Supreme Court of Tasmania|1991-09-06|Before: Wright J

Precise Timbers Pty Ltd & FAI General Insurance Co Ltd v Darrel Ian Burgess A70/1991 Workers' Compensation [1991] TASSC 20; (1991) 3 Tas R 124 (6 September 1991)

Precise Timbers Pty. Ltd. & Fai General Insurance Co. Ltd. v. Darrel Ian Burgess

IN THE FULL COURT OF THE SUPREME COURT OF TASMANIA

Workers' compensation - Weekly payments - Employer disputing liability after payments commenced - Workers' Compensation Act 1988, s.88 - Statutory requirements for dispute on liability - s.42, settled by agreement.

HOBART, 18-19 March 1991 (hearing), 6 September 1991 (decision)

Solicitors for appellant: Wallace Wilkinson and Webster

Solicitors for respondent: McLean Phillips and Bartlett

3.. Purported determination and orders of the Commissioner made on 27 March 1990 set aside.

4.. Reference to the Commissioner made by application dated 2 November 1989 by the second appellant on behalf of the first appellant dismissed as incompetent.

I adopt the recital of the facts and the history of these proceedings appearing in the reasons for judgment of the other members of the Court.

Neither s.42 nor any of the provisions of Division I of Part VII of the Act impose any time limits or any other conditions or restrictions upon the exercise of the right to refer a claim for compensation to the commissioner which s.42 confers upon the classes of persons referred to therein. It follows that the determination of the issue of whether the reference to the commissioner was competent depends upon whether that which was referred was a "claim for compensation which has not been settled by agreement between the parties". The claim which was referred to the commissioner under s.42 of the Act could be regarded as being either the respondent's claim for compensation or those "aspects" of that claim which the second appellant claimed needed "clarification". But whether it is characterised as a "claim for compensation" or as a "matter or question arising in connection with or incidental to such a claim" that which was referred was by virtue of the wide definition of "claim for compensation" appearing in s.3 of the Act a claim for compensation for the purposes of s.42(1). The remaining question is whether or not it was a claim which had "been settled by agreement between the parties".

The ordinary meaning of the expression "settled by agreement" is clear. It simply means that the rights of a person who is making a claim and the liabilities of the person against whom that claim is made have been discharged by an agreement made between them. Although I agree with the views expressed by the other members of the Court as to the policy manifested by the provisions of Division 1 of Part VII of the Act I do not feel able to give the expression "settled by agreement" any meaning other than its ordinary meaning. In particular I am not aware of any canon of construction which would justify my extending the ambit of the phrase so that its effect is to raise an irrebuttable presumption of law that a claim which an employer has not referred to the commissioner pursuant to s.81(2) is deemed to be a claim which has been settled by agreement between the parties. Had the phrase employed in s.42(1) been "a claim for compensation which has not been settled" simpliciter it might well be arguable that such a construction could be placed upon it. But s.42(1) only excludes claims which have been settled in a particular way viz. "by agreement between the parties" and whatever views I might hold about the policy of the Act or the utility of some other construction I can in the end only apply the words which Parliament has chosen to use.

Like any other contract an agreement to settle a claim for compensation may be implied or inferred from the conduct of the parties. In particular the fact that payments of weekly compensation have been made or that an employer has not disputed a claim or has not referred it to the commissioner under s.81(2) is capable of constituting strong evidence that such an agreement ought to be implied. However the issue of whether a claim has been settled by agreement is in the end a question of fact which can only be resolved by a judicial determination made in the light of the circumstances of each particular case. The statement by Goddard L.J. in Birch v. Pease and Partners Ltd. [1941] 1 K.B. 615 at p.636 that "the only inference" which can be drawn from the fact that payments of compensation have been made without reservation is "an implication that the employer agrees that the workman is entitled to it" cannot be elevated to the status of a rule of law. In that passage his Lordship was advancing reasons for his rejection of a submission that the mere fact that compensation has been paid is no evidence of agreement and cannot be taken as an assertion that as a matter of law such an agreement is deemed to arise whenever such a payment is made whatever might be the circumstances.

The determination of the competency of the reference to the commissioner depends upon the determination of the issue of whether the claim was a claim which had been settled by agreement between the parties. The commissioner has made no concluded finding as to that issue and in my opinion it would not be appropriate for this Court to determine that question on the sketchy and untested materials which are before us.

In my opinion the appeal should be allowed, the orders made by Wright J. should be set aside and in lieu thereof the following orders should be made:

1.. That the purported determination and orders of the commissioner made on 27 March 1990 be set aside.

2.. That the reference to the commissioner made by application dated 2 November 1989 by the second appellant be reheard by the commissioner.

All the relevant facts concerning this matter are set out in the judgment of Zeeman J. They give rise to the fundamental question, argued but not a ground of this appeal; did the Workers' Compensation Commissioner have jurisdiction to make the determination which is the subject matter of this appeal? This issue was raised on the appeal to a single judge by amendment to the notice of appeal which added a new ground of appeal that the Commissioner had no jurisdiction to deal with the dispute under s.42. The learned appeal judge discussed this ground at pp.14-19 of his reasons for judgment but did not resolve it because he concluded that in the circumstances, whatever jurisdiction the Commissioner exercised, he should have determined the application on the basis the appellant bore the onus of proof. In his reasons, the learned appeal judge said, "I think the only feasible course is for me to refer the application [my emphasis] back to a part time Commissioner ... for rehearing." The formal order of the court records an order, "That the matter [my emphasis] be remitted for hearing before another Commissioner".

The notice of appeal to this Court relies only on error in the finding made with respect to the onus of proof, but the jurisdictional point must be determined first. If the Commissioner had no jurisdiction to make the determination, the question of which party bore the onus of proof did not arise and the application or "matter" should not have been remitted for a rehearing.

In the Workers' Compensation Act 1988, the primary definition of a "claim for compensation" is "a claim for compensation under this Act." Compensation has no statutory definition. Foundationally s.25(1) prescribes the circumstances in which liability to pay compensation in accordance with the Act arises and, the provisions of Part VI set out various heads of compensation and the circumstances in which each are payable in discharge of that liability. Compensation is clearly a reference to any one or more of the types of payment referred to in Part VI. See Northwest Iron Co. Ltd. & Anor. v. Co-Operative Insurance Co. of Australia Ltd., Crawford J. 68/74.

Section 34(1) provides that a claim for compensation "shall be in the prescribed form." I interpolate here to observe that the form, prescribed by Statutory Rule 157/88, requires claimants to delete "as required" either injury or disease, a task I imagine many would find daunting in view of the statutory definition which deems the former to include the latter. At all events, in the light of the statutory provisions just referred to, it is beyond doubt that in the present case there was only one claim for compensation. It was comprised in the document signed by the respondent and dated 9 June 1989. The determination of the Commissioner purported to relate to that claim.

Pursuant to s.42(1), the Workers' Compensation Commissioner has jurisdiction to determine a claim for compensation "which has not been settled by agreement between the parties" and which is referred to him by one of the four persons set out in the subsection. By a document dated 2 November 1989 the second appellant purported to refer the respondent's claim for compensation to the Commissioner as it wished to dispute it. The respondent had been paid weekly compensation between the occurrence of the alleged injury and 13 October 1989. Section 39(1) provides that, subject to special requirements in the case of an agreement for the payment of a lump sum, a claim for compensation may be settled by agreement between the parties. Such claims cannot be referred to the Commissioner pursuant to s.42 for a determination. Settlement of workers' compensation claims by agreement is a concept well known in the field of workers' compensation legislation. The Workmans' Compensation Act 1925 (U.K.), ss.12 and 21 set in place a scheme that became the basis of early workers' compensation legislation in Australia. By these two sections it was provided that claims for compensation could be settled (inter alia) by agreement and, once commenced, payment of weekly compensation could only be terminated by an employer in the circumstances prescribed by the statute. See Guest, Keen and Nettlefolds Ltd. v. Williams (Court of Appeal) (1925) 18 B.W.C.C. 68. It appears from the early English cases that writing was not necessary to evidence settlement by agreement of a workers' compensation claim. In each case it was a question of fact whether or not there had been an agreement which settled the claim. See Davies v. Midland Railway Carriage and Wagon Co. Ltd. (1926) 19 B.W.C.C. 69, Thorpe v. A.L. Saddler & Son (1927) 20 B.W.C.C. 488 at p.499 and Smith v. Redpath, Brown & Co. Ltd. (1917) 10 B.W.C.C. 663.

The philosophy behind this early legislation is expressed by Lord Phillimore in Anchor Donaldson, Ltd. v. Crossland [1929] A.C. 297 at pp.306,307:

"My Lords, when a workman has been injured by an accident for which the employer is liable to make compensation and a figure has been arrived at for the weekly payment, if for any reason the employer makes default, there is a summary procedure by which the workman can get his money. If the payment is due under an award, the award is like any other order of the court upon which execution can issue, to use the English phrase, or a charge can be made upon an extract of the award, to use the Scotch [sic] one. If there is no award but a written agreement, the agreement can be registered, and becomes like an award. If there is no written agreement but only an oral one to be inferred from the fact of previous payments, a memorandum of this oral agreement may be drawn up and registered."

Now there comes, or may come, a time when the disability of the workman due to his accident ceases, or partially ceases, and when the weekly payment should wholly or partially cease also. If the employer thinks that this time has arrived, but the workman denies that it has arrived, a procedure has been established by which this question can be decided. But pending this decision, what is to happen as to the periodical weekly payment? If the employer is to continue making it, and it turns out that he need not have made it, he will have a poor chance of getting his money back. If the workman ought to have had it and does not get it, he will have been subjected to serious hardship. In these circumstances the Legislature has decided that it would be the lesser of two evils if the workman (though he was found in the end not to be entitled to them) continued pendente lite to receive his weekly payments".

A side note in the last reprint of the Workers' Compensation Act 1927 (Tas.), s.21(1) indicates that this section owes it origins to the English provisions referred to in the passage cited above. It seems however, that the fundamental intent of the Legislature was defeated by the addition of para.(e) to subs.(1) which authorised the termination or diminution of weekly payments "where the worker ceases to be entitled to such payment under the provisions of this Act". The effect of the addition of this paragraph and the absence of any statutory penalty for acting in breach of s.21 operated to defeat the basic philosophy behind the legislation. See Carr v. The Glenorchy Municipality, Cox J. 54/88 and the earlier Tasmanian cases referred to in that judgment.

The 1988 legislation addressed two important issues: provision of machinery for the expeditious resolution of claims for weekly payments and hardship to the worker if payment of weekly payments is delayed pending curial determination or terminated other than on the happening of specific events. Sections 81 and 86 provide the legislative foundations for a statutory scheme to remedy defects in the 1927 Act. The substance of these provisions is not unique to Tasmania. See for example, Workers' Compensation Act 1958, (Vic), s.9, clauses 5A and following; Workers' Compensation Act 1971 (S.A.), s.52 and following.

In State of South Australia v. Wall [1980] 24 S.A.S.R. 189 the Full Court of South Australia considered the provisions of s.53 of the Act as it was then enacted. This section appears to have been a provenance for s.81 of the 1988 Tasmanian Act. In summary form, s.53 of the South Australian Act provided in part 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).

The policy behind those provisions was expressed by Cox J. at p.193 as follows:

"The policy of subs.(1) of s.53 is that a worker who is entitled to weekly compensation by reason of an employment injury should not be kept out of his payments while the employer's insurers decide at their leisure whether they will admit liability or let the question be decided by the court. It is notorious that, prior to the introduction of the s.53 scheme, a worker with an unanswerable claim might nevertheless have to wait a long time before he got his weekly payments, and that this was often the cause of real hardship."

Cox J. (with whose reasons the other members of the court expressed agreement) went on to say that the words "genuine dispute" were to be given a plain and uncomplicated meaning. He said (p.194) that the statutory scheme required the court to be satisfied that the dispute is a genuine one as a safeguard against allowing "a colourable and insincere denial of liability to frustrate the policy underlying subs.(1)".

There is a very important distinction between that South Australian provision and s.81(2) of the Tasmanian Act. The former provides that an employer who disputes liability MAY make an application, the latter provides that such employer SHALL take the steps prescribed by the subsection, viz, notify the worker and refer the matter to the Commissioner. Thus, the Tasmanian legislation, by s.81(2), provides a condition precedent which must be fulfilled before an employer is entitled to dispute liability to make weekly payments. If the requisite notice is not given and referral made within the time prescribed the issue of liability to pay compensation for weekly payments for an injury in relation to which a claim for compensation has been made is determined conclusively against the employer. Such a claim has been settled by agreement and cannot be referred to the Commissioner for determination pursuant to s.42(1).

In the event that notice is given to the worker and the matter referred to the Commissioner in accordance with s.81(2), the claim is not settled by agreement. Even though, in the exercise of the jurisdiction given him by subs.(3), the Commissioner may make an order that weekly payments be made, such payments would not oust the jurisdiction created by s.42 nor, by virtue of subs.(4) have any effect on the determination of the issue of liability.

In my view, the provision in s.86(1) that weekly payments once made may only be terminated or reduced in accordance with the provisions of that section or pursuant to a determination under s.88(2), must be read down to co-exist with the wider jurisdiction created by s.42 to deal generally with disputed claims.

The intention of the Parliament, as expressed by its enacted provisions, is to require an employer to make up his mind whether to dispute liability to make weekly payments within what might, in some circumstances, be thought to be a remarkably short time. The issue of liability to make weekly payments is conclusively determined against the employer if he fails to take the steps set out by s.81(2). So far as the worker is concerned, making a claim for compensation as provided by s.81(1) creates an entitlement to the receipt of weekly payments commencing within the time specified by the subsection unless the Commissioner makes an order to the contrary in accordance with subs.(3). If notice of disputed liability is not given and the matter not referred to the Commissioner, such weekly payments, or at least those which comply with the requirements of s.69(1), may only be terminated in accordance with the provisions of ss.86 and 88. Consequently, the respondent's claim for compensation being a settled claim, could not have been referred to the Commissioner pursuant to s.42 and the Commissioner had no jurisdiction to determine it. There was no application before him pursuant to either ss.86 or 88 and consequently the determination he purported to make was a nullity as it was made without jurisdiction.

I would allow the appeal and set aside the orders of Wright J. and agree that the orders proposed by Zeeman J. be made in lieu thereof.

This is an appeal from an order made by Wright J. on 19 September 1990 upon an appeal pursuant to s.63(1) of the Workers Compensation Act 1988 ("the Act") from "the determination and orders" of the Workers Compensation Commissioner said to have been made on 27 March 1990. The sole ground of appeal sought to be argued by the appellants was in the following terms:

"The learned Judge erred in law in finding that the employer as applicant before the Workers' Compensation Commissioner bore the onus of proof of all matters raised by its application, specifically of proving that the worker was not entitled to receive Workers' Compensation because the requirements of Section 25 of the Workers' Compensation Act 1988 had not been complied with."

During argument it became apparent that a far more fundamental question required resolution, namely whether the learned commissioner had jurisdiction to adjudicate upon the matter which had been referred to him. In order to understand how the jurisdictional question arises, it is necessary to recite some of the history of the matter. On 9 June 1989 the respondent made a claim for compensation in a form apparently provided by the second appellant, but bearing only a general resemblance to the form prescribed by reg.4 of the Workers Compensation Regulations 1988. Notwithstanding the departure from the prescribed form, it appears to constitute a sufficient claim by virtue of s.34(3) of the Act. That form contained the following statements:

Describe briefly how the accident happened or what caused the disease

Digging foundations out at new mill on Thorsday (sic) 25th May, pulled right leg muscle. Worked again Friday 26th May. Cleaned up new mill & twisted whilst picking up piece of timber.

The form of claim was submitted to the first appellant as the respondent's employer and passed on to the second appellant, it being the relevant licensed insurer. That claim resulted in weekly payments of compensation being made to the respondent in respect of the period 29 May 1989 to 13 October 1989. Thereafter no further weekly payments of compensation were made, the appellants taking the view that they were entitled to suspend payment by virtue of s.85(6) of the Act. It is common ground that there was no basis for suspending payment pursuant to that provision.

On 2 November 1989, the second appellant made an application to the Commissioner in the following terms:

"I, FAI INSURANCE FOR AND ON BEHALF OF PRECISE TIMBERS of 125 COLLINS ST. HOBART

hereby apply to the Workers Compensation Commissioner to hear and determine the following:- + DUE TO THE CIRCUMSTANCES SURROUNDING THE CLAIM WE WISH TO DISPUTE THIS CLAIM FOR COMPENSATION.

This application is made pursuant to section 42 of the Workers Compensation Act 1988."

That application was accompanied by a letter from the second appellant in the following terms:

"It appears that some circumstances surrounding the alledged (sic) accident are somewhat vague and therefore we have decided to dispute this claim.

We briefly submit the following information which outlines the basis of our dispute:

(a). The worker stated on their claim form that the alleged injury occurred on the 25/5/89.

(b). The client stated on their claim form that the worker had the alleged injury on the 25/5/89, started working for Precise Timbers on the 24/5/89 and that the worker didn't stop work until 4.30 pm on the 26/5/89.

(c). It has been established since the completion of the claim forms that the worker actually started employment on the 17/5/89 and had the alleged accident on the 18/5/89.

(d). A witnesses' (sic) statement states that the worker complained of a torn leg muscle which he said happened whilst working on the roof of Hamilton's Butcher Shop in Wynyard, earlier that week.

The claim was initially accepted because the employer's claim form was not forwarded to us within the 5 day limit. Also, as it did not seem a very serious injury, we assumed that it would be only a relatively small claim so we did not dispute it at the time.

After sometime the initial injury progressed into a back problem.

We referred him to a specialist in Hobart but he did not attend the appointment so we served a notice on him advising that compensation would be terminated in accordance with section 85 (6) of the Act.

A couple days after the notice was served both letters that were sent to him returned to us in the mail marked 'Return to Sender'.

When he noticed he was not receiving compensation payments he contacted his employer as well as ourselves and I advised him of our actions and our intentions to dispute the claim. He said that he had left his previous address about 4 months before. We have arranged a further appointment with the specialist on the 27/11/89. He also advised that he has had an operation which was performed by Mr G Duffy but we have no records on our file that indicate this. We have requested a report from him.

As it can be seen by the above facts, some aspects of this claim need clarification and therefore we enclosed an Application for hearing along with copies of our file in order that the Commissioner can make a determination.

It will be observed that the application purported to be one made pursuant to s.42 of the Act. Section 42(2) provides that "A claim for compensation shall be referred to the Commissioner by application in the prescribed form filed with a Registrar." Counsel for the appellants did not seek to argue that the application ought to be treated as being anything other than a reference under section 42(1). The assertion contained in the letter that the appellant had stated that "the alleged injury" had occurred on 25 May 1989 may not have been entirely accurate as the form of claim is capable of being construed as alleging that separate injuries had occurred on each of 25 and 26 May.

The parties appeared before the learned Commissioner on 21 November 1989. It is uncertain as to precisely what occurred on that occasion, but in any event the learned Commissioner expressed some views in the following terms:

"The employee is a labourer. He claims he pulled a right leg muscle at work on the 18th of May last (sic). He was duly paid compensation. However recently compensation was terminated on the ground that the claimant did not keep an appointment with an orthopaedic surgeon.

At the hearing before me it appeared that the claimant was not properly served with notice to attend the appointment and that therefore payment could not be terminated under section 85(b)". [This is obviously a typographical error and the section referred to should have been s.85(6)]. "However there are no medical certificates in accordance with the Act served upon the employer in relation to the alleged back injury which on the face of it has no connection with the leg injury alleged last May. Accordingly I expressed the opinion that it would seem that for some time past at least, the employer has had no obligation to make any payments under the Act. I requested an officer of the Department of Labour and Industry to make an investigation. The insurer has very properly arranged an appointment with a doctor in Hobart in order to ascertain whether the leg and back injury are in any way related. There is also a dispute as to whether the leg injury was in any case caused at work. The reference under section 42 by the insurer is adjourned sine die pending a report by the Department of Labour."

Clearly the learned Commissioner was not purporting to determine any application or reference on that occasion. At best he ought to be taken as having expressed some tentative views. Why he requested the department to furnish a report is uncertain. The learned Commissioner did not ask that any particular matter be made the subject of the report. However, having received a report prepared by a senior industrial officer employed by the Department of Employment, Industrial Relations and Training, the learned Commissioner proceeded to hear the application on 27 March 1990. It is uncertain as to whether the learned Commissioner attached any, and if so, what, weight to the report.

At the conclusion of the hearing on 27 March 1990, having given some brief oral reasons, the learned Commissioner said:

" ..... it's simply on the whole of the evidence I am simply not satisfied, on the balance of probabilities, that the claim was made out and accordingly the claim is dismissed."

On 2 April 1990 the Registrar issued a purported Notice of Order in the following terms:

"TAKE NOTICE THAT the above claim has been determined by the Commissioner following the hearing of the matter on the 27TH day of MARCH 1990 when the Commissioner made an order as shown herein.

Accompanying that notice was a document in the form of reasons for judgment, concluding with the words, "I confirm my order made on the 27th of March that the claim for compensation be dismissed." Those reasons for judgment included the following:

"The claimant was a labourer employed by the employer for a few days in May of last year. In June of last year he made a claim for compensation with regard to incapacity due to a pulled muscle in his leg at work on the 26th of May (sic). The claim was supported by a medical certificate to that effect. The claimant had concluded his employment on the 26th of May. The insurers for the employer did not contest what appeared to be a minor claim, and commenced weekly payments of compensation. Payment continued up to the 13th of October. The claimant was apparently referred to a specialist for examination and failed to keep the appointment. He was subsequently served with a notice purporting to be under Section 85 of the Act terminating payments of compensation.

The claimant underwent an operation on his back for a back injury on the 23rd of August. After payments ceased the claimant made a complaint to his former employer that payments of compensation had been terminated. The insurer referred the disputed claim for compensation to me under Section 42 of the Act on the 2nd of November.

When the parties came before me on the 21st of November, I referred the disputed claim to an officer of the Department of Labour and Industry for investigation. I gave leave to a solicitor to appear for the claimant. He questioned the termination of weekly payments in October. However it appeared to me that the claim in respect of a back injury was not supported by any claim or medical certificate in accordance with the Act. Therefore cessation of payment was justified independently of Section 85. I gave a written decision (240 of 1989).

The Department's report was made available to me on the 13th of March and I summoned the parties to appear before me on the 20th of March. At that hearing the representative for the insurer requested an adjournment to call witnesses. I granted an adjournment and arranged a further hearing on the 27th of March. At that hearing I permitted the parties to be both represented by legal counsel. I took evidence on oath from a number of witnesses including the claimant. The critical issue was whether the claimant's back injury occurred during his employment. At the conclusion of the hearing I gave some brief oral reasons in support of my conclusion that the claim should be dismissed because the claimant had failed to establish that his back injury occurred during his employment. I stated that I would give the parties a copy of my reasons in writing."

The learned Commissioner appears to have taken the view that he was determining a claim for workers compensation arising out of a back injury, as distinct from the claim for compensation made by the respondent relating to a leg injury, when in fact the only claim for compensation ever made by the respondent was that made on 9 June 1989 and it could only have been that claim that the appellants purported to refer to him. Whatever claim the learned commissioner thought that he was determining, he proceeded upon the basis that the respondent carried the burden of proving his claim and that he had not discharged the burden of proof.

The appeal to Wright J. was instituted by a Notice of Appeal which purported to appeal against:

"..... the determination and orders made by the Workers' Compensation Commissioner, Mr. Sikk on the 27th day of March, 1990 in which he:-

'determined that the Appellant was not entitled to receive workers' compensation for a condition known as prolapsed intervetebral lumbar disc in accordance with the provisions of the Workers' Compensation Act 1988'"

I will assume that that Notice of Appeal correctly categorised what the learned Commissioner did as amounting to a determination and orders, although if the "Notice of Order" is intended to constitute the formal order required by s.61, it is plainly defective. The reference to "an order as shown herein" is meaningless. Whatever informalities may attend proceedings before the Workers Compensation Commissioner, s.61 requires there to be a form of order copies of which are to be served upon the parties. Such form of order must identify in its terms, and without reference to reasons for judgment, the proceedings in which the order was made and the text of the order made.

The appellants identified the application to the Commissioner dated 2 November 1989 as being by way of a reference to the Commissioner of the respondent's initial claim for compensation, so that it fell to the Commissioner to determine whether or not the respondent had established that he was entitled to payments of weekly compensation at all. The appellants submitted that it was competent for the appellants to make such an application, it being authorised by s.42 of the Act. The respondent submitted that s.42 did not authorise such an application, but that the application ought to have been treated as a reference under s.88 of the Act whereby the licensed insurer referred to the Commissioner for review the weekly payment being made to the respondent.

In his reasons for judgment Wright J. considered the applicability of ss.42 and 86 and expressed doubts as to whether or not the appellants had any right to apply to the learned Commissioner pursuant to either of those sections. Having considered some of the statutory provisions, his Honour said, at p.15 of his judgment:

"This could lead to the conclusion that the respondents had no right to apply to the Commissioner pursuant to either s.42 or s.86. If this view is correct it would follow that the whole procedure before the Commissioner was fundamentally flawed from the outset and he should not have entertained an application by the employer or its insurer and he should not have embarked upon a hearing to determine whether Mr. Burgess had an entitlement to compensation at all. His only role was to determine whether the employer was entitled to reduce or terminate weekly payments for one of the reason adumbrated in s.86(1)."

I observe that it is somewhat difficult to see how the learned Commissioner could ever have had jurisdiction to consider whether the appellants were entitled to reduce or terminate weekly payments for one of the reasons specified in s.86(1). The scheme of s.86 is such that notice of intention to terminate or reduce must be given by the employer pursuant to s.86(3) and it is the worker, and only the worker, who may refer the matter (presumably the question as to whether or not the employer is entitled to terminate or reduce pursuant to s.86(1)) to the Commissioner for determination. There was no suggestion in the present case that any such notice had been given and no application was made by the respondent.

At p.19 of his judgment, Wright J. summarised his conclusions as follows:

"If the Commissioner was entitled to proceed under s.42, as the application was made by the insurer on behalf of the employer, those parties bore the onus of proof of all issues raised by that application. They had no right to apply under s.86 and, insofar as they applied under s.88, again, as applicants, they bore the onus of proof."

In other words, his Honour appears to have not determined the true nature of the application, but having apparently concluded that the learned Commissioner might have been entitled to proceed under s.42 or under s.88, he then determined that in either case the appellants carried the burden of proof, and, that as the learned Commissioner erroneously had concluded that the respondent carried the burden of proof, the application ought to be referred back for re-hearing.

It is necessary to give close consideration to the relevant statutory provisions. These are as follows:

"42 - (1). A claim for compensation which has not been settled by agreement between the parties may be referred to the Commissioner by -

(a). an injured worker or a dependant of an injured worker;

(d). the Secretary where the claim has been referred to him under section 40.

(2). A claim for compensation shall be referred to the Commissioner by application in the prescribed form filed with a Registrar.

81 - (1). Except as provided in this section, where an employer has received a claim for compensation in relation to an injury to a worker employed by him in respect of which the employer is liable to pay compensation in accordance with this Act, the employer shall pay to the worker, wherever practicable, the first of the weekly payments provided for in section 69 within 5 working days from the day on which the claim for compensation was received by him and, in any case, not later than the next pay day following the day on which the claim was received by him if that pay day is not less than 5 working days from the day on which the claim is received.

(2). An employer who disputes his liability to pay compensation by way of weekly payments for an injury referred to in subsection (1) shall, before the next pay day of the worker following the day on which the claim for compensation in respect of that injury was received by him -

(a). notify the worker, in writing, that he disputes liability to pay compensation by way of weekly payments and shall inform the worker of his reasons for disputing that liability; and

(b). refer, as prescribed, the matter to the Commissioner.

(3). Where a matter is referred to the Commissioner under subsection (2), the Commissioner shall determine whether or not subsection (1) should apply and -

(a). if he considers that subsection (1) should apply, he shall make such determination as to the modification of the application of subsection (1) as he thinks fit and on making such a determination that subsection, as modified, applies and has effect accordingly; or

(b). if he considers that a genuine dispute exists concerning the liability of the employer to pay compensation by way of weekly payments, shall determine that subsection (1) does not apply, and on making such a determination that subsection does not apply.

(4). The fact that the Commissioner has determined under subsection (3 that subsection (1) should apply shall not be taken into account by the Commissioner in any other proceedings under this Act.

88 - (1). A worker, an employer of a worker, or the licensed insurer of the employer may, as prescribed, refer to the Commissioner for review a weekly payment being made to the worker.

(2). The Commissioner may, upon hearing an application to review a weekly payment, make a determination -

(b). increasing the payment, subject to the limitations prescribed by section 69."

The expression "claim for compensation" is defined by s.3(1) in wide terms as meaning, "a claim for compensation under this Act and includes any matter or question arising in connection with or incidental to such a claim." Various categories of compensation are provided for by the Act including compensation in the case of death (s.67), weekly compensation (s.69), lump sum compensation for specified injuries (s.71) and compensation by way of payment for medical and other services (s.75). Claims for any type of compensation and any matter or question arising in connection with or incidental to such claims prima facie are subject to the provisions of s.42.

Section 81 specifically deals with weekly payments. Prior to its enactment, a worker who made a claim for weekly payments of compensation in respect of total or partial incapacity had no means of compelling his employer to commence or continue making payments prior to the determination of an action for compensation (see, e.g. Routledge v. A. E. Jack Nominees Pty. Ltd. [1982] Tas.R. 81). It is notorious that prior to the enactment of the Act a worker whose claim to receive weekly payments of compensation was denied by the employer could be left without income no matter what was the strength of his case until his action for compensation had been determined by the court.

The perceived evils which plainly s.81 of the Act was intended to remedy were summarised by King C.J. in Pagliacci v. General Motors Holdens Ltd. (1980) 23 S.A.S.R. 126 where his Honour, in dealing with the time prior to the enactment of remedial legislation in South Australia, said, at p.131:

"Prior to that time a workman who was incapacitated as a consequence of a compensable injury had no means of compelling the employer to commence or continue weekly payments before the hearing of his application for compensation. During the months which would normally elapse before the hearing he could be left without income no matter how watertight his case might be. The hardship often caused to the injured workman could easily be used as pressure to secure a settlement favourable to the employer. If payments were commenced they could be discontinued or diminished arbitrarily and capriciously and perhaps as a tactical means of forcing an impecunious workman to accept a settlement favourable to the employer. These sections were introduced by the 1971 Act and for the undoubted purpose of remedying these mischiefs."

The scheme provided for by the Act as to payment of weekly compensation is one broadly similar to that which had previously been adopted in a number of other jurisdictions including South Australia, the Australian Capital Territory and the Northern Territory.

The question of the relationship between a general provision for the determination of claims for compensation (such as is contained in s.42 of the Act) and particular provisions concerning the disputing of an entitlement to payment of weekly compensation (such as is contained in s.81 of the Act) was considered by O'Loughlin J. in General Motors Holdens Pty. Ltd. v. Ryan (1976) 43 S.A.I.R. 1099. Although not cited at the bar, it appears to be the only reported case directly on point. The facts of that case were as follows. In October 1973 the worker first complained of pain in both heels but did not then lose time from work. In early 1974 the worker served notice on the employer claiming compensation. By that notice the worker alleged that on 18 October 1973 he suffered injury, namely a painful condition of both heels, arising out of or in the course of the employment. The worker went off from work for two weeks and was paid weekly compensation for that period. The employer did not then dispute the worker's entitlement. The worker then resumed work and continued working until September 1974 when the worker again went off work and claimed weekly compensation, apparently arising out of the same injury. The weekly payments commenced afresh and were still continuing at the time of the hearing. The employer had not availed itself of the provision in the South Australian Act enabling it to apply for a review of a weekly payment. The substantive application before the court was one which (inter alia) sought a declaration that the worker "is not now and never was incapacitated by injury on the 18th of October 1973 arising out of or in the course of his employment". That application purported to be made pursuant to s.21 of the now repealed Workmen's Compensation Act 1971-1974 of South Australia which was in the following terms:

"21.. The Industrial Court of South Australia shall have jurisdiction to hear and determine any question or dispute concerning any matter or thing arising out of or connected with the liability to pay, or the amount of compensation under this Act and all matters and things ancillary thereto."

The employer filed an interlocutory application seeking an order that the worker "be dux litis in the proceedings" and consequential directions. It was that application which fell to be determined. For that purpose it became necessary to determine:

(a). whether the substantive application was competent; and

(b). if competent, whether the worker carried the burden of proving his entitlement to be paid weekly compensation.

O'Loughlin J. held that the substantive application was competent and that the worker carried the burden of proving his entitlement. A consideration of the judgment indicates that his Honour determined the application to be competent for the following reasons:

(a). Section 55(1) of the South Australian Act expressly provided that no weekly payment of itself constituted an admission of liability to pay compensation.

(b). Section 55(2) of that Act expressly provided that the fact that an employer is found "not to be liable to pay compensation" did not entitle the payer of any weekly payment to sue for or recover it except in limited defined circumstances;

(c). The opening words of s.52 of that Act (containing provisions to some extent equivalent to s.86 of the Tasmanian Act) were "Except as is expressly provided by this Act".

(d). The breadth of the language used in s.21 of that Act was such that it evidenced an intention to confer jurisdiction widely rather than narrowly.

(e). There was no reason why special provisions in the Act should be construed as controlling the general provisions contained in s.21.

A recital of these reasons makes it apparent that General Motors Holdens Pty. Ltd. v. Ryan (supra) readily may be distinguished as being based on reasoning inapplicable to the Tasmanian Act. The Act does not contain any provisions equivalent to s.55(1) or (2) of the former South Australian Act. Section 86 precisely circumscribes the entitlement of an employer to terminate or reduce weekly payments and is therefore to be contrasted with s.52 of the former South Australian Act. Section 42 is of more limited application than the South Australian s.21 in that it only applies to "a claim for compensation which has not been settled by agreement between the parties". Section 23 does not confer any general jurisdiction beyond that expressly conferred by other provisions of the Act.

Section 81(1) ought to be construed as imposing a prima facie absolute obligation upon an employer to pay compensation in accordance with the Act whenever an employer receives a claim which, in its terms, is a claim for compensation in relation to an injury to a worker employed by him. The following sub-sections of s.81 confirm that construction, and, in particular, militate against construing the reference to "a claim for compensation in relation to an injury to a worker employed by him in respect of which the employer is liable to pay compensation in accordance with this Act" as enabling the employer at any time to go behind the assertions made in the form of claim. If any issue is to be raised by the employer by way of disputing liability to pay compensation at all (as distinct from a right to terminate a weekly payment) then subs.(2) and (3) of s.81 provide the exclusive method of doing so. If an employer avails himself of the provisions of s.81(2), the Commissioner has the powers referred to in s.81(3) and that provision is to be taken as exhaustively providing for the matters which may be dealt with by the Commissioner upon a reference under s.81(2)(b). The "matter" referred to in s.81(2)(b) does not encompass the dispute. The determination of the Commissioner upon such a reference determines the question as to whether weekly payments are to be made pending a resolution of the dispute. It does not involve a resolution of that dispute. Even if the effect of a determination by the Commissioner under s.81(3) is that weekly payments are to continue, the dispute remains unresolved. The claim for compensation has not then been settled by agreement. The Commissioner may resolve the dispute but only if his jurisdiction is further invoked by a party making another application. It would be open to a party to the dispute to refer the matter to the Commissioner under s.42(1). It might be thought that if the Commissioner had determined that s.81(1) should apply notwithstanding the dispute, then the employer or the licensed insurer would be motivated to apply. On the other hand, if the Commissioner determined that s.81(1) should not apply, the worker would have an incentive to apply under s.42. As an alternative to a reference under s.42 a party is entitled to refer such a dispute to the Secretary under s.40. The provisions of s.81(4) lend support to these propositions, in that a determination that s.81(1) should apply is not to be taken into account "in any other proceedings", indicative of a legislative intent that separate action be taken to actually resolve the dispute which action is to be taken under s.40 or under s.42. In summary:

(a). If an employer wishes to dispute liability to make a weekly payment at all he may only do so under s.81(2).

(b). The reference under s.81(2)(b) is limited to considering the matters referred to in s.81(3).

(c). If the Commissioner makes the appropriate order under s.81(3) there is an obligation on the part of an employer to make a weekly payment until the determination of a dispute notwithstanding that ultimately the dispute may be resolved in favour of the employer.

(d). Once a weekly payment commences it may not be terminated unless such termination is authorized by s.86 or a determination under s.88.

A claim for a weekly payment of compensation which has not been made the subject of a dispute notified and referred under s.81(2) ought to be taken as being a claim which has been settled by agreement between the parties. When a worker claims payment of weekly compensation, the employer has a right to dispute that claim. That right is provided for and circumscribed by the provisions of s.81. The policy to be derived from the Act is that where an employer receives such a claim and does not avail himself of the statutory right to dispute that claim, but makes payment, then there is implicit agreement on the part of the employer that the worker is entitled to be paid. That is sufficient agreement for the purposes of the Act. Where that occurs, the claim has been settled by agreement. That proposition is supported by the dictum of Goddard L.J. (with whom Clauson L.J. agreed) in Birch v. Pease and Partners, Limited [1941] 1 K.B. 615 at p.636:

"When a workman claims compensation and, in the case of an industrial disease, produces the necessary certificate, and thereupon the employer, without stating that he does so without prejudice or pending further enquiry, or the like, pays and continues to pay the full amount for which the Act provides and offers no evidence to explain why he made these payments, the only inference that can be drawn, as it seems to me, is that the payment involves a recognition of liability and an implication that the employer agrees that the workman is entitled to it. If authority be needed it will be found in Guest, Keen & Nettlefolds, Ld. v. Williams 18 B. W. C. C. 68, and Rees v. Imperial Navigation Coal Co. 20 B. W. C. C. 287."

It would be incongruous and quite contrary to the scheme of the Act (in particular, ss.81 and 86) if despite the very particular provisions dealing with the commencement of weekly payments and the termination or reduction thereof, it would nevertheless be open to an employer to by-pass those provisions and seek to have a worker's entitlement to weekly compensation determined ab initio by an application under s.42(1) brought at any time.

Mason, Murphy and Wilson JJ. in Western Australian Coastal Shipping Commission v. Wallner [1980] HCA 22; (1980) 144 C.L.R. 110, at p.117 said that:

"If and when an employer makes weekly payments to a worker voluntarily he is doing so because he believes that the worker is entitled to such payments by virtue of the Ordinance. The fact of payment is sufficient to sustain a new right in the worker, the right to their continuance pending a determination in favour of the employer".

Whilst their Honours were dealing with the Northern Territory Ordinance their observations are equally applicable to the Act. Reference might also be made to the judgments of Smithers and Franki JJ. in Barbaro v. Leighton Contractors Pty. Ltd. [1980] FCA 56; (1980) 30 A.L.R. 123. The respondent's right to a continuance of the weekly payment continued until a termination or diminution was authorized by s.86 although it may be that actual payment is not required in respect of any period not covered by a medical certificate under s.69(1). I would prefer to leave open the question as to whether the Act requires as a precondition to payment any medical certificate other than that required by s.34(1). The respondent having the right to a continuation of the weekly payment until the operation of s.86, which on no view had any application, there was no room for categorizing the respondent's claim to a weekly payment as one which had not been settled by agreement. The "claim" was settled once payment commenced without the appellants availing themselves of the provisions of s.81. The question of the continuation of the payment could only be determined by the appellants taking steps under s.86 or by a party applying under s.88. If there was "any claim for compensation" (using the extended definition contained in the Act) "which had not been settled" it was the question whether the appellants were entitled to terminate the weekly payment. Such a question could only have been determined upon a reference under s.88(1) which ought to be construed as being a specific provision providing the only means of invoking the jurisdiction of the Commissioner to terminate, reduce or increase a weekly payment. That construction is imperative because of the opening words of s.86(1) which operate so that the only determination of the Commissioner which provides authority for the termination or reduction of a weekly payment is one made under s.88(2).

I conclude that the Commissioner had no jurisdiction to entertain any application under s.42. The appellants did not purport to apply under s.88. By their counsel, they expressly disclaimed any intention to apply under s.88. The learned Commissioner did not direct his mind to the questions relevant on an application under s.88. He made no order in the terms of any of the orders permitted by s.88(2). The provisions of s.49(1) do not provide a warrant for a commissioner to embark upon some type of general enquiry without first clearly defining what jurisdiction is being invoked, considering whether the legal prerequisites for the exercise of that jurisdiction exist and then making an order authorised by the jurisdiction invoked.

I agree with Wright J. when, speaking of the Act, he said, at p.9 of his judgment:

"This is a fairly typical example of modern legislation which tends to embrace the criteria of speed and economy without full regard to the more fundamental requirements of natural justice and procedural fairness. Technicality and formality are virtually discarded as unimportant in the quest for a speedy resolution. Unfortunately, a speedy resolution is not necessarily a just one."

Before stating my ultimate conclusions, I ought to refer to one matter strongly urged by counsel for the appellants, namely that the court express a view as to the observations made by Wright J. as to where the burden of proof might lie on a reference to the Commissioner. In my view the court should not express such a view unless it arises in the matter before it. My conclusions that the learned Commissioner embarked upon the hearing of a reference when there was no jurisdiction to entertain any such reference means that it is unnecessary and inappropriate to express any views on the matter of burden of proof. It may well be that the question as to who carries the onus will depend on matters such as who initiates the reference and what is being referred. It may be that in some cases there will be a shifting onus. The relevant questions ought to be determined when they clearly arise for decision. They do not so arise in the present appeal.

As I have concluded that the learned Commissioner was devoid of jurisdiction to entertain the application, it follows that the order of Wright J., referring the application back to a part-time commissioner for re-hearing, cannot stand.

I would allow the appeal by setting aside the orders of Wright J. and in lieu thereof, ordering as follows:

1.. That the purported determination and orders of the learned Commissioner made on 27 March 1990 be set aside.

2.. That the reference to the learned Commissioner made by application dated 2 November 1989 by the second appellant on behalf of the first appellant be dismissed as incompetent.

Workers' Compensation Act 1988

Workmans' Compensation Act 1925

Workers' Compensation Act 1927

Compensation Act 1958

Workers' Compensation Act 1971

Workers Compensation Act 1988

Workers Compensation Regulations 1988

Workmen's Compensation Act 1971

Precise Timbers Pty Ltd & FAI General Insurance Co Ltd v Darrel Ian Burgess A70/1991 Workers' Compensation [1991] TASSC 20;

At a glance

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Judgment (141 paragraphs)

Precise Timbers Pty Ltd & FAI General Insurance Co Ltd v Darrel Ian Burgess A70/1991 Workers' Compensation [1991] TASSC 20; (1991) 3 Tas R 124 (6 September 1991)

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Legislation Cited (8)

Cases Cited (1)