Anderson v Arnott's Biscuits Limited [2001] SAWCT 27

4 The issue here is whether the exempt employer can bring itself within s 53(7a)(c). That section says:-

"(7) The Corporation may, in an appropriate case, by notice in writing to the worker, redetermine a claim.

(7a) For the purposes of subsection (7), an appropriate case is one where -

(c) the redetermination is appropriate by reason of new information that was not available and could not reasonably have been discovered by due enquiry at the time that the original determination was made;"

The worker injured his left hip on 3 February 1997. He made a claim on 21 March 1997. That claim was accepted on 17 April 1997. The worker subsequently underwent surgery at the hands of Mr A Spriggins. In addition to the usual surgical qualifications Mr Spriggins holds the Degree of Master of Surgery.

6 That orthopaedic management was the subject of consultation with DW Howie PhD, Professor of Orthopaedics at the University of Adelaide. He also holds appointments as the Clinical Director and Head of Department of Orthopaedics and Trauma, and Head of the Joint Replacement Unit at the Royal Adelaide Hospital.

7 The consensus of their opinion between April 1997 and July 1999 was that the worker's disability is an aggravation of an underlying problem to his hip - see Professor Howie's letter to exempt employer 5 July 1999.

8 Between April 1997 and August 2000 the worker was very extensively examined, assessed and commented upon by a series of occupational physicians, psychiatrists and on two occasions by the Director of a Pain Management Clinic.

9 On 30 June 2000 the respondent's solicitors wrote to Professor Bauze and enclosed 17 medical reports requesting the following opinions.

2. If no to 1 above is the worker fit for any, and if so, what light duties?

3. If the worker is suffering any incapacity or disability is this a result of:-

3.2 an aggravation of a pre-existing degenerative condition;

The balance of the letter is directed to s 43 issues.

10 Professor Bauze examined the worker on 21 August 2000. His reply to the questions was:-

1. From a physical point of view he is probably not fit for normal duties as he has osteoarthritis of the left hip and cannot cope.

3. His incapacity or disability is related to a degenerative condition and, probably, the reinforcement from various sources that his pain in due to his work and therefore compensable. (my emphasis)

4. There is no physical treatment that can help him.

5. For completion I note that Dr Bauze authorised a further report dated 27 October 2000 as follows addressed to the exempt employer's solicitors:-

"Further to your letter of the 26 September 2000 (which was not in evidence) and my previous report about the above dated the 23 August 2000, I advise as follows:

1. In my opinion the incident that occurred on the 3 February 1997 did not cause an aggravation, exacerbation, acceleration, deterioration or recurrence of the worker's pre-existing condition which was osteoarthritis of the right hip. At a pinch it may have caused a temporary aggravation. (my emphasis)

2. If it did cause an aggravation, I estimate the period of incapacity that would have followed the incident as being about one week.

3. In my opinion he would have been fit to return to full pre-injury duties after about one week."

11 The evidence before me consisted of an affidavit of Ms J Palios of 30 January 2001. That relates the history of the matter and annexed the medical reports. The respondent relied upon an affidavit of Mr David Ey dated 23 February 2001 that annexed additional medical reports obtained between 1997 and 2000. In addition there was an affidavit of Robert J Bauze. That detailed the material and the reports to which he had regard in framing his opinion, as well as the limitations he would have experienced had he examined the worker prior to 17 April 1997.

12 Hence the facts that are germane to this issue are not in dispute.

13 The terms of the determination of 27 September 2000 after setting out the appropriate section of the Act state:-

"In the present case we consider the further medical report of Professor R Bauze dated 23 August 2000 constitutes such new information. We enclose a copy for your information.

Accordingly in the light of that new information we have redetermined the above claims as follows:-

Your claims are rejected on the following grounds:-

1. You did not sustain a physical injury at work on 3 February 1997.

2. If you have suffered any incapacity for work it has resulted purely from your pre-existing degenerative hip condition and as such you have no entitlement to any weekly payments of weekly payments or compensation for medical and like expenses pursuant to section 32 of the Act."

(The determination continues on to deal with a s 38 claim and appeal rights.)

14 The real issue is whether the exempt employer was entitled to rely upon Professor Bauze's opinion to redetermine the original claim, relying on s 53(7a)(c).

15 It is a serious question and has serious financial consequences for the worker. Had the exempt employer used s 36(1)(b) ie a discontinuance on the grounds that "the employer is satisfied on the basis of a certificate of a recognised medical expert that the worker has ceased to be incapacitated for work by the compensable disability" that of itself would have given rise to the worker having rights pursuant to s 36(4) - which would have suspended the operation of the decision to discontinue pending the resolution of the dispute.

16 In other words weekly payments would have continued. By relying on s 53(7a)(c) the worker is deprived of the protection of s 36(4). see Local Government Association of South Australia v Delle Donne S5661 FC 6 June 1996 for authority if such were needed.

17 The proper construction of s 54(7a) is free from direct authority.

18 S 53 is the last of three sections within Div 8 of Pt 4 of the Act. Pt 4 is headed Compensation. Div 8 deals with notices of disability and claims for compensation.

19 S 51 deals with the obligation to give a Notice of Disability.

20 S 52 deals with the form, content and time for a Claim for Compensation.

21 S 53 deals with the determination of a claim that has been made.

22 S 53(1) s 53(2) and s 53(3) invest the compensating authority with wide powers of investigation, largely at its own discretion, to enable it to come to a proper and informed decision whether or not to accept a claim.

23 S 53(4) proposes expedition in the decision making process, although it does not actually impose a time limit.

24 In the event of a delay the worker can resort to an application pursuant to s 97 to have a decision expedited. Likewise the Compensating Authority is empowered by s 116 to make interim payments without prejudice to its final determination.

25 S 53(5) provides for notice to be given of the determination.

26 S 53(6) provides for the reasons to be given in the event of a rejection. S 53(7) gives the Compensating Authority power to redetermine a claim in an appropriate case.

27 S 53(7a) came into the Act via Act 49 of 1994. It came operative on 1 July 1994 (for a case dealing with the retrospective operation of s 53(7) and 53(7a) see O'Brien v South Australia (1994) 63 SASR 175 where a useful historical summary is set out at 177).

28 A redetermination is appropriate in four classes of case.

b Where the claimant deliberately withheld information that should have been supplied and the original determination was based on inadequate information.

c Where there is new information see the text quoted above

d To correct an administrative error (ie a slip rule provision).

29 S 53 presents a simple and clear code to dispose of claims for compensation as expeditiously as possible . It gives the power to investigate - but it enjoins prudent expedition and protects both the claimant and the Compensating Authority from unnecessary delay.

30 S 53(7) gathers up the classes of cases that are exceptional or anomalous.

31 Its philosophy seems to be analogous to the obligations of utmost good faith imposed upon an insured at common law in its dealings with an underwriter.

32 S 53 in general and s 53(1), s 53(2), s 53(3) and s 53(7) in particular, have as their foundation the proposition that in a claim situation most of the pertinent information is initially largely in the hands of the claimant. The prudent administration of the fund requires that appropriate investigation should take place before a claim is accepted and paid.

34 The worker submits the following general propositions should inform the interpretation of the section.

(a) The administration of the Act should be efficient and effective s 2(1)(b)

(b) The scheme should reduce litigation and adversarial contests to the greatest possible extent s 2(b)(f).

(d) As a general principle, limits on litigation are desirable. All litigation should be brought to an end as expeditiously as possible.

2. Parliament has already provided the Compensating Authorities with the legal resources in s 53(1) and s 53(2) to conform to the above principles 1(a), 1(b) and 1(c).

3. Only in very clear circumstances should a redetermination be allowed, as multiple determinations prima facie breach the above principles.

4. The purpose of s 53(7a) is to ensure that the determination reflects the real position of the parties.

(i) S 54(7a)(a) and s 54(7a)(d) are clear cases. They need no further explanation. Ie there is either an agreement or there is an error. Given the existence of either, it is appropriate that the determination should reflect the real relationship between the parties, to reflect the agreement or to correct the error..

(ii) S 54(7a)(b) and s 54(7a)(c) are different species of the same genus. The genus is information that "was not available".

S 54(7a)(b) is the species that deals with non disclosure of information that is material to the decision making process but not any type of non disclosure. It is deliberate non disclosure. Information that is withheld innocently or inadvertently or accidentally, even though it might be material, is not a ground for redetermination.

The section goes further. It requires a causal nexus between the withheld information and the determination, so it can properly be said that the determination was based on information that was inadequate. This is a high test. The withholding must be deliberate, and it must have a causal effect on the decision.

The second species of information is that not taken into account at the time of the original determination. It is information which has nothing to do with the claimant. It has nothing to do with the morally perjorative nature of being "withheld". It is "new information".

5. The worker's primary submission is that "new information" is information that exists at the time of the determination. It is "new" only in the sense that it is "new to the decision maker".

(a) S 53(7a)(b) deals with withheld information which postulates that that which is "withheld" already exists - otherwise it could not be withheld. Applying the same criteria to the other species of information in s 53(7a)(c), this information is new, not in the sense that it comes into existence post the determination but that it exists, but is unknown to the decision maker.

(b) Such a construction is consistent with its following words "it was not available and could not reasonably have been discovered by due inquiry." Ie if the information does not exist - then it follows that it could not be discovered by inquiry, due or otherwise.

(c) To construe the section otherwise would do violence to the concept of "discovery". It is impossible to "discover" that which does not exist. Ie "Discovery" would never take place and the words of the section would be meaningless.

(d) All information that comes into existence after the determination is "new". No matter how long after the determination it is created. To construe the section, without limiting such material to already existing material in order to found a redetermination, effectively makes the section a new form of the rejection mechanism as an alternative to s 36. However s 53(7a) is only in the Act in the first place as a fail safe to catch the anomalous case.

The determination says it is the report of Professor R Bauze of 23 August 2000. Mr Hanus said it is more accurately "the opinion of Professor Bauze" or "the fact that Professor Bauze holds that opinion".

A mere "opinion" is not per se "information". It is nothing more than one person's intellectual conclusions or inferences drawn from what that person considers to be facts relevant to the solution of the question that is posed. It is not the "opinion" that is the new information, it is the facts that are the new information.

Professor Bauze's affidavit at the very best mentions no such fact other than that of the report of an open arthroscopy which took place on 13 June 1997.

(i) An MRI Scan and left hip arthrogram dated 4 April 1997 and

(ii) A bone scan and a CT Scan of the hips performed on 15 April 1997.

The failure of the exempt employer to utilise its powers under s 53(1) and s 53(2) and s 53(B) to obtain possession of those "facts" is something that should be laid at the door of the exempt employer. It should not be allowed to be prayed in aid in an exercise in exculpating itself from its own inefficiency (if that be the case) via s 53(7a)(c).

Hence, it is submitted that the exempt employer's case falls at the first hurdle. That which the exempt employer asserts is new "information", is not new "information" at all. It is nothing more than a different diagnosis drawn from the very same facts that were before eminent orthopaedic specialists.

The substance of the dispute is a divergence between the views of Mr Spriggins and probably Professor Howie on the one hand and Professor Bauze on the other. That dispute will be resolved in the ordinary course after a s 36(1)(f) Notice issues.

7. As a fall back position the worker submits that the word "appropriate" vests a residual discretion in the Tribunal to disallow the redetermination if it is "inappropriate".

The section is worded "the redetermination is appropriate by reason of new information etc." It is noteworthy that s 53(7a)(c) is the only section that repeats the word "appropriate" - it therefore must have some work to do other than to simply echo "appropriate" in sub s (7) "The Corporation may, in an appropriate case, by notice in writing to the worker, redetermine a claim".

35 Hence even if (which is not conceded) the exempt employer could make out the ground of s 53(7a)(c), it has to pass the further test that the decision to implement the redetermination is "appropriate".

36 It is submitted that in the circumstances of this case the Tribunal would exercise its discretion against allowing the redetermination.

(i) The lapse of time of three years and five months between the determinations.

(ii) The exempt employer has of its own motion and through the applicant's solicitors been kept fully informed as to the applicant's medical condition.

(iii) The exempt employer has advanced no reason why the referral to Professor Bauze or indeed any other orthopaedic surgeon took three years and five months to arrange.

(iv) The exempt employer has its remedy available in a s 36(1)(f) Notice (ie the worker is no longer suffering from a compensable disability).

(v) The worker has altered his position on the strength of the original determination economically socially, medically and otherwise to the point where it would be unjust to suddenly deprive him of the support of the income maintenance. Ceasing s 35 payments suddenly to a worker who suffers such a severe physical and psychological disability as is disclosed by the medical reports in this case, is unconscionable.

38 The exempt employer's submission is of limpid simplicity.

(a) An opinion can be a new fact - see in particular s 48 of the Limitation of Actions Act and Sola Optical v Mills 46 SAR 365.

If an opinion can be a fact it can be "information".

The fact that Professor Bauze holds the opinion and reproduces that opinion in his report is information.

(b) It is new information. It first came into existence in August 2000. Compared to April 1997 its emergence at that stage is new.

(c) The requirement for new information is to prevent the compensating authority having information and not using it for some time. At that stage of use it would be old information not new information.

(d) Was the opinion expressed by Professor Bauze available on 17 April 1997? It clearly was not because it was not available until August 2000. It could not reasonably have been discovered by due inquiry as at 17 April 1997 because it did not exist. That is self evident.

(e) Could that opinion have been reasonably discovered by due inquiry by 17 April 1997. The answer is no - it did not exist at that time.

(f) The section contemplates the state of the information that is available at the time of the original determination - rather than information that could have been acquired. The section does not predicate that the compensating authority must first canvass all reasonable possible sources of information. The section simply looks at the state of information as it existed at the 17 April 1997. If the information did not exist then - it is new.

39 To summarise, the information must be available and must have been discoverable. If it is available it must have been in existence and capable of being discovered. By any test the opinion of Professor Bauze was not in existence therefore it was not available and was therefore not discoverable.

40 This is a matter to which I come, free from the burden of the assistance imposed upon me by authorities.

41 S 53 is a code. It spells out the position of both parties in a claim for compensation.

42 The 1994 amendments, inserting s 53(7) provide for the anomalous claim where the determination already made does not reflect the real position of the parties. This purpose of s 53(7a) is seen perhaps in its clearest form in s 53(7a)(e). One of the appropriate cases is "the redetermination is made in prescribed circumstances". In fact those circumstances have not yet been prescribed. Nevertheless s 53(7a)(e) is there to enable other anomalous circumstances to be dealt with if and when they arise without the necessity of an amendment to the Act.

43 The purpose of s 53(7a)(b) and s 53(7a)(c) is to correct the anomaly of the compensating authority making a determination on a false basis - a basis that is either created wilfully (b) or accidently (c).

44 The section is not in the Act as a substitute for the ordinary dispute resolution process that is generated by rejection under s 53(3)(b) and is followed through by s 90, s 90A and s 90B.

45 Nor is it in the Act as a substitute for s 36 with its built in protection. I have no need to repeat what fell from the former Chief Justice in Mitsubishi Motors Australia Ltd v Frank Sosa S5084 FC 8 June 1995.

46 I adopt the submissions of the worker that the "new information" refers to information that exists at the time the original determination is made. The construction of s 53(7a)(c) would then be congruent with s 53(7a)(b). On that ground alone the report of Professor Bauze is not "new information".

47 I have grave doubts that a medical opinion is "information" new or otherwise. I have no doubt that if the medical opinion does no more than to raise a difference of opinion with other medical experts, it is not "new information". What the position might be if a new medical report disclosed a hitherto undiscovered disease presumes a different set of facts which have to await solution on another day.

48 I am also of the view that there is a discretion in the Tribunal to decide whether the redetermination is appropriate. Even assuming the exempt employer's submissions were acceptable I would exercise my discretion against allowing the redetermination on the facts of this case.

49 In general I hold that s 53(7a)(c) has a much narrower application than that contended for by the respondent. It does not permit a redetermination to be made years after the original determination on the basis of a medical opinion fortuitously then discovered. The results of holding otherwise are so obvious and so deleterious to the proper working of the compensation system as to not require any further dilation from me thereupon.

50 I hold that on the evidence before me the conditions precedent for the operation of s 53(7a)(c) have not been made out. The purported determination of 20 September 2000 is void and of no effect.

51 I order that weekly and other payments recommence forthwith. I order that the back payments carry interest in accordance with the Act.

52 I order that the respondent pay the worker's costs.

Parties are advised that if a party wishes to appeal against any part of this decision which is appealable pursuant to s 86(1) of the Act such appeal must be filed with the Registrar in accordance with Form 11 within 14 days of the delivery of this decision and must be served on all parties.