Coombs trading as Abbotsleigh Engineering v Workcover Authority of NSW

Supreme Court of NSW|2014-12-17|Before: Adams J

Judgment 1This case concerns an appeal from a summary decision of the Local Court of New South Wales dismissing the plaintiff's defence to, and cross-claim in, proceedings seeking to enforce a statutory debt which arose by operation of s 145(6) of the Workers Compensation Act 1987 (NSW).

Background 2The plaintiff employed Mr Willis Smith for the period between 30 April 2008 and 13 May 2008. During this period, the plaintiff was a sole trader in a small balustrading and hand rail business. On 12 May 2008, Mr Smith was asked to cut a series of steel hollow tubes, which required the tubes to be lifted from the floor onto rollers. He was also asked to drill holes in approximately 100 to 150 metal brackets, which were kept in a bag next to the drill press which Mr Smith was operating. As Mr Smith bent over either to replace a bracket or to pick up a bracket, he experienced stiffness in his lower back. A week or two prior to 12 May 2008, Mr Smith had also been involved in heavy lifting whilst handling steel angle beams. At the end of the working day, he experienced a shooting pain in his right leg as he entered his car to drive to his girlfriend's residence. 3On 15 July 2008, Mr Smith was diagnosed with a significant posterocentral disc protusion. Dr Casikar, a consultant neurosurgeon, later diagnosed Mr Smith with an L5/S1 disc prolapse and, on the basis of the history that he had taken from Mr Smith, considered that the injury was attributable to the lifting of heavy objects. Due to Mr Smith's unfitness to continue work, the plaintiff offered Mr Smith alternative clerical work. However, that offer was declined as he decided to pursue tertiary education qualifications. 4At the time of Mr Smith's injuries, the plaintiff did not have in place a policy of workers compensation insurance, which is required under s 155 of the Workers Compensation Act. On 11 June 2008, Mr Smith made a claim against the defendant, who was deemed to be the Nominal Insurer by operation of s 130 of the Workers Compensation Act. The defendant accepted this claim and, on 30 July 2009, issued a Notice to Reimburse to the plaintiff in the amount of $27,819.55.

The proceedings before the Workers Compensation Commission 5On 27 August, the plaintiff lodged an application with the Workers Compensation Commission ("the Commission") to review his liability under the Notice to Reimburse. The review was conducted by Mr McManamey, an arbitrator of the Commission, who was asked to determine whether Mr Smith suffered an injury arising out of, or in the course of, his employment. The plaintiff submitted that Mr Smith had not been engaged in heavy lifting on or before the day of injury, and that therefore no finding that he had been injured while at work could be sustained. Evidence of individuals working at the plaintiff's premises on the day was also tendered and indicated that Mr Smith had not displayed any signs of physical injury or complained of any physical pain before he left. 6Mr Smith's statement disclosed he first felt pain as he got into his car to drive home. He stopped on the way at a video store and again at his girlfriend's home, the pain getting steadily worse. 7On 12 November 2009, Mr McManamey found in favour of the defendant. Although the plaintiff had framed his case by reference to the alleged heavy lifting as the putative cause of injury, Mr McManamey focused upon the fact that Mr Smith became symptomatic upon entering his car at the end of the working day. As these symptoms became apparent during a 'periodic work journey', the injury could be characterised as one arising out of, or in the course of, Mr Smith's employment. Mr McManamey made no reference to the stops made by Mr Smith on his way home. The plaintiff contends that the submissions of the parties were directed to whether Mr Smith had been injured at work and no reference was made to the possibility that it was a journey injury. Mr McManamey's reasoning was explained at [24] of his statement of reasons - The Applicant says that the leg pain commenced whilst getting into his car. The commencement of the leg pain would correspond with the disc protrusion occurring. At the time that the leg pain commenced (and the disc protrusion occurred) Mr Smith was on a periodic journey within s.10. A frank disc protrusion falls within the description of a personal injury. It follows that the disc protrusion is an injury arising out of or in the course of his employment. Because the injury occurred on the periodic journey it is unnecessary to consider whether employment was a substantial contributing factor to that injury. Mr McManamey ordered that the plaintiff pay $27,819.55 to the defendant, in addition to costs as assessed. 8On 18 January 2012, the defendant issued a further Notice to Reimburse ("the Certificate") to the plaintiff in the amount of $95,016.64. This amount included the payments and costs ordered by the Commission on 12 November 2009 such that the earlier Notice was superseded. Although the Certificate provided for 28 days for the plaintiff to seek a review of his liability, no review was sought. No payment as required under the Certificate has been made. 9For completeness, it should be noted that the circumstances giving rise to Mr Smith's injuries came before the Commission for a second time on 8 February 2012. Mr Smith had sought a review of the defendant's decision of 2 November 2011 to terminate his weekly benefits. Both the plaintiff and defendant were parties to these review proceedings. On 13 November 2012, the arbitrator for the Commission, Mr Batchelor, found in Mr Smith's favour, relying upon Mr McManamey's prior determination of 12 November 2009 that Mr Smith had been injured in the course of a periodic journey from work. The plaintiff did not challenge these findings.

The proceedings before the Local Court 10The defendant commenced proceedings in the Local Court of New South Wales on 3 April 2013, seeking payment of the amount specified in the Certificate of 18 January 2012 as a debt due and owing to the defendant under s 145(6) of the Workers Compensation Act. The plaintiff filed a defence and cross-claim on 18 June 2013, both of which were later amended. 11In substance, the plaintiff's defence focused upon how the Commission reached its determination as to the existence of a compensable injury. In the plaintiff's submissions, the evidence brought by the defendant was entirely inconsistent with a finding that Mr Smith was injured while on a periodic work journey, the proceedings before the Commission concerning only whether the injury was sustained while Mr Smith was engaged in heavy lifting. The plaintiff had tendered evidence that no heavy lifting had taken place on or before the day of the injury. Whether the injury was sustained in the course of a workplace journey was, as I have mentioned, never raised as an issue. Even so, the facts on which the finding was based were patent on Mr Smith's statement. 12These contentions provided the basis for the plaintiff's cross-claim. The cross-claim alleged that the defendant was under a duty to investigate the claim properly, including examining the circumstances in which it had been made, to consider properly the fact that Mr Smith had broken his journey home by travelling to his girlfriend's residence, and to deny the claim on the basis that it was not a work-related injury. This duty was said to be implied by law or imported by operation of s 12ED of the Australian Securities and Investments Commission Act 2001 (Cth) or the Australian Consumer Law (Schedule 1 to the Competition and Consumer Act 2010 (Cth)). In the plaintiff's cross-claim, the defendant's failure in fulfilling its duty of care, skill and diligence resulted in the Commission reaching an erroneous determination imposing liability upon the plaintiff. This failure was said to supply the basis of an order for damages. I interpolate that, as mentioned already, these facts were all well-known to the plaintiff at the relevant times, so that it is difficult to see how any investigation could have revealed more relevant facts or what further investigation was required. 13His Honour Miszalski LCM delivered summary judgment in favour of the defendant on 25 February 2014 in the amount of $104,577.58. The plaintiff's amended cross-claim was also dismissed. Although his Honour did not elaborate upon the reasons for this judgment, it is evident that the purpose of the reimbursement regime under the Workers Compensation Act in providing for an expeditious default power to obtain reimbursement supplied the primary basis for his Honour's decision. As the plaintiff's attempts to re-litigate the issues originally before the Commission would frustrate that regime, it was appropriate to dismiss the defence and cross-claim.

The appeal to this court 14On 25 March 2014, the plaintiff filed a summons in this Court, seeking the following relief: (1)Leave to appeal; (2)An order setting aside the order of Miszalski LCM of 25 February 2014 striking out the plaintiff's amended defence and cross-claim; (3)An order remitting the proceedings back for determination; (4)Costs; and (5)Such other orders as may be suitable. 15This relief is sought on two bases: first, that the judgment of Miszalski LCM 'assumed incorrectly that vesting of jurisdiction in the Workers Compensation Commission to determine certain matters deprived the Local Court of the jurisdiction to determine certain other matters'; and secondly, that the judgment 'deprived the Court below of its general jurisdiction concerning debt claims and the determination as to whether or not there was in substance and in fact a debt due.' The plaintiff's submissions in this court effectively re-agitated the contentions brought before the Local Court. It is therefore unnecessary to repeat those submissions here. 16It is not for me to assess the merits of the claim which originally came before the Commission. Nor is it relevant for the purposes of these proceedings whether Mr Smith was on a periodic work journey at the time that the injury became symptomatic. The question before this court is whether the WIM Act and Workers Compensation Act permit the plaintiff to re-litigate the matters which have already come before, and been the subject of a determination by, the Commission.

Relevant Legislation 17The Commission's jurisdiction to hear and determine matters pertaining to workers compensation is stated in s 105(1) of the WIM Act - (1)Subject to [the WIM Act], the Commission has exclusive jurisdiction to examine, hear and determine all matters arising under this Act and the [Workers Compensation Act 1987 (NSW)]. ... 18The Commission also has jurisdiction under s 145(3) of the Workers Compensation Act to review Certificates issued under s 145(1) of that Act, including the Notice to Reimburse of 18 January 2012 - (1)The Nominal Insurer may serve on a person who, in the opinion of the Nominal Insurer, was: (a) In respect of an injured worker to or in respect of whom a payment has been made by the Nominal Insurer in respect of a claim under this Division, an employer at the relevant time; or (b) An insurer under this Act of such an employer, a notice requiring that person within a period specified in the notice, to reimburse the Insurance Fund an amount (not being an amount exceeding the amount of the payment made) specified in the notice. ... (3)A person to whom a notice has been served under subsection (1) in respect of an injured worker may, within the period specified in the notice, apply to the Commission for a determination as to the person's liability in respect of the payment concerned. (4)The Commission may hear any such application and may: (a) make such determination in relation to the application, and (b) make such awards or orders as to the payment of compensation under this Act to or in respect of the injured worker concerned, as the Commission thinks fit. ... 19A right of appeal to a Presidential member of the Commission from a determination of a matter under s 105(1) of the WIM Act is available under s 352 of that Act - (1)A party to a dispute in connection with a claim for compensation may appeal to the Commission constituted by a Presidential member against a decision in respect of the dispute by the Commission constituted by an Arbitrator. ... (4)An appeal can only be made within 28 days after the making of the decision appealed against. ... 20Similarly, an appeal from the determination of a Presidential member to the Court of Appeal of New South Wales is available under s 353 of the WIM Act - (1)If a party to any proceeding before the Commission constituted by a Presidential member is aggrieved by a decision of the Presidential member in a point of law, the party may appeal to the Court of Appeal. ... 21Finally, s 145(6) of the Workers Compensation Act, upon which the defendant relied in instituting proceedings in the Local Court, provides for the enforcement of a Certificate issued by the Nominal Insurer - ... (6)The Nominal Insurer may recover an amount specified in a notice served under subsection (1) (being a notice in respect of which an application has not been made under subsection (3)) from the person to whom the notice was given as a debt in a court of competent jurisdiction. ...

The jurisdiction of the Commission 22Although it was common ground that Mr Smith began experiencing symptoms of a disc protusion upon entering his car, Mr Smith's case did appear to be fought originally on the basis that the injury was caused by his lifting of objects, as set out in his statement and the medical reports. The plaintiff's attempt to impugn the Commission's decision for its alleged failure to place in issue the characterisation of Mr Smith's journey as a 'workplace journey' does not overcome the fact that the question of liability was a matter exclusively for the Commission to decide. This follows from s 105(1) of the WIM Act, which Young CJ in Eq in Teofilo v State of New South Wales [2007] NSWSC 767 at [11] described as indicating that 'the exclusive jurisdiction is up to the point of determination' and therefore with respect to the question of liability. Consequently, where the plaintiff's liability has been the subject of a conclusive determination by the Commission, the issue is not capable of being re-litigated before the Local Court in enforcement or, indeed any, proceedings. The Local Court's jurisdiction with respect to enforcement under s 145(6) of the Workers Compensation Act could not extend to reconsidering whether a workplace injury or claim existed and, by extension, whether there was in fact a debt to be enforced. Nor would it permit the hearing of a cross-claim which placed into contention the fact of a compensable injury. Were the decision affected by procedural unfairness (as appears to be put), s 105 might not preclude judicial review, but such a case could not be put to the Local Court and is not put here. 23It is clear in this case that the Commission's determination of 12 November 2009 conclusively determined the plaintiff's liability with respect to Mr Smith's injury. The Commission determined whether, which was disputed, a workplace injury within the meaning of s 10 of the Workers Compensation Act had occurred. A finding as to the existence of a compensable injury was legally indispensable to the Commission's determination, as the plaintiff's liability to reimburse the defendant turned on that finding. As such, the Commission's determination foreclosed further litigation on the point. 24Furthermore, the plaintiff had the opportunity to contest Mr McManamey's findings by way of appeal to a Presidential member of the Commission under s 352 of the WIM Act. A further appeal from a determination of a presidential member to the Court of Appeal of New South Wales was also available under s 353 of the WIM Act. Neither of these avenues was pursued. 25Similarly, when the Certificate of 18 January 2012 was issued by the defendant, it was open to the plaintiff to seek a review of that Certificate by the Commission: s 145(3) Workers Compensation Act. However, the plaintiff was required to lodge an application for review within 28 days of the date of service of the Certificate, which the plaintiff did not do. As the Court of Appeal of New South Wales indicated in Raniere Nominees Pty Ltd trading as Horizon Motor Lodge v Daley [2006] NSWCA 235, compliance with this statutory regime is a condition precedent to the plaintiff's entitlement to relief: Giles JA at [19]; Santow JA at [72]. Allowing the plaintiff to contest the defence and cross-claim by alleging the non-existence of a workplace injury would merely operate to circumvent these statutory procedures. The plaintiff's submissions must therefore be rejected.

The plaintiff's cross-claim 26The substance of the plaintiff's cross-claim is outlined above. The plaintiff submitted that the Local Court was entitled to hear the cross-claim in proceedings brought to enforce the Certificate as it was not considered by the Commission and fell within the Local Court's jurisdiction under s 30 of the Local Court Act 2007 (NSW) to determine a claim in debt. 27The reasons regarding the striking out of the plaintiff's defence apply equally to the cross-claim. The Local Court's jurisdiction does not extend beyond the question of enforcement. Although the cross-claim is framed in terms of an alleged failure by the defendant to investigate the injury and properly to determine liability, rather than a failure by the Commission, this does not escape the fact that the Commission's findings, which are no longer open to appeal, would also need to be impugned. There is the additional problem with the collateral attack that the facts relevant to the plaintiff's contention that the journey from work to Mr Smith's home was 'broken' were, at all events, before the Commission. 28For these reasons, I would dismiss the appeal with costs.

Amendments 17 December 2014 - amendment to orders Amended paragraphs: Coversheet DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 17 December 2014

Compensation Act 1987(NSW)

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