Workers Compensation - Proceedings to obtain compensation - Determination of claims - Jurisdiction and powers of Tribunals - Tasmania - Whether "genuine dispute".

Workers Rehabilitation and Compensation Act 1988 (Tas), s81A(3).

Edgell Birds-Eye v Costello [1995] TASSC 10; (1994) 4 Tas R 319; FAI General Insurance Company Limited & Anor v De Saye A23/1992, applied.

Judgment Number: [2001] TASSC 147

1 The respondent worker jarred his back in the course of his employment with the appellant employer on 23 March 1999, when a tractor on which the worker was travelling ran over a rock. In consequence, the worker suffered back pain and was incapacitated for work. He applied for and obtained compensation from his employer pursuant to the Workers Rehabilitation and Compensation Act 1988 ("the Act").

2 In late 2000, the employer disputed the worker's entitlement to receive weekly compensation for a total incapacity during a period which concluded on 15 December 2000. Ultimately, the employer conceded liability in relation to that period and discharged its liability to the worker in respect of the same by a payment made on 19 March 2001. After that concession the worker delivered a medical certificate to the employer on the basis of which he sought weekly payments for the period between 15 December 2000 and 30 April 2001. Upon receiving that certificate, the employer gave the worker notice that it was dealing with the certificate as a new claim for compensation and that the claim was disputed. The employer referred the claim to the Workers Rehabilitation and Compensation Tribunal ("the Tribunal"), pursuant to the Act, s81A. Thereupon, the Tribunal was obliged to consider whether a genuine dispute existed. That obligation is derived from the Act, s81A(3)(c), which provides:

(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; ..."

3 For the purposes of the Tribunal's consideration of whether a genuine dispute exists the Act, s81A(6), authorises it to "conduct any hearing the Tribunal ... considers necessary by any appropriate means including, but not limited to, a telephone conference".

4 In the course of several hearings which bore on the issue of whether a genuine dispute existed, the parties tendered evidence to the Tribunal. As to that issue, the learned Chief Commissioner who constituted the Tribunal, published reasons for determination in which he addressed the material that had been put into evidence, and concluded that a genuine dispute did not exist. The employer has appealed against that decision.

5 The task which the learned Chief Commissioner was called upon to perform required him to determine whether a genuine dispute existed at the time of his consideration of the matter; State of South Australia v Wall (1980) 24 SASR 189; Edgell Birds-Eye v Costello [1995] TASSC 10; (1994) 4 Tas R 319 and GIO Australia Limited v Lovell [2000] TASSC 75, par4. As to the test of whether or not a genuine dispute exists, the learned Chief Commissioner referred to FAI General Insurance Company Limited & Anor v De Saye A23/1992; State of South Australia v Wall (supra) and Edgell Birds-Eye v Costello (supra). In FAI General Insurance Company Limited (supra), Underwood J considered an appeal against a finding of a Commissioner of the Tribunal who, having assessed the material put before the Tribunal, concluded:

"... In my view there is at least a suspicion existing in the minds of the insurer and the employer that the injury which is said to have occurred was an injury that may be attributable to a pre-existing back condition. There is however, no evidence to that effect. Even if there were, I take the view that there is insufficient evidence before me to show that a genuine dispute exists ..."

"It is clear that the learned commissioner misdirected himself with respect to the meaning of the words, 'a genuine dispute' in s82(3)(b). As I said in Precise Timbers Pty Ltd v FAI General Insurance Co Ltd & Burgess, Full Court 70/1991, s53 of the Workers Compensation Act 1971 (SA), appears to have been the provenance of s81 of the Tasmanian Act. The South Australian section was considered in State of South Australia v Wall (1980) 24 SASR 189. At that time, s53 provided, in substance that:

1 Weekly payments are to be commenced not later than a specified time after receipt of a claim.

2 An employer 'who disputes his liability to pay compensation' may, within a specified period, make application to the court for an order that weekly payments not commence as provided by subs(1).

3 The court may dismiss such application or, 'if it considers there is a genuine dispute concerning the liability of the employer' to pay compensation, order that weekly payments not commence as provided by subs(1).

Cox J, with whose judgment the other members of the Full Court agreed, said at p194:

'Bearing in mind the policy of subs(2), there is every good reason, in my opinion, for giving the words "genuine dispute" a plain and uncomplicated meaning, and not reading into them more than the language of the subsection will reasonably bear. Requiring the Court to be satisfied that the dispute is a genuine one is a safeguard against allowing a colourable and insincere denial of liability to frustrate the policy underlying subs(1). A less legitimate reason, however, for making things more difficult for the employer has been the interpreting of para(b) of subs(2) so as to require what has been called an "objective" appraisal of the dispute by the Court with the result than an employer who genuinely disputes his liability might well be told that, notwithstanding his attitude, in the opinion of the Court a genuine dispute about liability does not exist. This kind of thinking has led the Court on occasions to make its own appraisal of the merits of the employer's case, whether as to the law or the facts, in order to determine whether they are sufficient to constitute a dispute within the meaning of the paragraph. No doubt a patently feeble legal argument, or an assertion of facts unsupported by evidence, would more readily disincline the Court to consider the dispute to be a genuine one, so far as the employer is concerned. Otherwise I should not expect the merits of the employer's denial to have any bearing on the question before the Court. A right to make an application under subs(2) is given to an employer "who disputes his liability to pay compensation" and, apart from the introduction of the requirement of genuineness, I cannot think that there is any conceptual difference between the criterion upon which the employer may make his application under subs(2), and the criterion by which the Court will in due course determine it under subs(3). In short, if an employer disputes his liability, it follows that, except in the unlikely event of the worker abandoning his claim, a dispute will necessarily exist. So far as the nature of the dispute itself is concerned, it seems to me to require no more than a challenge or contest to the assertion of liability that the worker has made under subs(1). Again, it must not be a frivolous dispute, or one made without adequate inquiry and consideration, or it will run the risk of not being considered by the Court to be genuine, but otherwise the section, in my opinion, does not look beyond the employer's declared attitude.'

That passage was challenged in the Full Court of South Australia in Schilter v Institute of Technology (No. 1) (1982) 31 SASR 316. All three justices confirmed that it was a correct exposition of the law. So it is with respect to the words 'genuine dispute' in the Tasmanian Act, s81(3)(b). The learned commissioner misdirected himself in law in that he applied an objective test to his determination of whether a genuine dispute existed. He came to the conclusion there was not a genuine dispute on the basis there was insufficient medical evidence to sustain the claim that the alleged incapacity for work might not be causally related to a compensable injury or disease. The appropriate questions under s81(3)(b) are does the employer in fact disputes liability, has the employer complied with the requirements of s81(2) and is that dispute a genuine one, in the sense that it is not frivolous and arises after appropriate consideration and enquiry?"

6 In Edgell Birds-Eye, Wright J dealt with an appeal against the decision of a Commissioner of the Tribunal who, in reliance upon a medical report tendered by the worker's counsel, found that no genuine dispute existed. Wright J, at 327, said that in FAI General Insurance Company, Underwood J had correctly completely endorsed the views expressed by Cox J in State of South Australia and his Honour went on to say that in that case Cox J:

"... made several other observations which are pertinent to the present appeal. He accepted that the onus of persuasion that a genuine dispute exists is upon the employer but he observed that in the case before him it would have been open to the court to find, on no more material than the worker's own papers and the employer's application, that a genuine dispute existed. At 196 he said:

'... the evidence or information to which the employer will have to refer in order to persuade the Court that he genuinely disputes the claim, may in some cases, go no further than a serious assertion that it appears to the employer, on the information available to him (including the materials provided by the worker under subs(1) of 53), that the worker may not be able to make out his claim.'

It is not obligatory for an employer to support its genuine dispute by calling independent evidence (per Legoe J, with whom Bollen J agreed, in Schilter v South Australian Institute of Technology (1982) 31 SASR 316).

In my opinion the time at which the learned Commissioner must be satisfied that a genuine dispute exists is at the time he makes his determination and he should facilitate this process by granting an adjournment, if necessary, to enable the employer to make further enquiries. He should be careful that such a course is not used by a dishonest employer as a ploy to avoid payment of a worker's just entitlements, but he should also be alive to the fact that once an employer commences payments under the Act they are virtually irretrievable. [The difficulty of recovering payments has now been reduced by an amendment made to the Act, s88, by 99/2000.] I am also of opinion that the question whether or not a genuine dispute exists involves a subjective assessment of the employer's bona fide appreciation of issues requiring elucidation or contradiction. An obviously fallacious view of the law would scarcely qualify as a genuine dispute but an arguable case whether of fact or law would meet the statutory criterion. If a Commissioner were to refuse an employer's reasonable application for time to make further enquiries he would need to be on very firm ground before finding that a genuine dispute did not exist.

In my opinion the matters to which I have referred clearly indicate that the learned Commissioner both misconceived the nature of his enquiry and misused the material before him. He relied on the evidence of the worker and the report by Mr Ghali to, in effect, determine that the employer would be unsuccessful on the merits. This he was not entitled to do (see Precise Timbers Pty Ltd v Burgess Serial No A70/1991 per Zeeman J at 10 and 12, and my own judgment in APPM Forest Products v Sutcliffe Serial No B80/1990 at 5)."

7 In Griffiths v Devonport Youth Accommodation Services Inc A39/1996, Zeeman J, at 6 said that the test expressed by Cox J in State of South Australia, was the appropriate test to apply to the expression "genuine dispute" and it followed that a dispute must not be frivolous and may not be genuine if made without adequate enquiry or consideration. In Incat Tasmania Pty Ltd v Lockett [2001] TASSC 126, par4, Slicer J applied the genuine dispute test as explained in State of South Australia.

8 For the purposes of the present appeal, it is pertinent to keep in mind that:

h antonyms which have been adopted for the word genuine are insincere and frivolous;

h the question whether or not a genuine dispute exists involves a subjective assessment of the employer's appraisal of the circumstances; and

h for the purposes of the above assessment it is appropriate for the Tribunal to make its own appraisal of the material in relation to the claim and the considerations and enquiries of the employer, and to pay regard to its conclusions in this regard when determining the ultimate question for its consideration, that is, a subjective determination of whether the employer's disputation of the claim is genuine.

9 In the course of the reasons for determination which are the subject of this appeal, the learned Chief Commissioner, having referred to each of the decisions mentioned above, said as to the issue for his determination "there must be sufficient material before the Tribunal to establish as at the time of hearing, that the employer is genuine in its dispute. Some actual basis of argument must be shown to exist". On its face, this encapsulation of the test suggests that the learned Chief Commissioner misconceived the task he was to perform insofar as his statement that "some actual basis of argument must be shown to exist" implies that this must be established on an objective basis. That the learned Chief Commissioner in fact misconceived the test is made plain from what followed in his reasons for determination, the clearest illustration of which is the following passage:

"There is no material before me to establish an arguable issue that the worker was not at the relevant time suffering symptoms as explained by him, and at the level described by him, and there is no basis for any determination save that the incapacity for which he presents is as a result of his original injury."

10 Having made objective findings such as the above, the learned Chief Commissioner failed to apply them in relation to the ultimate issue he was called upon to determine, that is, whether the employer's rejection of the claim was genuine, as distinct from insincere. With respect, had the learned Chief Commissioner made a subjective assessment of the employer's position in relation to the claim, he could not have doubted that a genuine dispute existed.

11 The employer put before the learned Chief Commissioner a proof of evidence from Dr Amanda Sillock, who saw the worker on 28 March 2001. Her proof included the following:

Mr Viney was a well looking man who moved easily and had no difficulty climbing on and off the examination couch. His neck was not tender and there as [sic] a full range of movement. There were no abnormalities in his thoracic spine. His lumbar spine was slightly tender over the L5 and sacral areas. There was no scoliosis and he had a normal lumbar lordosis. He had normal movement with the exception of a slight restriction of flexion, which was 70 degrees, the expected range being 90 degrees. Straight leg raising was 90 degrees on both sides which is normal. Sciatic stretch tests were negative and hip movement was normal and did not cause any pain. Mr Viney had normal reflexes in his arms and legs. He had a very slight reduction in sensation down the backs of his thighs, but this was very minimal and did not correspond to any particular dermatome.

Whilst Mr Viney undoubtedly suffers from a small bulge of his L5-S1 disc I am of the opinion that such a finding is not of particular significance and that Mr Viney has sustained a simple strain to his back as a result of the jolting episode of the 24th March 1999. In my opinion, he is also exaggerating his condition considerably and there is a great degree of functional overlay and that this is now the reason for his current symptoms. The exacerbation of his symptoms in late November 2000 may well have occurred as he stated, but I would have expected it to have settled down well and truly by now.

I believe that Mr Viney is fit to return to work that does not require lifting in excess of 15 kg and does not require repetitive or sustained bending. ..."

12 On the basis of this proof, the employer was entitled to believe that for all or part of the period which included the period covered by the claim: the worker had exaggerated his condition considerably; functional overlay had been a significant factor in the worker's condition; and, the worker had been fit to return to work which did not require lifting in excess of 15 kgs or repetitive or sustained bending. The employer accordingly had good reason to call on the worker to prove: what his condition was; and, the extent to which such condition as was found to exist impacted on his capacity to work.

13 As the learned Chief Commissioner erred in law in relation to the test to be applied in determining whether a genuine dispute existed, the appeal will be allowed. I should, however, say that I consider that the learned Chief Commissioner also made an error in law in par17 of his determination. He said that an employer could not dispute a claim for compensation on the basis that although there was an initial entitlement to weekly payments for a total incapacity, the employer considered that at sometime during the period covered by the claim, the worker became partially incapacitated. The learned Chief Commissioner said that this scenario was addressed by the Act, s88. I can find no justification for that conclusion. If a worker makes a claim on the basis that he or she has been totally incapacitated during the period of the claim, it is in my view quite proper for an employer to dispute the claim on the basis that the worker was partially incapacitated during all or part of the period. The fact that the Act, s88, enables an employer to apply for a review of a worker's entitlements once liability has been established has no bearing on an employer's entitlement to dispute the extent of a worker's incapacity prior to the establishment of liability.

14 The parties requested that if I was of the view that there was a genuine dispute, then I should make an order which reflects that view, rather than referring the matter back to the Tribunal. I, accordingly order that the Tribunal's determination [2001] TASWRCT 90, made on 4 September 2001, be quashed and, in substitution, the determination of the Tribunal be that a genuine dispute exists concerning the liability of the employer to pay compensation to the worker by way of weekly payments and that compensation not be paid by the employer.