Hornhardt v Workcover/Hih

4 The worker contends that such an approach is not permissible. He submits that my task is to assess his notional weekly earnings, which has yielded the amount stated above and that apart from the reduction to 80 per cent upon the anniversary of the incapacity, which he says occurs by the operation of s 35(1)(b) and s 38A, I have no further role to play and that if the Corporation wishes to embark upon a review of such payments it ought avail itself to the review procedures provided for by s 38.

5 The situation here is different to that which presented itself to the Tribunal in Petric v WorkCover Corporation/Mercantile Mutual Insurance (SA Workers Compensation) Limited (Consulting and Development Engineers) [2000] SAWCT 108 and Adderton v WorkCover Corporation/Royal & Sun Alliance Workers Compensation (SA) Ltd (Rising Sun Imports (Samsung Nominees Pty Ltd)) [2000] SAWCT 119. In both of those cases at the time of the lodging of the worker's claim for compensation two years had elapsed since the commencement of the incapacity. It was held that the Corporation was obliged in determining the amount of compensation to which the worker was entitled to turn its mind to s 35(2)(c) of the Act and if as a result of that enquiry it was revealed that the worker had a nil entitlement then the Corporation was entitled to reject the worker's claim.

6 In this case at the time when the worker lodged his claim for compensation he had an entitlement to weekly payments. The issue is whether the Tribunal in making a determination in respect thereof can consider the matters that the Corporation wishes to raise.

7 In order to deal with this issue I need to explore the role of the Tribunal in determining a dispute. This issue was briefly touched upon me in Adams v WorkCover Corporation/NZI Workers Compensation (SA) Ltd (WB and SM Doser JD3/1997. At p9 of my reasons I said:-

"Whereas there was, upon the filing of an application for review, a requirement for the matter to be redetermined: Santos v. Saunders (1988) 49 S.A.S.R. 556, that is no longer the case. The determination that is disputed remains the status quo, unless and until it is corrected either by agreement between the parties or by an order of the Tribunal."

I made this observation solely in respect of the question of the burden of proof. I did not concern myself with issues such as the nature of the hearing before the Tribunal, that is, whether it was in the nature of an appeal or whether it was a hearing de novo. I nevertheless think that I need to deal with this case, because the approach that I adopted might suggest that the Tribunal has to consider the position, as it was when the disputed determination was made. This is of some significance here because at the time when the Corporation made its determination in this case, which was subsequently been corrected by judicial determination, the potential for facts to be in existence to extinguish the worker's ongoing rights to weekly payments of income maintenance had not yet occurred, but they have potentially done so now.

8 At the time I made this observation the only relevant decision of the Supreme Court touching upon the status of a compensating authority's determination was O'Brien v The State of South Australia and Mostowyj (1994) 63 SASR 175. I understood the decision of the majority in that case to suggest that a determination by a compensating authority created accrued rights. Assuming that to be the position, and absent a provision such as s 96(2) of the Act as it formerly was, which provided: "on a review under this section, the Review Officer shall make a fresh determination of the matters to which the decision subject to the review relates." I assumed that the function of the Tribunal was different to that of a Review Officer conducting a review of a disputed decision under the former regime. I proceeded on the basis that the party disputing the decision of the compensating authority carried the onus of demonstrating that the disputed decision was wrong

9 This needs to be reconsidered in light of the subsequent decisions of the Supreme Court in Mitsubishi Motors Australia Limited v Harbord (1997) 69 SASR 75 and Della Flora v Rehabilitation and Compensation Corporation (unreported S 6691 delivered 26 May 1998). Amongst other things those decisions make it clear that the proposition that I understood O'Brien (supra) to stand for, is wrong, and that a determination made by compensating authorities does not, absent any other form of estoppel, create accrued rights.

10 In Della Flora v Workers Rehabilitation and Compensation Corporation (supra) at p12 of his reasons, Doyle CJ, with whom the other members of the Court agreed, went on to say:-

"I have concluded that Parliament did not intend that a determination should be enforceable by action on the part of a worker before the expiry of the period within which a notice of dispute can be lodged, nor after such a notice has been filed and before the dispute has been finalised. I am influenced by the potential for injustice if a payment must be made at a time when the determination might still be set aside. If payment had to be made during the period I would have expected to find a provision to that effect, coupled with a provision enabling payment to be deposed in specified circumstances. Accordingly, I am influenced by the absence of any provision requiring payment during this period, and by the absence of any provision for the staying of a determination by the Corporation. As to cases in which a notice of dispute has been lodged, I am also influenced by the express provisions for the enforcement of orders of the Tribunal. They suggest that if a notice of dispute is lodged, it is the order disposing of the dispute that is enforced, not the original determination by the Corporation."

11 I think that it follows from this that the effect of the lodging of a notice of dispute within time is to render the disputed decision unenforceable and that remains so until the Tribunal makes an order either by consent or after an adjudication on the merits. In the latter case, the order only becomes enforceable after the time limit for which to seek judicial determination after arbitration or appeal after judicial determination, as the case may be, has expired. Thus the disputed determination carries no status in hearings before the Tribunal other than to provide a framework from which to ascertain the nature of the issues of dispute. The effect of this is that the party disputing the compensating authority's position need not demonstrate that the determination, or in the case of a disputed variation subsequent to a reconsideration, the reconsideration, was made in error. The status quo is the position as it was before the disputed determination was made. Thus, when the parties come before the Tribunal, the party seeking to disturb that status quo, absent any contrary provision in the Act, bears the onus of proof.

12 As to the nature of the hearing itself, given the status of the disputed determination, it must be a hearing de novo at which the Tribunal must arrive at its own decision based upon the evidence presented to it and the law as it is as the time of the hearing. Thus, the Tribunal is not constrained by the grounds upon which the determination was made, nor is it limited in making its decision to the facts and evidence available at the time when the disputed determination was made. Subject to compliance with the rules of natural justice and subject to all relevant parties being given an ample opportunity to meet their opponent's case, the Tribunal is entitled to make such determination as is appropriate in the circumstances, having regard to the nature of the issue in dispute, the evidence presented to it, and the law as it is at the time of the making of its determination.

13 Thus the role of the Tribunal in adjudicating upon a disputed determination is essentially the same as that of a Review Officer (with the important qualification that does not arise here, namely that it is obliged to act upon a lawful agreement reached between the parties). In dealing with the issue before me it is therefore appropriate to apply decisions dealing with the review process under the former regime.

14 The decision of Cristea v WorkCover Corporation (CCA Snack Foods (Smith Food Co)) [1993] SASC 4356; (1993) 61 SASR 487, makes it clear that if a compensating authority were to reject the worker's claim on the basis that the alleged disability did not occur in compensable circumstances, in determining a dispute about that claim, the focus of the Review Officer's attention would not necessarily be limited to that issue. It would be open for the compensating authority to argue at Review that if in fact a disability had occurred in compensable circumstances, that there was no incapacity for work; that if there was an incapacity, that at all material times suitable duties had been offered; or that the incapacity for work had ceased.

15 In Workers Rehabilitation and Compensation Corporation v Thuy Thi Vu (1988) 49 SASR 585, the Supreme Court upheld a determination that had been made by the Corporation to determine that the worker was entitled to weekly payments for a closed period. The Corporation's determination made reference to s 36(1)(b) of the Act which permits a discontinuance of weekly payments when incapacity for work has ceased. The Supreme Court thought that that reference was unfortunate but they nevertheless held that the section had not featured in the determination. Prior J said at 591:-

"The reference in subs (1)(b) of s 36 in the letter of 29 December did not convert the matter to one which called for the application of subs (3) of that section. To take account of the matter referred to in par (b) of subs (1) of s 36 is not to rely upon that paragraph to discontinue weekly payments. In this case the Corporation made a determination by invoking powers conferred upon it under s 106 of the Act to delay a final determination. The final determination discharged the Corporation's duty under s 53. There was no discontinuance of weekly payments but an identification of the period for which liability to make payments was admitted and determined."

16 In Hagean v WorkCover Corporation (Hallett Brick Transport Pty Ltd) A42/1997 I had cause to reflect upon Thuy (supra). Although Hagean's case was an appeal to the Workers Compensation Appeal Tribunal the parties had asked me to in effect assume the role of the Review Officer and to hear the matter de novo. They did so because it was conceded at the outset of the proceedings before me that the Review Officer's determination had to be set aside because of a misunderstanding by him in relation to some of the evidence that was placed before him and because they did want me to do as I would normally have done, that is, remit the matter back to the Review Officer for a re-hearing. I said at 11:-

"If it is possible to limit the period for which a worker is entitled to receive weekly payments in a determination pursuant to Section 53, there seems to me to be no logical reason why such a course should only be available in cases where the compensating authority is satisfied that the worker's incapacity for work has ceased at a particular date or where the worker has returned to work. If there has been some other event that has occurred that clearly extinguishes the worker's entitlement to income maintenance, that it seems to me, that in accordance with the decision of Thuy Thi Vu, the compensating authority ought to be able rely upon that event to limit the period of its liability to pay income maintenance. If it is competent for the compensating authority to do so, it is competent for a Review Officer to do likewise."

17 I then went on to say "if it is competent for a Review Officer to do that, in the context of this case, it is competent for me to do so". In making that remark I was mindful of the unique nature of the case before me. I regarded myself as standing in the shoes of a Review Officer. In accordance with the direction issued by the Supreme Court in Cristea v Workers Rehabilitation and Compensation Corporation (supra) at 489 - 490, I regarded my duty to make "any determination which can fairly be said to be within the scope of the matters to which the Corporation's decision relates" and "in reviewing the Corporation's decision as to the worker's claim for compensation and in making a fresh determination, the Review Officer was entitled to determine the worker's entitlement to income maintenance and in so doing to consider whether the claim for disability had resulted in incapacity for work and the period of that incapacity". Be that as it may, I think that my observations about Thuy remain valid.

18 In principle I think that this is the approach that must be adopted here. Subject to the qualifications that I have referred to in par 12, I have to base my decision upon the evidence that has been placed before me, and if that indicates that the worker's entitlement to weekly payments of income maintenance has ceased, in principle, I see no reason why the Tribunal should not give effect to that evidence and rule accordingly.

19 The only matter that would stand in the way of such an approach is if it could be said that s 38 creates an exclusive code and that the procedures therein prescribed have to be applied in any case where one is seeking to extinguish an entitlement to income maintenance in respect of an incapacity that has succeeded beyond two years.

20 I am mindful that s 38 contains detailed procedures that must be complied with if a reduction or cessation of weekly payments already being made is to be achieved. But it begs the question as to whether s 38 is being relied upon in a case such as this where no weekly payments are being made. I do not think that it is. Weekly payments are not being reviewed. What is occurring here, having found that an entitlement to weekly payments exists, is an identification of the period of incapacity, a realisation that that period extends beyond two years, and an assertion that without the benefit of the deeming provision contained in s 35(2)(b), no entitlement to weekly payments exists. Thus, in my opinion, given that the worker's incapacity for work has extended beyond two years, if the compensating authority is, through evidence, able to persuade the Tribunal that for the period beyond that date the worker has a capacity to earn in suitable employment an amount equal to or greater than his or her notional weekly earnings, the Tribunal is obliged to determine that the liability for weekly payments has ceased as that date. What the Tribunal would be doing is no different than if it determined that the liability to make weekly payments should be limited for a closed period because it was satisfied that the worker's incapacity for work had ceased or that he had returned to work. To conclude otherwise would, I think, be inconsistent with the reasoning in Thuy.

21 I therefore determine that as a matter of law it is permissible for the Corporation to assert in the circumstances of this case that its liability to pay weekly payments of income maintenance has come to an end upon the second anniversary of the worker's incapacity for work.

22 I will now relist this matter so that this issue can be determined.

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 Form 11 within 14 days of the delivery of this decision and must be served on all parties.