Workers Compensation Nominal Insurer v Chester
[2023] NSWPICPD 59
•28 September 2023
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY A MEMBER | |
CITATION: | Workers Compensation Nominal Insurer v Chester [2023] NSWPICPD 59 |
APPELLANT: | Workers Compensation Nominal Insurer |
FIRST RESPONDENT: | Nikita Chester |
SECOND RESPONDENT: | Kristie Maree Ferris t/as Rhonda’s Hair Boutique |
SECOND RESPONDENT’S INSURER: | Uninsured |
FILE NUMBER: | A1-W207/22 |
PRESIDENTIAL MEMBER: | Deputy President Elizabeth Wood |
DATE OF APPEAL DECISION: | 28 September 2023 |
ORDERS MADE ON APPEAL: | 1. The Member’s Certificate of Determination dated 16 May 2022 is revoked. 2. The matter is remitted for re-determination by another non-presidential member. |
CATCHWORDS: | WORKERS COMPENSATION – failure to accord procedural fairness – Twist v Randwick Municipal Council [1976] HCA 58; New South Wales Police Force v Winter [2011] NSWCA 330 applied |
HEARING: | Virtual conference 20 July 2023 and ‘on the papers’ |
REPRESENTATION: | Appellant: |
| Mr L Robison, counsel | |
| Hall & Wilcox | |
| First Respondent: | |
| Mr W Carney and Mr R Hanrahan, counsel | |
| LHD Lawyers | |
| Second Respondent: | |
| Unrepresented | |
DECISION UNDER APPEAL | |
MEMBER: | Mr B Batchelor |
DATE OF MEMBER’S DECISION: | 16 May 2022 |
INTRODUCTION AND BACKGROUND
Ms Nikita Chester (the first respondent) was employed as a hairdresser by Kristie Maree Ferris trading as Rhonda’s Hair Boutique (the employer). These proceedings involve a claim brought by the first respondent that on 1 September 2011, while cleaning a wash basin in the course of her employment, she injured her right wrist. She also alleged that she developed right elbow symptoms as a result of the right wrist injury. The first respondent underwent surgery in the form of right carpal tunnel release and right cubital tunnel release on 20 December 2018 and revision surgery on 10 September 2020. The first respondent had brief periods off work following the injury and the two surgeries.
The employer did not hold a workers compensation policy of insurance at the time of the injury. The claim was therefore dealt with by the Workers Compensation Nominal Insurer (the appellant), who declined the claim on the basis that the right wrist carpal tunnel syndrome was not caused by the injury, and the right cubital tunnel syndrome did not result from the injury. The appellant also disputed that the surgeries performed were reasonably necessary as a result of the injury.
The dispute proceeded to arbitration before a non-presidential member of the Commission. The employer did not appear in the proceedings, however, the Member proceeded with the matter on the basis that the steps taken by the appellant to notify the employer of the proceedings were unsuccessful. The Member determined the dispute in favour of the first respondent.
The Certificate of Determination[1] issued on 16 May 2022 records:
“The Commission determines:
1. The [first respondent] suffered injury to her right wrist on 1 September 2011 in the form of carpal tunnel syndrome arising out of or in the course of her employment with the [employer].
2. The [first respondent’s] employment with the [employer] was a substantial contributing factor to the injury suffered by the [first respondent].
3. The [first respondent] suffered the condition of cubital tunnel syndrome consequent upon injury to the right wrist on 1 September 2011.
4. The surgery performed by Dr Meads on 20 December 2018 and 4 August 2020 was reasonably necessary as a result of injury to the right wrist on 1 September 2011.
5. The [appellant] is to pay the [first respondent’s] costs and expenses pursuant to s 60 of the Workers Compensation Act 1987 as a result of injury to the right wrist on 1 September 2011 including the costs of and incidental to surgery on 20 December 2018 and 4 August 2020.
6. The [appellant] is to pay the [first respondent] $587.67 per week pursuant to s 36 of the Workers Compensation Act 1987 for the periods from 20 December 2018 to 3 January 2019, and from 10 September 2020 to 24 September 2020.
7. The [employer] is to reimburse the [appellant] for the compensation paid by [the appellant] pursuant to [5]–[6] above.”
[1] Chester v Workers Compensation Nominal Insurer [2022] NSWPIC 219 (reasons).
The appellant appeals the decision.
THRESHOLD MATTERS
There is no dispute between the parties that the threshold requirements as to quantum and time pursuant to ss 352(3) and 352(4) of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) have been met.
PROCEDURAL MATTERS
Although the employer was nominated as a respondent in these proceedings, the arbitration proceeded without the involvement of the employer because the appellant’s attempts to serve the employer had been unsuccessful. The Member determined the dispute and issued a Certificate of Determination making orders that included orders for payment of compensation by the appellant to the first respondent and an order that the employer reimburse the appellant for the compensation paid.
The appellant lodged the Application – Appeal Against Decision of Member (the appeal). In the appeal documents, there was nothing to indicate that the employer had been served with the appeal. The Certificate of Service lodged by the appellant only referred to the appeal having been served on the first respondent’s legal representatives and the employer did not file a Notice of Opposition (opposition) to the appeal.
The appeal was allocated to me. In the course of reviewing the evidence lodged in the proceedings, I noted that the employer’s email address and mobile telephone number had been recorded in the document “Employer Injury Claim Form” signed by the employer and dated 5 June 2012.[2]
[2] Application to Resolve a Dispute (ARD), pp 8–9.
On 27 June 2023, I directed the appellant to provide to the Commission details of all attempts to serve the appeal application on the employer. On 4 July 2023, the appellant responded as follows:
“We refer to the above matter in which we act for the Appellant, the Workers Compensation Nominal Insurer (icare).
We further refer to the Direction of the Personal Injury Commission dated 27 June 2023. In response we advise that the Appeal Application was not served on the [employer] as previous attempts to serve documents on the [employer] were unsuccessful.”
On 5 July 2023, notice was given to the parties to attend a virtual conference. The notice was forwarded to the employer’s email address recorded in the “Employer Injury Claim Form.” The employer responded to the notice, advising that she was unable to participate in the conference on that date. The date was re-scheduled to 20 July 2023 and all parties, including the employer (who was unrepresented), attended. In the meantime, the Commission encouraged the employer to seek legal advice. On 7 July 2023, I directed the appellant to serve on the employer all of the documents relied upon in the proceedings before the Member, together with the appeal and the first respondent’s opposition. The appellant also encouraged the employer to obtain legal assistance.
At the virtual conference on 20 July 2023, the first respondent’s legal representatives advised that the Application to Resolve a Dispute was posted to the employer on 3 February 2022, addressed to the employer at her former business address, which was returned to the legal representatives and marked “RTS”.
In response to questions posed by me at the virtual conference, the employer advised that she had been unaware of the proceedings before the Member and of the Member’s decision, as well as this appeal. I therefore directed the employer to provide to the Commission, and the other parties, details of her current address and to advise the name and contact details of her legal representative by 4.30 pm on Thursday 3 August 2023. There was no response to that direction by the due date. In a further direction issued on 4 August 2023, I provided the employer with another opportunity to advise the Commission of those details by 14 August 2023 and advised that if the employer failed to comply with the direction, I would proceed to determine the matter.
The employer did not respond by that date, however on 21 August 2023, the employer advised the Commission by email that she did not have a fixed address because of her domestic circumstances. The employer did not mention whether she had sought legal advice in respect of these proceedings.
On 23 August 2023, I issued a further Direction in the following terms:
“The parties are referred to the decision in Raniere Holdings Pty Ltd v Daley [2005] NSWCA 121; 66 NSWLR 594 [Raniere Holdings] (a copy of which has been provided with this Direction).
It is noted that the second respondent, Ms Ferris, indicated at the virtual conference on 20 July 2023 that, had she been aware of the proceedings, she would have defended the claim made by the first respondent.
The following directions are made in this matter:
1. By 4.30 pm on 6 September 2023, the appellant (the Workers Compensation Nominal Insurer (iCare)) is directed to lodge with the Commission and serve on the respondents, written submissions as to:
(a)whether the [employer] had been denied procedural fairness in that she was named as a party to the proceedings before the Member but was:
(i)not served with the Application to Resolve a Dispute or any of the documents lodged in the proceedings before the Member;
(ii)unaware that the proceedings were on foot;
(iii)unaware of the Certificate of Determination issued by the Commission on 16 May 2022, and
(iv)not served with the Application to Appeal Decision of a Member, and
(b)in those circumstances, the validity and enforceability of the orders made by the Member in the Certificate of Determination.
2. By 4.30 pm on 16 September 2023, the first [respondent] and [the employer], that is Ms Chester and Ms Ferris, are directed to respond to the appellant’s submissions.”
The appellant and the first respondent lodged submissions, however, the first respondent’s submissions were lodged out of time at 5.03 pm on 18 September 2023. The first respondent did not apply for leave to lodge the submissions out of time. However, in the interests of progressing this already troubled matter, the submissions were accepted. The employer did not respond to the Direction.
The submissions
The appellant
The appellant notes the procedural difficulties arising in this matter by the absence of service of the originating process, and that the employer has since been located, which precipitated her participation in the appeal process. The appellant acknowledges that there was an absence of procedural fairness in the original proceedings before the Member, which leads to the requirement that the Member’s Certificate of Determination must be set aside. The appellant says that setting aside the Certificate of Determination would enable the matter to be remitted to a different member for re-determination, with the opportunity given to the employer to participate in and defend the claim made against her.
The appellant submits that, while the employer can be afforded procedural fairness in the appeal process, that exercise would be futile because the subject matter of the appeal, which was the decision of the non-presidential Member at first instance, is tainted by the absence of procedural fairness. The appellant notes that the employer has indicated that she wished to defend the matter on its merits and says that the procedural unfairness the employer has experienced in the original proceedings can only be cured by a remittal and re-determination.
The first respondent
The first respondent submits that the Commission is required to give effect to its guiding principles set out in s 42 of the Personal Injury Commission Act2020 (the 2020 Act) to facilitate the “just quick and cost effective resolution of the real issues in the proceedings.” The first respondent points out that, of particular relevance to this matter, s 42(4) of the 2020 Act requires that the resolution of issues be conducted in such a way that the costs are proportionate to the importance and complexity of the matter. The first respondent also refers to s 43 of the 2020 Act, which requires that proceedings in the Commission are to be conducted with as little formality and technicality as a proper consideration of the issues allows, while “acting according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms.”
The first respondent cites various High Court authorities that deal with the requirement to provide procedural fairness, and quotes the following passages from those authorities:
(a) “The requirements of natural justice must depend on the circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject-matter that is being dealt with, and so forth”;[3]
(b) “The rules of natural justice are flexible, requiring fairness in all the circumstances, including the nature of the power exercised and the statutory provisions governing its exercise”;[4]
(c) “It can now be taken as settled that, when a statute confers power upon a public official to destroy, defeat or prejudice a person’s rights, interests or legitimate expectations, the rules of natural justice regulate the exercise of that power unless they are excluded by plain words of necessary intendment”,[5] and
(d) “It is now clear that a duty of procedural fairness arises, if at all, because the power involved is one which may ‘destroy, defeat or prejudice a person’s rights, interests or legitimate expectations.’ Thus, what is decisive is the nature of the power, not the character of the proceeding which attends its exercise.”[6]
[3] National Companies and Securities Commissionv The News Corporation Ltd [1984] HCA 29, per Mason, Wilson and Dawson JJ, [15].
[4] Kioa v West [1985] HCA 81, per Gibbs CJ, [11].
[5] Annetts v McCann [1990] HCA 57, per Mason CJ, Dean and McHugh JJ, [2].
[6] Ainsworth v Criminal Justice Commission [1992] HCA 10, [24].
The first respondent asserts that the employer has been given sufficient opportunity to address the matters about which she is now aware in relation to her entitlement to defend the case brought by the first respondent. The first respondent submits that the employer has failed to act on that opportunity and has not presented any evidence that might defeat or cast doubt on the Member’s decision, which was arrived at after a detailed consideration of the evidence. The first respondent contends that, even if the employer had done so, she would not have been able to provide any relevant or useful evidence in relation to the issues in dispute, which concerned questions of causation and the probative value of the medical opinions.
The first respondent refers to the Presidential decision of the former Workers Compensation Commission in Inghams Enterprises Pty Ltd v Zarb,[7] in which it was found that there had been a denial of procedural fairness when the Arbitrator proceeded to a determination without giving the parties an opportunity to make submissions in circumstances where the Arbitrator had indicated her intention to do so. The first respondent indicates that, in this case, the opposite has occurred. She points to the parties’ attendance at the virtual conference on 20 July 2023 and the Directions issued by me and submits that the employer was given the opportunity to participate but did not comply with the Directions dated 4 August 2023 and 23 August 2023. The first respondent takes issue with the reference in my Direction dated 23 August 2023 to the employer indicating at the virtual conference that she would have defended the matter had she been aware of it. The first respondent says that the employer did not suggest anything other than that she would have sought legal representation.
[7] [2003] NSWWCCPD 15.
The first respondent asserts that the employer did not provide a defence to the first respondent’s claim at the interview with Workcover when she completed the Employer Injury Claim Form dated 5 June 2012 and has had several opportunities to retain legal representation or to dispute any fact that might raise a defence to the claim.
The first respondent acknowledges that while decisions that may affect the rights of individuals will generally attract a duty to provide procedural fairness, in this case there was a breach of the fundamental duty by the employer to have in place a policy of insurance. The first respondent submits that she was unaware of the employer’s email address because it was illegible, as asserted by the appellant. The first respondent asserts that the interests of the employer were adequately represented by the appellant in the proceedings before the Member determined the dispute, and her rights continue to be represented in her absence in the appeal. She further asserts that the employer has not in fact suffered any detriment or loss at this stage at all.
The first respondent submits that the orders made in favour of the first respondent recorded in the Certificate of Determination were entered after the arbitration proceedings in which all of the available evidence was considered and therefore those orders should stand. She also submits that the orders made against the appellant should stand because the payment of compensation where the employer is uninsured is the function of the appellant.
The first respondent asserts that the Member’s final order that the employer is to reimburse the appellant for the compensation paid by the appellant to the first respondent ought to be revoked. The first respondent submits that s 145(1) of the Workers Compensation Act 1987 (the 1987 Act) requires the appellant to serve on the employer a notice in respect of the amount of compensation for which the appellant seeks reimbursement. She says that, applying Raniere Holdings, such a notice is a pre-condition to an order for reimbursement as is a determination that the employer is in fact liable to pay the compensation. She adds that s 145(3) provides that the employer can apply to the Commission if she is not satisfied with the substance of the notice.
The first respondent describes the quantum of her claim as “relatively modest” and the issues should be resolved in her favour on the basis of the beneficial nature of the legislation. She says that the appellant’s request for the matter to be remitted for re-determination is opportunistic and not consistent with the appellant’s obligation as a model litigant.
CONSIDERATION
In his Certificate of Determination, the Member provided a detailed summary of the procedural steps taken to advise the employer of the proceedings. The Member recorded that:
“4. At the telephone conference held in the proceedings on 15 February 2022 the Commission issued the following Direction:
‘The Commission directs:
1. Kristie Maree Ferris t/as Rhonda’s Hair Boutique is named as first respondent and the Workers Compensation Nominal Insurer joined as second respondent.
2. By 22 February 2022 the second respondent is to:
(a)notify the first respondent of the proceedings;
(b)serve on the first respondent all documents lodged and served to date in the proceedings, and
(c)inform the first respondent of her potential liability under s 145 of the Workers Compensation Act 1987.
3. The matter is stood over for conciliation/arbitration via telephone conference to 10.00 am on Tuesday 19 April 2022.’
5. On 22 February 2022 the solicitor for the second respondent wrote by prepaid Express Post to:
(a)Kristie Maree Ferris
Rhonda’s Hair Boutique
[former business address]
West Tamworth NSW 2340, and to
(b)Rhonda’s Hair Boutique
[former business address]
South Tamworth NSW 2340
forwarding copies of the ARD, Reply and the Direction referred to in [4] above.
6. It appears from the evidence before the Commission that no response was received to the letter referred to in [5(a)] above and that the response to the letter referred to in [5(b)] above was “RTS LEFT ADDRESS”.
7. There was no appearance by or on behalf of the first respondent at the conciliation/arbitration on 19 April 2022. The matter proceeded to arbitration hearing on that day. On 20 April 2022 the following Direction was issued by the Commission:
‘The Commission directs:
1.The second respondent is to lodge and serve by 26 April 2022:
(a)Application to Admit Late Documents with report of Dr G Doig dated 21 February 2022 attached;
(b)evidence of notification of the applicant’s claim given by WorkCover to the first respondent, and
(c)evidence of attempt(s) of service on the first respondent of notification of the proceedings, service of documents, and supply of information in accordance with Direction [2] issued 15 February 2022.
2.At the conclusion of the time allowed for compliance with [1] above the dispute will be the determined in writing.’
8. In respect of Direction [1(b)] it appears from evidence before the Commission that:
(a)On 18 July 2012 an officer of WorkCover Authority of New South Wales (WorkCover) wrote a letter by registered mail no 484512874012 headed ‘CLAIM FOR WORKERS COMPENSATION AGAINST THE NOMINAL INSURER’ to:
Kristie Marie Ferris t/as Rhondas Hair Boutique
[former business address]
SOUTH TAMWORTH NSW 2340
enclosing notice under s 161(1) of the 1987 Act which had attached thereto:
(i)Notice to Suspected Employer pursuant to s 141(2) of the 1987 Act, and
(ii) Schedule A, being questions relating to:
‘... the claim made by the claimant Nikita Riordan of [address] that an injury was received while in the employment of Kristie Maree Ferris t/as Rhondas Hair Boutique on 01/09/2011 being an injury described as Right Wrist.’, and
(b)the letter of 18 July 2012 and Schedule A, including a statutory declaration attached thereto signed by ‘K Ferris’ before ‘Cathy Frost’, ‘Licencee Tamworth South Post Office’ on 23 July 2012, was received by WorkCover on 25 July 2012.
9. Questions in Schedule A referred to in [8(a)(ii)] above were answered in handwriting. There were no answers provided to questions [1.11] and [1.12] relating to a policy of insurance for workers compensation as at the claimed date of injury.
10. The second respondent’s compliance with Direction [1(c)] of 20 April 2022 is referred to in [5] above.”[8]
[8] Reasons, [4]–[10].
It is apparent from the above information that, while the employer was aware that the first respondent had made a claim in respect of her injury, she was not made aware of the fact that proceedings had commenced in which she was nominated as a respondent to the claim. It is noted that the first respondent made a one and only attempt to serve the initiating process (the ARD), which was unsuccessful. The details of the appellant’s attempts to serve the employer are recorded above. Given the appellant’s role in respect of proceedings of this nature and the resources to which the appellant has access, the attempts, in my view, were not satisfactory.
The appellant also made no attempt to serve the appeal.
The Personal Injury Commission Rules 2021 relevantly provide:
“27 Address for service
(1) An application or reply lodged with the Commission must contain an address for service for the person or body lodging the document.
(2) A party’s address for service is to be an email address, but if an email address is not available, the address may be a postal or physical address.”
And:
“28 Service between parties
(1) A document is taken to have been served on or provided to a party if the document is delivered, or forwarded by one of the methods referred to in subrule (2), to the address for service of the party.
(2) Service of a document by a party on a receiving party is taken to be effected if the document is received by 5 pm—
(a)for service by an ECM system or email—at the time the document is capable of being received by the receiving party,
…”.
Both the appellant and the first respondent had access to the employer’s email address and mobile telephone number. The Nominal Insurer and the first respondent both assert that the email address recorded in the Employer Injury Claim Form was illegible. The document headed “Employer Injury Claim Form” signed by the employer on 5 June 2012 was annexed to the ARD, which was lodged electronically with the Commission. While the address was hard to read, it was sufficiently legible for the Commission to utilise that address in order to notify the employer of the proposed virtual conference. The employer responded to the Commission’s email contact.
The outcome is that the employer did not have the opportunity to participate in the proceedings before the Member and would have had no opportunity to take part in the appeal proceedings had it not been for the Commission’s intervention.
While s 43(1) of the 2020 Act provides that proceedings in the Commission are “to be conducted with as little formality and technicality as the proper consideration of the matter permits”, the common law rule of procedural fairness, in this case the ‘hearing rule’, still applies. A party to a dispute is entitled to be heard in relation to the case against it before a decision-maker determines a dispute adverse to the party’s interests.[9] The obligation to afford procedural fairness requires that the party be given notice of the case brought against him or her and that the party be given the opportunity to adduce evidence and make submissions about the case before the tribunal.[10]
[9] Twist v Randwick Municipal Council [1976] HCA 58.
[10] New South Wales Police Force v Winter [2011] NSWCA 330, [84].
The employer in this case has not had the opportunity to defend the case brought against her and thus has been denied been procedural fairness. The matter was determined adverse to her interests. The Member’s decision is therefore affected by an error of law and must be revoked and remitted to another non-presidential member for re-determination.
DECISION
The Member’s Certificate of Determination dated 16 May 2022 is revoked.
The matter is remitted for re-determination by another non-presidential member.
Elizabeth Wood
DEPUTY PRESIDENT
28 September 2023
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