FAI Workers' Compensation (Vic) Pty Ltd v Brewster [1999] VSC 388

Supreme Court of Victoria|1999-10-15|Before: Smith, J.

Workers Compensation - notice rejecting claim - validity of decision and notice - misstatement of evidence in reasons by insurer - capricious decision - error of fact - failure to consider relevant evidence.

FAI Workers' Compensation (Vic) Pty Ltd (FAI) appeals from orders made, on 17 March 1999, at the Magistrates' Court of Melbourne. Those orders direct FAI to make weekly payments under the Accident Compensation Act 1985 (the Act) to Ms Vicki Brewster (Ms Brewster) from 5 December 1997 and to continue to do so in accordance with law together with payments of reasonable medical and like expenses. FAI was also ordered to pay costs including reserved costs. Liberty to apply was reserved in respect of an application under of the Act.

Ms Brewster had filed a complaint seeking compensation under the Act for injuries allegedly suffered in the course of her employment by Freehouse Pty Ltd at the Bundoora Hotel. She claimed that she had suffered injuries to her back and psychological disturbance manifested by anxiety, depression, pain and distress.

Ms Brewster had submitted a claim to FAI in the prescribed form but that claim had been rejected by notice dated 8 January 1998. Her Magistrate's Court complaint alleged that the notice of rejection was invalid in that it

"fails to comply with the provision of section 109 in that the circumstances relied upon failed to make out the grounds for rejection of the claim, and the provisions of the Act generally. . ."

She sought, inter alia, a declaration that the notice was invalid.

The notice of rejection was tendered in evidence before the learned Magistrate. It stated that it was a formal notice under section 109 of the Act and that it was notice

"to advise that your claim for weekly payments under this Act has been rejected."

"after careful consideration of all available information, your claim was rejected as: * you did not sustain an injury within the meaning of the Accident Compensation Act 1985. * your claimed injury did not arise out of or in the course of employment. * your employment was not a significant contributing factor to the claimed injury. * your claimed injury was caused by stress of a type which does not create an entitlement to compensation under the Accident Compensation Act 1985. * your claimed injury has not resulted in an incapacity for work. * the circumstances of your claimed injury are not covered by the Accident Compensation Act 1985."

"The attached statement is part of this notice. Together they set out the reasons for the decision. It is important that you read the two documents carefully."

The notice then set out the options available to Ms Brewster.

The attached statement of reasons for decision, incorporated into the notice of rejection, was two pages in length. In it reference was made to a medical examination by Doctor Paul Grainger-Smith. That reference was in the following form (hereinafter "passage A")

"It was his opinion that: "She gave a complex history. She and her husband ran the Anglers Tavern for eight and a half years and were declared bankrupt in 1996. She was depressed some time after this. She was offered a job at the Bundoora Hotel which was owned at one time by her father. During this time she had an operation on her ribs. It was thought that she had a malignancy. Her ribs biopsy showed osteo-sclerotic change of unknown cause. At the same time her husband was having cardiac problems and since had coronary artery bypass surgery. Meanwhile, the licensee who co-owned the hotel would not pay her nephew who also works there. Her father died in 1995. Following the bankruptcy in 1996, she lost the family home. It is therefore considered that your employment was not a significant contributing factor. "

The last sentence was included as set out above in the paragraph which purported to be a quote from a report of Dr Grainger-Smith. In the text of the statement of the reasons of FAI it was not given its own concluding quotation mark.

The statement of reasons then went on to refer to an investigation carried out by a private investigator. The reasons concluded with the following (hereinafter "passage B"):

"On 8 January, 1997, we requested that you provide a medical report to be taken into consideration when making this decision. You have not responded to this request. All available information, including medical evidence relating to your claim support the view that you do not have an entitlement to compensation."

Counsel for Ms Brewster tendered in evidence before the magistrate a copy of Dr Grainger-Smith's report to the Workcover Manager of FAI. His report was a lengthy one in the course of which amongst other things he stated the following opinion, an opinion the opposite of that expressed in passage A:

"I believe that her work at the Bundoora Hotel was a significant contributing factor in the causation of her present illness."

Counsel submitted to the learned Magistrate that the notice was "pure chicanery. It was intended to deceive and it is false in those reasons." Counsel submitted that it was fraudulent and, therefore, invalid because it was perfectly clear that Dr Grainger-Smith had said nothing of the sort of that alleged in the notice of rejection. Counsel submitted that the notice was tainted by dishonesty, was false and it could not be used by FAI to reject the claim for weekly payments.

Counsel for FAI called one of its employees, Geoffrey Mortimer, as a witness but he was unable to give evidence about the relevant decision making by FAI. He identified the person who was able to give that evidence, a Mark Putalis. He gave evidence that Mark Putalis was currently employed at FAI but was not "at this stage" coming to court. Counsel for FAI had the matter stood down to seek instructions. He announced subsequently that no further evidence would be called.

Counsel for FAI submitted to the learned Magistrate that the point made on behalf of Ms Brewster made no difference ultimately because the case ultimately had to be determined on its merits. He submitted that the grounds for rejecting the claim had been set out in detail and they did not simply go to medical issues. Counsel conceded that the only medical report held by the insurer at the date of rejection was the medical report of Dr Grainger-Smith to which reference had been made. He submitted that it was up to Ms Brewster if she was alleging fraud to prove it and that the document did not prove it. Counsel also submitted that under the amended defence FAI had specifically raised section 82 (2A) of the Act.

As to the alleged misrepresentation of the views of Dr Grainger-Smith in passage A, counsel for FAI submitted that the final conclusion was not intended to be Dr Grainger-Smith's conclusion but the conclusion of the claims agent. Counsel submitted that the sentence,

"It is therefore considered that your employment was not a significant contributor."

in its own terms, was not the opinion of the doctor but the opinion of the author of the document. Counsel submitted that it may have been misleading but it was not intended as deception. In discussion with the learned Magistrate, however, counsel, conceded that the statement was grossly misleading.

The debate before the learned Magistrate then turned to the question whether a negligently drawn notice which contained an error was invalid. Counsel for FAI submitted that it was not and that in any event, even if it was, a person still had to establish an entitlement to compensation in accordance with the Act.

His Worship held that the notice given by FAI was grossly misleading, and, therefore, invalid, because it misquoted the findings of Dr Grainger-Smith.

His Worship indicated that he had reached the conclusion that the notice of rejection was

". . . a travesty, it being such a gross misrepresentation of the truth. I am not saying there is fraud; of course I am not saying that. It is a big step to go that far, but it is a gross misrepresentation of the medical report, and if such was allowed to constitute a valid notice within the meaning of 109 (2), it would open all sorts of watersheds and gates really you would have a gradual drifting away from the values of the notice."

". . . I am going to hold that there is a deemed acceptance - there is no notice and there is a deemed acceptance of the claim. In other words the matter will proceed as if no notice was given within the time limit of 28 days."

Thus, his Worship found that the notice of objection was not a proper notice within the meaning of the Statute because it was a gross misrepresentation of the medical evidence. In an earlier passage his Worship explained his thinking as follows -

"I would interpret sub-s. (2) myself, but the notice that must include a statement of the reasons must be an accurate statement of the reasons. Now, they're not an accurate statement of the reasons, and they're manifestly inaccurate, and therefore as presently minded, I would rule the way that Mr Blackburn has in a sense put it; not that there was fraud but the notice was not within the meaning of the statute of proper notice."

He held that the notice was invalid. He also held that section 109 of the Act operated to bring about a deemed acceptance of the claim because no valid notice of rejection had been given. He held that orders should, therefore, be made in favour of Ms Brewster. The orders he made reflected what he saw as the normal consequences that would flow from acceptance of the claim.

Section 109 of the Act provided as follows:

"109. Responsibilities of authorised insurers and the Authority

(1) If an authorised insurer, the Authority or a self insurer does not give written notice of a decision to accept or reject a claim for weekly payments within 28 days of receiving the claim -

(a) the claim is deemed to have been accepted;

and

(b) the authorised insurer, the Authority or a self insurer must pay weekly payments to the worker subject to and in accordance with this Part.

(ii) The written notice of a decision to accept or reject a claim for weekly payments must in the case of a decision to reject the claim include a statement of the reasons for the decision.

(iii) A decision or deemed decision under this section is binding on the employer in respect of the employer's liability under the employer's excess."

By order made on 25 May 1999, Master Evans identified the following questions of law as being raised on the appeal

"(a) That the learned Magistrate erred in law in holding that the rejection of claim notice dated 8 January 1998 given pursuant to section 109 of the Accident Compensation Act 1985 was invalid, or otherwise ineffective.

(b) Whether the learned Magistrate erred in law in holding that because of an irregularity in the said notice (constituted by the typographic layout of the quote from the opinion of Dr Paul Grainger-Smith contained on the first page of the said notice), there was no written notice of rejection given in accordance with section 109 of the Accident Compensation Act 1985.

(c) Whether the learned Magistrate erred in law in holding that because of an irregularity in the said notice (constituted by the typographic layout of the quote from the opinion of Mr Paul Grainger-Smith contained in the first page of the said notice), the claim was deemed to be accepted in accordance with section 109 (1) (a) of the Accident Compensation Act 1985.

(d) Whether the learned Magistrate erred in law in holding that once there was a deemed acceptance in accordance with section 109 (1) (a), the worker was ipso facto, entitled to an immediate order for arrears or weekly payments of compensation up to the date of hearing and continuing, without any requirement to establish by evidence that she was otherwise entitled to such compensation in accordance with the Accident Compensation Act 1985."

It should be noted that the learned Magistrate declined to find fraud. Fraud was the primary basis for the attack mounted by Ms Brewster. Rather he found that the notice was grossly misleading and therefore not a valid notice of rejection under section 109.

I note that section 109 applies only to weekly payments and, therefore, the decision to allow medical expenses is open to attack. This issue, however, was not sought to be argued below or on appeal. I also note that counsel for the appellant, FAI, conceded that it had been open below, and on this appeal, to challenge the jurisdiction of the Magistrate to consider the validity of the rejection notice but it was not wished to canvas those issues. In particular, the complainant had sought a declaration as to the validity of the notice of rejection but no issue was taken before the Magistrate, or before this court, as to the jurisdiction of the Magistrate to determine the complainant's collateral challenge, to the validity of that notice.

Counsel for FAI submitted on this appeal that, in essence, the learned Magistrate had held that the reasons were grossly misleading for two reasons in particular - firstly, the false attribution of the statement of opinion to Dr Grainger-Smith and, secondly, the fact that the opinion of Dr Grainger-Smith was the opposite to that which was attributed to him. Counsel submitted that the learned Magistrate held that, because the reasons were grossly misleading, they were invalid and that there was, therefore, no notice and, as a result, a deemed acceptance of the claim.

I note that the specific discussion before the learned Magistrate about the errors in the reasons focussed on the misdescription of the doctor's opinion in passage A. Plainly, however, passage B was before his Worship and served to both confirm the misdescription in passage A and to mislead.

Counsel put a number of submissions in support of FAI's attack on the decision. The first and fundamental question, however, is whether the grossly misleading nature of the notice and reasons deprived the notice and reasons of any validity. Counsel for FAI accepted that there was a statutory obligation to state reasons and that that statutory obligation must be exercised in a bona fide manner.

Counsel for FAI submitted that the Act required the following:

* written notice of the decision to accept or reject within 28 days of receiving the claim (section 109 (1) ),

* written notice to include a statement of reasons for the decision (section 109 (2) ), and

* the written notice to include a statement of rights of conciliation and review (section 123A).

He submitted that all these requirements were met and that the Act did not contain any other statutory requirements either expressly or by implication. In particular, he submitted that there was no statutory obligation express or implied that the reasons as set out in the notice should be capable of being objectively substantiated or, still less, that any factual assertion in the reasons must not be misleading. He submitted that the requirements of the Act were satisfied even if the reasons given could not be objectively substantiated or were in fact misleading as to any matter of fact stated in them.

Counsel for Ms Brewster submitted that it could be argued that what was done was a fraud but that argument was not relied upon in view of the learned Magistrate's decision not to find fraud. Counsel submitted that, on proper analysis, there had been an extremely gross misunderstanding of the material or a complete failure to consider the material with the result that the statutory direction had not been validly exercised. Counsel further submitted that there can be extreme cases where the purported exercise of a duty such as that imposed under the Act could be conducted in so careless a manner as to amount to a non-performance of the duty and a non-exercise of the powers conferred.

Counsel submitted that a non-capricious decision-maker would base his or her decision on the facts and opinions available on the materials placed before him or her and the reasons would demonstrate the thought processes leading to the decision. Counsel submitted that the decision-maker must fairly and properly consider the material. He or she must act on facts and opinions as presented to the decision-maker and not make guesses or false or misleading statements or act capriciously. The grounds for the decision must be noted and the reasons for those grounds set out. Counsel stressed the importance of the fact that the statute included the reasons as part of the notice and drew attention to the fact that the notice itself stated that the reasons were part of the notice and urged the claimant to read them carefully.

Counsel submitted that the purpose for having the reasons was firstly to ensure that the authorised insurer dealt with claims in a careful and reasoned manner and not a capricious manner. The authorised insurer was required to set out what it had accepted and relied upon in a way that can be understood and analysed. Counsel submitted that the other principal reason for requiring reasons under the Act was to give notice of the conclusion to the claimant and to inform the claimant as to the basis on which the decision was reached so that the claimant could understand the decision and decide whether to accept it or pursue the claim further. Counsel submitted that the reasons must be properly based on the material and opinions available before the decision-maker and, therefore, must include all matters material to the decision. Here the decision-maker should have said that he had medical material supporting the claim but that he had rejected it and set out the reasons for the rejection.

Counsel submitted that the analysis advanced for Ms Brewster did not create a practical problem. He argued that it was not necessary to draw a pre-determined line. In each case the question to be answered would be whether the reasons revealed that there had not been a reasoned consideration of the claim and, therefore, there had not been a decision.

When asked how the Magistrate's decision should be analysed counsel submitted that the Magistrate had, in substance, held that the decision had, on its face, been made on a basis which was not supported by the material before him. The reasons indicated, as a basis for decision, that Dr Grainger-Smith's opinion did not support the proposition that the employment of the claimant was a significant cause of her injury. The evidence showed that that was plainly wrong and in fact that the opposite was the case. Therefore the reasoning broke down completely at that stage and a notice with reasons complying with the Act had not been given.

Neither counsel was able to refer me to authority directly in point. Counsel for Ms Brewster drew my attention to the reasoning of his Honour Judge G D Lewis in Pintar v Venture Industries Aust Pty Ltd (County Court, unreported, 4 February 1999). In that case the claim was made for weekly payments of compensation. The claim was rejected but the notice of rejection purported to reject a claim in respect of lower back strain. The claimant in that case was not seeking compensation for lower back strain. His Honour held that the notice rejecting the claim was

"misdirected and that inaccuracy in my view renders it defective and of no effect. Accordingly the defendant has not complied with the requirements of section 109."

His Honour ordered the defendant to pay weekly payments. Thus, while this decision supports an approach that would allow an order for weekly payments where there is a deemed acceptance of the claim, it differs from the present case where there is no doubt that the notice of rejection was directed to the claim. In Pintar, the notice was not directed to the claim and, therefore, there was no notice of rejection that was relevant.

I was also referred to a decision of his Honour Judge Rendit in Gray v ACC (County Court, unreported, 31 Oct 1994). In that case his Honour was dealing with section 109(11) the predecessor of the present section 109(1). His Honour considered a claim for weekly payments where the defendant was deemed to have accepted the claim because of the failure to deliver a notice of rejection within the prescribed time. At the same time, the parties had placed agreed facts before him which inevitably led to the conclusion that the plaintiff's injury was not compensable under the Act. His Honour's view was that a prima facie claim had not been made out and that, on the agreed facts presented to him, the plaintiff was not entitled to compensation.

His Honour held that the scheme of the Act was that if the authority did not act expeditiously it would be deemed to have accepted the claim and be under an obligation to immediately commence weekly payments. In addition, however, his view was that if the authority considered that the claimant was not entitled to weekly payments it could give notice of termination on the grounds set out in s. 111A (1)(b)(i) and weekly payments would be so terminated. He concluded that the legislature never intended to compel the authority to make weekly payments of compensation pursuant to s.109(11) when the court determined that the claimant did not to have any such entitlement. He stated,

"Whatever the position may be prior to a determination by the court, once the court determines that the plaintiff has no entitlement, the plaintiff is not entitled to receive unpaid weekly compensation pursuant to section 109(11)."

In the present case, his Worship was in a different position because there was no evidence before him other than the evidence of the claim and response and the medical report. While counsel for FAI sought before his Worship to have the merits exposed, counsel did not attempt to lead evidence on the merits. Thus the situations are different and the case distinguishable for that reason. I note, also, that central to his Honour's reasoning in Gray was his construction of the phrase "subject to and in accordance with this Part" in s.109(11) of the Act In his reasons, a number of points are made supporting an interpretation of that phrase which would require, inter alia, that it was demonstrated that there was a primary entitlement even where there was a deemed acceptance under the section. This construction is relied upon by counsel for FAI on this appeal (see below). A difficulty I have with such a construction is that it would seem to deny the deeming provision of any real effect. His Honour's view should be distinguished in any event because of the form of the relevant subsection at the time. Section 109 (11) provided;

"(11) If the authorised insurer or a self-insurer does not accept or reject a claim within the relevant periods specified in this section, the claim shall be deemed to have been accepted and the authorised insurer or self-insurer must pay weekly payments to the worker subject to and in accordance with this Part."

The drafting of the sub-section lent itself to an argument that the deemed acceptance was also "subject to ... this Part." The present equivalent makes it clear that the phrase applies to the payment of weekly payments not the deemed acceptance.

For myself, I see no difficulty in practical terms with the narrower construction of the words "subject to and in accordance with this part of the Act" because of the powers that the Authority and self-insurer have under the Act to terminate payments and recover monies paid and the issue will arise only if the Authority or self-insurer fails to serve a notice of rejection within 28 days - a circumstance under their control.

The other decision to which I was referred is the decision of his Honour Judge Just in the matter of Lloyd v Victorian Workcover Authority and Anor (County Court, unreported, 15 February 1994). I was referred to a passage in his Honour's reasons (p.8), cited by Judge Lewis in Pintar (above), where it was said

"I am satisfied that the clear intention of the legislature was that persons such as the present plaintiff who have been in the receipt of weekly payments for a lengthy period would be served with an appropriate notice under s.112 (1,2,3, & 6) and s.123A. It was not the intention of the legislator that such a person would have payments simply stopped without notice. It was also the intention of the legislature that payments were not to be stopped unless the VWA or authorised insurer had followed appropriate procedures and made decisions based on proper material. It would for example be unthinkable that a notice could be given when no assessment on the issue of "a serious injury" had been made by a medical practitioner or when an assessment had in fact been made which resulted in a level of impairment of 30% or more."

I agree that such actions would be unthinkable and would be contrary to the intentions of the parliament under the present Act. His Honour, however, did not explore the legal consequences of circumstances where there was no assessment on the issue of "a serious injury" or where an assessment was made of no serious injury notwithstanding a level of impairment of 30% or more. That was the nature of the task that was before the learned Magistrate in the present case.

In essence his Worship held that the gross misrepresentations in the notice of rejection and reasons rendered the notice given invalid. As a matter of general principle it seems to me that whether that is the consequence or not depends upon express or implied limitations to be found in the legislation conferring the power and imposing the duty to consider claims and, if rejecting them, to give notice with reasons.

An analogy may be drawn from the authorities dealing with the question of what are relevant factors to be taken into account by a decision-maker. In Minister for Aboriginal Affairs v Peko-Wallsend (1985-1986) 162CLR 24 at 39, Mason J., as he then was said:

"What factors a decision-maker is bound to consider in making the decision is determined by construction of the statute conferring the discretion. If the statute expressly states the considerations to be taken into account, it will often be necessary for the Court to decide whether those enumerated factors are exhaustive or merely inclusive. If the relevant factors - and in this context I use this expression to refer to the factors which the decision-maker is bound to consider - are not expressly stated, they must be determined by implication from the subject matter, scope and purpose of the Act. In the context of judicial review on the ground of taking into account irrelevant considerations, this Court has held that, where a statute confers a discretion which in its terms is unconfined, the factors that may be taken into account in the exercise of the discretion are similarly unconfined, except in so far as there may be found in the subject-matter, scope and purpose of the statute some implied limitation on the factors to which the decision-maker may legitimately have regard: . . . "

I accept the submission of counsel for Ms Brewster that the statutory requirement to give notice and reasons is intended by the legislature to serve two principal purposes. The first is to ensure that the authorised insurer deals with claims in a careful and reasoned manner and not in a capricious manner. The second is to give notice of the conclusion to the claimant and to inform the claimant as to the basis on which the decision was reached. It would follow that the legislature intended that implied limits be placed on the authority of the decision-maker. In particular, the decision should be made on a reasoned basis on the materials and the opinions available to the decision-maker and not a capricious basis. In addition, in giving notice of rejection and reasons, the legislature impliedly required the decision-maker to state accurately the material evidence and opinions before him or her relevant to the decision.

I note that, in support of its argument that errors did not lead to invalidity, counsel for FAI referred to s.103 (2) and s.105 (2). Section 103 deals with the worker's claim for compensation. In sub-s (2) it is provided that a claim for compensation containing a

"material defect, omission or irregularity, will be deemed not to have been made if the claim is returned within 14 days of being served to the claimant with a notice under sub-section (3) [specifying material defects]."

Section 105 deals with medical certificates required to accompany a claim for compensation. Sub-section (2) provides

"(2) A certificate issued or purporting to have been issued under sub-section (1) is of no effect if it contains a material defect, omission or irregularity."

Counsel submitted that parliament had in these provisions attempted expressly to deal with the consequences of material defects in documents and had thought it necessary to state that material defects would render the document concerned "of no effect". The comparison was then drawn with s. 109 which contains no such provision. Section 109, however, confers powers and imposes duties upon self-insurers and the Authority. Sections 103 and 105 deal with acts to be carried out by a person exercising his or her right to seek compensation. It is understandable in that situation that the parliament might consider it necessary to spell out the consequences should the person seeking compensation submit documents which contain material defects or omissions.

I may have misunderstood the submissions of counsel for Ms Brewster, but it seems to me that the arguments advanced are arguments that do not directly support the learned magistrate's reasons. Rather they offer an alternative basis upon which the ultimate decision may be supported. That, of course, is a legitimate approach for a respondent in appeals of this nature.

There is some support to be found in the authorities for treating a capricious decision as ultra vires and invalid (c.f. Lockhart, J. in QIU v Minister for Immigration (1994) 55 FCR 439, 446 dealing with unreasonable use of regulation power and see Sharp v Wakefield [1991] AC 173, 179; in South Africa the issue of capriciousness has been considered to be covered by the general requirement that the person vested with the discretion must "apply his mind to the matter" - see Baxter, Administrative Law, Juta & Co Ltd 1984, 477 (n 3 and cases there cited) and 503 in 238 and cases there cited, and Applicant v Administrator Transvaal & Ors 1993 (4) SA 733, 738-9).

It seems to me, that both his Worship's and counsel's analyses are correct. I concur with the learned Magistrate's description of what occurred as a "travesty". The reasons, on a fair reading, misstated the opinion of Doctor Grainger-Smith and contained the remarkable conclusion that all available information including medical evidence supported the view that Ms Brewster did not have an entitlement to compensation. Nothing could have been further from the truth. The statements were so extreme that it seems to me that they demonstrated that the decision-maker concerned failed to comply with his or her obligations under the legislation in making a reasoned decision and in formulating an accurate notice and reasons and, therefore, acted ultra vires. Thus the decision, notice and reasons were invalid.

I have considered whether this analysis raises the spectre of a flood of debatable attacks in the future on the validity of rejection decisions and notices of rejection and reasons. This should not occur. Such attacks would be confined to extreme cases. Again, drawing an analogy with the authorities on the failure to take into account relevant factors, the question would be one of degree and arguable decisions and insignificant misstatements would not vitiate any decision or notice or reasons. (cf Peko-Wallsend Ltd, above, at 40 per Mason J.).

If reassurance be required, it seems to me that policy considerations warrant the application of such an approach. The scheme imposes on the Authority or self-insurer an obligation to sit in judgment on claims made against it. It was not intended that the consideration of claims be a sham. Rather, the statutory scheme plainly depends upon a careful, reasoned and bona-fide exercise of the statutory powers and duties given to and imposed upon the persons authorised to consider claims. It would make a mockery of the statutory scheme for a decision and a notice and reasons, like those in question in this case, to be accorded any validity. The acceptance of the above approach can only enhance the effective operation of the legislation.

I note also that there are alternative ways in which the validity of the decision, notice and reasons might have been challenged. One was an argument that the decision-maker had failed, whether negligently, deliberately or capriciously, to take into account a relevant consideration - namely, the opinion of Dr Grainger-Smith. The decision-maker is required to have regard to relevant matters and to ignore irrelevant matters. In ignoring relevant matters it may be argued that the decision-maker may have acted ultra vires and the decision and the notice and reasons are, therefore, invalid (see generally Peko Wallsend, above, and, generally, Aronson and Dyer, Judicial Review of Administrative Action 291 ff and 642 ff and De-Smith, Woolf and Jowell, Judicial Review of Administrative Action, 5th Ed,. 346 p. 256 ff). In the present case it is difficult to think of a piece of evidence that could be more relevant than the opinion of the insurer's own doctor as to whether there was a connection between the employment of Ms Brewster and her injuries.

Another possible analysis is that the decision was vitiated by mistake of fact (Daganayasi v Minister of Immigration [1980] 2NZLR 130, 149 per Cooke, J as he then was; Secretary of State for Education and Science v Tameside Borough Council [1977] AC 1044, 1030, 1047: R v London Residuary Body, ex parte Inner London Education Authority, The Times, July 3, 1987; Mason v Secretary of State for the Environment and Bromsgrove District Council [1984] JPL 332; R v Legal Aid Area Committee No 10, (1989) 2ALR 585, 605, 606 and see discussion in Timothy H Jones, Mistake of Fact in Administrative Law (1990) P.L. 507). In the present case the mistake of fact might be said to relate to the substance of the doctor's opinion.

Thus it may be argued that the decision maker either was mistaken as to its content or failed to take it into consideration or erred in both respects.

It becomes necessary then to consider the challenge made to the learned Magistrate's decision that there was a deemed acceptance of the claim.

Counsel for FAI submitted that if the notice and reasons were invalid, Ms Brewster, nonetheless, was obliged to establish her entitlement to compensation.

Counsel submitted that this is a consequence of the phrase "subject to and in accordance with this Part" in s.109 (1)(b). I am not persuaded that that is so. I have referred to this issue above. Those words appear in the context of the obligation imposed upon the Authority or a self-insurer to pay weekly payments. That obligation is described to be "subject to and in accordance with this Part". The quoted words do not qualify the question of whether the claim is deemed to have been accepted. They do not purport to affect the question of the right of the worker to compensation but rather spell out the consequences of that right. Among other things it would make the entitlement to weekly payments subject to the power to terminate in s.114. They would also refer to the sections in the Part which spell out the quantum of the compensation (see for example s.93A and s.93B). To accept the contrary argument would be to deny any sensible operation to s. 109(1)(a) in my view.

Accordingly, I have come to the conclusion that the learned Magistrate was correct in his approach. An invalid notice having been given, the authorised insurer had failed to give the requisite notice within the requisite time and the claim was deemed to have been accepted. It followed, therefore, applying s. 109(1)(a) & (b) that Ms Brewster was entitled to receive weekly payments in accordance with the Act. The learned Magistrate so ordered.

For the foregoing reasons the appeal should be dismissed.

Compensation Act 1985

At a glance

Court

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Before

Source

Judgment (91 paragraphs)

Parties

Legislation Cited (1)

Cases Cited (1)