Workers Compensation - Proceedings to obtain compensation - Determination of claims - Jurisdiction and powers of Tribunals - Tasmania - Termination of weekly payments - "Employer who disputes liability".

Workers Rehabilitation and Compensation Act 1988 (Tas), s81A(1).

Edgell Birds-Eye v Costello [1995] TASSC 10; (1995) 4 Tas R 319; FAI General Insurance Co Ltd v De Saye 23/1992; Freemasons Homes of Tasmania v Price A2/1994, referred to.

Judgment Number: [2000] TASSC 75

1 This is an appeal pursuant to the Workers Rehabilitation and Compensation Act 1988 ("the Act"), s63 from a determination of the Workers Rehabilitation and Compensation Tribunal. The respondent is or was an employee of the appellant. By a claim form dated 22 November 1999 and apparently received by the appellant's insurer the following day, she claimed compensation pursuant to the Act in respect of a back injury alleged to have occurred on 19 October 1999. On 26 November 1999, in purported pursuance of the Act, s81A, the appellant served a notice on the respondent and referred to the Tribunal the matter of its liability to pay compensation and benefits pursuant to the Act. The Tribunal, constituted by a commissioner, conducted a hearing and on 9 March 2000, made a determination that the appellant had not formed the intention to dispute the respondent's claim at the time of serving the notice on her, and that the Tribunal was therefore without jurisdiction. The reference to the Tribunal was dismissed on that basis. The appellant contends that the learned Commissioner erred in law in reaching those conclusions.

2 The following provisions in s81A are of relevance:

(a) to pay compensation by way of weekly payments for an injury referred to in section 81(1); or

(b) to pay the cost of any benefits payable under Division 2 of Part VI in respect of the injury

must, within 14 days of receiving the claim for compensation in respect of the injury to the worker

(c) serve the worker with written notice that the employer disputes liability

(i) to pay compensation by way of weekly payments and must inform the worker of the reasons for disputing liability; or

(ii) to pay any benefits payable under Division 2 of Part VI in respect of the injury and must inform the worker of the reasons for disputing liability; and

(a) if the Tribunal considers that weekly payments should be made, order the employer to make weekly payments from such date as the Tribunal determines; or

(b) if the Tribunal considers that the cost of any benefits payable under Division 2 of Part VI in respect of the injury to the worker should be paid, order the employer to pay the cost of the benefits from such date as the Tribunal determines; or

(c) if the Tribunal considers that a genuine dispute exists concerning the liability of the employer to pay compensation by way of weekly payments, determine that compensation is not to be paid by the employer; or

(d) if the Tribunal considers that a genuine dispute exists concerning the liability of the employer to pay the cost of any benefits payable under Division 2 of Part VI in respect of the injury to the worker, determine that the cost of the benefits is not to be paid by the employer."

3 The learned Commissioner held that, in order for s81A(1)(c) to be complied with, an employer needs to have formed the intention to dispute the worker's claim, and to have reached that state of mind, at the time of serving the worker with the notice of dispute required by that provision. By ground 5 of the notice of appeal, the appellant contends that the learned Commissioner "erred in law in determining that the Applicant [sic] was required to have formed the requisite state of mind at the time of the notice of dispute and not at some later time". In my view, the opening words of s81A(1) are of critical significance in relation to this ground. The procedure to which that subsection applies can only be invoked by "An employer who disputes liability". Until such time as an employer decides to dispute liability, that employer does not satisfy that description. But if, within 14 days of receiving the claim for compensation, the employer decides to dispute liability, then it is obliged to serve notice on the worker and refer the matter to the Tribunal in accordance with s81A(1)(c) and (d).

4 Mr Carter submitted on behalf of the appellant that, for the purpose of determining whether the appellant was an employer who disputed liability, the learned Commissioner should have considered the facts as they existed at the time of his determination. He relied on Edgell Birds-Eye v Costello [1995] TASSC 10; (1995) 4 Tas R 319, in which Wright J said, at 326, that in his opinion the time at which a commissioner must be satisfied that a genuine dispute exists is the time when he makes his determination. I agree that a commissioner should consider the state of facts as at that time in deciding whether a genuine dispute exists for the purposes of s81A(3)(c) and (d), but that is beside the point. The Tribunal needs to consider three questions: (i) whether the employer disputed liability at the relevant time; (ii) whether the employer complied with the requirements of s81A(1)(c) and (d); and (iii) whether a genuine dispute exists. Underwood J identified three similar questions in relation to a predecessor of s81A in FAI General Insurance Co Ltd v De Saye 23/1992 at 7. The comment of Wright J in Edgell Birds-Eye v Costello relates only to the third of the questions that the Tribunal must consider. So far as the first question is concerned, it is clear from the wording of s81A(1) that the relevant time is the time of the service of the notice on the worker. It is significant that the words "who disputes liability" are in the present tense. If one gives the subsection its ordinary literal meaning, it can only be taken to refer to an employer who disputes liability as at the time of the service of the notice to the worker and the referral to the Tribunal.

5 My conclusion as to this ground accords with a comment made by Underwood J in relation to s81A(1)(c) in Freemasons Homes of Tasmania v Price A2/1994 at 5 in the following sentence:

"Service of a notice, containing the required information and given on behalf of an employer by a duly authorised agent of an employer that has formed the requisite state of mind, is sufficient compliance with that paragraph of the subsection." [My emphasis.]

6 Grounds 1 and 2 of the notice of appeal read as follows:

"1 That the Learned Commissioner erred in law in finding that the Applicant Employer had not formed the intention to dispute the Respondent Worker's claim for compensation.

2 That the Learned Commissioner erred in law in finding, in effect, that there was no evidence before the Tribunal that the Applicant had formed the requisite intention to dispute the Respondent's claim for compensation."

7 The Act, s49(1)(a) provides that the Tribunal is not bound by the rules of evidence. Ordinarily, one would expect a notice served in pursuance or purported pursuance of s81A(1)(c) to constitute evidence that the employer was disputing liability. In this case, the notice served on the respondent in purported pursuance of that provision took the form of a letter from the appellant's insurer, written as its agent and signed by a claims agent. The significant paragraphs in that letter read as follows:

"In accordance with Section 81A of the Workers Rehabilitation & Compensation Act, 1988, we hereby notify you that liability is not accepted in respect of both weekly payments of compensation and in respect of any benefits payable under Division 2 of Part VI of the Workers Rehabilitation and Compensation Act 1988.

1 FURTHER INFORMATION IS REQUIRED TO DETERMINE WHETHER YOUR CLAIMED CONDITION ARISES OUT OF AND DURING THE COURSE OF YOUR EMPLOYMENT."

8 In my view, this notice, rather than suggesting that the appellant had decided to dispute liability, suggested that the appellant had an open mind as to whether liability should be admitted or disputed. Saying that "liability is not accepted" is different from saying that liability is disputed. The reference to the need for further information to determine whether the claimed condition arose out of and during the course of employment suggests that the company had not made any decision, one way or the other, whether liability should be accepted or disputed.

9 The appellant also lodged a referral to the Tribunal which included the following:

"1 I, GIO AUSTRALIA, being the employer of DIANNE LOVELL who has made a claim for compensation under the Act in relation to an injury, dispute any liability to pay compensation by way of weekly payments and/or the cost of benefits under Division 2 of Part VI in respect of the injury.

2 I hereby refer the matter to the Tribunal under Section 81A.

3 I have notified the worker in writing that I dispute liability to pay compensation and have informed the worker of my reasons for disputing liability.

4 Weekly payments are not being made to the worker.

5 I enclose the required documents with this referral.

My reasons for disputing liability to pay compensation are as follows: (Specify exact reasons)

1 The employer disputes that the alleged injury arose out of and in the course of his [sic] employment."

This document amounted to evidence that the appellant had, on the day that its agent gave to the respondent the notice that I have quoted from above, decided to dispute liability. If it was true that the appellant disputed that the alleged injury arose out of and in the course of the respondent's employment, then, in my view, the appellant was then an employer who was disputing liability within the meaning of the opening words of s81A(1).

10 The learned Commissioner had before him two exhibits tendered on behalf of the appellant, namely a statement dated 14 February 2000 by one of the appellant's managers named Elizabeth Makin, and a report dated 9 February 2000 by a consultant orthopaedic surgeon, a Mr J G Mander. Both before the learned Commissioner and before me, it was contended that these documents amounted to evidence that, for the purposes of s81A(1), the appellant was an employer who disputed liability. I disagree. It is clear from Ms Makin's statement that the appellant was disputing liability as at the date of that statement, 14 February 2000. However, there is nothing in either document that suggests that a decision to dispute liability had been made as at 26 November 1999. There is a reference in Ms Makin's statement to a video film obtained in November 1999. There is a reference in Mr Mander's report to an MRI scan obtained on 18 November 1999. However, there is absolutely nothing to indicate that, as at 26 November 1999, the appellant had made any decision whether to accept or dispute liability, nor even received any information that could have supported or warranted a denial of liability.

11 The Act makes provision, in s81AA, for the situation in which an employee, upon receiving a claim for compensation, needs time to make a decision whether to accept or dispute liability. The significant provisions in that section read as follows:

"81AA - (1) An employer who requires further information to determine whether the claim for compensation gives rise to an entitlement under this Act may defer a decision to accept or dispute liability to pay compensation by way of weekly payments or other benefits.

(2) The deferral of a decision under subsection (1) is effected by the employer, as soon as practicable but not later than 14 days after receiving the claim for compensation -

(a) serving on the worker a written notice stating -

(i) that the employer needs to defer that decision; and

(ii) the reasons for the requirement for further information; and

(iii) the action taken or to be taken by the employer to obtain the further information; and

(b) taking reasonable action to obtain the further information.

(3) An employer who has deferred a decision under subsection (1) must, within 28 days of receiving the claim for compensation in respect of the injury to the worker -

(a) accept liability and commence payment of weekly payments or other benefits to the worker; or

(b) dispute liability and comply with section 81A."

12 Counsel for the appellant submitted that, on the facts of this case, the appellant was both an employer to which s81AA applied and also an employer to which s81A(1) applied. I reject that submission. In my view the two provisions are mutually exclusive. An employer who has decided to "defer a decision to accept or dispute liability" within the meaning of s81AA(1) surely cannot also be an employer "who disputes liability" within the meaning of s81A(1). I think the references in those two provisions to disputing liability must be given the same meaning, rather than different meanings. I think it follows that the notice served on the respondent on 26 November 1999, rather than amounting to evidence that the employer was disputing liability, amounted to evidence that the employer had not decided whether to accept or dispute liability.

13 The evidence before the learned Commissioner as to whether, on 26 November 1999, the appellant was an employer who disputed liability comprised two contradictory pieces of paper - the referral suggesting that the appellant did dispute liability and the notice to the respondent suggesting that it had not made a decision whether to dispute liability or not. Both were signed by the same person. There was no reason for the learned Commissioner to give one piece of paper greater weight than the other. By virtue of s81AB, an employer is taken to have accepted liability unless it disputes liability in accordance with either ss81AA or 81A. I think it must follow that, in s81A proceedings, the employer bears an onus of proof. That onus was not discharged in this case in relation to the first question in such proceedings, namely whether the employer in fact disputed liability at the relevant time.

14 The learned Commissioner referred in his reasons to the letter to the respondent dated 26 November 1999, Ms Makin's statement, and the examination by Mr Mander. Without referring expressly to the reference to the Tribunal, he expressed his conclusion as follows:

"Having considered the evidence that was put before the Tribunal I have come to the view that I cannot be satisfied that the employer had formed the requisite intention to dispute the claim at the time of the notice of dispute. It therefore follows that the employer has not complied with Section 81A(1)(c) and the Tribunal thus does not have jurisdiction upon this reference."

15 It may be that the learned Commissioner overlooked the fact that the referral to the Tribunal constituted evidence suggesting that the appellant had formed an intention to dispute liability as at 26 November 1999. Whether he overlooked that or not, the conclusions that he reached were conclusions that he was obliged to reach.

16 Even if, at the relevant time, the appellant was an employer who disputed liability, its notice to the respondent of 26 November 1999 did not comply with s81A(1)(c) in that it told the respondent "that liability is not accepted", and did not tell her that liability was disputed. On that basis also, the inevitable outcome of the proceedings was a finding that the Tribunal did not have jurisdiction, and a dismissal of the referral to it.

17 Grounds 3 and 4 of the notice of appeal relate to the insurer's status as the appellant's agent. They read as follows:

"3 That the Learned Commissioner erred in law in that, having found that the Respondent did not take issue with the authority of the Applicant's insurer as agent to give to the Respondent notice that the Applicant disputed liability, he found that the Employer had not formed the intention to dispute the claim.

4 That the Learned Commissioner erred in law in failing to find that the Applicant's appointment of an agent for the purposes of disputing the Respondent's claim for compensation was evidence of the Applicant's requisite state of mind to dispute liability."

18 Before the learned Commissioner, it was not disputed that the appellant's insurer was its agent for the purpose of serving a notice on the respondent and referring the matter to the Tribunal. In his reasons, the learned Commissioner said, "In this instance, the notice of dispute has been given to the worker by the insurer acting as the authorised agent of the employer. The worker has not taken issue with the matter of the insurer's authority as agent to give that notice ...".

19 As to ground 3, it is true that the respondent did not take issue with the authority of the appellant's insurer as agent to give the respondent the notice that was in fact given, but there was no concession that the notice constituted a notice disputing liability. Since the notice, in my view, did not dispute liability, the concession as to the agency relationship cannot alter the fact that the notice was not evidence of a decision to dispute the claim. I therefore reject ground 3.

20 So far as ground 4 is concerned, there was no evidence that the insurer was appointed as the appellant's agent specifically "for the purposes of disputing the respondent's claim for compensation". The only evidence as to the existence of an agency relationship was at the end of the document, which concluded as follows:

21 This amounted to undisputed evidence that the insurer had authority to serve that notice on the respondent. It did not amount to evidence as to the circumstances of the insurer's appointment as an agent with that authority. The insurer could well have had general authority to send letters and notices to employees of the appellant in relation to workers compensation matters. There is no suggestion that any authority was conferred on the insurer in relation to the respondent's claim alone. As the notice did not advise that liability was disputed, the fact that it was written within the scope of the insurer's authority as the appellant's agent does not constitute evidence that the appellant had decided to dispute liability. I therefore reject ground 4.

22 Ground 6 of the notice of appeal, which is the final ground, simply asserts that the learned Commissioner "erred in law in finding that the Tribunal did not have jurisdiction to hear the Applicant's [sic] reference". It does not add anything to the other five grounds, which I have rejected. No separate argument was addressed in relation to ground 6.