Workers' compensation - Election for common law damages - Whether significant disability to be determined before election - Power to make regulations - Whether regulations ultra vires

Workers' Compensation and Rehabilitation Act 1981 (WA), s 93E

Ainsworth v Criminal Justice Commission [1992] HCA 10; (1992) 175 CLR 564

Boyce v Paddington Borough Council [1903] 1 Ch 109

Davies & Jones v State of Western Australia [1904] HCA 46; (1905) 2 CLR 29

Esmonds Motors Pty Ltd v Commonwealth of Australia [1970] HCA 15; (1970) 120 CLR 463

Forster v Jododex Australia Pty Ltd [1972] HCA 61; (1972) 127 CLR 421

Ibeneweka v Egbuna [1964] 1 WLR 219

IRA, L & AC Berk Ltd v Commonwealth (1930) 30 SR (NSW) 119

Ex parte Kauter (1904) 4 SR (NSW) 209

King-Brooks v Roberts (1991) 5 WAR 500

Macris v Lucas [1971] SASR 329

The Mayor, Councillors and Citizens of the City of Footscray v Maize Products Pty Ltd [1943] HCA 15; (1943) 67 CLR 301

McEldowney v Forde [1969] 2 All ER 1039

R v Commonwealth Court of Conciliation and Arbitration; ex parte Ozone Theatres (Aust) Ltd [1949] HCA 33; (1949) 78 CLR 389

Wells v Finnerty (1910) 12 WALR 41

Western Australian Field and Game Association v Minister of State for Conservation and Land Management and the Environment (1992) 8 WAR 64

Young v Tockassie [1905] HCA 17; (1905) 2 CLR 470

1 McKECHNIE J: This is an application for a writ of mandamus and a declaration. The respondent has filed a notice indicating an intention to abide the result. By leave, the Attorney General has intervened, through counsel, in order that there be a proper contradictor to the arguments put forward by the applicant.

2 The factual basis upon which this matter comes to be considered is that on 26 July 1997, Mr Woodford suffered an injury, which he asserts was a back injury and psychiatric impairment and sequelae.

3 For that injury he has been receiving weekly payments.

4 By the Workers' Compensation and Rehabilitation Amendment Act 1999, No 34 of 1999, as assented to on 5 October 1999, significant changes were made to workers' entitlements. Further restrictions were placed on their right to pursue an award of common law damages. Section 93E was amended. Section 93E(3) and s 93E(4) read:

(a) it is agreed or determined that the degree of disability is not less than 30% and that the agreement or determination is recorded in accordance with the regulations; or

(b) the worker has a significant disability and elects, in the prescribed manner, to retain the right to seek damages and the election is registered in accordance with the regulations.

(4) For the purposes of subsection (3)(b) the worker has a significant disability if it is agreed or determined that the degree of disability is not less than 16% and that agreement or determination is recorded in accordance with the regulations."

5 Mr Woodford does not assert his degree of disability is greater than 30 per cent. He asserts his disability is 25 per cent. He decided to make an election to retain the right to seek damages under s 93E(3)(b).

6 On 16 December 1999 he signed an election in the form prescribed by the Workers' Compensation and Rehabilitation Amendment Regulations (No 11) 1999, Form 25.

7 His solicitor attended at the offices of the Conciliation & Review Directorate the same day to lodge the form. The respondent, who is the director, declined to accept the form for lodgement for the following reason:

"Form 25 to be rejected on the basis of Amendment Regulation (No 11) 1999 Regulation 19M(1)(b)."

8 Because of the provisions of s 3 of the Workers' Compensation and Rehabilitation Amendment Act (No 3) 1999, the termination day, being the last day upon which Mr Woodford can lodge an election, is 5 January 2000.

9 The regulations referred to by the director are the Workers' Compensation and Rehabilitation Amendment Regulations (No 11) 1999, made by the Governor in Executive Council, and published in the Western Australian "Government Gazette" on Tuesday, 14 December 1999 No 234 special.

10 The former regulation 19M, extant since 15 October 1999, was repealed and replaced by the following:

"19M Election to retain right to seek common law damages

1. An election under section 93E(3)(b) of the Act -

(a) is to be made in the form of Form 25 in Appendix I (the 'election form') and lodged with the Director; and

(i) it is agreed that the degree of disability is not less than 16 per cent; or

(ii) is determined that the degree of disability is not less than 16 per cent."

11 Mr Woodford has not reached agreement as to the degree of disability, nor has there been, under the Act, a determination of the degree of disability.

12 In those circumstances the respondent was correct in declining to accept the form for lodgement if reg 19M(1)(b) was a valid exercise of executive power. The applicant says it is not and has brought these proceedings in consequence. In my view, given the circumstances, the applicant has standing to bring proceedings for mandamus and has standing to bring proceedings for a declaration.

13 Although the amended notice of motion sought a declaration of invalidity for the whole of reg 19M, at the hearing counsel attacked only reg 19M(1)(b) and so much of Form 25 as related to reg 19M(b). I shall therefore confine my consideration to those matters. The issue to be determined is whether, on its proper construction, reg 19M(1)(b) is within power. If it is within power, then the applicant must fail. If it is beyond power, then the director should be obliged to accept the Form 25 for lodgement. To determine this issue it is necessary to construe s 93E to discern Parliament's intent. Was that intent to require a worker's degree of disability to be agreed or determined prior to the worker electing to forego workers' compensation benefits and pursue instead a claim at common law?

The relevant sections of the Workers' Compensation and Rehabilitation Act 1981

14 There are a number of sections to which reference must be made to discern the scheme envisaged by Parliament. The relevant sections appear in Part IV Division 2 entitled "Constraints on awards of common law damages." The most important provision for present purposes is s 93E.

15 Relevant to the matters under consideration, the broad purpose of the Act in relation to workers' rights to seek damages at common law is as follows.

16 If a worker has a degree of disability of 30 per cent or more (the degree having been agreed or determined) then the worker may pursue a claim for damages for negligence at common law.

17 If the worker has a significant disability then the right to seek damages at common law can only be pursued if the worker elects in the prescribed manner and the election is registered in accordance with the regulations [s 93E(3)(b)].

18 I consider that the term "significant disability" in s 93E(3)(b) is defined in s 93E(4).

19 A significant disability is one which it is agreed or determined that the degree of disability is not less than 16 per cent and that agreement or determination is recorded in accordance with the regulations.

20 If a worker elects to pursue his or her rights at common law the right to compensation under the Act is foregone.

21 The assessment of the level of disability, particularly for the purposes of s 93E, is provided in s 93D.

22 After providing a method of calculation of the relevant level of disability, the section provides a mechanism for determining the level if there is a dispute between employer and worker.

23 The question of the relevant level is referred to the director with a medical opinion as to the level of disability. Thereafter there is a procedure for determination of the level of disability.

24 The first question is whether the provisions, when read together, evince an intention by Parliament that the agreement or determination of a degree of disability is a pre-condition to making an election.

25 For Mr Woodford it is submitted that nothing in the Workers' Compensation and Rehabilitation Act 1981 leads to the conclusion that the degree of disability is to be assessed before the termination day.

26 The opening words of s 93E(3), "Damages can only be awarded if -" are an expression of Parliamentary prescription, principally to a judicial officer hearing a common law claim for damages. The court cannot find that a worker has a significant disability. Only if the provisions of s 93E(4) are fulfilled can it be said that a worker has a significant disability.

27 The last requirement in s 93E(4) directs attention to s 93G, which provides that regulations may be made providing for:

(c) the registration by the Director of elections under section 93E(3)(b) if an agreement or determination for the purposes of section 93E(4) has been recorded, and the power of the Director to refuse to register an election if not satisfied that the worker has been properly advised of the consequences of the election;

(d) the recording by the Director of an agreement or determination under section 93E as to the degree of disability of a worker;

28 Section 93E(5) limits the right to make an election if weekly payments are commenced, as in the present case. An election must be made before the termination day.

29 Section 93E(6) and (7) give the director power to extend the period in which an election can be made, up to six months from the termination day, provided earlier conditions are met. They are that medical evidence from a medical practitioner, indicating that in the medical practitioner's opinion the degree of disability is not less than the relevant level (in the present case 16 per cent), and that a dispute between the employer and the worker has not been resolved before the termination day.

30 By s 93E(8), once an election has been registered, a worker's entitlement to compensation ceases.

31 There is an exception to s 93E(8) in the following subsection. Put shortly, there is the possibility that subsequent to election, a worker's degree of disability may be settled at more than 30 per cent. In this event, the worker is put into the position of a worker under s 93E(3)(a).

32 Section 93G provides for a specific regulation making power to control the procedures under s 93E.

33 The applicant's fundamental submission is that nothing in the Workers' Compensation and Rehabilitation Act 1981 makes a pre-condition that the degree of disability be agreed or assessed within the six months limited for election.

34 I am unable to agree. In my view the overall structure of s 93E makes manifest Parliament's intention that the degree of disability should be resolved prior to the election by a worker under s 93E(3)(b).

35 This construction fits with s 93E(6) and s 93E(7), which contemplate the possibility that election cannot be made prior to termination day because of a current dispute. In such a case there must at least be some evidence of significant disability produced to the director. These sections would appear to be unnecessary if the applicant's contention is correct. The power to grant an extension is temporally limited to six months beyond termination day, indicating Parliament's intention that the whole issue of disability and election be resolved sooner rather than later.

36 Furthermore, there would appear to be little sense in requiring an election within a defined period but then postponing, for a further undefined and undetermined period, the registration of the election. It would not appear to be beneficial to allow a worker to make an election but then at some period in the future, when the degree of disability has been settled, and the election is able to be registered, the director refuses to register because he or she is not then satisfied that the worker has been properly advised of the consequences of the election.

37 There would be a significant period of time before an employer was notified of an election, during which the worker would continue to receive benefits because the election, though lodged, has not been registered.

38 The applicant argues that the effect of s93E(6)(a) is to reduce the time limit by 21 days. Counsel illustrated this submission by postulating the case of a worker who does not seek to make an election until a period within 21 days and has no agreement or determination as to whether he or she has a significant disability.

39 This, it is said, suggests that Parliament cannot have intended that the determination of agreement as to a significant disability is a pre-condition to election.

40 There is some force in the submission but the answer lies in the notification provisions. Section 93G(a) states specifically that regulations may provide for the notification to be given to workers of the effect of the provisions of s 93G.

41 Regulation 19P, which is not impugned, places an obligation on employers to give a worker who has an unfinalised claim for compensation, written notice of the requirement under s 93E(3)(b) to elect, and the date by which the election is to be made.

42 While this regulation may not be directly applicable to the applicant, in combination with s 93G(a), it does provide an indication that Parliament intended to minimise any possible prejudice by ensuring steps would be taken to inform workers of their right to elect in good time. Therefore, I do not think the possibility that some workers may be shut out from election earlier than other workers, because they have not obtained medical evidence in good time, detracts from the general inference that the intention behind s 93E is to have the question of significant disability resolved prior to election.

43 Counsel for the applicant suggested that a worker might have good reason to elect now and await a determination later. The worker might be back at work with an unresolved injury, which may sometime in the future be agreed or determined to be a significant disability.

44 There is some force again in this example. I do not know whether Parliament considered all the ramifications to workers before enacting s 93E in its present form.

45 The example gives some weight to the submission that, because the requirement of reg 19M may lead to an injustice in such a case, Parliament did not intend the resolution of the question of significant disability should be a pre-condition for election.

46 This weight, however, is not sufficient to dissuade me from the view I have previously expressed about Parliament's intention.

47 The combined effect of the sections, which comprise the Workers' Compensation and Rehabilitation Act, Part IV, Division 2 is, notwithstanding that there may be an occasional injustice, nevertheless, Parliament clearly intended the question of significant disability be resolved before an election is made.

48 In consequence, far from being contrary to the purposes of s 93E, I consider reg 19M is consistent with those purposes and is therefore a valid exercise of executive power pursuant to s 93G.

49 I refuse the application for a writ of mandamus and a declaration.