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[2005] SAWCT 101
appellant. The Department's determination dated 31 January 2005 was set aside
A worker who had previously received a lump sum payment to redeem weekly compensation from a prior employer made a new claim for a different injury with a new employer. The new employer accepted the claim and set weekly payments without knowing about the prior redemption. When the employer later discovered the prior payment, it tried to reduce the worker's current payments by reviewing them under section 38 of the Workers Rehabilitation and Compensation Act. The Tribunal ruled that section 38 only applies when there has been a change in the worker's circumstances, not when the employer simply learns new information about the worker's existing circumstances. The Tribunal also found that the employer failed to give proper notice of the review because it did not tell the worker that the prior redemption would be considered. The employer's decision to reduce payments was set aside.
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1 cited instrument linked from this judgment.
1 Robert Healion suffered an injury to his lower back and lumbar spine in 1991 in respect of which he sought and obtained compensation from WorkCover pursuant to the Workers Rehabilitation and Compensation Act 1986.
2 In May 1996 Mr Healion agreed with WorkCover to accept a lump sum payment of $21,000 to redeem WorkCover's outstanding liability to pay him weekly payments and income maintenance. The agreement recorded that the weekly payment that was being redeemed was an amount of $348.20 per week.
3 Mr Healion subsequently obtained employment with the Department of Education and Children's Services as a teacher. As a result of an incident that occurred in the course of this employment Mr Healion developed an anxiety disorder in respect of which he sought and obtained from the Department compensation pursuant to the Act.
4 The Department was not aware when it fixed the amount of weekly payments payable that Mr Healion had received a lump sum payment from WorkCover. If it had known it no doubt would have applied s 35(6a) of the Act and taken into account the $348.20 that Mr Healion was deemed to be receiving from WorkCover.
5 On 19 May 2004 the Department advised Mr Healion that it intended to conduct a review of the amount of weekly payments that he was receiving pursuant to s 38 of the Act. It did not specify what the focus of the review would be other than to make mention of the fact that medical evidence and evidence of income earned might be taken into account. The letter contained an attachment that included a request for Mr Healion to provide evidence of his earnings.
6 S 38 of the Act enables a compensating authority to review the weekly payments payable to a worker and depending upon the outcome to adjust them upwards or downwards. Through s 38(3) it stipulates that before beginning the review the compensating authority must give the worker notice of the proposed review and an invitation to make written representations on the subject of the review. The section enables the compensating authority to require the worker to submit to a medical examination and to provide details of earnings. It therefore clearly contemplates that changes in the extent of a disabled worker's earnings or changes in his or her post disability earnings are grounds upon which a review can be conducted. It otherwise provides no indication as to what other grounds may be relied upon to review weekly payments.
7 In September 2004 the Department arranged for Mr Healion to be assessed by Dr Allan Cotton, a psychiatrist.
8 Dr Cotton obtained a comprehensive history from Mr Healion. It included an advice from him that he had received a lump sum payment from WorkCover.
9 This alerted the Department to the possibility that Mr Healion had received a redemption payment. It approached WorkCover and on 21 December 2004 was provided with details of the lump sum payment that Mr Healion had received.
10 The Department took the view that because s 38 does contain any provision that limits its scope it can be relied upon whenever circumstances present themselves that justify an adjustment of weekly payments. It concluded that its belated ascertainment of Mr Healion's prior lump sum payment was a sufficient change in circumstances to enliven the powers of review conferred by s 38. Accordingly, by determination dated 31 January 2005, it informed Mr Healion that his weekly payments were to be reduced to take into account the amount that had been redeemed by the earlier agreement with WorkCover.
11 Mr Healion contends that the Department had no right to do this. First, he contends that as the notice of proposed review made no reference to the prior redemption a necessary pre-requisite to the invocation of s 38 had not been met. It was argued that s 38(3) contemplates the worker being given an opportunity to make meaningful representations and that this cannot be achieved if the affected worker is not given adequate notice of the basis upon which the review is ultimately made.
12 Secondly, he argued that in any case, the Department's ascertainment of the prior redemption did not provide grounds that enlivened the capacity to adjust weekly payments pursuant to s 38 of the Act. It was conceded that the provision is not limited to changes in earning capacity or earnings. It was said that the key ingredient was a change in the worker's circumstances and that this was lacking here. It was argued that if there was a change in the compensating authority's understanding of the worker's circumstances, as opposed to a change in the worker's circumstances, the appropriate redress was though the possible invocation of s 53(7).
13 The Department contended that the Tribunal had rightly adopted a flexible approach to the correlation between the subject matter of a proposed review and the grounds underpinning a subsequent s 38 adjustment. It was said that in this case because Mr Healion had been asked to provide details of his earnings this should have been sufficient to alert him to the potential implication of the prior redemption because he should have appreciated that the effect of the redemption was that he was deemed to be receiving an income. The effect of the argument as I understood it was that to permit the defeat of the Department's s 38 review solely on the ground that Mr Healion was not expressly invited to make representations about the fact of and legal consequences of his prior lump sum payment would be a triumph of form over substance because in the processes that followed the determination Mr Healion was given every opportunity to put his position.
14 Next it argued that because in good faith the Department determined the claim oblivious to the prior redemption as a matter of fairness it ought now be able to adjust Mr Healion's payments to reflect what he is in fact lawfully entitled to. It was suggested that in the circumstances here it was unlikely that the pre-requisites to the successful invocation of s 53(7) had been met and therefore one needed to look to some other provision to enable the adjustment to occur. It was submitted that s 38 was the obvious choice and that it would not strain the language of the section to permit it to operate in the circumstances of this case. It contended that the re-formulation of s 38 through amendments to the act in 1995 is of significance and that it reflects a change of focus from simply a review based upon change in a worker's incapacity for work to a wider inquiry. It was said that the provision can be invoked in any circumstances where there is evidence indicating that the worker's weekly payments need adjustment and that this exists here.
15 I sympathise with the Department's position. All that it wishes to do is to pay Mr Healion that which he is lawfully entitled to. But the resolution of this case does not rest solely with notions of fairness. Ultimately it comes down to the proper construction of the relevant provisions.
16 The pivotal provision in s 38 is sub-section (4). It speaks of the compensating authority making a finding that the worker's entitlement to weekly payments has ceased, increased or decreased. The relevant finding here is not that Mr Healion's entitlement to weekly payments has decreased. The relevant finding is that it should not have been set as high as it was in the first place. If s 38 can be used to re-visit the assessment of weekly payments one might wonder why Parliament was so prescriptive in limiting the circumstances in which s 53(7) can be invoked. It might be thought surprising, for example, that Parliament would require a compensation authority to demonstrate that "new information that was not available and could not reasonably have been discovered by due enquiry at the time that the original determination was made": s 53(7a)(c), before being able to revisit the quantification of a previously accepted claim for s 32 expenses and yet would require no more than compliance with the benign requirements of s 38(3) to enable a compensating authority to revisit the prior determination of the amount of weekly payments.
17 Moreover I do not share the Department's view that the threshold requirements of s 53(7) are as onerous as it suggests.
18 In Anderson v Arnott's Biscuits Limited [2000] SAWCT 27 the Tribunal held, that "new information" as appears in s 53(7a)(c) means no more than "new to the decision maker".
19 By parity of reasoning it also must be concluded that the expression "not available" simply means "not available to the decision maker". I agree with Deputy President Thompson that simply because it was not known or had not been communicated to the compensating authority would not be sufficient. See Camburn v Holden Ltd [2002] SAWCT 20. But, given that the sub-section then speaks of "could not reasonably have been discovered" it must contemplate that the information could have been discoverable by the decision maker and yet a redetermination would still be permissible. The key is whether the failure to discover the information was unreasonable in light of what could be expected by "due enquiry".
20 It has now been recognised by cases such as Della Flora v Workers Rehabilitation and Compensation Corporation of South Australia ((unreported) Full Supreme Court Judgment No S6691) and Mitsubishi Motors Australia Ltd v Harbord and Another (1997) 69 SASR 75 that the process of inquiry and investigation permitted by s 53 of the Act does not have to be exhaustive in every case and, that in an appropriate case, in keeping with the spirit of the Act, it might be that the compensating authority conducts very few inquiries and investigations prior to its determination to accept a claim.
21 In my view, that approach has to colour the construction to be given to the expression "could not reasonably be discovered by due enquiry at the time that the original determination was made" in s 53 (7a). In light of the approach to application of s 53 endorsed in Della Flora and Harbord I would construe the word "due" as meaning: having regard to the scope of the investigations and inquiries then undertaken and the reasons underpinning that scope.
22 If, for example, in this case there was every expectation that the claim for income maintenance would be for no more than a few days or weeks and that in light of that the Department resolved to carry out no more than superficial inquiries and investigations before resolving to accept the claim, there is every reason to think that its later ascertainment of the prior redemption would constitute grounds to invoke s 53(7).
23 The Department has not in this case invoked s 53(7) and it is not part of the ambit of this judicial determination to determine whether if it did, its invocation of that provision would be successful.
24 What is relevant about that provision, is that I do not approach the construction of s 38 from the premise that simply because the fact of the redemption was in existence at the time when the original determination was made, and information about it could have been available to the Department had it embarked upon enquiries of WorkCover prior to its determination, it does not mean on the proper construction of s 53(7a)(c) that a redetermination would not be permissible.
25 In other words, I do not approach the construction of s 38 from the premise that an expansive construction of it is required to alleviate the injustices that might follow because of the restrictions applying to the successful invocation of s 53(7). With this and the matters alluded to by me in par 16 in mind I favour Mr Blewett's suggested construction of s 38. It is limited to changes in the worker's circumstances.
26 In this case no relevant change in the worker's circumstances has been identified. In my opinion the facts in this case do not provide a proper basis for the invocation of s 38.
27 That is sufficient to dispose of Mr Healion's challenge to the Department's determination.
28 If I am wrong in reaching that conclusion, I would nevertheless uphold his challenge.
29 Whilst cases such as Gaeta v WorkCover Corporation/HIH Workers Compensation Pty Ltd (Gaeta Constructions Pty Ltd) [1999] SAWCT 136 make it clear that a pedantic approach to determining whether the information supplied in connection with a proposed review under s 38 is adequate is not called for, they do not provide a license to ignore the requirements altogether. So much is made clear in Staines v WorkCover Corporation/Allianz Australia Workers Compensation (SA) Pty Ltd (Air International Pty Ltd) [2004] SAWCT 127. In my opinion the requests and information contained in the Department's letter of 19 May 2004 and its attachment did not give Mr Healion notice that his receipt of a lump sum payment might be the subject of a s 38 review. They did not in my view satisfy the requirement that a worker must be given the opportunity to make written representations on the subject of the review.
30 For these reasons, the Department's determination must be set aside and I order accordingly.
Parties are advised that if a party wishes to appeal against any part of this decision which is appealable pursuant to s 86(1) of the Act such appeal must be filed with the Registrar in accordance with the form titled Notice of Appeal within 14 days of the delivery of this decision and must be served on all parties.
Healion
State of South Australia
(1997) 69 SASR 75
The Department's determination dated 31 January 2005 was set aside