Workers Compensation - Proceedings to obtain compensation - Determination of claims - Disputing of claim - Whether still available if invoked within statutory period when claim previously admitted.

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

Judgment Number: [2003] TASSC 18

1 This is an appeal from the Workers Rehabilitation and Compensation Tribunal ("the Tribunal") from a determination that the respondent employer is entitled to invoke the Workers Rehabilitation and Compensation Act 1988 ("the Act"), s81A, to dispute liability and that a genuine dispute exists concerning the appellant worker's claim. The facts can be stated shortly.

2 The worker is a bus driver. She made a claim for compensation upon her employer asserting that on 6 November 2002 she suffered an injury to her lower back in the course of negotiating a round-about at Warrane. The worker's claim was received by the employer on that same day. On 8 November, the employer's insurer forwarded a letter to the worker which included this sentence:

"We confirm that your claim has been accepted and that your employer has been instructed to commence paying weekly compensation."

The employer then commenced making such payments. As part of the management of the worker's claim, the employer's insurer then made an appointment for her examination by a consultant physician whom she saw on 22 November 2002. The physician reported to the insurer on 25 November that, in his opinion, the worker had a previous significant episode of back pain in January 2002 when she fell down stairs at home. His report concluded as follows:

"Employment is not the major and most significant factor in the development of the condition. The underlying condition must be lumbar degenerative disc disease. This clearly can be aggravated by external factors, whether occupational or recreational. In this case there is history of previous significant back pain and avoidant behaviour thereafter. The actual work incident was one of extremely low kinetic force. In essence, the pressure transmitted to the lower lumbar spine while driving would be similar to those when seated at home. There was no major kinetic insult. One must logically see this as spontaneous onset of back pain at work but hardly because of work."

3 Upon receipt of the report, it was decided that the worker's claim would be disputed and the employer purported to invoke the Act, s81A, giving to the worker written notice that it disputed liability, and the matter was referred to the Tribunal. Both those steps were taken on or before 29 November 2002 before the expiration of the 28 days permitted by s81A(1) for the employer to dispute liability. The issue raised is whether the employer, having accepted the worker's claim and having commenced making weekly payments, is nevertheless permitted to utilise s81A and to dispute liability for that claim. The Tribunal determined that it was entitled to do so and was satisfied on the facts of the case that a genuine dispute existed.

4 Counsel for the worker submits that the claim, having been accepted by the employer and/or its insurer on its behalf on 8 November 2002 and the weekly payments of compensation having been commenced, the employer can no longer invoke s81A, notwithstanding that it sought to do so within the time allowed by that section.

5 It should be noted that since the application of Act No 99 of 2000 from 1 July 2001, s81 requires an employer to commence payment of weekly compensation whether or not the provisions of s81A have been availed of, whereas prior to that amendment, the invocation of s81A (which then had a time limit of 14 days) relieved the employer of the obligation to commence weekly payments. The fact, therefore, that payments have commenced as now required by the Act must be regarded as neutral and cannot be held against the employer. Section 81A(1) provides:

"81A (1) An employer who disputes liability to pay compensation by way of weekly payments for an injury referred to in section 81(1) or benefits under Division 2 of Part VI, must, within 28 days of receiving the claim for compensation in respect of the injury to the worker -

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

(i) to pay compensation by way of weekly payments; or

(ii) to pay any benefits payable under Division 2 of Part VI, in respect of the injury; and

(b) inform the worker of the reasons for disputing liability; and

Section 81AB provides:

"81AB - Where an employer has received a claim for compensation in relation to an injury to a worker employed by the employer and the employer does not, in accordance with section 81A, dispute liability to pay compensation, the employer is taken to have accepted liability in respect of that claim."

Giving these provisions their ordinary meaning, it is clear that an employer who wishes to do so has 28 days from the receipt of the claim to refer the matter to the Tribunal with a view to procuring a determination that a genuine dispute exists with a consequential order that weekly payments not be made. In this case, the employer did so and fulfilled the other requirements of the subsection. On the face of it, having in accordance with s81A disputed liability to pay compensation, the employer cannot now be taken to have admitted liability in respect of the worker's claim pursuant to s81AB.

6 Is there any reason why, in the circumstances of this case where the employer's insurer wrote advising that the claim had been accepted, the employer by its agent, the insurer, cannot retract that admission provided that within the 28 days allowed by s81A it adopts the necessary procedures laid down in that section?

7 It is not claimed that the letter acknowledging that the claim had been accepted constitutes an estoppel. A specific ground of appeal that the Tribunal erred in law in failing to consider whether "the acceptance of the appellant's claim by the respondent constituted an estoppel" was expressly abandoned. The letter contains an admission against interest and, as such, has some evidentiary value for the appellant in the ultimate establishment of her case and on the issue of the genuineness of the dispute, but is not otherwise of significance. There was a suggestion that it might constitute a formal admission of the kind which, in civil proceedings, can only be withdrawn by leave of the court. The Full Court of the Supreme Court of the Northern Territory pointed out in Carlsen v AAT Kings Tours Pty Ltd [1998] NTCA 94; (1998) 126 NTR 1 at 4 - 5:

"Voluntary payments of compensation made by an employer were treated as informal admissions of liability which could be relied upon as evidence supporting the worker's claim, but which did not estop the employer from disputing the claim: Way v Penrikyber Navigation Colliery Co Ltd [1940] 1 KB 517; S A. Stevedoring Co Ltd v Gerai [1965] SASR 212 at 213-14; Logie v Union Steam Ship Co of New Zealand Ltd [1945] NZLR 388; Bright v Opotiki Hospital Board [1946] NZLR 750."

However, as weekly payments, even where liability is disputed, are now mandatory they can scarcely, without more, amount even to informal admissions. The statement in the letter that the claim was accepted would, at best, in my view, constitute an informal admission. Indeed, prior to the filing of a reference which commences proceedings before the Tribunal, it is difficult to see how such a statement could amount to anything more than an admission against interest which lacked any formal character.

8 Counsel for the appellant relied upon certain dicta in cases involving the effect of an employer not availing itself within the time allowed of the dispute provisions in s81A. One such statement was an observation I made in Freemasons Homes of Southern Tasmania v Greenwood [1996] TASSC 74; (1996) 5 TAS R 445 at 450 to this effect:

"The clear intent of ss81 and 81A is to require the employer, upon receiving a claim for compensation, to make up his mind promptly whether to pay or to dispute the worker's right to payment. If he fails to do the latter, he is under a clear obligation to do the former and the worker has a corresponding right to receive the payments. The employer in these circumstances still has the right to seek relief from payment under ss81A(5), 86 or 88 and may, on such an application, challenge the worker's right to payment, as the appellant sought to in this case, either by virtue of failure to comply with s32(1) or because the incapacity is not caused by the injury."

However, that was made in the context of a failure by the employer to invoke s81A. At the time the legislation provided a 14 day period for doing so; hence the comment about the need for a prompt decision. Nothing I said in that case was directed to a situation where an employer at first decided to accept liability but altered that decision within the time allowed by s81A to dispute liability thereunder.

9 In my opinion the Tribunal was correct in accepting the employer's reference and it had jurisdiction to determine whether or not a genuine dispute existed. There is no challenge on this appeal to the Tribunal's factual finding that a genuine dispute did exist.