Workers Compensation - Proceedings to obtain compensation - Determination of claims - Jurisdiction and Courts, Tribunals, Commissions and Boards - Tasmania - Whether reasonably arguable case.

Workers Rehabilitation and Compensation Act 1988 (Tas), ss63, 69(13), 81A.

Haas Investments Pty Ltd v Viney [2001] TASSC 147; State of Tasmania v Beadle [2001] TASSC 122; (2001) 10 Tas R 302; State of Tasmania v Grigson [2002] TASSC 76; Suncoast Express Delivery Service v W (Ref No 115/05) [2005] TASWRCT 9; Report on the Review of Workers Compensation in Tasmania - Rutherford Report February 2004, referred to.

How v Colonial Car Rental Pty Ltd trading as Thrifty Car Rental [2004] TASSC 25; Rush v Skilled Engineering Limited & Ors [2002] TASSC 80, applied.

Judgment Number: [2006] TASSC 45

J & A FREEMAN BUILDING SERVICES v BERNARD WALKER

1 The respondent, an employee of the appellant, was injured at work in November 2004. The employer disputed its obligation to pay workers compensation and referred the matter to the Workers Rehabilitation and Compensation Tribunal ("the Tribunal") pursuant to the Workers Rehabilitation and Compensation Act 1988 ("the Act"), s81A. It obtained a finding that there was a "genuine dispute" between the parties as to the liability to pay compensation. There was a subsequent determination by the Tribunal that the respondent was entitled to workers compensation and weekly payments commenced. On 29 September 2005, the respondent's general practitioner, Dr Davidson, provided a medical certificate to the effect the respondent's incapacity for work would cease 1 October 2005.

2 On 14 November 2005, that is, some six weeks later, Dr Davidson issued a further certificate indicating an incapacity for the period from that date to 31 December 2005. The appellant treated that second certificate as a claim for compensation and made a further referral to the Tribunal pursuant to the Act, s81A, relying on s69(13). The respondent was then independently examined by a neurosurgeon, Mr Stuart.

3 The referral was heard by the Tribunal with the parties relying on the evidence of Dr Davidson and Mr Stuart. At the time of the first referral, the test to be applied by the Tribunal was whether there was a "genuine dispute" between the parties. When the second referral was dealt with, the test under s81A had altered from that of being a genuine dispute test to one of a reasonably arguable case test. The referral was dismissed and it is from that the appellant now appeals. The sole ground of appeal is that the learned Commissioner erred in law in determining he was not satisfied that there was a reasonably arguable case within the meaning of the Act.

4 The Act, s81A, as it applied at the time of the referral, relevantly provided as follows:

"(1) An employer who disputes liability to pay compensation by way of weekly payments for an injury ... must, within 84 days of receiving the claim for compensation in respect of the injury ... -

(2A) Where a matter is referred to the Tribunal under subsection (1), the Tribunal may authorise the Registrar to determine whether a reasonably arguable case exists concerning the liability of the employer to pay -

The section in this form came into effect from 17 December 2004. Prior to that, subs(2A) referred to the Registrar determining "whether a genuine dispute exists concerning liability".

5 The Act, s63, permits a party aggrieved by a determination of the Tribunal in point of law to appeal to this Court. Counsel for the appellant submitted that the Tribunal applied the correct test in making its determination, but in doing so reached a conclusion which was not open to it on the material before it. Hence this was an error of law. Counsel for the respondent did not dispute the appeal related to an asserted error of law.

6 The respondent conceded, and the learned Commissioner accepted, that the appellant was entitled to treat the certificate of 14 November 2005 as a claim for compensation pursuant to the Act, s69(13). The learned Commissioner also accepted, relying on the view expressed by Evans J in Haas Investments Pty Ltd v Viney [2001] TASSC 147 [13] that a difference upon the level of a worker's capacity for work can be a proper basis for disputation of a claim. The learned Commissioner then said at par6:

"Whether a reasonably arguable case finding should be made on this ground, as with all other grounds for disputation, depends on whether the Tribunal can be satisfied that the material before it does, at face value, avail the employer of a 'defence' to the claim. As I have said previously ([2005]TASWRCT 9 at [7]) a reasonably arguable case will not exist if the 'defence' postulated by the employer is considered to be obviously hopeless or entirely without merit."

7 The learned Commissioner set out the extracts from Mr Stuart's report upon which the appellant relied and commented upon the differences between the opinions of the two doctors. He then determined there was no reasonably arguable case. He said at par8:

"It would ... be quite incongruous to make a reasonably arguable case finding based on portion of Mr Stuart's evidence and thereby deny the worker weekly compensation for a partial incapacity when other portion of that same witnesses' evidence acknowledges an ongoing partial incapacity, albeit for other reasons."

8 Counsel for the respondent made extremely brief submissions as to the actual ground of appeal. In essence she submitted that the learned Commissioner did not err in finding there was no reasonably arguable case, given both doctors' reports indicated the respondent was partially incapacitated for work.

9 Counsel directed her submissions principally to an issue not raised before the Tribunal. She submitted that the referral process pursuant to the Act, s81A, should not even have been available to the appellant in this case. She submitted that a dispute as to the level, as opposed to the existence, of incapacity did not go to the obligation of an employer to pay compensation. She further submitted that the view of Evans J in Haas Investments Pty Ltd v Viney (supra) [13] was dictum only, not binding and, in any event, incorrect. She argued that the scheme of the Act did not support the view there expressed and relied on by the appellant and the learned Commissioner. She referred to various sections in the Act in support of her submission, but more particularly to the view expressed by Underwood J (as he then was) in State of Tasmania v Beadle [2001] TASSC 122; (2001) 10 Tas R 302 at 312 [29] where his Honour set out what he determined was the scheme of the Act. Counsel submitted that having regard to that view, it was clear that the Act, s81A, went to the existence of a liability and not the extent of it.

10 Counsel submitted that if the extent of an incapacity could give rise to an argument about liability capable of being agitated under s81A, it would be hard to see when that would not occur. To allow it would make the scheme of the Act unworkable. The more appropriate course would be for an employer to make application to the Tribunal pursuant to the Act, s88, and seek a determination as to the level of payments and the date from which payments should be made.

11 Counsel for the appellant agreed that the appellant could have made use of s88, commenting that there may be tactical reasons why it had not. As to the scheme of the Act, he did not necessarily contend that the view put forward was wrong. However, he said that s69(13) was inserted in the Act effective 1 July 2001, that is, after the hearing of the matter of Beadle at first instance. Further, there was no reference at all to the subsection in the appellate court's decision.

"(13) If the period specified in a medical certificate provided by a worker under this section expires and the worker provides a further certificate more than 14 days after the expiration of that specified period, the employer, on receipt of the subsequent certificate, may treat that certificate as a claim for compensation to which section 81A applies."

13 If the Act, s69(13), is read in the context of the whole section, it provided for a situation where there had been an injury with compensation paid but then a break in the periods covered by medical certificates. It then permitted the employer, who was not disputing a certificate on a fundamental issue, that is, that there was no injury at all, to argue about the extent of any ongoing incapacity.

14 The scheme of the Act as identified by Underwood J in Beadle's case does not, in my view, assist the respondent. I see no particular difficulty with that view, as far as it goes. His Honour, however, did not address the impact on that scheme of s69(13) which had been introduced only weeks before the hearing of the appeal. That section expressly permits an employer to utilise s81A in the circumstances in which it did.

15 I am of the view that this particular argument by counsel for the respondent on this appeal cannot succeed.

16 Accepting therefore that it was open to the learned Commissioner to accept that a dispute about the level of incapacity was a proper basis for a referral, did he err in his application of the test of what was a reasonably arguable case?

17 The basis of the submissions by counsel for the appellant was that the learned Commissioner acknowledged that there was a dispute as to the level of incapacity, but then sought to resolve it, reaching the conclusion there was no real difference between the views of the doctors. In so doing counsel submitted he mistook his task. Once he had determined there was a dispute, that should have been the end of it. He only needed to identify there was a dispute and not resolve it. This submission necessitates a consideration of just what the reasonably arguable case test is.

18 The phrase "reasonably arguable case" in the context of the Act, s81A, has not been considered by this Court. The test in s81A as it was of whether there was "a genuine dispute" has been so considered. In Haas Investments Pty Ltd v Viney (supra), Evans J canvassed the authorities relating to the meaning of the term. Underwood J (as he then was) also dealt with the meaning of the words in State of Tasmania v Grigson [2002] TASSC 76. The issue which now arises is, has the change of wording altered the test and, if so, in what way?

19 Counsel submitted that the second reading speeches at the time the amending legislation was introduced did not assist. Those speeches referred to the Rutherford Report, a review of workers compensation legislation commissioned by the relevant minister in Tasmania, and to the amendments introduced in 2004 being a response to that. The Minister, in his speech to the House of Assembly, said that two main problems were identified by that report, one being "the low threshold test for the granting of a 'genuine dispute' that has the effect of terminating weekly payments and shifting the burden of proof onto workers". That problem, he said, would be addressed by "replacing the concept of genuine dispute with a more stringent test of 'reasonably arguable case'". There was no further explanation of what was meant by that.

20 However, the Rutherford Report itself, in February 2004, is a little more helpful. At 56, the report's author commences a discussion of the "genuine dispute" test. He says at 57:

"In my view it is important that the Tribunal is in a position to apply a test of reasonableness to ensure that the dispute process is not used unnecessarily or inefficiently. I recommend that the Tribunal be empowered to apply a more stringent test for what constitutes a genuine dispute, namely, whether a prima facie case has been made that there are reasonable grounds for dispute. This would involve an assessment of the material put before it, without reference to the other side, as to whether a reasonable person could be satisfied that there are sufficient grounds to justify the dispute."

21 Counsel for the appellant went on to submit that while the phrase had not been judicially considered in the context of s81A, the words "arguable case" had been in the context of applications to extend time and that in the absence of any other guidance, the manner in which the term has been dealt with in that context was relevant. He conceded that in such applications the issue of an arguable case is not the only one. However, what is common to both situations is that the court is dealing with a "preliminary context".

22 In How v Colonial Car Rental Pty Ltd trading as Thrifty Car Rental [2004] TASSC 25, Slicer J was dealing with an application to extend time for the bringing of proceedings for damages and said at pars12 and 13:

"It may be that the terms 'arguable' and 'prima facie' are synonymous. In this case any distinction is meaningless. The applicant must show the existence of a 'cause of action' and it is not for the court to weigh up competing claims of control, duty or responsibility.

Whether the applicant is able to establish to the requisite degree duty and its breach is not to be here determined. She has established an arguable case or at least the existence of facts which, if accepted, are capable of grounding an action ... ."

23 In Rush v Skilled Engineering Limited & Ors [2002] TASSC 80, the Master dealt with an application to extend time. He said at par9:

"The plaintiff should demonstrate that he has an arguable case. Unless the apparent viability of the proposed action can be shown in an appropriately preliminary way, the plaintiff could not expect to persuade the Court that he will suffer an injustice if the time bar is left in place. If the case which the plaintiff outlines is obviously hopeless, the justice of the situation could never lie with the grant of the extension: Williams v The Minister Aboriginal Land Rights Act 1983 & Anor (1994) 35 NSWLR 497 at 508. On the hearing of an application for an extension of time the issue of the liability of the prospective defendant cannot be canvassed with the exhaustiveness that would be achieved at trial. The plaintiff only has to show the viability of the claim. There is no need to obtain comprehensive information from each and every witness available to the plaintiff. There is generally no opportunity to cross-examine the witnesses of the prospective defendant. Accordingly, the court having found that a claim is viable will not usually go on to assess whether the proposed case is weak or strong or somewhere in between. In relation to 'skeletal' evidence on an application of this kind Cox J (as he then was) said in Soul v Soul 23/1982 at 6:

'It may be that at a subsequent trial additional evidence might alter its complexion to such an extent that the conclusion no longer remains open.'"

24 In other cases of applications to extend time dealt with by this Court, the phrase "reasonably arguable case" has actually been used and not just "arguable case" (see G v Australian Red Cross Society A3/1994, an unreported decision of the Master where principles applicable to such applications were set out).

25 The learned Commissioner in Suncoast Express Delivery Service v W (Ref No 115/05) [2005] TASWRCT 9 said at par7 when considering the concept of "reasonably arguable case":

"In the context of s81A, a reasonably arguable case will, in my opinion, exist if the Tribunal can be satisfied upon its assessment, objectively made, that the material presented by the employer does, at face value, avail the employer of a defence to the worker's claim either upon the facts or at law. A defence will not warrant a determination that a reasonably arguable case exists if it is considered by the Tribunal to be obviously hopeless or entirely without merit. Nor will it qualify if considered to be irrational, absurd or ridiculous. The employer bears the onus of proof."

26 In the present case the learned Commissioner again referred to a defence. However, leaving aside the fact that s81A makes no reference to the existence of a "defence" being a threshold test, in this case it is an inappropriate term. The reference to the Tribunal did not ever involve a fundamental challenge to liability. It related to the level of incapacity of the respondent, a factor the learned Commissioner recognised. The question he therefore had before him was, was there a reasonably arguable case as to the level of incapacity of the respondent?

27 Counsel for the appellant submitted that the learned Commissioner recognised that Mr Stuart's opinion that the respondent was fit to return to work with only a restriction that he avoid lifting with a bent back, in the light of a claim based on a partial incapacity, demonstrated there was a reasonably arguable case between the parties as to what, if any, liability to pay benefits then existed. The learned Commissioner then, however, went further into Mr Stuart's report and that of Dr Davidson to examine in more detail what they each said, and while conceding there were differences between them, decided that essentially they both agreed there was a partial incapacity and hence there was no reasonably arguable case. Counsel for the appellant submitted he should not have attempted to resolve the inconsistencies and reach a conclusion as he did.

28 With respect, I agree. While clearly the intention behind the legislative change to the test under s81A was to make the threshold test for an employer harder to meet, it did not escalate it to the level adopted in this case. The appellant needed only to satisfy the learned Commissioner as to whether a prima facie case had been made out that there were reasonable grounds for a dispute. He did that, as the learned Commissioner acknowledged. That was the only conclusion available to the learned Commissioner on the material before him in the preliminary context in which he was bound to consider this matter.

29 In all the circumstances this appeal should succeed. Neither counsel addressed me as to how this matter should be finalised if I were of the view that a reasonably arguable case existed, that is, should I make an order reflecting that, or refer the matter back to the Tribunal. I will hear counsel as to that.