WorkCover Queensland v Collett
[2000] QDC 322
•3 November 2000
DISTRICT COURT OF QUEENSLAND
CITATION: WorkCover Queensland v. Collett [2000] QDC 322 PARTIES: WORKCOVER QUEENSLAND (Plaintiff/Respondent)
v.
STANLEY WILLIAM COLLETT (First Defendant)
And
WENDY FAITH COLLETT (Second Defendant/Appellant)FILE NO/S: Appeal 2219 of 1999
Plaint 20659 of 1998DIVISION: PROCEEDING: Appeal ORIGINATING COURT: Magistrates Court Brisbane DELIVERED ON: 3 November 2000 DELIVERED AT: Brisbane HEARING DATE: 6 September 2000 JUDGE: McGill DCJ ORDER: Appeal allowed; judgment set aside; summons dismissed; appellant to have unconditional leave to defend; respondent to pay appellant’s costs of the application in the sum of $304 and the appellant’s costs of the appeal to be assessed. CATCHWORDS: WORKERS COMPENSATION – insurance – premium – liability of employer to pay – whether person who is no longer employed liable if policy not renewed – Workers' Compensation Act 1990 s.44, 49; Workers Compensation Regulation 1992 s.14.
WORKERS COMPENSATION – Insurance – liability of employer for unpaid premium – whether defendant can dispute that he or she was an employer at the relevant time – WorkCover Queensland Act 1996 ss 58, 487, 490.
Ex Parte Workers' Compensation Board of Queensland [1982] Qd.R. 739 – cited
Re: K D Morris & Sons Pty Ltd [1978] Qd.R. 318 - cited
Rees v. State Government Insurance Office (Queensland) [1979] Qd.R. 369 – considered
State Government Insurance Office v. Rees (1979) 53 ALJR 752 - cited
Re: Hewson & Douglas Pty Ltd (No. 2) [1994] 1 Qd.R. 42 -
Considered
REB Engineering Pty Ltd v. Workers' Compensation Board of Queensland [1996] 1 Qd.R. 196 – considered
Queensland Trusts and Frame Pty Ltd v. Grenadar Constructions No. 2 Pty Ltd [1992] 2 Qd.R. 428 – followed
Coffey v. Secretary, Department of Social Security (1999) 86 FCR 434 - distinguishedCOUNSEL:
SOLICITORS:
R.C. Schulte for the respondent
P.J. Lynch of Lynch & Co for the appellant
Jones King Lawyers for the respondent
By a plaint filed in the Magistrates Court in Brisbane on 22 July 1998, WorkCover Queensland claimed against two defendants the amount included in a premium renewal notice dated 2 July 1997 as outstanding Workers’ Compensation premiums, which it was alleged the defendants had failed to pay. One of the allegations in the particulars annexed to the plaint and summons was that “the defendants were an employer as defined by the Act”: para. 1.4. On 8 September 1998 the second defendant filed an Entry of Appearance and Defence alleging that as from 1 July 1992 she had had no part in “this operation” as a result of certain changes that were made at that time and since then she has had no part in “the business”. Judgment in default was signed against the first defendant on 5 November 1998.
On 30 March 1999, the plaintiff filed a judgment summons seeking judgment against the second defendant. In response to that application the second defendant filed an affidavit which admitted that on about 17 June 1985 she and the first defendant had applied for a workers' compensation policy for a business they conducted under the name of “Rural Distributors”. She said that she and the first defendant ceased operating the business in 1989, but they began another business called “Regal Equipment” which was operated until about 1 July 1992 when it was sold to a company which thereafter conducted the business. She has not subsequently been involved in any business, although the first defendant commenced to carry on a new business on about 4 June 1996. She said that since 1 July 1992 she has not been an employer or employed any staff in connection with a business operated by her.
On 7 May 1999, the application came before a Stipendiary Magistrate who rejected an argument that the application could not be made because of delay, and continued:
“In relation to the merits of this case, the second defendant claims that she was not an employer within the meaning of the Act. She cites the fact that oral notice was given to the plaintiff but this in my view does not comply with Regulation 14. I find myself in agreement with Mr. Costello [for the plaintiff] in that the proper forum is the Industrial Magistrates Court by way of review proceedings as specified in the Act. I hold that the second defendant has not shown cause and further, I hold that the plaintiff should be at liberty to enter judgment against the second defendant.”
There is on the file a copy of the plaintiff’s outline of submissions which include the proposition that:
“Had the second defendant been at all concerned as to the accuracy of the assessment, she had an opportunity to have the assessment reviewed pursuant to the provisions of the 1996 Act (Chapter 9) … In the absence of any application for a review, s.526 of the WorkCover Queensland Act 1996 renders the amount payable as a premium, additional premium or charge, a debt due to WorkCover and recoverable as such. The second defendant has failed to exercise the right of review under Chapter 9 of the 1996 Act. Accordingly, she is prevented from challenging the quantum of the notice as she is out of time and as the power to review is conferred on an Industrial Magistrate, which has exclusively jurisdiction: s.311 Workplace Relations Act 1997. This honourable court therefore lacks jurisdiction to undertake what is, in effect, a review under Chapter 9 of the 1996 Act.”
In summary, the second defendant sought at the hearing to raise as a triable issue the question of whether she was at the relevant time an employer for the purposes of the Act, on the basis that if she was not an employer she was not liable for the workers' compensation premium. However, the Magistrate accepted the argument on behalf of the plaintiff that that issue was not open to be litigated in these proceedings, because it could only be disputed by way of a review before an Industrial Magistrate in accordance with Chapter 9 of the Act. Accordingly, he gave judgment for the amount claimed against the second defendant. The second defendant has appealed to this court against that order.
The Operation and Scope of Chapter 9 of WorkCover Queensland Act 1996
The only part of Chapter 9 which might be relevant is Part 1 dealing with policies and premiums; Parts 2 and 3 are only of concern to self insurers or self raters, and it was not suggested that the second defendant fell into either of these categories, and Part 4 is concerned with review of decisions dealing with claims for compensation. In Part 1, Division 1, providing for internal review of decisions, only applies to a decision made under ss. 58, 60, 61, 62, 68 or 74, and provides a right to an internal review only to “an employer who is aggrieved by the decision”: s.487 (emphasis added). The reviewable decision under s.58 is the decision setting the premium payable under a policy (subsection (1)); an employer to whom a premium notice is given must pay the premium as assessed by the due date: subsection (7). In my opinion, what is decided by WorkCover under s.58 is the quantum of the premium, and not whether or not a particular person is an employer.
Section 60 is concerned with circumstances under which WorkCover must reassess the premium, but again this is concerned with the quantum of the premium. Section 61 is concerned with a decision on an application by an employer to waive or reduce a penalty because of extenuating circumstances, and does not apply here. Section 62 is concerned with a decision by WorkCover on an objection by an employer to a default assessment under that section, and there is no suggestion that there was any such objection. Section 68 is concerned with a decision by WorkCover on an application from an employer to waive or reduce an additional premium, and again there is no suggestion that there was any such application in the present case. Section 74 only applies to a self rater, and is the provision which gives a self rater the opportunity to object to a decision about the amount of premium payable. In my opinion, none of these provisions apply to this case, and therefore there could have been no application for a review of any relevant decision. In any case, only an employer can apply for a decision to be reviewed under s.487. That is not a course which appears to be open where a person asserts that he or she is not an employer.
Division 2 gives a right of appeal to an industrial magistrate, but only to “an employer who is aggrieved by a review decision” under Division 1 or a decision under ss.81 or 92: s.490. Section 81 is concerned with a refusal of an application to be a self rater, and s.92 is concerned with a decision to cancel a registration as a self rater. Neither of these are relevant in the present case.
In my opinion, therefore, there was no scope for an appeal to an Industrial Magistrate, or indeed any form of review under Chapter 9, from a determination by WorkCover that a particular person was an employer for the purposes of the Act. Only an employer can appeal to an Industrial Magistrate, and only from the outcome of a review process initiated by an employer. In my opinion, the issue of whether or not the second defendant was an employer at the relevant period is not one which could have been the subject of review and appeal under Chapter 9, so it cannot be correct to conclude that Chapter 9 provides an exclusive mechanism for resolving that question.
I might add that I can find nothing in the Act which makes a notice of assessment of premium conclusive evidence of the liability to pay the amount of the premium so assessed by the person named in the notice as the employer, nor can I find any provision which makes the jurisdiction of the Industrial Magistrates court on this issue exclusive. The position is simply that the statute provides a mechanism for review of certain decisions which leads to the Industrial Magistrates Court, and thus that court has exclusive jurisdiction to perform that review function under Chapter 9. But it does not follow that that court is the only court which can decide whether or not a person is an employer. There is no equivalent to s.177 of the Income Tax Assessment Act 1936 (Cwth), the effect of which has been determined by the High Court: F J Bloemen Pty Ltd v. Commissioner of Taxation (1981) 147 CLR 360, where it was held that a court dealing with enforcement proceedings was not deprived of jurisdiction to decide questions by the section, but the effect of the section was that once the appropriate document was produced, the taxpayer was precluded from contesting that the Commissioner had made an assessment, or that in making the assessment he had complied with the statutory formalities: p.375. The taxpayer was entitled to dispute his substantive liability to tax only in proceedings then under Part 5 of the Act.
It was submitted on behalf of the respondent that the Act provides a regime for the resolution of disputes which is a code. It may well be that the mechanism for disputing a decision by way of assessment of premium is a code in the sense that the legislation provides a mechanism by which an assessment decision can be challenged, and provides for the recoverability of the amount assessed as a premium. The terms of s.58(7) of the 1996 Act suggest that an employer is liable to pay the amount of the premium assessed and stated in a premium notice given to the employer by the due date, which suggests that the amount recoverable from the employer is the amount of the premium in fact assessed, rather than the amount which ought to have been assessed.
It may well be that the structure of the Act is such that it is not possible to challenge an assessment decision other than under the mechanism provided for in the Act, although some other means of challenge may be available, for example, under the Judicial Review Act. But if the amount recoverable from the employer is the premium in fact assessed by WorkCover, it would be no defence to show that WorkCover ought to have assessed a different amount. However, where the liability to pay such a premium is one which falls only on an employer, I cannot see why it would not be a defence to show that the defendant was not an employer, or for that matter, not the employer referred to in the premium notice. There may be other possible defences. But where the issue sought to be raised by the defendant is not one which can properly be raised under Chapter 9, the proposition that an appeal under Chapter 9 is the only way in which the issue can be litigated is, in my opinion, plainly not correct.
There was cited to the Magistrate two earlier decisions, that of Mr. Gribbin SM in WorkCover Queensland v. Parkin (Plaint 31215 of 1998) and that of Mr. Hyne SM in WorkCover Queensland v. Stewart (Plaint 29331 of 1998). The former decision was one where the defence sought to challenge the manner of assessment, that is the quantum of the premium payable under the policy. It does not appear that there was any challenge to the proposition that the defendant was an employer at the relevant time, or was liable as employer under the policy for some amount. The latter decision was, it seems to me, to the same effect. Each concluded that the court could not in such proceedings go behind the face of the notice and determine if quantum was correct since under the Act that had to be done by appeal to an Industrial Magistrate. The issue seems to have been the same in both cases, and not to be the issue which is raised in the present matter. In my opinion, the Magistrate ought to have distinguished those decisions. It is unnecessary for me to express any conclusion to whether or not they are correct in respect of the issue they decided.
In my opinion, the reason given by the Magistrate for rejecting this argument on behalf of the second defendant was wrong. However, it does not necessarily follow that the appeal should succeed. It may be that, on a correct application of the appropriate principles and in the light of material, the respondent/plaintiff was entitled to judgment, although for different reasons. One of the propositions relied on on behalf of the plaintiff was that the second defendant was an employer at one time and a policy was issued to the second defendant (and first defendant) at one time, and that that policy had never been validly terminated in accordance with Regulation 14, so that it remained in force and the second defendant was therefore still liable to pay premiums under the policy as assessed by the plaintiff, even if she had in fact ceased to employ anyone. In order to determine whether this is so, it is necessary to consider the structure of the legislation and the terms of the relevant provisions.
Unfortunately, the legislation has undergone various changes during the relevant periods. At the time when the original application was made in 1985, the applicable legislation was the Workers' Compensation Act 1916 (“the 1916 Act”). That was replaced by the Workers' Compensation Act 1990 (“the 1990 Act”) which in due course was replaced by the WorkCover Queensland Act 1996 (“the 1996 Act”). To make matters worse, all of this legislation has been frequently and at times extensively amended.
The 1916 Act
By s.8 of the 1916 Act[1]:
[1]Consolidations of the 1916 Act are difficult to locate now. Fortunately the 1916 Act in its final form is available as part of the CCH Workers’ Compensation Service. This is quoted from Vol 6 of the 1962 reprint, and is from the Act as at 31 March 1966; by 1990 the only changes were that “Board” had replaced “Office”, and s.19A continued: “or as a civil debt in a court of competent jurisdiction.”
“Every employer shall insure himself and keep himself insured with the Office against all sums for which, in respect to injury to any worker employed by him, he may become legally liable …”
Subsection (2) provided:
“An employer shall fail to comply with this section –
(a) If, immediately after he commenced to employ a worker or workers, he did not make application in the prescribed form to the Office for a policy of accident insurance …; or
(b) if, having applied as prescribed by paragraph (a) of this subsection for a policy of accident insurance, and having obtained such a policy, he has not maintained it in force at all times whilst he is an employer by –
(i) in respect of workers employed by him making at the time and in the manner prescribed any and every prescribed annual or other periodical return; and
(ii) paying at the time and in the manner prescribed, any and every premium prescribed to be payable in respect of such policy or the renewing thereof for any year or other period of time.”
Section 19A provided:
“Every premium payable under this Act when it becomes due and payable, and every amount recoverable by the Office by virtue of this Act in respect of compensation paid to an uninsured worker, shall be deemed to be a debt due to His Majesty and payable to the Office, and should be recoverable by complaint under this Act.”
The schedule to the Act contained a provision for default assessment in the case of an employer who had failed to comply with s.8(1), and provision for a penalty for late payment of the premium. Some discussion of the number of relevant provisions of the Act may be found in the judgment of G N Williams AJ (as His Honour then was) in Ex Parte Workers' Compensation Board of Queensland [1982] Qd.R. 739, where His Honour concluded that an injured worker who recovered damages from an employer was entitled to receive the amount of such damages from the Workers' Compensation Fund whether or not there was in existence a policy of accident insurance under the 1916 Act in favour of the employer.
The effect of s.8 was also discussed by Connolly J in Re: K D Morris & Sons Pty Ltd [1978] Qd.R. 318. That was a case where an employer had failed to pay premiums due under the policy, as a consequence of which the State Government Insurance Office asserted that the policy was not “in order”: p.319. His Honour at p.320 said:
“The obligation of s.8 including the obligation on the employer to keep himself insured, the effect of the failure of the company to pay the premiums was that it had failed to comply with s.8. It was therefore to be treated as uninsured at the relevant time. The further consequence of this failure to comply with the requirement of s.8 was that the office was empowered by s.8(5) to recover from the employer monies paid to any worker employed by him from the Workers' Compensation Fund. … The employee recovers from the Fund and the assets of this company will be liable not to claims brought against it by its employees, but to a claim by the office under s.8(5) by reason of its having allowed the insurance to lapse.”
What His Honour actually decided in that case was that the claims of the office to recover these monies were entitled to certain priority in the winding up of the company, but that conclusion was reversed on appeal by the Full Court: Rees v. State Government Insurance Office (Queensland) [1979] Qd.R. 369. W B Campbell J (as he then was) said at p.373:
“The only liability to the office remaining on the employer is, where he has failed to make application for a policy or, if having obtained one he has failed to maintain it in force, to pay to the office the amount of any unpaid premiums and the amounts paid out of the fund to an uninsured worker”.
Andrews J on the other hand at p.376, described the company as being “in effect, uninsured” during the relevant period. There was a further appeal to the High Court, which was dismissed: State Government Insurance Office v. Rees [1979] 53 ALJR 752. The judgments of Their Honours do not contain anything which to me casts any light on the question of what happens when a person not only ceases to pay premiums but also ceases to be an employer.
The 1990 Act
It may not matter, however, what the effect of the 1916 Act was in such circumstances because apparently the second defendant continued to be an employer and continued to pay premiums until the commencement of the 1990 Act on 1 January 1991: s.1.2(2)[2]. Section 4.9 corresponds to s.8 of the 1916 Act, and subsection (2) provided relevantly that:
[2]The 1990 Act was passed during a period of temporary enthusiasm for decimal section numbering but in at least one later reprint the Act was renumbered to normal section numbering. A comparative table appears at the back of reprint number 4. This is quoted from the Act as passed in 1990; there are no material changes in the version in Reprint 4, as at 1 January 1996.
“Every employer is to insure and remain insured with the Board under a policy in respect of the employer’s legal liability to pay compensation under this Act and the employer’s legal liability existing independently of this Act to pay damages in respect of injury to a worker employed by the employer …”
Section 4.14 provided in subsection (1):
“An employer fails to comply with s.4.9(2) –
(a) if, before or immediately after the employer commences to employ any worker or workers, the employer does not make application in the prescribed form to the Board for a policy in accordance with this Act; or
(b) if, having taken out a policy in accordance with this Act, the employer does not maintain it in force at all times whilst being an employer by –
(i) making at the time and in the manner prescribed every prescribed annual or other periodic return in respect of workers employed by the employer; and
(ii) paying at the time and in the manner prescribed every premium prescribed as payable in respect of the policy or of the renewal thereof for any year”.
By s.4.15, if an employer has failed to comply with s.4.9(2) “in respect of all workers employed by the employer”, and monies are paid from the fund in respect of injury to any of the workers, the Board may recover from the employer the amounts so paid from the fund, and the amount of all premiums that should have been paid by the employer and were not paid to the Board during the period of the employer’s failure to comply with s.4.9(2).” There is provision for a default assessment in s.4.22, but only in circumstances where there has been a failure by an employer to comply with s.4.9(2). There is provision in s.4.29 for additional premium to be payable for non payment of premium. There are provisions in s.11.5 for recovery of debts under the Act, but they simply make amounts payable as a premium, additional premium or charge, a debt due and payable to the Board by each person liable to pay such a premium or charge, and allows that debt to be recovered by an action for debt. There is, so far as I can see, nothing in the legislation that throws any further light on the question of the duration of the policy.
The crucial provision therefore seems to be s.4.14(1)(b), which deals with the situation where a policy has been taken out. That section imposes an obligation to maintain it in force by making prescribed returns and paying prescribed premiums, but the obligation exists only “at all times whilst being an employer”. If a person who held a policy ceases to be an employer, the inference from that wording is that there is no obligation to make the prescribed return or to pay any prescribed fee. The wording “maintain it in force” suggests that if these steps are not taken, the consequence is that the policy is not maintained in force, and therefore it comes to an end. In this respect the position seems to be similar to that under the 1916 Act, and that seems to have been the view of Connolly J and W B Campbell J in the Rees cases.
The 1992 Regulation
The Workers' Compensation Regulation 1992 does not really throw any more light on the subject, although it does proceed on the assumption that a policy will be renewed. There is provision for issue of a policy: s.8(1). A policy renewal certificate is said to have no force or effect until the premium payable in relation to the renewal has been received by the Board: s.8(3). There is provision in s.11 for the Board to accept payment of the premium by instalments under an instalment plan predetermined by the Board, which makes some allowance for interest.
Provision is made for cancellation of policies by Regulation 14[3] as follows:
[3]This is quoted from Reprint 1 as at 27 July 1993; Reprint 2 is in the same terms.
“(1) An employer who wishes to cancel a policy because the employer has ceased to employ workers is to lodge with the Board –
(a) written notice of –
(i) having ceased to employer workers, on and from a date specified in the notice; and
(ii) the employer’s wish to cancel the policy; and
(b) details of wages and contracts requiring performance of work in relation to the period commencing 1 July last preceding the day on which employment of workers ceased and terminating on that day.
(2) On receipt of a notice and details mentioned in subsection (1), the Board is to assess the premium payable by the employer for the period during which the employer was required by the Act to maintain a policy.
(3) If the premium paid by the employer for the period mentioned in subsection (2) –
(a) is greater than the amount of premium assessed under subsection (2), the Board is to refund to the employer the amount overpaid; or
(b) is less than the amount of premium assessed under subsection (2), the employer is to pay to the Board the amount of the deficit on or before the due date for payment of the deficit as shown in a final premium notice issued in relation to the amount of the deficit or as prescribed by the Act, as the case may be.”
It seems to me that the obvious purpose of this provision is to enable an employer who has renewed a policy to obtain a partial refund of the premium if it turns out that the policy is not needed for the whole period of the renewal because the employer has ceased to be an employer. If a policy has been renewed for a particular financial year, and before that financial year has expired the employer wishes to cancel that policy, resort may be had to the regulation. This follows from the assumption in sub-regulation (3) that a premium will already have been paid for the period. However, it seems to me that there was nothing in that regulation which has the effect that the policy will come to an end only if it is cancelled in accordance with that regulation, so that even if a person ceases to be an employer, and does not renew a policy, it continues in force, so as to give rise to a continuing obligation to pay premiums.
The obligation under the Act to pay the premium was simply an obligation to pay it at the time and in the manner prescribed: s.4.14(1)(b)(ii). Section 9 of the Regulation provided for the assessment of the premium, but it assumed that the employer had made an estimate of the amount of wages to be paid to all workers employed by the employer during the period of insurance: s.9(1). The annual return was provided for in s.13 of the regulation; it included a declaration as to the actual wages paid during the previous financial year, as well as an estimate of those to be paid in what is by then the current year. This was obviously a reference to the obligation in s.4.14(1)(b)(i) of the Act to make returns in respect of workers employed by the employer, but this obligation was only imposed on a person who was an employer. Section 11(1) of the regulation provided that an employer was to pay the premium shown in “the premium notice … on or before the due date for payment as prescribed by the Act, or as shown in the notice”. That expression was defined as “a notice of assessment of premium issued by the Board under the Act”: s.4. It was therefore a notice based on an assessment under s.4.22 of the Act dealing with default assessment, which could only apply to an employer, or one under s.9 of the regulation, which was to be based on an employer’s estimate of wages. The whole structure was based on the proposition that liability to pay a premium for renewal of a policy of insurance depended upon a person continuing to be an employer. That was consistent with the provisions of s.4.14 of the Act.
Cases on the 1990 Act
There was some consideration of the provisions of the 1990 Act and the regulation made under it in Re: Hewson & Douglas Pty Ltd (No. 2) [1994] 1 Qd.R. 42. That case turned on the question of just what amount the employer had to pay under the Act and regulations in order to effect a renewal of the policy, and it was a case where there was no issue about whether the employer was still an employer. The employer had lodged the annual return and received a premium notice, but not paid all of the amounts sought in that notice, only the amount assessed as “provisional premium” for the year in respect of which renewal was sought. Ryan J reviewed a number of the provisions to which I have referred and at p.46 said:
“The statutory scheme differs from the ordinary annual contract which is renewable by mutual consent, in that it requires a renewal of the policy each year. But the obligation to pay is that prescribed by s.4.14(1)(b)(ii), and the question is whether the employer’s obligation thereunder is restricted to the amount payable on renewal of the policy.”
Although some reference had been made to s.14 of the regulation, there was no issue in that case as to whether a notice under s.14 was the only way to bring a policy to an end. It seems to me that a policy is renewed by paying a premium for the coming year so that if one is not paid it is not renewed.
The operation of the relevant provisions, and the effect of a failure to renew a policy under the 1990 Act, had earlier been considered by Derrington J on an application for directions under the Corporations Law concerning the same question: Re: Henson & Douglas Pty Ltd (Application 870/92, Derrington J, 16.11.92, unreported). In a helpful analysis His Honour said:
“The employer’s obligation is to take out a policy when employment first begins and then to renew it from year to year with a new policy while the status of employer remains, for s.4.9(2) of the Act requires employers to remain insured with the Board. However it says nothing more about this and the Regulations are unhelpful.
…
When an employer fails to comply with s.4.9(2) of the Act, s.4.14 imposes a penalty for the offence of non-compliance. The circumstances when that may occur are twofold. The first is when the employer fails immediately after the commencement of employment at the latest to make application for a policy. The second occurs when having taken out a policy, the employer does not maintain it in force at all times whilst being an employer. He maintains it by making every prescribed annual or other periodic return in respect of workers employed and by paying the prescribed premium in respect of the renewal of the policy for any year. By that procedure he enters into a contract for renewal of the policy.
…
It must be remembered that the Act and Regulations do not pretend to alter basic principles as to contracts of insurance and the nature of renewal of a policy, even though it may make it compulsory for an employer to take out a policy and to renew it, and though on non-compliance it may provide the Board with the means of recovering what should have been paid as a premium. But this does not mean that a renewal of the policy takes place automatically if the employer does not enter into the contract of insurance, and renewal does not mean that the old policy continues to exist.
It is trite law that renewal involves a new contract entered into afresh between the parties, using the old policy as a model but not necessarily unchanged. The point is that if the insured company did not apply for a renewal for the year 1990/1991, but did so for a period of the 1991/1992 year, there is no contract for the former and no premium is payable under the contract. The equivalent sum may be recovered under the means provided by the statute, and presumable a policy will then issue; but it is not as though there has been a renewal for which a premium is payable for the company did not enter into any contract.
…
It is true that the company was required by the statute to have the policy renewed, but its failure to do so does not mean that the policy was renewed by operation of the statute. It meant only that the company was in default and as such it was liable to be sued for the sum and to pay penalties; but it does not mean that it has entered into any such renewal contract either actually or constructively.” (emphasis added)
This, in my opinion, supports my conclusion as to the operation of the legislation.
The way in which the 1990 Act and the regulations under it operated was summarised by Demack J in REB Engineering Pty Ltd v. Workers' Compensation Board of Queensland [1996] 1 Qd.R. 196 at 197:
“Every employer is to insure and remain insured with the Board under a policy in respect to compensation and other legal liability (the Act, s.4.9(2)). The employer must make an annual return in respect of its employees and pay the prescribed premium (s.4.14(1)(b)). In its return, the employer estimates the amount of wages to be paid to employees, and, on the basis of this estimate, the Board assesses the premium to be paid (reg.9). The premium paid in respect of each period of insurance is later to be adjusted in accordance with the employer’s actual expenditure on account of wages during the period, in accordance with a declaration of wages lodged by the employer before 31 August each year. When that declaration has been received, the Board assesses the premium payable “in relation to the last preceding period of insurance” (reg.13(1)(a) and (b)). According to the various premium assessment notices which were tendered (Exhibit 1), an annual provisional premium is imposed on the basis of the employer’s estimate of wages to be paid, and this is assessed after the Board is advised of the actual wages paid over the 12 month period.”
His Honour’s decision in that case was concerned with the circumstances under which the Board had power to adjust or vary insurance premiums. It did not touch on the question of the duration of the policy.
So far as I can see there is nothing in the Act or regulation to the effect that an “employer” includes a person who has previously been an employer. In my opinion, it follows that there was no obligation on a person who was not, in fact, an employer to maintain in force a policy in accordance with the Act by taking the steps specified in s.14(1)(b). Accordingly, a person who was not in fact an employer could not fail to comply with s.4.9(2). It also follows from the terms of s.4.22(1) that there was no power to issue a default assessment to a person who was not in fact an employer during the period in respect of which the default assessment has issued. If the second defendant ceased to be an employer by 1 July 1992, she was under no obligation after that date to remain insured under a policy issued by the Board. She was therefore under no obligation to take any steps necessary to effect the renewal of the policy, and in my opinion, the effect of her failure to take those steps was that the policy was not renewed. Accepting that once a policy issued under the 1916 Act or under the 1990 Act it continued in force, the provisions for renewal indicate that it must be possible for the policy not to be renewed, and there must be a difference between the situation where a continuing policy is renewed and one where it is not renewed. It is only an employer who is under an obligation to renew a policy, and I think it follows that the legislature contemplated that there would be no obligation on a person who had ceased to be an employer to continue the policy in force, by renewing it. In my opinion, it follows that a policy which is not renewed comes to an end, at least once something which was required to be done under the Act in order to effect a renewal had not been done within the time required by the Act or regulation.
The proposition that a person who was at one time an employer continues to be liable to pay premiums under a Workers’ Compensation policy unless and until that person follows the procedure formerly set out in s.14 of the Workers Compensation Regulation 1992, and now found in s.14 of the WorkCover Queensland Regulation 1997, is in my opinion not correct. Although the legislation contemplates a continuing policy, the legislation contemplates a policy which may cease to be in force if the appropriate steps are not taken. There is not in evidence a copy of the prescribed form of policy under the 1990 Act, and I cannot assume that at any relevant time the form of policy was different from the form endorsed on the instalment notice which was exhibited to the affidavit of Ms. Brown filed in the Magistrates Court, under which the policy was in force for a specified period of insurance stated in the policy. It is therefore not, as a matter of contract, a policy which continues until it is cancelled in accordance with the regulation.
It is not necessary for me to decide whether, on the second defendant’s material and on the true construction of the regulation, there was an obligation on the second defendant to lodge an annual return prior to 31 August 1992, even though she had by then ceased to be an employer. Nor is it necessary for me to identify precisely when the policy ceased to be in force. Assuming that she had not subsequently begun to employ workers, it follows that she was under no obligation to do anything, or to pay anything, at least by the time the 1996 Act came into operation in 1997. There was no material to the contrary before the magistrate, and if there had been there may have been a triable issue anyway.
Exhibited to an affidavit filed in the Magistrates Court was a copy of what is described as “an instalment notice” which refers to an application to pay outstanding premium by way of instalments on the part of the first and second defendant having been accepted. There is provision in s.10 of the regulation made under the 1996 Act for a premium to be paid by instalments. The instalment notice purports to be a policy, and says that
“This policy is current for the period of insurance stated on the premium notice subject to adjustment of premium of 30 June next in accordance with the employer’s actual expenditure on account of wages during the period, and provided the premium shown on the premium notice is paid on or before the due date”.
The period of insurance stated on p.1 of the notice is from 1 July 1996 to 30 August 1996. The premium calculation is set out on p.3 of the notice. Interestingly the bulk of the amount payable is a sum of $9,514.85 by way of arrears. The second defendant in her affidavit denied ever having signed an application to enter into an instalment plan under s.10 of the regulation.
If the second defendant was not in fact an employer during the latter part of 1996, she was not under any obligation to maintain a policy under the 1990 Act during that period. She was therefore not under any obligation to pay any premium, and indeed it seems to me that there was no power to assess any premium in respect of a policy during that period. In my opinion, the material sworn to in the second defendant’s affidavit, assuming it is correct (as one should for the purposes of an application for summary judgment) provided a good defence to the plaintiff’s claim. There was therefore a triable issue, since the plaintiff had alleged in its particulars that the second defendant was an employer at the relevant time. That having been denied by the second defendant, it is an issue in respect of which the onus is on the plaintiff. Judgment should not have been given in a summary way, and the appeal should be allowed.
The 1996 Act
The 1996 Act[4] contains an employer’s obligation to insure in s.52, which again is an obligation imposed on “an employer”. That term is defined in s.32, but in a way which does not appear to extend to a person who used to be an employer but is no longer. The employer’s liability must be provided for under a WorkCover policy or under a license as a self insurer under Part 5. When an employer contravenes the obligation to insure is defined by s.54, which requires an employer to apply for a policy before or immediately after the employer starts to employ any worker, and:
[4]Text quoted from the Act as passed, No 75 of 1996.
“(b) having taken out a policy required under s.52, the employer does not maintain it in force at all times while being an employer by –
(i) making at the time and in the way required every annual or other periodic return required for all workers employed by the employer; and
(ii) paying at the time and in the way required every premium payable for the policy or for its renewal for any year”.
This is essentially the same as the earlier legislation.
Other Issues
The outline of argument on behalf of the appellant also raises the issue of delay. In my opinion, delay in itself is of no consequence in relation to an application for summary judgment: Queensland Truss and Frame Pty Ltd v. Grenadier Constructions No. 2 Pty Ltd [1992] 2 Qd.R. 428.
It was argued on behalf of the respondent that the instalment notice to which I have referred amounted to a certificate for the purpose of s.529(2)(h) of the 1996 Act. That section permits the chief executive officer to issue a certificate which is evidence of certain matters in proceedings about anything arising under the Act, including that a specified amount is due and payable to WorkCover and unpaid by a specified person for a premium or a charge. Subsection (3) then provides:
“A document purporting to be a certificate under this Act is admissible as the certificate it purports to be in any proceeding about anything arising under this Act.”
It seems to me clear that the instalment notice is not a certificate for the purpose of s.529 and therefore the respondent cannot rely on this provision. The document does not purport to be a certificate under the Act and therefore it was not automatically admissible under subsection (3) and there was no evidence as far as I can see before the Magistrate that it is in fact a certificate. Indeed, it is clear on its face that it is not a certificate. In any case, all it does is amount to some evidence in support of the proposition specified, but it is not made conclusive and it cannot exclude a triable issue properly raised.
Reference was also made to the decision of the Full Federal Court in Coffey v. Secretary, Department of Social Security (1999) 86 FCR 434. That decision is plainly distinguishable; there is no question here of the defendant taking proceedings in the Magistrate Court which constitute a collateral attack on some decision in respect of which there is a separate mechanism for review. The proceedings here were taken by WorkCover, not by the second defendant. That decision, in my opinion, is of no assistance to the respondent.
Accordingly, the appeal is allowed, the decision of the Magistrate is set aside and in lieu thereof I order that the application for summary judgment be dismissed with costs. It appears that the costs of that application ought to be quantified at $304, but I am willing to entertain a prompt submission in relation to the quantification of this amount. I order that the respondent pay the appellant’s costs of the appeal to be assessed.
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