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[2014] VSC 318
Supreme Court of Victoria
2014-07-15
DIXON J
Original judgment source is linked above.
ADMINISTRATIVE LAW - Judicial Review - Appeal from magistrate under s 109 of the Magistrates' Court Act 1989 - Proper construction of s 114 (2A) of the Accident Compensation Act 1985 - Whether error of law - Accident Compensation Act 1985 s 114, 114(1), (1A), (2A).
ACCIDENT COMPENSATION - Weekly payments - Proper construction of s 114 (2A) of the Accident Compensation Act 1985 - Whether power to determine pursuant to s 114(2A) not to pay the worker weekly payments is subject to s 114(1A) and limited to circumstances where the worker is receiving weekly payments as at the date of the change in entitlements of the worker - _Accident Compensation Act 1985 s_s 114, 114(1), 114(1A), 114(2A).
1 The respondent, Terrance Parker, ('the worker') was employed by the appellant, Cetel Communications Pty Ltd ('the employer'). The Magistrates' Court of Victoria at La Trobe Valley dismissed the worker's complaint that, having been constructively dismissed from his employment, his employer was not entitled to terminate weekly payments for compensation.
2 This proceeding is an appeal brought under s 109 of the Magistrates' Court Act 1989. The questions of law raised on the appeal are:
(a) whether the learned magistrate erred in construing ss 114(1A) and 114(2A) of the Accident Compensation Act 1985;
(b) whether the learned magistrate erred in law in his construction of s 114(1A) of the Act by holding on the basis only that the worker was not in receipt of weekly payments as at 9 May 2012 that the Victorian Workcover Authority's claim agent, Allianz, did not have power to determine pursuant to s 114(2A) not to pay the worker compensation in the form of weekly payments from that date; and
3 The facts are not in dispute and may be briefly stated. The worker's claim for weekly compensation payments and medical and like expenses, following on an injury to his cervical spine and neck said to have occurred in the course of his employment with the employer on 18 November 2011, was accepted by the Authority. In due course, the worker returned to work but his employment ceased on 9 May 2012. At that time, he was not in receipt of weekly payments of compensation.
4 On 26 July 2012, Allianz gave notice that it had determined not to pay to the worker compensation in the form of weekly payments with effect from 9 May 2012 because the worker had returned to work on 7 May 2012 to work the productive duties and the hours that he worked prior to his injury and was expected to make a sustainable return to work. On 9 May 2012, the worker stated that he intended to find a job elsewhere and had not returned to work since that date. The operation of s 114(2A) of the Act permitted the Authority to determine not to pay compensation in the form of weekly payments.
5 On 31 January 2013, Allianz gave a further notice that it had determined that it would no longer pay for medical and like expenses on or after 1 March 2013.
6 In the Magistrates' Court, the worker contested each of these decisions. However, by the time of the hearing, Allianz had withdrawn the notice of 31 January 2013 concerning payment for medical and like services.
7 There were two issues to be determined by the magistrate.
(a) On 9 May 2012, did the worker resign or was his employment terminated?
(b) If the worker resigned, did the operation and effect of s 114(2A) of the Act disentitle him to weekly payments of compensation from that date?
8 In essence, the magistrate's decision consisted of two findings of fact and a conclusion of law. The magistrate found that:
(b) the worker was not in receipt of weekly payments as at that date, which was the date of the change in his entitlement to weekly payments.
The magistrate concluded that in light of these factual findings and the proper construction of s 114(1A), Allianz did not have the power under s 114(2A) to determine not to pay the worker compensation in the form of weekly payments from 9 May 2012 on the ground that he had resigned for reasons unrelated to his incapacity, as Allianz had stated in its notice of 26 July 2012.
9 The magistrate's reasoning for this conclusion can be succinctly extracted from his thoughtful and carefully prepared reasons for judgment:
10 The relevant parts of s 114 of the Act were in the following terms:
114 Termination or alteration of weekly payments
(1) The Authority or self-insurer may in accordance with this Act terminate a worker's entitlement to weekly payments or alter the basis on which the amount of the weekly payment is to be calculated whether or not the worker is currently receiving weekly payments.
(1A) Subsections (2) to (13) only apply if the worker is currently receiving weekly payments as at the date of the change in the entitlement of the worker to weekly payments.
...
(2A) If the current weekly earnings of a worker who -
(a) has an incapacity for work resulting from, or materially contributed to by, an injury; and
(b) is receiving, or but for the worker's current weekly earnings, would have been entitled to receive, compensation in the form of weekly payments -
are reduced because -
(c) the worker no longer resides in Victoria; or
(d) the worker's employment was terminated because of the worker's misconduct; or
(e) the worker -
(i) has resigned; or
(ii) reduced the hours worked otherwise than in the circumstances referred in section 93CDA -
for reasons unrelated to the worker's incapacity -
the Authority or a self-insurer may determine -
(f) not to alter the amount of compensation in the form of weekly payments paid to the worker; or
(g) not to pay compensation in the form of weekly payments.
11 To understand the contentions on the appeal, it is necessary to recall the legislative history of this section. Subsection (1A) was introduced by the Accident Compensation (Amendment) Act 2005 in response to Victorian Workcover Authority v Balogh.[1] When the Accident Compensation (Amendment) Bill was read for the second time in the Legislative Assembly on 19 May 2005, the Minister remarked about the proposed introduction of s 39(1AA) and s 114(1A):
The Bill includes provisions intended to address issues raised by the Victorian Court of Appeal's decision in the matter of Balogh v Shire of Yarra Ranges. In that case the court determined that in the absence of a formal 104-week notice, it had no jurisdiction to consider a worker's entitlement and therefore the worker was entitled to continuing weekly payments.
This decision overturned what was the common practice and understanding of the provisions in both the plaintiff and defendant communities. The amendments come with their support, given the court's far reaching administrative and financial consequences that could undermine the VWA's viability. The amendments therefore return to the position as it was understood prior to the Balogh decision.
The provisions operate to clarify Parliament's intention with respect to the termination of weekly payments in the absence of a formal notice.
12 Subsection (2A) was inserted by the Accident Compensation (Amendment) Act 2010. The explanatory memorandum to the Accident Compensation (Amendment) Bill 2009 states that the proposed amendments to s 114 were intended:
... to permit the Authority or self-insurer not to commence or recommence weekly payments of compensation, or not to alter the weekly payments that the worker is receiving, if the worker resigns, leaves Victoria, or reduces the hours worked for reasons unrelated to his or her incapacity or his employment has been terminated for misconduct.
13 The relevant date, when I use that expression, refers to the date on which there was a change in the entitlement of the worker to weekly payments. In this case, the relevant date was 9 May 2012.
14 The appellant contended first that that there was no ambiguity between the language of subs (1) and the language of sub-s (2A). These provisions expressly state that they can apply even though weekly payments are not currently being made. Although subs (2A) can also apply consistently with subs (1A) when the worker is receiving weekly payments, the section expressly applies in the circumstance where the worker is not receiving weekly payments because of the quantum of the worker's current weekly earnings. Subs (1A) does not, by its express terms, directly refer to subs (2A)-(2D) and the express language of subs (2A) demonstrates that Parliament could not have intended in 2010 to limit the operation of the amendment of s 114 in the manner brought about by reading the phrase 'subsections (2) to (13) only apply' in subs (1A) as incorporating the new amending subs (2A)-(2D).
15 The magistrate fell into error in failing to read the express unambiguous language of s 114 in its entirety. The application of s 114(2A) in qualifying the primary operative power under s 114(1) is determined by the introductory provisions of subs (2A) and not by the preceding subs (1A).
16 Next, the appellant contended if it was thought that there was ambiguity as to how subs (1A) and (2A) interacted, a clear inconsistency between the language of subs (1A) and (2A) in respect of the circumstances in which the section has application is evident. Subsection (1A) constrains the application of the following subsections (2)-(13), which I will refer to as the notice provisions, to circumstances where, at the relevant time, the worker is 'currently receiving weekly payments'. If the phrase 'subsections (2) to (13) only apply' in subs (1A) is read as including subs (2A)-(2D) and defining when the notice provisions apply, subs (2A) can only apply whenever the worker is 'currently receiving weekly payments'. However, subs (2A) expressly states that it may be applicable when the worker 'would have been entitled to receive' weekly payments, but is not because of the quantum of the weekly earnings the worker is actually receiving. The qualification on the notice provisions imposed by subs (1A) is not consistent with the qualification on the power of the Authority or self-insurer to alter, or not to pay, compensation in the form of weekly payments under subs (2A).
17 The magistrate fell into error in failing to identify the inconsistency in the statutory language when his Honour stated 'In my opinion, there is no ambiguity or conflict with such an interpretation that requires the court to adjust the meaning of the provisions ...'.
18 The appellant contended that by the proper application of statutory interpretation principle, subs (2A) applied in accordance with its plain terms. The learned magistrate found that, but for the worker's current weekly earnings, he would have been entitled to receive compensation in the form of weekly payments at the relevant time. That finding directly engaged the language of subs (2A) to permit the Authority to make the decision that it made. When the worker's current weekly earnings were reduced because he resigned his employment for reasons unrelated to his incapacity, the Authority was empowered by subs (2A) to determine not to pay compensation in the form of weekly payments.
19 The appellant contended this interpretation is consistent with the stated intention of the legislature at the time of introducing subs (1A), namely to 'return to the position as it was understood prior to the Balogh decision'. The intended effect of the amendment was to impose on the Authority the notice requirements set out in relevant provisions of subs (2)-(13) - as they were at the time of introducing subs (1A) - only in instances where the worker was in fact receiving weekly payments. There was no apparent intention for the amendments to have any effect in instances where the worker was no longer in receipt of weekly payments. The appellant contended that subs (1A) was not intended to interact at all with subs (2A). Subs (1A) is only intended to deal with notice issues and isn't intended to prevent subs (2A) from operating when weekly payments were not being paid at the relevant time, as it expressly provides.
20 For these reasons, the appellant contended that the learned magistrate erred in his construction of subs (1A) and (2A), and had he correctly construed these provisions, the learned magistrate would have been bound to find that Allianz was empowered to determine not to pay the worker compensation in the form of weekly payments from 9 May 2012 on the basis that he had resigned his employment for reasons unrelated to his incapacity.
21 The worker contended that the genesis of the 2005 amendments to s 114 of the Act was the observation of Nettle JA in Balogh that payments may be terminated in accordance with the Act 'whether or not the worker is currently receiving weekly payments'. The grounds upon which weekly payments could be terminated were enlarged by s 114(2). These provisions were identified as the leading provisions of the Act by which an entitlement to actual weekly payments might be terminated or altered.
22 The worker contended that the 2005 amendments had two effects. Sub-sections 114(2)-(13) were rendered inoperative in respect of an injured worker who was not in receipt of weekly payments. Section 114(1A) removed the obligation on the Authority to give notice of a change in entitlement happening when a worker was not in active receipt of payments. Secondly, those amendments introduced s 39(1AA) which allowed the court to consider and apply all the operative provisions affecting entitlement to weekly payments when the court was determining issues of ongoing entitlement when payments had ceased.
23 The respondent contended that the legislature must be taken to have been aware of the reasoning and effect of Balogh when s 114 was further amended in 2010 by the introduction of subs (2A)-(2D). The constraint imposed by subs (1A) - the worker is currently receiving weekly payments on the relevant date - applies to both subs (2)-(13) and subs (2A)-(2D) added by the 2010 amendment. There was no impediment, the respondent submitted, if a different outcome had been desired, to the amendments having been introduced as a separate section or in a provision which was not affected by the clear terms of s 114(1A).
24 The respondent contended for this construction of the Act firstly, on the basis of its architecture. The later decision of the legislature to insert subs (2A)-(2D) into the Act after subs (1A) supports the proposition that Parliament's intention was that the latter provisions should be governed by the former. The respondent contended that s 17 of the Interpretation of Legislation Act 1984 compelled this conclusion because it requires that a reference in an Act to any provision of that Act shall, unless the contrary intention appears, be construed if the provision in question has been amended as a reference to the provision as amended and in force for the time being.
25 Next, the respondent contended that interpreting subs (2A) as subject to subs (1A) maintains an important distinction used throughout the Act between the 'entitlement to' and the 'receipt of' weekly payments. The respondent contended that s 205(2) of the Act is a clear example of this distinction. That section specifies the options available at the discretion of the Authority or self-insurer in the case of a worker's failure to meet his or her return to work obligations. The distinction between cessation of payments and extinguishment of entitlement evident in s 205(2) was absent from s 114(2A) which in its clear terms does not give the Authority or self-insurer the power to terminate the entitlement to weekly payments but only the power to determine 'not to pay compensation in the form of weekly payments'.
26 The respondent therefore submitted that the learned magistrate was correct to conclude that weekly payments could not be stopped in the circumstances by reason of s 114(2A)-(2D), since the worker was not in receipt of weekly payments at the relevant time.
27 Section 114 of the Act headed, "Termination or alteration of weekly payments" sets out the procedure whereby a claims agent on behalf of the Authority can terminate or alter weekly payments. The primary provision is subs (1) that permits the Authority or self-insurer in accordance with the Act to terminate a worker's entitlement to weekly payments whether or not the worker is currently receiving weekly payments. It is procedural and does not set out the entitling or disentitling provisions that are found elsewhere in the Act. The section imposes notice requirements for certain types of terminations or alterations of weekly payments. If the worker is currently receiving weekly payments, subs(2)-(13) apply.
The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole". In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus, the process of construction must always begin by examining the context of the provision that is being construed.
A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court "to determine which is the leading provision and which the subordinate provision, and which must give way to the other". Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.
Furthermore, a court construing a statutory provision must strive to give meaning to every word of the provision. In The Commonwealth v Baume Griffith CJ cited R v Berchet to support the proposition that it was "a known rule in the interpretation of Statutes that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent". (Citations omitted)
29 I am persuaded that subs (2A) is intended to apply in accordance with its plain terms and that in 2010 Parliament did not intend to limit the operative effect of the amendment by reference to the earlier amendment of s 114 in 2005 by the insertion of subs (1A). This conclusion is dictated by the context of subs (2A), the provision being construed. It is logically inconsistent to impute to Parliament an intention that would qualify the intended operation of subs (2A) by limiting its operation to when the worker is receiving weekly payments as subs (1A) requires, when the amending subsection expressly states otherwise. Subsection (1A) must be read as limited in its reference to subs (2)-(13). That reference is to those subsections that were enacted at the time subs (1A) was enacted in 2005. The reference is limited to subs (2), (3), (4), (5), (6), (8), (9), (10), (11), (12), and (13) only and is not a reference to subs (2A)-(2D), and presumably (5A) and (9A) although it is not necessary to decide how subs (5A) and (9A) are to be read. Reading s 114 in this manner construes the section as a whole in a consistent manner having regard to the language and purpose of all the provisions of the statute generally and s 114 in particular.
30 I do not accept the worker's contention that the architecture of section 114 can fairly be the proper guide to the meaning of subs (2A). Although there are other ways of expressing or drafting s 114 that would make clear beyond any doubt what Parliament intended, I do not accept the worker's submission that subs (2A) must be read subject to subs (1A) because the latter subsection necessarily includes a nominated sequence of subsections that logically incorporates subs (2A)-(2D) as if the same were expressly set out. That is, subs (1A) should be interpreted as if it reads 'subsections (2), (2A) to (2D) and (3) to (13) only apply'. Such an interpretation is not consistent with the language and purpose of subs (2A) or, more broadly, s 114. No different construction is required by s 17 of the Interpretation of Legislation Act 1984. The section has no direct application and does not compel the construction contended for by the worker for two reasons. The section does not operate to require the nominated sequence of subsections in subs (1A) to incorporate subs (2A)-(2D). The operation of s 17 can be demonstrated by reference to an example, s 114(5) because that subsection was amended in 2010. Section 17 requires that the reference in subs (1A) to subs (5) shall, unless the contrary intention appears, be construed as a reference to subs (5) as amended in 2010 and in force for the time being. Secondly, if that not be so, the contrary intention appears from the express words of subs (2A) in any event, as I have already stated.
31 Further, the distinction between entitlement and receipt, to which the worker referred in submissions, is evident in s 114. Section 114 is concerned with both receipt of and entitlement to weekly payments as subs (1), its primary operative provision, makes clear. However, subs (2A) is concerned with receipts rather than entitlements. Relevantly, subs (2A) empowers the Authority or self-insurer to determine not to 'alter the amount of compensation in the form of' or not to 'pay compensation in the form of' weekly payments. Consistently in this case, the appellant's withdrawal of the notice of 31 January 2013, which maintained, in effect, the worker's entitlements to medical and like expenses, limited the issue in the proceeding to receipt, not entitlement.
32 The only reference to entitlement in subs (2A) is incidental, and is found in (2A)(b), where it defines the application of the operative parts of subs (2A). Subs (2A) includes in the category of worker whose current weekly earnings are reduced for specified reasons, a worker who is entitled to receive payments but does not, because the entitlement is exceeded by the worker's current weekly earnings. Subs (2A) incorporates this category of worker into the category of worker that is in receipt of weekly payments of compensation and subject to the operation of the section.
33 I would add that if this analysis not be thought to be correct because conflict appears to arise from the language of subs (1A) and subs (2A), that conflict is alleviated by adjusting the meaning of subs (1A) in the manner I have stated above. That adjustment best gives effect to the purpose and language of those subsections while maintaining the unity of all the statutory provisions within the Act as a whole. The construction of subs (1A) that I have suggested gives meaning to every word of s 114. The construction of subs (1A) that the worker contends for does not achieve that result effectively denying operative effect to most of the words in subs (2A)(b).
34 In Project Blue Sky, the High Court recognised that reconciling conflicting provisions may require the court to determine which is the leading provision and which the subordinate provision, and which must give way to the other. On the explanation of the legislative history, purpose, and the hierarchy of the subsections that I have set out above, in the circumstances when a worker's current weekly earnings are reduced, defined by subs (2A) as a precondition for the operative parts of the subsection, subs (2A) is the leading provision and subs (1A) is a subordinate provision. To give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme, in the relevant circumstances subs (1A) must give way to subs (2A).
35 I am satisfied that the learned magistrate erred in construing ss 114(1A) and 114(2A) of the Accident Compensation Act 1985. The learned magistrate erred in law by not holding that s 114(1A) of the Act does not limit the application of subs (2A) to circumstances where the worker is receiving weekly payments at the relevant date. Consequently, the learned magistrate erred in law by holding on the basis only that the worker was not in receipt of weekly payments as at 9 May 2012 that Allianz did not have power to determine pursuant to s 114(2A) not to pay the worker compensation in the form of weekly payments from that date.
36 Having regard to the way the matter was conducted before the learned magistrate, it appears that the proper disposition is to set aside the primary court's orders and dismiss the complaint with costs. However, the worker contended that the primary application was for the reinstatement of weekly payments, which was dealt with on the statutory construction point, not on its merits, and the proper disposition of the case, if the appellant's arguments succeed, would be to refer the matter back to the magistrate, to be reheard in accordance with this court's directions. Integral to this contention was the submission that the complaint was drawn widely enough to raise the material facts that would permit the court to exercise power under ss 39 and 43 of the Act. The worker contended that even if the appellant was correct not to continue payments as determined by its notice, that decision does not preclude the court at a later point in time adjudicating on the substantive rights to the entitlement to weekly payments from the relevant date. Three medical reports were tendered that establish that the worker was incapacitated for work and, prima facie, entitled to compensation. An application for reinstatement of weekly payments could be determined as a matter of substance.
37 I do not agree. The circumstances in which the worker's entitlement to weekly payments might be revived involved facts that were not raised in the proceeding, probably because the substantive entitlement to weekly payments from the resignation date was not in issue in the proceeding. The fact that there was some evidence relevant to the issue of entitlement, including that the worker was waiting for surgery, did not define the issue that was before the primary court. It is not appropriate to send the proceeding back to the primary court for it to be substantially amended to allow the worker to pursue a different claim; one that could be pursued in a fresh proceeding. The worker submitted that the Civil Procedure Act required this outcome but I do not accept that that Act requires a remitter to permit the complainant to amend his complaint and present a different claim when the claim that he did pursue was wrongly decided in his favour. The proper course for a worker who seeks reinstatement of weekly payments is to first require the appellant to consider the new circumstances and make a determination. The appellant did not suggest that such an issue could not be the subject of a later proceeding if its determination was adverse to the worker.
38 I will order that the appeal be allowed, the judgment of the primary court be set aside and in lieu thereof, the complaint be dismissed. I will hear counsel on the question of costs.
Cetel Communications
Parker [2014] VSC 318
(1998) 194 CLR 355