WorkCover Authority v Riordan
[2003] NSWWCCPD 13
•8 May 2003
APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
__________________________________________________________________
| CITATION: | WorkCover Authority v Leonard Patrick Riordan [2003] NSW WCC PD 13 |
| APPELLANT: | WorkCover Authority of NSW |
| RESPONDENT: | Leonard Patrick Riordan |
| FILE NO: | WCC 1732-2002 |
| DATE OF DECISION: | 8 May 2003 |
| PRESIDENTIAL MEMBER: | Dr Gabriel Fleming Deputy President |
| DECISION UNDER APPEAL: | Appeal Against Decision of Arbitrator. $5000 Threshold. Award Against Non-Legal Entity. Claim under ULIS. Incorrect Respondent, Joinder of WorkCover, Jurisdictional Error. Denial of Procedural Fairness. Arbitrator determined On the Papers. Leave to Appeal. |
| DATE OF DECISION UNDER APPEAL: | 24 December 2002 |
| HEARING: | Leave Determined On the Papers. |
| REPRESENTATION: | Appellant: Bernadette Grant, Solicitor, WorkCover Authority of NSW |
| Respondent: Sommerville and Co, Solicitors. | |
| ORDERS MADE ON APPEAL: | The Arbitrator has failed to make a determination in accordance with the Workplace Injury Management and Workers Compensation Act 1988. The matter should be referred to the Registrar for allocation to an Arbitrator. |
THE APPEAL
On 22 January 2003 the WorkCover Authority of New South Wales (‘the Appellant’ or ‘the Authority’) lodged an ‘Application to Appeal Against a Decision of an Arbitrator’ in the Commission. The appeal named Leonard Patrick Riordan as the Respondent (the Applicant in the original proceedings). The original proceedings identified Selby Biolab Pty Limited (previously known as Selby Scientific Pty Limited) as ‘the Respondent’ and the WorkCover Authority of NSW as ‘the Insurer to the Application under the Uninsured Liability and Indemnity Scheme (ULIS)’ as ‘the Insurer’.
The Certificate of Determination issued by the Commission on 3 January 2003, sets out the decision of the Arbitrator as follows:
i.That the Respondent pay the Applicant’s section 60 past medical expenses under the Workers Compensation Act 1987 in the amount of $1899.37 as filed and as set out in the Statement of Reasons.
ii.That the Respondent pay the Applicant’s costs of the Application on a reasonable party and party basis as agreed or assessed.
A brief statement of reasons was attached to the decision.
The Appellant seeks leave to give fresh evidence as to the identity of the relevant insurer.
The Appellant states that the outcome of the appeal should be that:
1.The correct decision in this matter after consideration of the fresh evidence . . . is to allow the Applicant to withdraw the current claim. For the Applicant to join the insurer on risk whilst the Applicant was employed at Beckman Instruments following his leaving the employ of the alleged uninsured Respondent.
2.If the Applicant is not agreeable to this course of action then the Commission should dismiss the current claim and direct that the Applicant join Beckman Instruments as a Respondent so that at worst for the Appellant its proportion of liability can be determined. However, on its face it appears that liability may lay completely with the relevant insurer on risk for Beckman Instruments.
The Respondent submits that the Commission should confirm the orders made by the Arbitrator and make an additional order against the Uninsured Liability Indemnity Scheme (ULIS).
JURISDICTION TO HEAR THE APPEAL
Before proceeding to hear the appeal the Commission must determine whether the application meets the requirements of section 352 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the Act’), as follows:
352 Appeal against decision of Commission constituted by Arbitrator
(1) A party to a dispute in connection with a claim for compensation may, with leave of the Commission constituted by a Presidential member, appeal to the Commission as so constituted against a decision in respect of the dispute by the Commission constituted by an Arbitrator.
(2) The Commission is not to grant leave to appeal unless the amount of compensation at issue on the appeal is both:
(a)at least $5,000 (or such other amount as may be prescribed by the regulations), and
(b)at least 20% of the amount awarded in the decision appealed against.
(3) If the Commission refuses to grant leave to appeal, the Commission must state reasons for the refusal in writing to the parties.
(4) An appeal can only be made within 28 days after the making of the decision appealed against.
(5) An appeal under this section is to be by way of review of the decision appealed against.
(6) Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against may not be given on an appeal to the Commission except with the leave of the Commission.
(7) On appeal, the decision may be confirmed or may be revoked and a new decision made in its place.
(8) In this section, decision includes an award, interim award, order, determination, ruling and direction.
The appeal has been made within 28 days of the making of the decision appealed against.
The threshold criteria in section 352 (2) are in dispute.
A number of substantive issues are in dispute, as set out below. The identity of the relevant insurer in the proceedings and the form of the Arbitrator’s orders are the most significant issues.
ON THE PAPERS REVIEW
Both parties have stated that they do not consider this matter suitable for determination on the papers, although whether this view applies to the issue of leave as well as the substantive issues in the appeal is not clear. I do not accept that the issue of leave cannot be determined on the papers.
In accordance with the President’s Practice Direction, 6B of 2002, I am satisfied that sufficient information has been supplied in connection with the application for leave to appeal to enable me to determine that issue without holding a conference or formal hearing i.e. ‘on the papers’ (section 354(6) of the Act). For reasons that should become clear from this decision it has been necessary to examine the substantive issues in the dispute in order to consider the matter of leave and of the jurisdiction of the Commission to hear the appeal.
BACKGROUND TO THE DECISION UNDER REVIEW
Mr Riordan has been employed as an Instrument Technician since 1965. The correct corporate identity of his employer over this period is central to this dispute. He believed that he commenced employment with H B Selby & Co in approximately 1965. Some time prior to 1979 the company became known as Selby Scientific or Selby Scientific and Medical (‘Selby Scientific’).
Between 1967 and 1978 his duties as an Instrument Technician involved the servicing, installation and maintenance of scientific equipment, specifically Beckman Ultracentrifuges. This involved significant exposure to ultraviolet light. Mr Riordan claims that this exposure is the cause of skin cancers that have appeared on his chest, face, forearms, hands and back. He has been diagnosed with actinic elastosis, or skin lesions, which are permanent and for which he will need future treatment. He has had several operations to have these lesions removed and has scarring on his face and body as a result. His application to the Commission was for past medical expenses in relation to these procedures in the total sum of $1899.37.
Mr Riordan left Selby Scientific in about 1979 for eleven months and then rejoined the company. He worked for Beckman Coulter Australia Pty Ltd from about 1978-1981. He states in his application that he has not worked with the Beckman Ultracentrifuges since about 1981.
On 10 November 2001 Mr Riordan lodged a claim with the ULIS, who denied liability on 26 April 2002.
PROCEEDINGS BEFORE THE ARBITRATOR
The telephone conference in this matter was held on 18 October 2002, in accordance with the ‘Registrar’s Guideline for Conciliation and Arbitration in the Workers Compensation Commission’. Directions were issued to vacate the scheduled conciliation and arbitration listed for 28 October 2002 to allow Mr Riordan to lodge an application for lump sum compensation for permanent impairment on or about 11 December 2002. It was intended to join both applications upon the filing of the lump sum application.
At the telephone conference the Respondent advised that it was continuing inquiries to identify the insurer on risk, which could lead to the need to join another party to the proceedings.
The Applicant worker did not comply with the directions, there being no lump sum application filed.
The Arbitrator issued further directions on 18 December 2002 to the effect that the matter was to be determined on the papers. There is no record on the Commission file to substantiate that this direction was ever communicated to the parties. The Authority submits that it did not receive this direction until the matter had been determined and a copy of the ‘Certificate of Determination’ was received on 9 January 2003.
SUBMISSIONS ON THE APPEAL
Both parties relied upon submissions made to the President in an ‘Application to Refer a Question of Law’ filed in these same proceedings. I have taken those submissions into account. The Appellant asserts that the amount of compensation at issue is: over $5000.00 and 100% of the amount awarded on the decision appealed against. The Appellant claims that the total value of the Applicant’s claim in this matter is large and includes past medical and associated expenses, pending claims under section 66 and 67 and likely ongoing section 60 expenses and future weekly payments.
The Appellant submitted that the amount of compensation at issue on the appeal is a value threshold that must be considered in the context of the practical impact or extent of prejudice to the Appellant. This prejudice is measured as an amount of compensation payable under the Acts flowing from the matters determined by the Arbitrator, rather than the value of a specific benefit, award or service the subject of the decision of the Arbitrator (Appellant’s submissions on the question of law application). The Appellant relied upon the decision in the matter of Moller v Roy (1975) 132 CLR 622 at 625-626 to support this proposition.
The Respondent worker also relied upon Moller v Roy (1975) 132 CLR 622, but for the proposition that where the statute sets a specific amount as defining the appeal jurisdiction then there is no room for valuing the appeal or determining the extent of the prejudice produced by the judgment in order to determine whether the appeal is competent (at 626). The Respondent argued that the amount in issue in the appeal is the amount claimed and awarded by the Arbitrator, i.e. $1899.37, this being the totality of the claim. Any future claims that may or may not be made are not relevant to this particular appeal. To find otherwise, argued the Respondent, would be effectively to allow all claims to meet the test in section 352(2) of the Act.
The Appellant’s submissions as to why leave to appeal should be granted were lengthy and at times repetitive, addressing many of the substantive issues. They may be summarized as follows:
1.If the decision stands, the Appellant will face a substantial injustice because the worker’s condition is likely to deteriorate and result in future claims. At the same time the Appellant was not the last relevant employer in the work to which the Applicant’s injury is attributable.
2.The decision of the Arbitrator to exercise his discretion to determine the matter on the papers was made without due regard to the complexity of the matter and without regard to evidence that had been foreshadowed by the Appellant in the ‘Reply to the Application’.
3.The Arbitrator failed to properly apply the President’s Practice Direction No.1 of 2002 in relation to determination of the matter on the papers. The matter did not meet any of the criteria for suitability of a matter for determination on the papers.
4.The Arbitrator failed to establish on reasonable and objective grounds that the matter was suitable for determination on the papers.
5.The Arbitrator failed to consider whether the material upon which the Appellant had indicated in its Reply would become available, had, in fact, become available and if not, whether that was due to some failure on the part of the worker.
6.The Arbitrator failed to inform the Appellant of the revocation of his Directions of 29 October 2002 and the making of a direction to determine the matter on the papers on 18 December 2002.
7.The Arbitrator failed to take in to account the financial implications of his decision on liability for the Appellant.
8.The Arbitrator failed to consider whether the relevant insurer on risk had been identified or whether the Appellant was taking steps to so identify.
9.The Arbitrator failed to consider whether the Applicant had established whether the Respondent was uninsured at the time of the injury.
10.The Arbitrator took into account an irrelevant consideration by relying upon the Appellant’s failure to file any material with the Commission following the teleconference to justify determination of the matter on the papers.
11.The Arbitrator took into account an irrelevant consideration by relying upon the Appellant’s failure to take any further step in the proceeding in relation to the foreshadowed lump sum claim.
12.The Arbitrator took into account an irrelevant consideration by relying upon the failure of the Appellant to identify an insurance policy for the worker for the relevant period.
13.The Arbitrator made the decision prior to hearing all relevant facts and without sufficient relevant factual material to determine the matter according to law.
14.The Arbitrator has purportedly made an award against two distinct legal entities, both of which appear to be non-existent. The order is thus likely to be unenforceable against either of those entities or the Authority on behalf of ULIS.
15.The Arbitrator purported to make an award against a non-existent Respondent. The legislation requires ULIS to be joined as a separate Respondent to the proceedings and for orders to be made against ULIS so that they are capable of enforcement.
In reply the Respondent worker’s legal representative submitted that:
1.Since the determination he has become aware that the worker was employed by Beckman Coulter Australia Pty Limited for 13 months between October 1980 and November 1981. The Authority informed the Applicant on 14 February 2003 that an insurer could not be located for this company prior to 1988.
2.The matter was suitable for determination on the papers given that it related to a claim that was small in value and was relatively uncomplicated.
3.The Applicant worker made all necessary searches and inquiries as to the relevant insurer for the relevant time. At the telephone conference the Authority advised that the identity of the insurer could not be established and that inquiries were underway. No results were produced prior to the Arbitrator’s determination.
4.The Arbitrator was entitled to make a determination given that the Respondent failed to produce further information.
It is clear from the parties’ submissions that information about the identity of the correct Respondent has been problematic, both before the application was filed in the Commission and since the determination of the Arbitrator has been made. In summary, the evidence of both parties on this issue is as follows:
1.Selby’s Scientific Pty Ltd was deregistered on 2 September 1983. The Authority has no record of a workers compensation insurance policy held in this name for the period 1967-1978.
2.Selby Scientific Limited was registered as a company on 23 August 1996 and deregistered on 9 August 2002. It carried on business under the registered business name of Selby-Biolab between 1 September 1996 until it was deregistered, date unknown. The Authority has a record of a worker’s compensation insurance policy held in the name of Australian National Ltd-Selby Scientific relevant to a date of injury on 20 September 1984.
3.Beckman Coulter Australia Pty Ltd, formerly known as Beckman Instruments (Australia) Pty Limited, was registered in NSW on 13 October 1980. It held workers compensation insurance with Zurich and later NRMA from 30 June 1988 and continuing. Selby Scientific Pty Ltd was sole agent for Beckman Coulter Australia Pty Ltd prior to 1981.
DISCUSSION AND FINDINGS
Has a decision been made?
The first question to be answered is whether I have jurisdiction to hear this appeal. Whether or not the Arbitrator has fallen into error, and the nature of that error, is central to the question of whether or not the Arbitrator has exercised his jurisdiction to make any decision at all. Section 352 (1) provides for appeal against a decision in respect of the dispute.
It appears that the following matters are not in dispute:
i.The Arbitrator has not made orders against a recognized legal entity. Selby Biolab Pty Limited does not exist. Selby Biolab was the registered business name for Selby Scientific Limited however both the business name and the company no longer carry on business. Selby Scientific Pty Ltd is also deregistered.
ii.The Arbitrator did not have sufficient information to determine the correct Respondent in the matter. Since the determination, evidence of the worker’s employment with Beckman Coulter Australia Pty Limited has come to light.
The Uninsured Liability and Indemnity Scheme is created by Division 6 of Part 4 of the Workers Compensation Act 1987. It is a statutory scheme that provides for payment of workers compensation and ex gratia payments from the WorkCover Authority Fund for claims against employers who are found to have been uninsured at the relevant time in relation to a claim by an employee for workers compensation. The Act provides who is eligible to make a claim and the manner of making a claim under the scheme. It also provides that the Authority may pursue the employer for reimbursement for payments made under the scheme. The Authority does not become an ‘insurer’ but administers this particular statutory scheme. Section 144 of the Workers Compensation Act 1987 provides that if a claimant under the Scheme is dissatisfied with a decision in relation to the claim he or she may apply to the Commission for determination of the claim.
The Authority must be joined in the proceedings as a Respondent and the Authority may join any person who may be liable in the proceedings. The original Application in this matter, which was before the Arbitrator, identified ‘Selby Biolab P/L previously know as Selby Scientific P/L’ as the employer and ‘WorkCover, ULIS’ as the insurer. This is sufficient to comply with section 144 (2).
Difficulties arise because the Certificate of Determination issued pursuant to section 294 of the Act, does not identify the Authority as a Respondent in the proceedings. It is identified as the Insurer. While this is an error in the Certificate of Determination, it is clear from reading of the statement of reasons and the Certificate of Determination together, that the Authority was properly a Respondent in the matter and that it was intended that the orders be made against it. The attached Statement of Reasons includes the words (WorkCover Authority of NSW) following the name of the Respondent.
If it were appropriate to make an order against the Authority, then the form of this order could be corrected pursuant to section 294(3) of the Act using the Registrar’s power to correct an ‘obvious error’, and to identify the Authority as a ‘Respondent’ in the Certificate of Determination. However the Applicant worker must establish on the evidence that the relevant employer was in fact uninsured before an order can be made against the Authority, to claim on the ULIS (Hickson v the EFCO Property Pty Ltd and others, Burke J, Compensation Court, 26 October 1998, Unreported). I am not satisfied that in this case the Arbitrator has turned his mind to the preconditions for the making of an order against the Authority.
The orders as they currently stand in the Certificate of Determination are not, on their face, enforceable against the Authority nor any legal entity. The result in my view is that the Arbitrator has not exercised his power to make a determination of the matter. The Arbitrator had no jurisdiction to make an order against a non-legal entity and in purporting to do so has made a jurisdictional error. As the High Court stated in Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11 (at paragraph 51): “A decision that involves jurisdictional error is a decision that lacks legal foundation and is properly regarded, in law, as no decision at all”. It is a pre-condition to the making of a determination against a Respondent by an Arbitrator that the Respondent is an employer against whom a claim may be made under the Workers Compensation Act 1987. The result is that no valid decision has been made and the matter remains to be properly determined according to law.
The $5000 and 20% threshold test
Leave to appeal could not be granted even if the Arbitrator were found to have made a valid decision. I do not accept the Appellant’s submissions in relation to the threshold requirements of section 352(2). The amount at issue must be determined by reference to the amount of compensation at issue in the proceedings before the Arbitrator at first instance (Sheridan v Coles Supermarkets Australia Pty Limited [2003] NSW WCC PD 3). The section specifies an ‘amount’ and I do not accept the submission that this amount is virtually at large, depending upon the totality of a claim that may or may not ever be made, or indeed met. To adopt the construction suggested by the Appellant would be to effectively deprive the threshold criteria in section 352(2) of any import. The section does not allow for the consideration of matters such as the extent of the prejudice to the Appellant who is denied the right of appeal. In my view the decision in Moller v Roy (1975) 132 CLR 622 supports this view.
The total amount of compensation at issue in the appeal is $1899.37. This does not meet the threshold of $5000.00 and consequently leave to appeal the decision should, had a proper decision been made, be refused.
Was there a denial of procedural fairness?
Many of the Appellant’s submissions on the appeal amount to a claim that it was denied procedural fairness. This includes the alleged failure to notify the Appellant of the Direction to determine the matter on the papers, the failure to comply with the President’s Practice Direction No 1 and the failure to allow the Appellant time to determine the identity of the relevant insurer.
The content of procedural fairness will depend upon the nature of the decision under review (Kioa v West (1985) 159 CLR 550). The Commission is bound by general law principles of procedural fairness and by the statutory provisions governing its procedure. The Act expressly modifies the content of procedural fairness as it applies to the Commission. Section 354 of the Act, provides as follows:
354 Procedure before Commission
(1) Proceedings in any matter before the Commission are to be conducted with as little formality and technicality as the proper consideration of the matter permits.
(2) The Commission is not bound by the rules of evidence but may inform itself on any matter in such manner as the Commission thinks appropriate and as the proper consideration of the matter before the Commission permits.
(3) The Commission is to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms.
(4) Proceedings need not be conducted by formal hearing and may be conducted by way of a conference between the parties, including a conference at which the parties (or some of them) participate by telephone, closed-circuit television or other means.
(5) Subject to any general directions of the President, the Commission may hold a conference with all relevant parties in attendance and with relevant experts in attendance, or a separate conference in private with any of them.
(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.
(7) An assessment or determination is to be made by the Commission having regard to such information as is conveniently available to the Commission, even if one or more of the parties to the assessment or determination proceedings does not co-operate or ceases to co-operate.
(8) . . .
The President has issued a Practice Direction, No. 1 of 2002, dealing with the procedure for the determination of matters on the papers. This provides, in part, that:
When an application is filed the Registrar may refer it to an Arbitrator. The Arbitrator will decide whether or not the matter may be suitable for determination on the basis of the documents that have been filed by the parties at that time.
Each matter referred to an Arbitrator will be the subject of a preliminary telephone conference. At this conference the Arbitrator will address a number of procedural issues including whether, in the particular circumstances of the case, to proceed to determine the matter on the papers. The Arbitrator will consider any objections raised by the parties. The Arbitrator will then advise the parties as to whether the matter is to be determined on the papers or whether the conciliation conference and arbitration hearing will proceed as scheduled.
The telephone conference in this matter was not recorded, nor was it required to be by standard Commission practice. The Arbitrator’s notes, on the Commission file that accompany the Directions issued following the telephone conference, do not refer to any discussion of the possible determination of the matter on the papers. The notes do make clear that the Arbitrator was aware that the Authority was in the process of making further inquiries as to who was the insurer on risk and that these inquiries could result in the identification of an alternative or additional Respondent to the Application.
There is no evidence to show that the Arbitrator’s Direction of 18 December 2002 was communicated to the parties. In contrast to the earlier Directions, there are no copies of correspondence on the Commission’s file indicating that the Direction has been sent. I am satisfied that it was not sent and therefore the parties were not advised that the matter was to proceed to determination on the papers. This was a breach of procedural fairness. It denied the Appellant, in particular, the opportunity to put submissions as to whether it was the proper Respondent, and was wholly or partly liable for Mr Riordan’s claim. A denial of procedural fairness is an error of law going to jurisdiction (Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11). In this matter this is a further ground to support the finding that there has been a failure to properly exercise the jurisdiction resulting in no valid decision being made.
There was also a breach of the President’s Practice Direction No.1 of 2002. The parties are entitled to rely on published Practice Directions as authority for the way in which the Commission will deal with matters. The Arbitrator was on notice of the difficulties in identifying the relevant insurer and may well have decided not to proceed on the papers, or come to a different decision, had the Appellant made persuasive submissions on the issues after having been informed of the Arbitrator’s intention. It seems clear, in hindsight, that the Arbitrator would, at least, have framed the actual orders in the Certificate of Determination differently.
In these circumstances I am not satisfied that the Arbitrator has in fact exercised his jurisdiction to determine the matter under the Act. The matter should be returned to the Registrar for allocation to an Arbitrator for determination. In the circumstances of this matter I see no barrier to returning the matter to the Arbitrator who purported to make the original decision.
DECISION
The Arbitrator has failed to make a determination in accordance with the Workplace Injury Management and Workers Compensation Act 1988. The matter should be referred to the Registrar for allocation to an Arbitrator.
COSTS
No order as to costs has been sought.
Dr Gabriel Fleming
Deputy President
I certify that that this is a true and accurate record of the reasons for decision of Deputy President Dr Gabriel Fleming, Workers Compensation Commission.
Registrar
Date: