Appellant v Respondent

Order 56, Supreme Court (General Civil Procedure) Rules 2005 (Vic) - application for judicial review of Magistrates' Court order - application out of time - whether "special circumstances" established.

1 There are two proceedings before me. The first is an appeal under s 109 of the Magistrates' Court Act 1989 (Vic) ("MC Act") against an order made on 1 October 2007 by the Magistrates' Court at Melbourne dismissing an application under s 60(2) of the Accident Compensation Act 1985 (Vic) ("AC Act") to revoke directions given by a conciliation officer. The second proceeding is an application under Order 56 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) ("Rules") for judicial review of that order.

2 The conciliation officer issued a "conciliation outcome certificate" making directions under s 59 of the AC Act and indicating the officer's satisfaction that there was no arguable case in support of the denial of liability of the appellant, Somerville Retail Services Pty Ltd ("Somerville"), to make or continue to make weekly payments to the respondent, Mrs Petisi Vi. The two proceedings before me seek to set aside the learned Magistrate's order dismissing the application to revoke the directions.

3 Before me, Somerville submitted that the order of the Magistrates' Court was interlocutory and not final. It was common ground that, as s 109 of the MC Act permits an appeal to the Supreme Court only from a final order of the Magistrates' Court, if the order was interlocutory, the appeal is incompetent and the application for judicial review under Order 56 would need to be considered. It was also common ground that, if the order of the Magistrates' Court was final, the appeal is competent and it would not be necessary for me to consider the application for review under Order 56. Further, it was common ground that if the appeal was incompetent, I would first need to consider whether an extension of time should be granted under r 56.02 of the Rules, as the application under Order 56 was filed more than 60 days after the order was made by the Magistrates' Court.

4 For the reasons set out in this judgment, I have concluded that the order of the Magistrates' Court was not a final order, that the appeal should therefore be dismissed and that the application under Order 56 should also be dismissed because special circumstances have not been demonstrated to justify an extension of time.

5 This judgment is divided into the following parts:

(c) Whether the order of the Magistrates' Court is a final order;

6 It is necessary to set out the facts of, and background to, this matter in some detail. In this respect, it will be useful to first set out the procedural history, before turning to the details of the factual background against which Mrs Vi's claim was made.

7 A claim by Mrs Vi for weekly payments of compensation and medical expenses under the AC Act was initiated by a "WorkCover worker's claim form" signed by Mrs Vi on 28 June 2007, the day she ceased work as a process worker with her employer, Somerville. On the form, the injury or condition was described as "adjustment disorder" caused by Mrs Vi being "subject to sexual harassment and assault". Although this was not apparent from the form itself, the sexual harassment and assault was alleged to have been committed by Robert Dintinosante, a colleague of Mrs Vi's who held a supervisory role in relation to her. The form contained a section that was completed by Somerville on 29 June 2007, in which it denied that there had been any sexual harassment or assault and asserted that the claim was not work-related.

8 By letter dated 1 August 2007, QBE Workers Compensation (Vic) Ltd ("QBE"), an authorised agent of the Victorian WorkCover Authority ("VWA"), gave Mrs Vi notice under s 109 of the AC Act that her claim had been rejected. The ground for rejecting the claim given in the notice was: "Your claimed injury did not arise out of or in the course of employment". The letter from QBE also provided more detailed reasons for the decision. Those reasons referred to an independent medical examination conducted by a psychiatrist, Dr Don Senadipathy, on 23 July 2007, and to a circumstance investigation undertaken by MPOL Group resulting in a report from MPOL Group received by QBE on 25 July 2007. The reasons also referred to statements taken from Mrs Vi, Mr Dintinosante and other employees of Somerville. The reasons for decision stated that "there is no evidence which supports your claim that employment is the causation for your condition".

9 Dr Senadipathy's report dated 23 July 2007 to QBE concluded that Mrs Vi

suffers from profound depression resulting from the sexual abuse and two terminations of pregnancies that resulted from the sexual encounters she had with her supervisor who, in my opinion, failed in his duty of care and used his position of power and her vulnerability for his advantage

and that she "is totally and temporarily unfit for her pre-injury employment and any other employment". After QBE provided him with a copy of Mr Dintinosante's statement, Dr Senadipathy wrote to QBE on 24 July 2007 stating:

Here we have a woman who is suffering from a mental illness resulting from willing or unwilling sexual activity with a superior officer. He failed to take necessary steps to consider the seriousness of such activity and prevent it happening. Therefore, I am of the opinion that her condition is work-related.

10 On 6 September 2007, a conciliation conference was held pursuant to Division 2 of Part III of the AC Act. The conciliation officer was unable to bring the parties (Mrs Vi and Somerville) to agreement by conciliation. In a "conciliation outcome certificate" dated 12 September 2007, the conciliation officer certified that the claimant has taken all reasonable steps to settle the dispute. The certificate stated that the officer was satisfied that there was no arguable case in support of the denial of liability to make or continue to make weekly payments because there was no dispute that there was an injury to which the worker's employment was a significant contributing factor. The certificate also stated that the injury was a contributing factor to the worker's incapacity for work. In accordance with s 59(10) of the AC Act, the certificate stated that, as the officer was satisfied that there was no arguable case, the officer was taken to be satisfied that there was no genuine dispute with respect to the liability to make or continue to make weekly payments, or with respect to the liability to make or continue to make payment of compensation under s 99 of the AC Act.

11 The conciliation outcome certificate set out the following directions, made pursuant to s 59 of the AC Act:

In accordance with section 59(7), I direct that the WorkCover agent make payments of weekly compensation in accordance with the Act for the period 28 June, 2007 to 11 September 2007 inclusive.

In accordance with section 59(5), I direct that the WorkCover agent make payments of weekly compensation in accordance with the Act for the period 12 September 2007 to 5 December, 2007, inclusive.

In accordance with section 59(9) of the Accident Compensation Act 1985, I direct that the WorkCover agent pay the reasonable costs of services under section 99 (medical and like expenses) up to the sum of $2,000.00.

12 Somerville applied by summons to the Magistrates' Court, pursuant to s 60(2) of the AC Act, for the revocation of the 12 September 2007 directions made by the conciliation officer. For convenience, I refer to the directions as "the direction". The application was heard in the Magistrates' Court at Melbourne on 1 October 2007. The Court found that there was no arguable case in support of the denial of liability to pay compensation and therefore no genuine dispute, and accordingly dismissed the application and ordered Somerville to pay Mrs Vi's costs.

13 The amended notice of appeal[1] from the learned Magistrate's order was filed on 14 December 2007 and lists the following questions of law upon which the appeal is brought:

1. Whether on the evidence upon the application, it was open for the learned magistrate to be satisfied that there was no arguable case in support of the denial of liability to pay weekly payments of compensation pursuant to the Act.
2. Whether on the evidence upon the application, the learned magistrate's finding that there was no arguable case in support of the denial of liability was one which a reasonable magistrate could make.
3. Whether on the facts assumed as established, it was open for the learned magistrate to hold that the Appellant had no arguable case on the law, that the Respondent's claimed adjustment disorder injury was not an injury, as defined, which had arisen out of or in the course of employment with the Appellant.
4. Whether the Respondent's sexual relationship, even if willing as alleged by Mr Dintinosante, could in law have been 'incidental' to the Respondent's employment?
5. Whether the Respondent's employment, even if her sexual relationship, was willing as alleged by Mr Dintinosante, could in law have been a cause of the alleged injury on the basis that the 'arising out of' test was satisfied.

14 The application for judicial review under Order 56 of the Rules was filed on 3 June 2008. I discuss it later in this judgment.

Agreed and disputed factual background to Mrs Vi's claim

15 Mrs Vi and Mr Dintinosante met during their shared employment by Somerville. A sexual relationship commenced between Mrs Vi and Mr Dintinosante in around 2004 and continued for around three years. Mrs Vi twice became pregnant over the course of the relationship and terminated both pregnancies. During their relationship, Mrs Vi and Mr Dintinosante continued to work in the same workplace.

16 As described earlier in this judgment, Mrs Vi and Mr Dintinosante both made statements for the purposes of QBE's initial decision about Mrs Vi's claim. In her statement, Mrs Vi claims that the relationship was initiated and subsequently pursued by Mr Dintinosante against her will. She states that he pressured her and sometimes threatened her with the loss of her job if she said anything to anyone. She describes Mr Dintinosante's actions as being sexual harassment. By contrast, in his statement, Mr Dintinosante claims that the relationship was initiated and subsequently pursued by Mrs Vi, and that the relationship was consensual.

17 There is also a dispute as between Mrs Vi and Mr Dintinosante about the extent and nature of the sexual contact between them in the workplace and elsewhere. They both agree that sexual intercourse usually took place in Mrs Vi's car after they left work. In relation to sexual contact in the workplace, Mr Dintinosante states that the only contact in the workplace was kissing "[m]aybe once or twice". By contrast, Mrs Vi states that there was more extensive sexual contact in the workplace, including an occasion when Mr Dintinosante performed oral sex on her in the boardroom, late in her shift. She also states that Mr Dintinosante repeatedly made dirty comments to her in the workplace and that he sometimes asked her to clock off early so that he could meet her.

18 In his statement, Mr Dintinosante states that the only person at Somerville who knew that he was having a relationship with another employee (but not the identity of that employee) was Ross D'Elton, the Occupational Health and Safety Officer. This was not contradicted by Mrs Vi in her statement, or by any other material before me.

19 The key provisions of the AC Act that are relevant to this proceeding are in Part IV headed "Payment of Compensation" and Part III headed "Dispute Resolution".

20 Section 82(1) of the AC Act, which is in Division 1 (headed "Application") of Part IV, provides that "[i]f there is caused to a worker an injury arising out of or in the course of any employment, the worker shall be entitled to compensation in accordance with this Act". Section 93 of the AC Act, which is in Division 2 (headed "Benefits") of Part IV, provides "[i]f a worker's incapacity for work results from, or is materially contributed to by, an injury which entitles the worker to compensation, the compensation shall be in the form of weekly payments subject to and in accordance with this Part".

21 Section 43(1) of the AC Act, which is in Division 1 (headed "County Court") of Part III, confers jurisdiction on the Magistrates' Court in relation to certain matters that are within the jurisdiction of the County Court, including matters in respect of the payment of weekly payments. Section 43(3) provides that the AC Act applies to the Magistrates' Court when exercising jurisdiction under Part III as if a reference to the County Court were a reference to the Magistrates' Court.

22 Section 49, which is also in Division 1 of Part III, provides that, save for certain exceptions which are not relevant to this case, proceedings must not be commenced in the County Court or Magistrates' Court unless the dispute between the parties has been referred for conciliation under Division 2 of Part III and until the conciliation officer has issued a certificate that all reasonable steps have been taken by the claimant to settle the dispute.

23 Division 2 of Part III of the AC Act contains ss 53 to 62. It is headed "Conciliation of disputes". Section 53 provides:

conciliation conference means any conference held with or before a conciliation officer -

(a) to resolve a dispute referred for conciliation; or

(b) for the purpose of giving directions in connection with any such dispute;

dispute means a dispute in connection with a claim for compensation between the person who makes or has made the claim and any one or more of the following -

(a) the employer (not being a self-insurer or a subsidiary of a self-insurer) of the relevant worker;

(b) where the compensation is or may be payable by the Authority, the Authority;

(c) where the compensation is or may be payable by a self-insurer, that self-insurer.

(1) In this section a reference to a dispute as to liability to make or continue to make weekly payments includes a reference to a dispute as to whether a worker has no current work capacity or has a current work capacity or as to any other matter which affects the amount of the weekly payments.

(2) This section applies if a dispute relating to -

(a) a claim for weekly payments of compensation; or

(b) a continuation of weekly payments of compensation; or

(c) a claim for the payment of compensation under section 99 -

has been referred to conciliation under this Division, but a Conciliation Officer is unable to bring the parties to agreement by conciliation.

(3) If the Conciliation Officer is satisfied that there is no genuine dispute with respect to the liability to make or continue to make weekly payments, the Conciliation Officer may direct the Authority, employer or self-insurer, as the case may be to pay or continue to pay compensation in accordance with the direction.

(4) If the Conciliation Officer is satisfied that there is a genuine dispute with respect to the liability to make or continue to make weekly payments, the Conciliation Officer must notify the person who made the claim for weekly payments, or who was receiving weekly payments, of that fact and that an application may be made to the County Court to determine the matter.

(5) A direction or further direction of a Conciliation Officer under this section may require the Authority, employer or self-insurer to pay or continue to pay weekly payments for such period not exceeding 12 weeks as is specified in the direction.

(6) Nothing in this section prevents a Conciliation Officer from giving a further direction or further directions for payment of compensation after the expiry of an earlier direction except where the earlier direction is revoked by the County Court.

(7) In addition to the power conferred by subsection (5), a Conciliation Officer may direct payment of weekly payments during a period that is before the direction is given, but that period must not exceed 24 weeks.

(8) If a Conciliation Officer gives a direction or further direction to pay or continue to pay weekly payments, the Conciliation Officer may also give a general direction to the Authority, employer or self-insurer, to pay subject to and in accordance with section 99 the reasonable costs of services specified in that section that were or are to be provided during the period specified in the direction under subsection (5) or (7) as the case may be.

(9) If the dispute is, or includes, a dispute as to the liability for the payment of compensation under section 99 in respect of an injury and the Conciliation Officer is satisfied that there is no genuine dispute with respect to such liability, the Conciliation Officer, unless subsection (8) applies, may give a general direction to the Authority, employer or self-insurer, to pay subject to and in accordance with section 99 the reasonable costs of services specified in that section up to a total of $2000 in respect of the relevant injury.

(10) For the purposes of this section a Conciliation Officer is to be taken to be satisfied that -

(a) there is a genuine dispute if the Conciliation Officer is satisfied that there is an arguable case in support of the denial of liability;

(b) there is no genuine dispute if the Conciliation Officer is satisfied that there is no arguable case in support of the denial of liability.

60 Revocation of directions of Conciliation Officer

(1) A direction given by a Conciliation Officer under this Division may be revoked by the Conciliation Officer or by any other Conciliation Officer.

(2) The County Court may, on the application of a person who is liable to make payments of compensation in accordance with a direction of a Conciliation Officer under this Division, revoke the direction.

(3) If a direction is revoked, the obligation to make payments of compensation under the direction ceases.

(4) If the County Court subsequently determines that a person is not liable to make the payments of compensation that have been paid in accordance with a direction of a Conciliation Officer, the following provisions apply -

(a) the worker or other person who received those payments is not required to refund those payments unless the County Court otherwise orders under paragraph (b);

(b) if the County Court is satisfied that the claim for compensation was wholly or partly fraudulent or made without proper justification, it may order the worker or other person concerned to refund the whole or a specified part of those payments;

(c) the County Court may (instead of making an order for a refund) order any other person whom it determines was liable for the whole or any part of those payments to reimburse the person who made those payments.

61 Payments under direction etc. not admission of liability

(a) pays or continues to pay compensation in accordance with a direction or recommendation of a Conciliation Officer under this Division; or

(b) does not apply for a revocation of any such direction -

(2) The grant or refusal by the County Court of an application for revocation of a direction is not a finding as to liability in respect of the matter in dispute.

27 Section 114 of the AC Act, which is in Division 3 (headed "Claims management and procedures") of Part IV, enables the VWA to terminate or alter a worker's entitlement to weekly payments in certain circumstances. Those circumstances include where the worker is no longer entitled to compensation, where the worker returns to work and where the VWA considers that payments were obtained fraudulently. Other provisions which can affect a worker's entitlement to weekly payments include ss 93CA(4), 93CB(4), 93CC(5), 93E, 93EA, 93F, 96, 97(2) and 97(7) of the AC Act.

Whether the order of the Magistrates' Court is a final order

28 A party to a "civil proceeding" in the Magistrates' Court may appeal to this Court on a question of law from a "final order" of the Magistrates' Court "in that proceeding".[2]

29 Before me, Mr Gorton QC, who appeared with Mr Fleming for Somerville, submitted that the order of the Magistrates' Court was final because it dealt with all of the issues involved in the proceeding before the Magistrate. He referred to s 3 of the MC Act which relevantly defines "proceeding" as meaning "any matter in the [Magistrates'] Court, including a committal proceeding". Mr Gorton submitted that the subject matter of the relevant proceeding was an application under s 60(2) of the AC Act to revoke the direction of the conciliation officer. In his submission, the order of the Magistrates' Court dismissing the application dealt finally with the entire subject matter in the proceeding before the Magistrate.

30 Mr O'Loghlen QC, who appeared with Mr Wicks for Mrs Vi, conceded that an application under s 60(2) of the AC Act constitutes a proceeding. However, Mr O'Loghlen submitted that the order of the Magistrates' Court was interlocutory because it did not resolve the entire principal cause between the parties. He submitted that the direction only dealt with part of the legal dispute between the parties and that the learned Magistrate's order dismissing the application to revoke the conciliation officer's direction could not be considered final because the direction was capable of being revoked by any conciliation officer under s 60(1) of the AC Act. He also submitted that, because the conciliation officer's certificate satisfied s 49 of the AC Act, it was open to Somerville to commence proceedings in the County Court or Magistrates' Court for a determination on the merits in respect of its liability to Mrs Vi. Mr O'Loghlen submitted that as the direction was interlocutory, the order of the Magistrates' Court had the same character.

31 I agree, with respect, with the observations of Maxwell P and Neave JA in Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd[3] that reasonable minds can differ on whether an order is final or interlocutory. I have found the authorities in this area difficult to reconcile.

32 The most authoritative decision of the Court of Appeal on what constitutes a final order is Dodoro v Knighting.[4] That case involved an application for leave to appeal from an unsuccessful application to a County Court judge for leave under s 93(4)(d) of the Transport Accident Act 1986 (Vic) to bring a proceeding for common law damages for a "serious injury". Callaway JA, with whom the other members of the Court agreed on this point, said:[5]

1. All orders are either final or interlocutory. In Australia the test to determine whether an order is final or interlocutory proposed by Lord Alverstone CJ in Bozson v Altrincham Urban District Council has been adopted, rather than the test proposed by Lord Esher MR in Salaman v Warner. The general rule is that an order is interlocutory unless, in the words of Windeyer J in Hall v Nominal Defendant, it "finally determine[s] the rights of the parties in a principal cause pending between them". Whether it does so is determined by the legal, not the practical, effect of the order.
2. Three kinds of interlocutory order are relevant for present purposes. First, because an order is interlocutory unless it finally determines the rights of the parties, a refusal of relief is interlocutory if it is theoretically possible to make a fresh application for the same relief. Accordingly, for example, an order refusing to set aside a default judgment or refusing to grant an extension of time is not a final order, because the unsuccessful party could make a further application for the same relief, even though such an application might have very little prospect of success. That was also, by way of further example, the main reason given by a court of five judges in Western Australia for holding that a refusal of leave to appeal pursuant to s 38 of the Commercial Arbitration Act 1985 is interlocutory. As Mathews AJ said in the leading judgment:

Just as leave to appeal, once granted, can always be revoked, so it will always remain open to parties to renew applications for leave, notwithstanding a previous refusal, in the event of changed circumstances. There is no reason in principle why leave to appeal under s 38(4) is in any different category.

1. Secondly, an order may be interlocutory because, whether or not a fresh application might be made, it does not determine the rights of the parties in a principal cause_._ In Brincat v R an order was made in the Supreme Court of Victoria in aid of criminal proceedings in Western Australia. In X v Director of Public Prosecutions an order was made in the Supreme Court under ss 9H and 9I of the Evidence Act 1958 for a witness to give evidence in a committal proceeding by video link from Canberra. In Hornsby v Kaschke an order was made in the Supreme Court quashing an order in the Magistrates' Court in relation to pre-trial disclosure. In Kassionis v Magistrates' Court of Victoria an order was made in the Supreme Court refusing relief in the nature of certiorari and prohibition in relation to orders and rulings made on a contested mention in the Magistrates' Court. In all those cases the order made in the Supreme Court was interlocutory because the principal cause lay elsewhere.
2. Thirdly, an order striking out, or even "forever staying" or dismissing, a proceeding because it is frivolous, vexatious or an abuse of process or because it does not disclose a reasonable cause of action is interlocutory, unless the abuse of process lies in an attempt to litigate an issue which is res judicata. It was decided by this Court in Little v State of Victoria that that is still the law. It was reaffirmed by the High Court in Re Luck, where it was held that the same is true of an order refusing leave to commence or proceed with an action because it is frivolous, vexatious or an abuse of process or does not disclose a reasonable cause of action. It is unnecessary to consider whether this third class constitutes an exception to the general rule referred to in [17].

1. In my opinion ... an order refusing leave to bring common law proceedings is interlocutory and the applicant requires leave to appeal from the order made on 17 June 2004. The natural reading of s 93(4)(d) is that an application for "leave to bring" common law proceedings is not a principal cause but a preliminary step. An application pursuant to s 93(4)(d) is a proceeding, but it is not a principal cause. Like an application for leave to appeal to the Trial Division or to this Court or an application for special leave to appeal to the High Court, it is no more than a preliminary application. Indeed, because there is no cause of action, the application has an even more preliminary character: not only is there, as yet, no principal cause, but there is not even a cause of action.

33 The present case does not fall within either the first or third category of interlocutory order discussed by Callaway JA. In relation to the first category, it is not theoretically possible for Somerville to make a fresh application to the Magistrates' Court for an order revoking the direction. In relation to the third category, there was no striking out, stay or dismissal of a proceeding.

34 In relation to the second category in Callaway JA's judgment in Dodoro, none of the examples given by his Honour are entirely analogous to this case, as the Magistrates' Court order was not in aid of other proceedings in a principal cause pending in the same court, a different court or a tribunal. However, I have concluded that the Magistrates' Court order is interlocutory because it did not finally resolve a principal cause pending between the parties notwithstanding that no other proceedings were on foot between the parties. The principal cause between the parties was their dispute as to whether Mrs Vi had suffered a compensable injury for the purposes of the AC Act. The key section is s 82. Division 2 of Part 2 of the AC Act contains conciliation provisions which provide a mechanism for the making of directions of an interim nature. Where a conciliation officer finds that there is no genuine dispute about the employer's liability to make weekly payments and to make a direction under s 59(3), that direction does not finally determine the principal cause between the parties. It does not finally determine that the worker has suffered a compensable injury and the making of payments pursuant to the direction does not constitute an admission of liability.[6]

35 The entitlement to be paid weekly payments pursuant to a direction under s 59(3) is for a limited period and even within that period the entitlement may cease because the direction is revoked under s 60(1) (for example, on the application of the employer) or because some other event occurs which authorises the employer to cease making payments under s 114 or another provision of the AC Act. In short, a direction under s 59(3) deals only with part of the dispute between the parties and, although it is an offence not to comply with it,[7] it is of limited temporal effect. It does not put an end to the dispute between the parties. A direction under s 59(3) is clearly interlocutory and, in my opinion, it must follow that an order of the Magistrates' Court refusing to revoke the direction has similar features and must have the same character. This proposition is supported by Victorian Legal Aid v County Court of Victoria,[8] where it was held that a Supreme Court judge's order refusing to quash an interlocutory costs order made by a County Court judge was itself interlocutory.

36 The limited and transient nature of the direction tells strongly against an order refusing to revoke it being a final order. The order is similar to an order refusing an application to set aside a statutory demand for payment of a debt, which was held in Aussie to be an interlocutory order because it did not determine a principal dispute between the parties, namely whether the amount claimed was owing.[9]

37 In any event, in my opinion, the conclusion that the Magistrates' Court order is interlocutory is inescapable in light of s 61(2) of the AC Act, which provides that the grant or refusal by the Magistrates' Court[10] of an application for revocation of a direction is not a finding as to liability in respect of the matter in dispute.

38 The mere fact that the order determined the issue in the proceeding before the Magistrates' Court does not make the order final.[11] This is because, although the order finally determined the proceeding in which it was made, it did not involve a final adjudication of substantive rights.[12] As submitted by Mr O'Loghlen, the legal consequence of the order refusing to revoke the interlocutory direction is to allow that interlocutory direction to stand, at least for the time being, with no greater effect than it had before the order.

39 As the Magistrates' Court order is not a final order, the appeal under s 109 of the MC Act is incompetent and must be dismissed.

40 In light of the above conclusion, it is necessary for me to deal with the application for judicial review under Order 56. The application by originating motion was filed on 3 June 2008, 246 days after the Magistrates' Court order. The originating motion sought an order in the nature of certiorari to quash the order of the Magistrates' Court and an order pursuant to r 56.02(3) of the Rules extending the time to commence the proceeding.

41 The originating motion relies on the following grounds of review:

In giving his decision, the learned magistrate fell into jurisdictional error.

(i) The learned magistrate misconstrued the statutory test for whether there was a genuine dispute which thereby led him to misconceive the nature of his function and jurisdiction in considering the revocation application.

(ii) By determining the revocation application by holding that, even if the Firstnamed Defendant's sexual relationship was consensual as alleged by Mr Dintinosante, her employment was a cause of the alleged injury, the learned magistrate showed that he had misconceived the nature of the jurisdiction he was required to exercise.

Further, the learned magistrate made errors of law manifest on the record.

(i) The learned magistrate erred in law in construing the statutory test for genuine dispute.

(ii) The learned magistrate erred in law in construing whether an injury arose out of or in the course of employment by misidentifying and misapplying the legal tests for arising out of employment, and arising in the course of employment.

(iii) The learned magistrate erred in law in that it was not open on the material before him to find that there was no arguable case that the Firstnamed Defendant's injury was not a compensable injury.

42 Rule 56.02(1) provides that a proceeding under Order 56 must be commenced within 60 days after the date when grounds for the grant of the relief claimed first arose. Rule 56.02(2) makes it clear that, in a case such as this, time runs from the date of the Magistrates' Court order. Rule 56.02(3) provides that the Supreme Court must not extend time "except in special circumstances".

43 The parties have referred to numerous decisions on what constitutes "special circumstances", including Denysenko v Dessau,[13] Prencipe v Nisselle,[14] Lednar v Magistrates' Court[15] and Mann v Medical Practitioners' Board.[16] The decision that I find of the greatest assistance for present purposes is that of Gillard J in Lednar. In that case, his Honour said:[17]

1. Rule 56.02(3) does not confine the special circumstances to the failure to institute the appeal within time and reading Order 56 as a whole there is nothing in its provisions which limit the special circumstances to the failure to institute the proceeding.
2. In my opinion it was not the intention of the framers of the rule to so confine the paragraph in Rule 56.02 and in my opinion one has to consider all the circumstances which include not only the reasons for failing to bring the proceeding within time but also whether the plaintiffs have an arguable case and whether the defendants would be prejudiced by an extension of time.
3. In determining what are special circumstances it is necessary for the court to weigh up the interests of both the plaintiff and the defendant. The rules have prescribed a 60 day period during which a proceeding should be commenced and the rules should be complied with. Further, in the area of public law it is not only the interests of the parties that may be affected but also the public interest. A party that has the benefit of an order in its favour should be able to proceed and enforce or rely upon the order or decision once the period for judicial review has expired. Indeed it is a matter of some weight if a late attack is made upon an order where a party has relied upon it and would suffer detriment or prejudice if time was extended.
4. The court does have a discretion which it may exercise where special circumstances are established and what constitutes special circumstances in any particular case will depend upon the circumstances of the case. It is not appropriate to attempt to fetter the jurisdiction by seeking to define what are "special circumstances". In my opinion the chances of the plaintiff being successful in the application, the injustice to a plaintiff if the decision or order is allowed to stand, prejudice to the other party and difficulties concerning legal aid in my view are relevant factors as to whether or not there are special circumstances. They have to be weighed and the court has to then determine whether in totality they constitute special circumstances.

44 The key issues for consideration identified in Lednar are the reasons for the delay, the prejudice to the other party and the prospects of success of the substantive application. I consider these issues in reverse order.

45 In considering whether there was an arguable case in support of Somerville's denial of liability to pay compensation, and therefore a genuine dispute, the critical issue before the learned Magistrate was whether Mrs Vi's injury was "an injury arising out of or in the course of any employment" within the meaning of s 82 of the AC Act. After reviewing the material before him, the learned Magistrate held:[18]

On any view of the facts and in particular the statements of Mr Dintinosante, Mr D'Elton and Dr Senadipathy's reports, Mrs. Vi has suffered an injury arising out of, if not in the course of, her employment with the employer. On any view the two parties had a lengthy and highly frequent sexual relationship in which they had met at work, were involved in a close sexual relationship, had some minor sexual contact at the workplace and sexual intercourse upon both leaving the workplace at the end of working shifts.

I find that there is no genuine dispute in this matter in that on the ... facts a psychiatric injury to Mrs Vi arose out of her employment. At the very least the sexual relationship, whether willing or unwilling, was at least "incidental" to the employment (see Danvers v Commissioner of Railways [1969] HCA 64; 122 CLR 529).

The link to the employment was not peripheral (see Bill Williams Pty Ltd v Williams [1972] HCA 23; 126 CLR 146).

The employment itself was a cause of the injury having regard to the initial basis for, and involvement of the sexual relationship. As a matter of common sense, even on the employer's argument of a willing sexual relationship, the "arising out of" test has been satisfied (see Zlateska v Consolidated Cleaning [2006] VSCA 141).

There is no genuine dispute in this case in that there is no arguable case, even if I accept the employer's version of the relationship between Mrs Vi and Mr Dintinosante, in support of the denial of liability (s.59(10)(b)).

I must look at this case from the point of view of the employer's defence. Even if I was to accept the employer's version for the purposes of argument, it is irrelevant whether Mrs Vi contributed to her own condition or was in part to blame ... The Act is "no fault" legislation.

46 Before me, Mr Gorton submitted that the learned Magistrate had made an error of law on the face of the record, being the reasons for decision and documents incorporated by reference in the reasons.[19] He submitted that the learned Magistrate's reference to the sexual relationship being "incidental" to the employment in concluding that the injury "arose out of" Mrs Vi's employment indicates that he misapplied the law because cases such as Kavanagh v Commonwealth,[20] Danvers v Commissioner for Railways (NSW)[21] and Bill Williams Pty Ltd v Williams[22] make it clear that the question of what is incidental to the performance of a worker's duties is relevant to the "arising in the course of the employment" limb rather than to the "arising out of the employment" limb.

47 Mr Gorton submitted that the learned Magistrate misunderstood what was said in Danvers. He referred me to the following passage in Danvers: "The course of employment ... includes the doing of 'whatever is incidental to the performance of the work' and will include what a worker 'is reasonably required, expected or authorized to do in order to carry out his actual duties'".[23] He submitted that on that test, the sexual relationship could not be characterised as something reasonably required, expected or authorised to be done to carry out Mrs Vi's or Mr Dintinosante's actual duties, and any psychiatric consequences cannot necessarily be characterised as arising in the course of employment.

48 Mr Gorton also submitted that the learned Magistrate erred in his reliance on Bill Williams and Zlateska v Consolidated Cleaning Services Pty Ltd[24] because the concept of "peripheral" does not appear in Bill Williams, and Zlateska relates to causation rather than what constitutes "arising out of the employment". He submitted that, on the hypothesis that the sexual relationship was consensual, it was not open to the learned Magistrate to hold that Mrs Vi's employment was a cause of her injury.

49 Mr Gorton also submitted that a conciliation officer under s 59(3) and a Magistrate under s 60(2) must accept the facts that are most favourable to the employer. He submitted that when the facts as put forward by the employer were correctly applied to the legal tests as set out in the cases referred to in paragraphs 46 to 48 of this judgment, it was clear that a conclusion that the injury did not arise out of the employment was arguable and therefore, there was a genuine dispute.

50 Mr O'Loghlen submitted that the learned Magistrate did not make any error of law, jurisdictional or otherwise. He submitted that, on a fair reading of the Magistrate's reasons, the learned Magistrate applied the correct legal tests. Mr O'Loghlen relied upon a statement made by the Court of Appeal in Zlateska that the "[t]he words 'arising out of' the employment have long been recognised as requiring a causal connection between the employment or its incident and the injury"[25] and the Court's later comment that:[26]

There is a single test to be applied under s.82(1) - the "arising out of" test. The test raises a question of causation. In a case, such as the present, the test is satisfied if it can be shown, on the balance of probabilities, that an injury to the worker was caused by an act or omission of the employer (including any servant or agent of the employer). This causation question is to be approached, like any other causation question, as a matter of common sense.

51 Having examined the authorities referred to me, I am of the opinion that Mr Gorton's submission that the learned Magistrate confused the test for the "arising out of the employment" limb with the test for the "in the course of the employment" limb has substance and that the learned Magistrate may have erred in law. Also, the learned Magistrate's reasons do not disclose what test he applied in determining that there was "no arguable case". Whilst there does not appear to have been any judicial consideration of this expression as it appears in s 59(10)(b) of the AC Act,[27] where similar expressions are relied upon to justify a summary order precluding a party from pursuing its claim or defence on its merits, the courts exercise great care and require the other party to satisfy them that on the first party's version of the evidence, there is no real question to be tried.[28]

52 It is also not clear whether the learned Magistrate decided the question before him based on the best view of the material from Somerville's perspective because he used the expression "even if I accept the employer's version" and then considered this issue in the context of his decision that Mrs Vi's contribution to her own condition is not relevant. In any event, the learned Magistrate did not expressly apply the evidence most favourable to Somerville (as distinct from the general notion of a willing sexual relationship) against the applicable legal tests for determining the meaning of "in the course of the employment" and "arising out of the employment" in the present case.

53 In my opinion, if Somerville's evidence (which was to the effect that although Mr Dintinosante and Mrs Vi met at work and he held a supervisory role in relation to her, the only sexual contact in the workplace was kissing "[m]aybe once or twice") is accepted, it is difficult to see how it can be concluded that Somerville has no chance of establishing it has no liability in respect of Mrs Vi's claim.

54 In all the circumstances, while I have not formed a view as to whether the learned Magistrate made an error of law on the face of the record or a jurisdictional error,[29] I am of the opinion that there is doubt about the legal correctness of the learned Magistrate's order. I am therefore prepared to assume, for the purposes of considering the question of special circumstances under r 58.02(3) of the Rules, that Somerville has good prospects of establishing grounds for judicial review of that order. This is obviously a factor that weighs in favour of granting an extension of time.

55 Mr Gorton submitted that there would not be any prejudice to Mrs Vi if the time for making the application under Order 56 is extended. He referred, in particular, to s 60(4)(a) of the AC Act which provides that where a direction under s 59(3) is revoked, the worker is not obliged to repay any weekly payments received by the worker except where there is a finding under s 60(4)(b) that the claim was fraudulent or made without proper justification. Mr Gorton submitted that no allegations of fraud or absence of proper justification are made against Mrs Vi. He also submitted that the direction had already been implemented and had been superseded by subsequent directions under s 59(3). He further submitted that as the grounds of appeal were similar to the grounds of judicial review, Mrs Vi was on notice that Somerville was disputing the legal correctness of the Magistrates' Court order as early as 30 October 2007, which was well within 60 days of the making of the order, and therefore Mrs Vi did not suffer any prejudice from the lateness of the judicial review application.

56 Mr O'Loghlen submitted that there would be prejudice to Mrs Vi, as the extension of time may lead to an unfavourable outcome for her which could possibly result in an order for the repayment of benefits under s 60(4)(b).

57 In my opinion, there may be some prejudice to Mrs Vi and this weighs against the granting of an extension of time.

58 Mr Gorton sought to explain the delay in issuing the application under Order 56 principally on the fact that Mrs Vi's counsel did not raise any issue as to the competency of the appeal at a directions hearing that took place before a Master on 14 December 2007 to enable the Master to exercise the power under r 58.10(8) of the Rules to dismiss the appeal, and on a conversation that took place in the corridor outside the court room at the conclusion of that directions hearing. It was common ground before me that, at the directions hearing, no issue was raised by counsel for Mrs Vi as to the competency of the appeal. It was also common ground before me that, immediately following the directions hearing, a conversation took place between Mr Fleming (counsel for Somerville) and Mr Carson (counsel for Mrs Vi) in the presence of Mr Singleton (solicitor for Somerville). That conversation was the subject of an affidavit from Mr Singleton sworn on 3 June 2008 and an affidavit from Mr Carson sworn on 6 June 2008. Neither deponent was cross-examined. Mr Fleming did not swear an affidavit. Mr Giandinoto, solicitor for Mrs Vi, swore an affidavit on 5 June 2008 about his communications with Mr Carson.

59 There is no dispute that in the conversation between Mr Fleming and Mr Carson, Mr Fleming raised the issue of the competency of the appeal and whether the Magistrate's decision was a "final order" and noted that Mr Carson had not raised the issue before the Master. However, there is a dispute about Mr Carson's response. Mr Singleton's evidence is that Mr Carson said that he was not instructed that there was any concern about the incompetence of the appeal on the ground that the Magistrates' Court order was not a final order and that this was not an issue. Mr Carson's evidence is that all he said was that he had no instructions to raise the issue and that at no stage did he make a concession on the point because he had no instructions to do so. Mr Giandinoto, who was not present when the conversation took place, deposed that he had never discussed the issue of "final orders" or the incompetency of the appeal with Mr Carson and that Mr Carson did not refer to the conversation when he reported in writing on the outcome of the directions hearing. Mr Giandinoto also deposed that he had never had any communication on these issues from Mrs Vi's legal representatives.

60 In the absence of cross-examination, it is difficult for me to determine whose version of the disputed conversation is accurate. It is not unusual for honest witnesses to have differing recollections of a conversation. On balance, I prefer Mr Carson's version because Mr Fleming, who appeared before me with Mr Gorton, did not give evidence and also because if the concession alleged had been given by Mr Carson, I would have expected Mr Singleton to have confirmed it in writing to Mr Giandinoto or to have taken a file note of the conversation and exhibited this to his affidavit. He did neither.

61 Mrs Vi's outline of submissions dated 21 May 2008, which was filed and served in the appeal, submitted that the appeal is incompetent because the Magistrates' Court order is not a final order. It was only after Somerville reviewed the outline of submissions that it filed the application under Order 56 on 3 June 2008.

62 Mr Gorton submitted that it was reasonable for Somerville not to have applied for judicial review until after 21 May 2008 because, until it received Mrs Vi's outline of submissions, it had properly formed the view, as a result of the discussion that took place on 14 December 2007, that it was not contested that the Magistrates' Court's order was a final order.

63 Mr O'Loghlen submitted that Somerville has failed to provide a satisfactory explanation for the delay. I agree. Somerville's legal representatives were aware, unprompted by Mrs Vi's legal representatives, at least as early as 14 December 2007 that there was an issue as to the competence of the appeal. This is apparent from the undisputed fact that, on the day of the directions hearing on 14 December 2007, Mr Fleming, counsel for Somerville, raised the issue with Mr Carson, counsel for Mrs Vi. Notwithstanding this, Somerville did not take the prudent step of immediately issuing an application under Order 56 seeking substantive relief and an extension of time. It failed to take this step until 3 June 2008, shortly after receiving Mrs Vi's outline of submissions, and three days before the hearing of the appeal. The fact that Somerville deliberately chose to take the risk that the appeal may be incompetent, strongly suggests that Somerville should not be permitted to commence an application under Order 56 some eight months after the order of the Magistrates' Court was made.

64 In deciding whether there are any special circumstances for the purposes of r 56.02(3) of the Rules, I must weigh up all the matters referred to above and any other circumstances that are relevant to doing justice as between the parties. A relevant consideration in this case is the fact that the direction is no longer extant and that the issue of whether there is an arguable case in support of Somerville's denial of liability and thus a genuine dispute can be reagitated before a conciliation officer.

65 I must also have regard to the public policy reasons for the requirement that applications under Order 56 must be made within 60 days in the absence of special circumstances. Those public policy considerations include the need for finality in public decision-making, particularly where the rights of third parties are involved.

66 Having regard to all the circumstances of this case, I have concluded that there are no special circumstances warranting an extension of time.

67 Subject to any submissions from the parties, I propose to make the following orders:

(a) In matter number 9133 of 2007: The appeal is dismissed.

(b) In matter number 6488 of 2008: The application for review under Order 56 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic) is dismissed.

68 I will hear the parties on the precise form of the orders and on costs.

[1] The original notice of appeal was filed on 30 October 2007.

[3] (2007) 212 FLR 56; (2007) 63 ACSR 300; [2007] VSCA 121, [13] ("Aussie").

[4] [2004] VSCA 217; (2004) 10 VR 277 ("Dodoro"). The Court was constituted by a bench of five, Winneke P and Charles, Callaway, Buchanan and Eames JJA.

[5] [2004] VSCA 217; (2004) 10 VR 277, 281-4 (citations omitted).

[8] [2004] VSCA 113; (2004) 9 VR 686, 690-1 [8].

[9] (2007) 212 FLR 56; (2007) 63 ACSR 300; [2007] VSCA 121.

[10] Although s 61(2) refers to the County Court, s 43(3) of the AC Act enables s 61(2) to be read as if it refers to the Magistrates' Court.

[11] Hall v Nominal Defendant [1966] HCA 36; (1966) 117 CLR 423, 443; Victorian Legal Aid v County Court of Victoria [2004] VSCA 113; (2004) 9 VR 686, 690-1 [8]; Aussie (2007) 212 FLR 56; (2007) 63 ACSR 300; [2007] VSCA 121, [111].

[12] Aussie (2007) 212 FLR 56; (2007) 63 ACSR 300; [2007] VSCA 121, [111].

[13] [1996] VicRp 65; [1996] 2 VR 221.

[14] [1998] VSC 137.

[15] (2000) A Crim R 396; [2000] VSC 549.

[16] [2002] VSC 256; aff'd Mann v Medical Practitioners' Board (2004) 21 VAR 429; [2004] VSCA 148.

[17] (2000) A Crim R 396; [2000] VSC 549.

[18] Somerville Retail Services Pty Ltd v Vi (Unreported, Magistrates' Court of Victoria, Mr Wright, Magistrate, undated written reasons for decision previously delivered orally on 1 October 2007) 6-7.

[19] See Administrative Law Act 1978 (Vic) s 10; Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163, 181-2 ("Craig").

[20] [1960] HCA 25; (1960) 103 CLR 547.

[21] [1969] HCA 64; (1969) 122 CLR 529 ("Danvers").

[22] [1972] HCA 23; (1972) 126 CLR 146 ("Bill Williams").

[23] [1969] HCA 64; (1969) 122 CLR 529, 536.

[24] [2006] VSCA 141 ("Zlateska").

[25] [2006] VSCA 141, [7].

[26] [2006] VSCA 141, [82].

[27] The expression "genuine dispute" was considered in Accident Compensation Commission v Accident Compensation Tribunal (1989) 2 Vic ACR 450, 453-4 but the statutory definition of the expression considered in that case differed from the current definition in s 59(10). In the context of an application to set aside a statutory demand for payment of a debt on the basis that there is a genuine dispute about the existence or amount of the debt, the Court of Appeal in TR Administration Pty Ltd v Frank Marchetti & Sons Pty Ltd (2008) 66 ACSR 67; [2008] VSCA 70, [62] applied previous authority that held that a genuine dispute is one which is bona fide and truly exists in fact, where the grounds for alleging the existence of a dispute are real and not spurious, hypothetical, illusory or misconceived.

[28] Fancourt v Mercantile Credits Pty Ltd [1983] HCA 25; (1983) 154 CLR 87, 99.

[29] In light of Craig [1995] HCA 58; (1995) 184 CLR 163, 179-80, it is more difficult to establish that a court has made a jurisdictional error as distinct from a non-jurisdictional error of law.