, indicates that the appeal should properly have been brought by WorkCover Authority of New South Wales, as agent for the Nominal Insurer, alone. The sole appellant is the Authority, the Hospital having taken no active role in the appeal process.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 27 May 2009 records the Arbitrator’s orders as follows:
“The Commission determines:
1.That WorkCover Authority of New South Wales is properly served as Nominal Insurer in respect of this claim.
2. That the application be remitted to the Registrar for referral to an
Approved Medical Specialist to be assessed appropriately considering the date of the injury.
3. That the respondent pay the applicant’s reasonable section 60
expenses on production of accounts, receipts or Health Insurance
Commission Charge.
4. That the costs of each party to date be subject to an uplift of 25% in
respect of the complexity of the matter.
A brief statement is attached to this determination setting out the Commission’s reasons for the determination.”
PRELIMINIARY MATTERS
At the hearing before the Arbitrator it was argued by counsel appearing for the Authority and the Hospital that Ms Sadler had failed to prove that the Hospital was uninsured in terms of section 140(2)(a) of the Workers Compensation Act 1987 (‘the 1987 Act’). The Arbitrator made a finding (at Reasons [48]) that the Hospital had “…not obtained or was not maintaining in force a policy of insurance for the full amount of its liability… at the relevant time.”
The Arbitrator proceeded to deal with the only other matter in dispute being the question as to whether Ms Sadler had been injured as alleged. That issue (at Reasons [87]) was determined in Ms Sadler’s favour.
It may be seen from the terms of the Certificate of Determination that the Arbitrator records that the Authority “…is properly served as Nominal Insurer in respect of this claim.” The Arbitrator’s orders contained in that certificate do not specify which of the respondents is to pay compensation and costs. Leaving aside, for the moment, the merits of the appeal it is clear that the orders made by the Arbitrator are deficient and will require appropriate amendment on this appeal. The orders as sought by Ms Sadler included those matters particularised at paragraphs 1 and 2 at page one of her original application concerning payment by the Workers Compensation Insurance Fund and reimbursement by the employer. The question as to whether, on this appeal, such orders should be made is addressed hereunder.
ISSUES IN DISPUTE
The issues in dispute in the appeal are:
(i) whether the Arbitrator erred concerning the construction and/or application of section 140(2)(a) of the 1987 Act, and
(ii) whether the Arbitrator erred in finding that the employer, the hospital, was uninsured.
The issues summarised above are taken from the document headed “Submissions in Appeal against decision of an Arbitrator” which accompanies the Authority’s application made concerning this appeal.
ON THE PAPERS REVIEW
Section 354(6) of the 1998 Act provides:
“(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 the parties that the appeal can proceed to be determined on the basis of these documents, 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.
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.
Ms Sadler in her Notice of Opposition to this appeal has submitted that the appellant should not be granted leave to proceed with this appeal. It is asserted at paragraph 2.1 of written submissions which accompanied that notice that “there is no amount in dispute”. Whilst no reference is made to the relevant legislation it is clear that Ms Sadler’s argument is founded upon the proposition that the monetary threshold as prescribed by section 352(2) of the 1998 Act have not been met. Shortly stated the argument advanced is that, given there is no challenge on this appeal with respect to the Arbitrator’s finding with concerning the issue of “injury”, the question of liability in respect of a monetary sum has not been raised. Whilst the argument is not expressed in that form the thrust of the argument is that the appellant has not challenged any finding by the Arbitrator other than that with respect to the insurance question thus the appeal, whatever the outcome, would leave the question of monetary liability undisturbed.
I cannot accept the argument advanced on behalf of Ms Sadler given that the Authority is seeking on this appeal to avoid liability as found, albeit in uncertain and confused terms, by the Arbitrator. I conclude, having regard to the quantum of compensation claimed under the two heads specified in the original application, that the monetary threshold as prescribed by the aforementioned subsection has been met, and in the circumstances I grant leave to the appellant to proceed with the appeal.
FRESH EVIDENCE
The Commission may, pursuant to section 352(6) of the 1998 Act, grant leave to a party to adduce fresh evidence or evidence in addition to or in substitution for the evidence received in the original application on an appeal. The procedure to be followed concerning an application for such leave is prescribed by the terms of Practice Direction Number 6. Ms Sadler seeks leave to adduce fresh evidence. That evidence is documentary and is described at paragraph 4.5 of written submissions accompanying the Notice of Opposition. The documents are stated in those submissions to be relevant to the extent of searches conducted on behalf of Ms Sadler to establish the identity of the hospital’s insurer. It is sought to adduce that fresh evidence, or additional evidence, to refute an argument advanced by the Authority that there is a “gap” in such searches.
The Authority opposes the admission of the fresh or further evidence. It is argued by the Authority that the “criteria set out in Practice Direction Number 6” are not “satisfied”.
The authorities and relevant principles were discussed by Roche DP in NSW Police Force v Kearns and Anor [2008] NSWWCCPD 29 (‘Kearns’) where it was stated at [23]-[25]:
“23. The question of the introduction of fresh evidence on appeal was
considered by the Court of Appeal in Haider v JP Morgan Holdings Aust Ltd t/as JP Morgan Operations Australia Ltd [2007] NSWCA 158, (2007) 4 DDCR 634 (‘Haider’) where Basten JA referred to Akins v National Australia Bank (1994) 34 NSWLR 155 (‘Akins’) and other authorities. In Akins, Clarke JA (Sheller JA and Powell JA agreeing) stated at 160 that three conditions need to be met before “fresh evidence” can be admitted:
“These are: (1) It must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial; (2) The evidence must be such that there must be a high degree of probability that there would be a different verdict; (3) The evidence must be credible.”
24. However, in Nowlan v Marson Transport Pty Ltd [2001] NSWCA 346; (2001) 53 NSWLR 116 Heydon JA stated at [15]:
“Even if the three tests stated in the Akins case are applicable and are not satisfied, a question remains: is it just to admit the further evidence in this case?”
25. In considering an application to rely on fresh evidence or further evidence on appeal, the Commission must balance two competing requirements: the public interest that litigation should not continue indefinitely against the need to ensure that justice is done in all the circumstances of the case. In balancing these matters the Commission must also keep in mind its statutory duty to act “according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms” (section 354(3) of the 1998 Act).”
I respectfully agree with the summary as appears in the extract as quoted above. It has not been established by Ms Sadler that the subject evidence could not have been obtained with reasonable diligence for use at the trial. Furthermore I do not consider that the subject evidence materially adds to the weight of the evidence available generally concerning the issue of insurance. In all the circumstances I am not persuaded that the interests of justice require that leave be granted to adduce the further evidence and leave to do so is refused.
EVIDENCE
The documentary evidence produced before the Arbitrator is described at [21] of Reasons. There was no oral evidence presented before the Arbitrator.
The documents relied upon by Ms Sadler at the hearing included a number of medical reports, medical records and other documents which were relevant solely to the issue of “injury”. That material included a written statement by Ms Sadler dated 28 January 2009. That evidence was addressed by the Arbitrator between [50] and [85] of Reasons. Following consideration of that evidence the Arbitrator (at [87]) made a finding that Ms Sadler had been injured in the course of her employment with the Hospital in 1973.
That finding of fact is not in dispute on this appeal and in the circumstances it is not proposed to attempt a summary of that evidence relevant to the issue of “injury”.
Ms Sadler also relied upon the content of copies of approximately 52 items of correspondence most of which were concerned with the question of insurance. Included among that correspondence were letters relating to the period of her employment with the hospital, notices of claim addressed to the Hospital, records of storage details from the government records repository, and a letter dated 4 December 2006 from Ms Sadler’s solicitors to the Authority which enclosed a Claim form seeking compensation against the “Uninsured Liability and Indemnity Scheme”(which Scheme was then administered by the Authority and operated until 2007 when amending legislation substituted the earlier established Nominal Insurer, administrator of the Insurance Fund). That claim form has the Authority’s corporate letterhead. Also included among those documents is correspondence received from the Authority by Ms Sadler’s solicitors dated 13 December 2006 which appears to be a response to the claim form earlier forwarded to it.
Most of the items of correspondence relied upon by Ms Sadler concern enquiries of licensed insurers as to the existence or otherwise of records relating to a relevant policy of insurance. There is evidence of enquiries made of 17 licensed insurers as well as the organisation Corporate Management Services, the administrator of the Insurance Guarantee Fund relating to outstanding liabilities of the liquidated insurer NEM General Insurance Association Ltd.
The extensive enquiries conducted on behalf of Ms Sadler which occurred between 2004 and 2008 failed to establish the existence or otherwise of a relevant policy of insurance. Those enquiries did establish that the insurer known as GIO had issued a policy to the hospital which expired on 30 June 1971, and it was further established that the insurer known as National and General Insurance Company Ltd had issued a policy commencing on 30 June 1976. The evidence does not reveal the existence or otherwise of a relevant policy having been in force between June 1971 and June 1976.
Correspondence between Ms Sadler’s representatives and the Hospital (or its successor) seeking details of relevant insurance commenced on 15 January 2004. Correspondence forwarded by the Hospital indicates that any record concerning insurance cannot be located. A letter dated 3 March 2008 from Ms Sadler’s solicitors to the Hospital sought formal advice or confirmation that the Hospital had no workers compensation insurance at the relevant time. That correspondence was responded to, following a reminder, on 12 September 2008. That reply signed by Mr Neil G. Wornes, Claims Officer of the North Coast Area Health Service stated, in part:
“Your letter asks to give formal advice that no workers compensation insurance was held for Hastings District Hospital. At this point in time I do not possess enough information about the matter to give advice. I will do some investigating and respond with another letter. Any information you can provide such as Vicki Baker’s previous letters would be helpful.”
Ms Sadler’s solicitors replied to Mr Wornes’s letter promptly and enclosed copies of 15 relevant items of correspondence. No reply was received by 20 November 2008 on which date a reminder letter was forwarded to Mr Wornes’s office. The evidence includes a file note that Mr Wornes had advised, on 14 January 2009, that he hadn’t “had any luck”. Mr Wornes further advised that the Claims Officer Vicki Baker was to be “back in a few weeks” and that he (Mr Wornes) would ask Vicki to “look into it”.
Ms Baker wrote to Ms Sadler’s solicitors on 26 February 2009. The text of that correspondence was, relevantly:
“We refer to previous correspondence on this matter.
No record could be found of the workers compensation policy for Hastings District Hospital for the period from 26 February 1973 to 2 November 1973.
Every endeavour has been made and all avenues exhausted in our attempts to find this policy.
Attached is a copy of Ms Sadler’s “Nurse’s Training and Health Record”. The remarks written by Matron at time of resignation may be of interest.”
The evidence establishes that the Hospital had suggested in correspondence that Ms Sadler make enquiries of the New South Wales Department of Health. This suggestion was taken up by those representing Ms Sadler and correspondence was forwarded to that Department in January 2009. The Department responded promptly to that correspondence with the following advice:
“The Department does not hold records of workers compensation policy holders for individual hospitals for the period of the potential claim.”
The correspondence proceeded to include a suggestion that enquiries be directed to the Authority. Such enquiry had earlier been pursued.
Correspondence which was before the Arbitrator includes a series of letters exchanged between Ms Sadler’s solicitors and the Authority which commenced on 7 July 2006. On that date a request was made for information concerning relevant insurance. The Authority responded promptly and advised that the “latest record” indicated that relevant insurance had been issued to the Hospital by Allianz. Details for the relevant policy number were provided and the period was specified as being between 30 June 1979 and 30 June 1989.
The correspondence includes the letter dated 4 December 2006 from Ms Sadler’s solicitors to the Authority referred to above which enclosed the claim form addressed to the Uninsured Liability and Indemnity Scheme and relevant documentation. That claim was acknowledged promptly by the Authority and further information was sought concerning the claim. Ms Sadler’s solicitors promptly forwarded a copy of correspondence dated 8 January 2004 received by Ms Sadler’s former solicitors from the Hospital which letter confirmed the period of employment of Ms Sadler. Further items of correspondence concerning particulars of the claim were in evidence before the Arbitrator. The contents of that correspondence, where relevant, is discussed below.
Ms Sadler relied upon a number of other documents presented in evidence before the Arbitrator which are not strictly relevant to the issues raised on this appeal. Where relevant reference is made to those documents below.
The Authority relied upon the content of copies of correspondence and a series of file notes which were attached to its Reply to Ms Sadler’s original application. The majority of the items of correspondence had been tendered on behalf of Ms Sadler. Relevant detail is discussed below. The file notes which were compiled by Ms Deahne Campbell, Case Manager with the Authority as well as Ms Leanne Hill, Co-ordinator Case Management of the Authority relate to dealings between the Authority, Ms Sadler’s solicitors and the Department of Health. The last of those notations is dated 6 June 2008. Where relevant detail of those documents is addressed below. The Hospital relied upon those documents attached to its Reply filed in response to the original application filed by Ms Sadler. Those documents include numerous items of correspondence, some of which had been tendered on behalf of the other parties before the Arbitrator. Those documents also include material relevant to the employment by the Hospital of Ms Sadler and medical records which documents are not strictly relevant to the issues raised on this appeal. Where relevant this evidence is referred to below.
SUBMISSIONS, DISCUSSION AND FINDINGS
It should be again noted that the original application filed with respect to this appeal named both the Hospital and the Authority as joint appellants. The Authority has since filed a document headed “Further submissions in Appeal against decision of an Arbitrator” which includes the following notation:
“The decision is appealed only by the WorkCover Authority of NSW (ULIS) (sic). The appellant respectfully requests that the appeal file be amended accordingly.”
Having regard to the request made in the course of submissions, which I treat as an application seeking an amendment, I order that the title of the appeal be amended by deletion of reference to North Coast Area Health Service as an appellant.
It may be seen that the Hospital takes no part in this appeal. The implications of that fact are addressed below.
The only matter raised on this appeal was a challenge to the Arbitrator’s finding that the Hospital had not obtained, or was not maintaining in force, a policy of insurance for the full amount of its liability under the relevant legislation to the injured worker at the relevant time as required by section 140(2) of the 1987 Act. Shortly stated, the Appellant challenges the Arbitrator’s finding that there was no insurance policy issued as required by the Act at the relevant time.
The Arbitrator in the course of his reasons summarised that evidence which was before him concerning the question as to the existence or otherwise of a relevant policy of insurance. Following that summary he proceeded to state (at [46]-[49]):
“46.In order to make a claim against the Nominal Insurer it seems there is an onus on the applicant to prove that the employer had not obtained or was not maintaining in force a policy of insurance at the relevant time.
47.I am required to determine that issue “on the balance of probabilities”.
48.I am satisfied after perusing the evidence and the responses that were obtained from those companies that did respond and, in particular, from the letter from the North Coast Area Health Service dated 26 February 2009 that on the balance of probabilities the North Coast Area Health Service had not obtained or was not maintaining in force a policy of insurance for the full amount of its liability under this Act in respect of the insured worker at the relevant time.
49.It follows that I find that Ms Sadler has made a valid claim against WorkCover Authority of New South Wales.”
The Arbitrator has found (at [87] of Reasons) that Ms Sadler had received an injury “during 1973 in the course of her employment.” At the date of injury Ms Sadler’s entitlement to compensation benefits was governed by the provisions of the 1926 Act. That Act was repealed in its entirety with the passage of the 1987 Act. Whilst the 1926 Act made provision for the protection of workers in the employ of employers who held no insurance cover as required by that Act, which Scheme was similar to that provided by the current legislation, the parties rights and liabilities are presently governed by the provisions of Division 6 of Part 4 of the 1987 Act which addresses the subject of “Uninsured Liabilities”.
It is the Authority’s contention that the Arbitrator erred in law in his “interpretation and/or application of sections [sic] 140(2)(a) of the Workers Compensation Act 1987”. The error identified under the heading “Grounds of Appeal” was that finding made by the Arbitrator that the Hospital was “uninsured” in terms of section 140(1)(a) of the 1987 Act.
The Authority’s “Grounds of Appeal” assert error of law on the part of the Arbitrator in failing to apply the principles concerning burden of poof as stated in Briginshaw v Briginshaw (1938) 60 CLR 336 (‘Briginshaw’).
Those “grounds” also include the assertion:
“The Arbitrator erred in relying upon the absence of searches by the employer when determining section 140(2)(a) in the 1987 Act.”
Section 140 of the 1987 Act makes provision for the making of a claim against the Nominal insurer. That section includes provisions as to those persons eligible to make such claims and provides relevantly:
“(1) A claim under this Division may be made against the Nominal Insurer by any person who considers he or she has a claim against an employer for compensation under this Act or work injury damages in respect of an injury to a worker, if:
(a)the employer is uninsured, or
(b)the person claiming the compensation has been unable, after due search and inquiry, to identify the relevant employer.
(2) An employer is considered to be "uninsured" if the employer:
(a)had not obtained, or was not maintaining in force, a policy of insurance for the full amount of the employer’s liability under this Act in respect of the injured worker at the relevant time, or
(b)having been a self-insurer at the relevant time, has ceased to undertake liability to pay compensation to the employer’s own workers (but only if the claim cannot be paid under section 216 from any money deposited with the Authority or under any arrangement relating to the refund of any such deposit).
(2A) A claim may not be made under this Division in respect of a claim for work injury damages against a person who is an employer as a result of being a principal within the meaning of section 20 who is liable to pay compensation to the worker.
(2B) The regulations may prescribe the searches and inquiries necessary to constitute due search and inquiry to identify an employer for the purposes of this section.”
It is the Authority’s submission that Ms Sadler is eligible to make a claim against the Nominal Insurer only upon proof that the Hospital was uninsured in terms of section 140. It is argued that the evidence presented with respect to the question of insurance was “…insufficient to establish the fact of uninsurance.”
The thrust of the Authority’s argument concerning proof of non-insurance is that, whilst the Arbitrator correctly identified the standard of proof as being one to be determined “on the balance of probabilities”, the seriousness of the issue in the context of the operation of Division 6 Part 4 of the 1987 Act must be taken into account when determining the relevant standard of proof of non-insurance. As noted above reliance is placed by the Authority on the decision of the High Court of Australia in Briginshaw.
I accept the Authority’s argument that the issue of insurance is one of particular significance. Proof of non-insurance provides, as submitted by the Authority, the gateway to the security of an award for compensation which is to be paid by the Nominal Insurer. It is correct, as asserted by the Authority, that there is a need to preserve the integrity of the assets of the Nominal Insurer for the benefit of those whom the legislature intended should be protected in the case of injury received in the employ of an uninsured employer.
The Authority submits, in the alternative, that the appropriate standard of proof requires that non-insurance be established “definitely or with reasonable certainty”.
The Authority seeks to contrast the provisions of section 140 concerning proof of uninsurance and proof of identity of employer. The point is made in submissions that in the case of an unidentified employer provision is made in that section to “due search and inquiry”. Such a provision is not made with respect to questions of non-insurance and it follows, it is argued, that a more “burdensome” standard of proof applies to questions of non-insurance than that which is relevant to proof of existence of an unidentified employer.
The Authority notes in the course of submissions that the Arbitrator found that there were a number of insurers who had failed to reply to inquiries made on behalf of Ms Sadler. It is put that this leaves “…a critical lacuna in the evidence.” It is also suggested that the insurers mentioned at [28] of Reasons “were not found by the Arbitrator to be amongst those insurers contacted by the Respondent worker.”
It is argued that the existence of the “lacuna” causes the evidence relied upon by the Arbitrator to be “unsound” and that it “fell short of the requisite standard proof”.
The Authority refers to the decision of Ho v Powell (2001) 51 NSWLR 572 (‘Ho’) where it was stated by Hodgson JA (with whom Beazley JA agreed) at [14]:
“14. There is a long-standing controversy whether the civil standard of proof requires a numerical probability in excess of 50 per cent (see Davies v. Taylor [1974] AC 207 at 219), or belief amounting to reasonable satisfaction (see Briginshaw v. Briginshaw [1990] HCA 20; (1938) 169 CLR 638 at 642-3). My own opinion is that the resolution of the controversy involves recognition that, in deciding facts according to the civil standard of proof, the court is dealing with two questions: not just what are the probabilities on the limited material which the court has, but also whether that limited material is an appropriate basis on which to reach a reasonable decision. I discussed this in some detail in an article published at (1995) 69 ALJ 731. (D H Hodgson, ‘The Scales of Justice: Probability and Proof in Legal Fact-Finding’)”
The Authority further argues that, in the course of his Reasons the Arbitrator erred in that he “…incorrectly placed weight on the fact that there was no detail of any attempt at search on the part of the employer.” It is argued that the burden of proof is upon Ms Sadler to establish non-insurance and it is asserted that “…the absence of any action by the employer is irrelevant.”
Ms Sadler in her submissions seeks to uphold the Arbitrator’s finding with respect to non-insurance. Submissions in support of her Notice of Opposition to the appeal argued, in particular, that the Arbitrator did not find there was “no evidence of searches made by the employer”. It is asserted that there is substantial evidence that searches had been conducted by the Hospital.
Reference is made by Ms Sadler to the decision of Briginshaw and it is argued that the authority affirms the civil standard of proof as being upon the balance of probabilities. It is argued that Briginshaw addresses the manner of application of that concept in particular circumstances.
Reference is made in the course of submissions by Ms Sadler to the decision of the Court of Appeal in Ho. The Commission’s attention is drawn to those statements by Hodgson JA in particular that which is to be found at [15]. The general submission is made that evidence presented was sufficient to establish the issue of non-insurance.
The Authority has provided written submissions in response to Ms Sadler’s Notice of Opposition. It is argued that correspondence relied upon by her which has been received from the Hospital or its successor does not prove that there was no policy of insurance in force at the relevant time but merely confirms that despite efforts made, records of such insurance could not be located.
It is suggested by the Authority that, given it was mandatory that the Hospital maintain the subject insurance cover and having regard to its status as a “government entity”, there should be a presumption “in favour of the likelihood of insurance”.
The Authority proceeds to reiterate arguments raised earlier and seeks to emphasis that evidence concerning searches as to the existence of a relevant policy of insurance does not extend to the precise nature and extent of such searches. It is again emphasised that the distinction between the terms of section 140(1)(a) and (b), particularly the absence of a phrase such as “after due inquiry and search” in subsection (a) demonstrates that the Legislature intended a stricter (or more burdensome) “gateway” to subsection (a).
Standard of proof and the evidence before the Arbitrator.
It is agreed between the parties that the onus of proof is upon Ms Sadler to establish non-insurance. It is agreed that the standard of proof required of her in these proceedings is proof on the balance of probabilities. The parties differ as to whether such standard has been attained.
The Authority argues that the seriousness of the allegation, the inherent unlikelihood that the Hospital was not insured and the consequences following from a finding of non-insurance are each relevant and must be taken into consideration when deciding whether non-insurance has been proven to the “reasonable satisfaction” of the Commission.
The failure of the employer to insure as required by the provisions of the 1987 Act and its predecessor the 1926 Act is deemed to be an offence against the provisions of each of those Acts. Whilst the Commission is not here dealing with a matter as grave as proof of fraud, I accept the Authority’s submission that the seriousness of the allegation is such as to require evidence of such a character as to lead to “reasonable satisfaction” as to proof. There is, in my view, reasonable grounds to expect that the Hospital, a government agency, would hold at all relevant times insurance as required by the relevant legislation. Whilst one may have that expectation, bearing in mind that the relevant events took placing in the early 1970s, at a time when hospitals were managed by independent boards, I do not consider it “inherently unlikely” that no such policy was in existence. Having said that I again express the view that evidentiary material concerning non-insurance should be such that the Commission should be reasonably satisfied before finding the issue proven.
Proof of non-insurance renders the Nominal Insurer liable for any payments of compensation the Commission may find Ms Sadler entitled to receive. Such a consequence is serious, a fact which needs to be taken into account by the Commission when deciding whether non-insurance has been proven.
The Authority draws the Commission’s attention to the terms of section 140(1)(a) and seeks to highlight the absence of any legislative provision enabling discharge of the burden of proof by establishing “due inquiry and search”. The difficulty with this argument is that a worker has always had a right to information concerning details of relevant insurance. Such entitlement was provided for in the 1926 Act (section 18B) and the present entitlement is regulated by the provision of section 232 of the 1998 Act which provides:
“232 Worker’s right to information
(cf 1926 s 18B; 1987 s 270)
(1) A worker may request the employer of the worker to supply the following information:
(a)the employer’s name and address for the service of documents for the purposes of this Act, and
(b)the name and address of the insurer from whom the employer has obtained a policy of insurance or, if the employer is a self-insurer, to be so informed.
(2) An employer, or a person acting for an employer in the management of the employer’s trade or business, must not:
(a)fail to supply any such information, or
(b)supply information which the employer or person knows to be false or misleading in a material particular.
Maximum penalty: 20 penalty units.
(3) In this section:
“employer”, in relation to a worker, includes a principal within the meaning of section 20 of the 1987 Act who is liable to pay compensation to the worker.”
In my view, having regard to the provision of section 232 as above quoted, the existence of the obligation to provide information, or suffer penalty for the commission of an offence if not so provided, precludes either the Hospital or the Authority from arguing that the absence of “due inquiry and search” in section 140(2)(a) gives rise to a more stringent requirement of proof than would otherwise be appropriate.
As noted above the Authority relies upon those observations of Hodgson JA in Ho where His Honour was considering the Court’s function in deciding facts according to the civil standard of proof. His Honour, as above noted, observed that in such a case:
“…the Court is dealing with two questions: not just what are the probabilities on the limited material which the Court has, but also whether that limited material is an appropriate basis upon which to reach a reasonable decision.”
Ms Sadler, in response to the Authority’s argument founded upon the decision in Ho drew the Commission’s attention to what His Honour said at [15] of that judgment:
“15. In considering the second question, it is important to have regard to the ability of parties, particularly parties bearing the onus of proof, to lead evidence on a particular matter, and the extent to which they have in fact done so: cf. 69 ALJ at 732-3, 736, 740. As stated by Lord Mansfield in Blatch v. Archer [1774] EngR 2; (1774) 1 Cowp. 63 at 65 [1774] EngR 2; (98 ER 969 at 970): ‘…[A]ll evidence is to be weighed according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted”. See also Azzopardi v The Queen (2000) 75 ALJR 931 [10]; 179 ALR 349 at 353 [10].”
On the present facts I am of the opinion that a determination as to the relevant standard of proof requires not only a consideration of the state of the evidence but also the statutory obligation which the Hospital has to provide information concerning the matter in issue as well as the general law which was summarised by His Honour in those observations quoted immediately above from his decision in Ho.
There is a further matter to be taken into account in determining whether the evidentiary material before the Commission forms a sufficient basis upon which to make finding of non-insurance or otherwise, that is the fact that the relevant provision of the 1987 Act requires proof by Ms Sadler of a negative. The burden of proving a negative such as non-insurance gives rise to particular difficulties. The difficulty confronting Ms Sadler is in part occasioned by the fact that the Hospital, and indeed the Authority, have in my view greater ability to adduce evidence relevant to the issue of insurance than Ms Sadler. Such a circumstance was addressed by Hunt J in Apollo Shower Screens Pty Limited and anor v Building and Construction Industry Long Service Payments Corporation (Supreme Court of New South Wales 11 February 1985 (unreported))(‘Apollo’) where His Honour observed concerning the onus upon a plaintiff to prove a negative:
“...provided that the plaintiffs have established sufficient evidence from which the negative proposition may be inferred, the defendant carries what has been called an evidential burden to advance in evidence any particular matters with which (if relevant) the plaintiffs would have to deal in the discharge of their overall burden of proof: cf Purkess v Crittenden (1965) 114 CLR 164 at 167-168, 171.”
His Honour proceeded to state in Apollo:
“I do not, however, intend to suggest that only comparatively slight evidence is required for the plaintiffs to discharge their onus in this case as in the case where the facts are peculiarly within the knowledge of the defendant: cf Parker v Paton (1941) 41 SR (NSW) 237 at 243; 58 WN 189 at 192; Hampton Court Ltd v Crooks (1957) 97 CLR 367 at 371. That is the co-called ‘scintilla’ doctrine. Obviously, it does not apply to the position here. What I do intend to suggest is that the plaintiffs’ burden of proof of the negative proposition for which they contend is not as difficult in this case as it might otherwise have been because of the defendant’s greater means to produce evidence which contradicts that proposition. That is a pale reflection of the ‘scintilla’ doctrine. It is but an application of the more general maxim, not restricted to cases where the facts are peculiarly within the knowledge of one party, that all the evidence is to be weighed according to the proof which it was in the power of one side to produce, and in the power of the other to have contradicted…”
Taking into consideration the foregoing matters I consider that the standard of proof, that being proof on the balance of probability, requires an evaluation of the evidence adduced by Ms Sadler taking into account the seriousness of the allegation of non-insurance, the degree of unlikelihood of there being no insurance cover and the consequences of a finding of non-insurance. Those matters need to be weighed having regard to the fact that Ms Sadler’s task of proof is rendered difficult given that proof of a negative is required. Another factor to be considered is the proposition that because both the Hospital and the Authority, given their special knowledge or ability to ascertain relevant facts, bear an evidential burden with respect to all questions relating to insurance.
I have attempted to summarise the evidence adduced before the Arbitrator concerning the issue of insurance above between [28] and [39]. The exchange of correspondence between Ms Sadler’s solicitors and the Authority referred to in the last sentence of [37] above concerned the proposed proceedings to be instituted against the Hospital and the Authority as well as the subject of “insurance of the Hospital”. With respect to the proposed proceedings the Authority sought particulars and Ms Sadler’s solicitors provided that information which was available to them. An explanation was given to the Authority that neither Ms Sadler nor the Australian Taxation Office had available group certificates or tax returns relating to her employment by the Hospital. Those documents had been sought by the Authority in a request for further particulars dated 13 December 2006. It is significant to note that the Authority’s correspondence indicated that information was needed to “prove employment, and the duration of employment between the initial and final date with the nominated employer.” Ms Sadler’s solicitors, on 15 December 2006, forwarded to the Authority a copy of correspondence dated 8 January 2004 which they had received from the Hospital which confirmed the relevant period of employment. Further correspondence was exchanged in which information was sought by the Authority and Ms Sadler’s solicitors advised again that no further information was available. On 18 July 2007 the solicitors wrote to the Authority referring to the earlier correspondence and noting that it was Ms Sadler’s intention to proceed with an Application before the Commission.
The Authority replied to the solicitors by letter dated 27 July 2007. That correspondence suggested that the likely insurer was “the GIO”. Reference was made in that correspondence to confusion concerning date of alleged injury which appears in earlier correspondence at the time Ms Sadler’s previous solicitors had conduct of the claim. The correspondence, signed by Mr Graham Layt, acting case manager, stated that the Authority was of the opinion that insufficient factual information had been provided to enable the Authority to consider the claim and it was asserted that a claim had not been “duly made”. The correspondence included a notation that proceedings were to be commenced by Ms Sadler and advice that “WorkCover will pursue you for costs should a determination be made in favour of WorkCover as manager of the Uninsured Liability and Indemnity Scheme.”
Ms Sadler’s solicitors wrote again to the Authority on 29 October 2007 enclosing a copy of correspondence received from the Hospital dated 22 October 2007 which confirmed employment of Ms Sadler. No response had been received by the solicitors and a follow up letter was forwarded to the Authority on 7 January 2008.
The Authority wrote to the solicitors on 12 February 2008 acknowledging earlier correspondence which confirmed Ms Sadler’s employment in 1973 with the Hospital. That correspondence, signed by Dehane Campbell, case manager stated, “I am currently liaising with the Legal Services Branch of NSW Health to identify the insurer that will be responsible for managing this claim. Once the appropriate insurer has been identified I will then provide you with this advice.” Later correspondence dated 28 February 2008 stated:
“Please be advised that consideration of this claim under the Uninsured Liability and Indemnity Scheme is not able to proceed unless you provide evidence that you have served Notice of Claim on North Coast Area Health Service and they provide formal advice that no workers compensation insurance was held for Hastings District Hospital at the date of injury.
Based on the above information it is now necessary for you to provide Notice of Claim to North Coast Area Health Service as outlined above. I will now be finalising Ms Sadler’s claim under the Uninsured Liability and Indemnity Scheme however, the claim can be reopened at a later date if evidence is proved as above.”
The evidence reveals that a Notice of Claim was addressed to the Hospital on behalf of Ms Sadler in January 2006. The Authority had received a copy of that Notice under cover of the solicitor’s letter of 4 December 2006. The Authority had also been on notice as to Ms Sadler’s inability to identify an insurer of the Hospital since July 2006 at which time the solicitors sought assistance from the Authority to identify the insurer.
The solicitors responded to the Authority by letter dated 3 March 2008 which had attached a number of documents, many of which had earlier been provided to the Authority. It was noted in that correspondence that the solicitors had “totally exhausted” means of identifying the relevant insurer, which fact had given rise to the need to forward a claim to the Authority. An invitation was made to arrange an independent medical examination, a matter that had been touched on in earlier correspondence from the Authority.
The Authority replied to the last mentioned correspondence by letter dated 10 April 2008. It was stated that, given the fact that the Hospital had not stated they were uninsured rather that “they were having difficulty locating the insurer details” the Authority was unable “to progress the claim under the Uninsured Liability Indemnity Scheme.” A suggestion was made that inquiries be conducted to ascertain whether the Department of Health had any relevant information.
The solicitors responded to the last mentioned correspondence by letter dated 15 April 2008. It was noted that the Hospital did not indicate that they were having difficulty locating the insurer details, rather that the Hospital had stated that “registers could not be found for the period prior to 1978”. Enclosed with that letter were copies of correspondence between the solicitors and the NSW Department of Health exchanged in 2006.
The file notes relied upon by the Authority referred to in [39] above include one dated 11 February 2008 signed by Ms Campbell, case manager. That note is a summary of efforts made by Ms Campbell to confirm the existence of a relevant policy of insurance and the identity of the insurer. The note records discussion had with Ms Baker the claims officer from the Hospital. Ms Baker’s advice was recorded, that being that “a search of all records has failed to indicate the insurer that was on risk in 1973”. The note makes reference to discussions between Ms Campbell and Mr Bruder of Legal Services NSW Health.
Among the file notes attached to the Authority’s reply is one dated 28 February 2008 made again by Ms Campbell. That note records discussions had between Ms Campbell and Mr Vail, technical manager. The note records Mr Vail’s view that the Hospital “would have been appropriately insured even in the 1970s as it was a government entity”. Mr Vail’s advice was noted that Ms Sadler would need to serve a Notice of Claim against the Hospital and obtain evidence of non-insurance before a claim “will be determined under ULIS scheme”. The note also records difficulty encountered by Ms Campbell communicating with the relevant officer of the Department of Health.
A further file noted dated 3 March 2008 signed by Ms Campbell records a telephone call from Mr Wilkinson of the Department of Health. It was Mr Wilkinson’s view, as recorded in the note, that a Notice of Claim should be served upon the Hospital and there should only be a claim against the ULIS “if there is evidence that there was no insurance held.” Mr Wilkinson expressed his belief that the insurer on risk was “NEM”. The note records further enquiries made by Ms Campbell concerning “run off claims from NEM”.
The Reply filed on behalf of the Hospital contains no details concerning relevant insurance. Part 2 of that document which requires the provision of details of both the employer and its insurer contains only details of the Hospital. The insurer details including claim number, name of insurer, address, contact person and period of risk have been left in blank.
Teleconference conducted 15 September 2009.
The Commission arranged a telephone hearing (teleconference) with the parties on 15 September 2009. A number of issues were addressed during the course of that teleconference including the state of the evidence concerning non-insurance. The attention of the parties was directed to a matter which was heard by the President of the Dust Diseases Tribunal of New South Wales in August 1997 in which the Hospital was a plaintiff appearing before the Tribunal seeking contribution from another party in respect of a verdict secured by a plaintiff, the late Mr John Harrison Steep. Mr Steep’s action against the Hospital arose out of the circumstances of his employment by it between 1950 and 1977. The verdict secured orders in respect of damage suffered as a result of exposure to asbestos. (Macleay-Hasting Area Health Services v Wallaby Grip (BAE) Pty Ltd (in liq); Re. Steep Dust Disease Tribunal of New South Wales, O’Meally P, 26 August 1997 unreported). The matter went on appeal to the Court of Appeal following which an unsuccessful application was made for leave to proceed on appeal before the High Court of Australia. It was thought that the legal representatives of the Hospital in those proceedings may have some relevant information concerning insurance or non-insurance. In the circumstances a direction was issued by the Commission to the solicitors acting on behalf of the Hospital and the Authority to make inquiries of the solicitors then acting for the Hospital. Those solicitors were directed to inform the Commission and the worker’s representatives of the outcome of such inquiry on or before 25 September 2009.
Correspondence has been received by the Commission from the Hospital’s solicitors concerning compliance with that direction. Whilst that correspondence is not in evidence on this appeal I note that no application seeking leave to adduce any additional evidence has been made by any party since conduct of that teleconference.
Did the Arbitrator in err in finding the Hospital was uninsured?
It is accepted that the onus of proof with respect to the issue of non-insurance is on Ms Sadler. It is also accepted that the relevant standard of proof is that the Commission must be satisfied on the balance of probabilities that a case of non-insurance has been made out. The real issue raised on this appeal involves an examination of the standard of proof in the present circumstances which may be summarised as follows:
(i) Ms Sadler is required to prove a negative.
(ii) The relevant legislation places an obligation on the Hospital to provide Ms Sadler with details of workers compensation insurance cover upon her request.
(iii) The Authority is entitled to require the Hospital to furnish information following the giving of notice in accordance with section 141(2) of the 1987 Act.
The efforts of Ms Sadler’s solicitors to establish the existence or otherwise of a relevant policy of insurance have involved the following:
(i) Inquiries of the Hospital.
(ii) Inquiries of the Authority.
(iii) Inquiries of the Health Department of New South Wales.
(iv) Inquiries of a very large number of licensed insurers.
Whilst it is conceded by Ms Sadler at (7.12 of submissions accompanying Notice of Opposition) that some insurers contacted by mail have not replied to the correspondence and inquiries, I have reached the conclusion that the state of the evidence establishes that exhaustive inquiries have been conducted and that the existence of a policy of insurance has not been established. It is correct, as the Authority has submitted, that “inquiry and search” is not specified in the relevant provision concerning proof of non-insurance (section 140(2)(a) of the 1987 Act). However it is clear that such search and inquiry as has been conducted by Ms Sadler is both an obvious and necessary course to adopt in seeking to garner evidence on the issue of insurance. It is of significance, in my view, that those inquiries conducted by Ms Sadler have established the existence of insurance prior to 30 June 1971 and after 30 June 1976. Having regard to the comprehensive nature of the inquiries conducted I consider that it is open to inference that there was, on the probabilities, no insurance in the interval between June 1971 and June 1976.
I am fortified in this view having regard to that evidence which was considered significant by the Arbitrator, namely, correspondence from the Hospital addressed to Ms Sadler’s solicitors dated 26 February 2009. That correspondence establishes that no record could be found concerning the existence of a relevant policy and that the Hospital had made every endeavour and exhausted all avenues in an attempt to locate a policy. It is plainly open to be inferred that such a policy does not exist and I so find. I reach this conclusion notwithstanding the need for careful scrutiny and evaluation of the evidence having regard to the reasonable likelihood that a government agency such as the Hospital would have met its obligations with respect to insurance as imposed by the legislation. In reaching my conclusion I have had regard to that which was stated in Apollo above quoted and by that which was stated by Campbell JA in Rockcote Enterprises Pty Ltd v FS Architects Pty Ltd [2008] NSWCA 39 at [78]:
“78. If a plaintiff has the onus of proving a negative proposition, the fact that the defendant has greater means to produce evidence which contradicts that negative proposition, does not mean that the plaintiff ceases to have the onus of proof of that negative proposition. However, once the plaintiff establishes sufficient evidence from which, if that evidence is accepted, the negative proposition may be inferred, an evidential onus shifts to the defendant to adduce evidence that tends to show that the negative proposition is incorrect. If a defendant adduces such evidence, the plaintiff must then, as part of its overall burden of proof, deal with that evidence either by submission or argument. See generally Apollo Shower Screens Pty Ltd v Building and Construction Industry Long Service Payments Corporation (1985) 1 NSWLR 561; Hampton Court Ltd v Crooks [1957] HCA 28; (1957) 97 CLR 367 at [1]- [2], 371-2; Baiada v Waste Recycling & Processing Service of NSW [1999] NSWCA 139; (1999) 130 LGERA 52 at [55], 64-65.”
In the present matter the negative proposition inferred, that the Hospital held no relevant policy of insurance, is not demonstrated to be incorrect by any evidence adduced by it or indeed by the Authority. To the contrary, the inference is not in any way disturbed and, to an extent, is reinforced by that evidence adduced by both the Hospital and the Authority.
The Arbitrator’s reasoning as demonstrated in those paragraphs of his determination quoted at [44] above demonstrates, in my view, no error of law, and the factual conclusion reached by the Arbitrator concerning uninsurance is one with which I respectfully agree. On this appeal I find that the Hospital was uninsured in respect of its liability under the 1926 Act between 26 February 1973 and 2 November 1973.
As observed at [12] above the Arbitrator’s orders as recorded in the Certificate of Determination require some amendment. Such amendments will include a finding of non-insurance in accordance with the aforementioned reasons. It is also necessary to amend those orders to precisely state the liability of the respective Respondents to Ms Sadler’s original application.
It is the Commission’s practice when determining questions involving an uninsured employer to address all questions raised by the relevant legislation’s application to the facts in the one proceeding. It is for that reason that the form of application utilised in such matters by the Commission includes provision for the making of ancillary orders with respect to reimbursement of the Nominal Insurer by the uninsured employer. Such orders were sought in the Application as filed by Ms Sadler in March 2009.
The Authority has, on this appeal, given no careful consideration to the form of the orders made by the Arbitrator, and indeed the relief sought in the documentation filed with respect to this appeal demonstrates either a misapprehension of the nature of these proceedings or a disregard for the need to correct the form of orders regardless of the outcome of the appeal.
The form of the Arbitrator’s orders was raised with the parties at the teleconference at which time Mr Stewart, solicitor for Ms Sadler, agreed that an appropriate order should have been made against the Nominal Insurer. No submission was put on behalf of either the Authority or the Hospital with respect to that matter.
Given the nature of the proceedings and the fact that both the Authority and the Hospital were represented by the one solicitor and counsel, the subject of a possible conflict of duty was raised during the course of the teleconference. In response to a question I put to Mr Medak, solicitor for the Authority and the Hospital, as to whether the Authority intends to seek an order concerning reimbursement by the Hospital in the event that the award was confirmed on the appeal, Mr Medak stated that such an order was to be sought. The subject of a potential conflict was then raised in discussion. Mr Medak informed the Commission that each of his clients was aware of the issues involved and that they were content to maintain their instructions that they both be represented by his firm.
Whilst the Commission does not seek to go behind an assurance such as that given by Mr Medak it is clear that none of the parties have given any careful consideration to the form of appropriate orders including the appropriateness or otherwise of an order concerning reimbursement. The difficulties arising from potential conflict of duty have been foreshadowed during the course of the teleconference and I have concluded, on reflection, that it would be inappropriate to make the usual orders with respect to reimbursement on this appeal. I so conclude firstly upon the basis that no such order has been formally sought other than as appears in the standard form of application utilised by Ms Sadler and secondly because of my discomfort in making such an order when the Hospital has not been heard at all on that issue.
Before dealing with the question as to the appropriate form of orders there is a matter which, in my view, needs to be raised. There is an apparent inconsistency between the Authority’s position concerning the requirement of proof by Ms Sadler of non-insurance and its apparent agreement as revealed at the teleconference that the Hospital “…will meet any liability that flows regardless of what happens to [sic] this appeal” (per transcript of telephone hearing 15 September 2009 at page 10). At the time that last mentioned statement was made the solicitor for the Authority and Hospital denied that such agreement constituted an admission of non-insurance.
The Authority acts on behalf of the Nominal Insurer pursuant to section 154C(1) of the 1987 Act. The Nominal Insurer is committed to a “Model Litigant Policy”. The Nominal Insurer was established to facilitate payments to injured workers in circumstances where the employer is either uninsured or unidentified. Pursuant to section 142A(1) the Nominal Insurer is deemed to be the insurer in respect of the claims brought pursuant to Division 6 of Part 4 of the 1987 Act.
There can be no doubt that it is proper that the Nominal Insurer acts firmly and properly to protect its interests as is stated in the Model Litigant Policy. However in the present matter it is apparent that the manner of conduct of the defence of the claim has given rise to a probable departure from the standards set by that policy. Claims are to be dealt with promptly and the Nominal Insurer is not to cause unnecessary delay in the handling of claims and litigation. A perusal of relevant correspondence in this matter demonstrates that the Nominal Insurer’s stance and in particular its refusal to “progress the claim” has caused considerable delay to finalisation of the matter. The policy requires that the Nominal Insurer acts “consistently” in the handling of Claims and litigation. As I have observed above there appears to be considerable tension between the position taken concerning proof of non-insurance and the Nominal Insurer’s apparent insistence on obtaining reimbursement from the Hospital and the suggested agreement with respect to such reimbursement. I make the observation that it was open to the Authority to issue a Notice addressed to the Hospital requiring, pursuant to section 141(2) of the 1987 Act, all information relevant to the question of insurance at the relevant time. Had such a course been adopted and responses scrutinised at an early stage in the conduct of Ms Sadler’s claim, it may reasonably be expected that the hiatus in insurance that has been revealed after many years of investigation by those representing Ms Sadler would likely have been established and accepted soon after the claim was forwarded to the Uninsured Liability and Indemnity Scheme. That delay is regrettable and should not have occurred.
I make the observation in passing that the requirement of proof as prescribed by section 140(1)(a) of the 1987 Act has, in the present matter, given rise to a most burdensome task for Ms Sadler and those representing her. Having regard to the limited resources of most if not all injured workers it may be seen as appropriate by Parliament that the requirements of proof be reviewed. My respectful view is, as was historically the case, that a worker should be permitted to commence proceedings against the Nominal Insurer once, following inquiry, the worker is unable to confirm that the employer had obtained or was maintaining in force at the relevant time a policy of insurance under the Act.
DECISION
The appeal is unsuccessful. Having regard to the form of certain orders made by the Arbitrator it is appropriate on this review to amend the determination pursuant to section 352(7) of the 1998 Act.
Paragraph one of the Arbitrator’s determination dated 27 May 2009 is revoked and the following determination is made:
1. The Employer North Coast Area Health Service (formerly Hastings District Hospital) was not insured as required by the Workers Compensation Act 1926 at the time of Maureen Kay Sadler’s injury.
2. Paragraphs two, three and four of the Arbitrator’s determination are confirmed.
The Arbitrator’s determination is amended to include the following order:
5. That the WorkCover Authority of New South Wales, acting for the Workers Compensation Nominal Insurer, pay to the Applicant, Maureen Kay Sadler the compensation and costs awarded against the North Coast Area Health Service from the Workers Compensation Insurance Fund established pursuant to section 154D of the Workers Compensation Act 1987.
COSTS
The WorkCover Authority of New South Wales, acting for the Workers Compensation Nominal Insurer, is to pay Maureen Kay Sadler’s costs of this appeal.
Kevin O’Grady
Deputy President
9 October 2009
I, MARIE JOHNS, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF KEVIN O’GRADY, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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