Workers Compensation - Proceedings to obtain compensation - Onus of proof - Disputes as to liability for weekly payments and other benefits - Referral by employer pursuant to the Act disputing liability to continue to pay - Employer bears the onus of proof.

Workers Rehabilitation and Compensation Act 1988 (Tas), ss 25(1), 49(2), 81, 81A(5), 81AA, 81(AB).

Skilled Group Limited v Anning [2014] TASSC 40; Fishpool v Incat Tasmania Pty Ltd [2013] TASFC 6; GIO Australia Limited v Lovell [2000] TASSC 75; State of Tasmania v Parsons [2002] TASSC 59, considered.

Judgment Number: [2015] TASSC 18

1. This appeal, from the decision of Chief Commissioner Carey in Skilled Group Limited v A [2014] TASWRCT 47, concerns the question of whether it is the employer or the worker who bears the onus of proof upon a reference to the Workers Rehabilitation and Compensation Tribunal (the Tribunal) made by the employer pursuant to s 81A(5) of the Workers Rehabilitation and Compensation Act 1988 (the Act).
2. Given that the statutory entitlement to make such a reference is bestowed by s 81A(5) upon an employer who wishes to dispute liability to continue to pay compensation to a worker in respect of an injury, one would have thought that it was quite clear that the onus would lie with the employer who seeks to establish facts justifying the cessation of payments. Obviously, to the appellant at least, who on this appeal contends to the contrary, the matter is not so clear.
3. This is somewhat surprising given that on the hearing of an appeal to this Court against a procedural decision of the Tribunal in the same reference, the appellant contended that in the s 81A(5) proceedings the employer bears the onus of proving that it is not liable to continue making weekly payments of compensation: Skilled Group Limited v Anning [2014] TASSC 40 at [17].
4. The appellant's present contention is even more surprising given that s 49(2)(b) of the Act, headed "Procedure of Tribunal" and contained in Pt V of the Act entitled "Dispute Resolution", and applying to all proceedings before the Tribunal, provides that the onus of proving an initial entitlement to a payment of compensation to a worker lies on the worker, but that the onus of proving that a worker is no longer entitled to the payment of compensation lies on the employer.
5. Notwithstanding those considerations the appellant now advances, as the sole ground of appeal pursued, the proposition that a s 81A(5) reference "that puts initial entitlement in issue", requires the worker to prove an initial entitlement to compensation within the meaning of s 49(2)(a) of the Act, or alternatively, places the onus of proof on the worker because at common law, the relevant principle is that "he or she who asserts must prove".

1. In his claim for compensation dated 4 December 2012 the respondent stated that he was suffering from a "golden staph infection"; that the infection had spread through his "complete body"; and that it happened as a result of "pumping flood waters from drains".
2. The appellant did not dispute the respondent's claim within the time provided for by the Act and was therefore required by the Act to pay the respondent compensation. Weekly payments of compensation commenced and benefits under Div 2 of Pt VI of the Act were paid.
3. On 3 September 2013, the appellant referred the matter to the Tribunal pursuant to s 81A(5) of the Act. The reference sought orders that compensation by way of weekly payments and the cost of any benefits under Div 2 of Pt VI of the Act "is not to be paid by the employer". Whether the employment of the expression "is not to be paid" was disingenuous or merely an error, the reality is that the appellant was seeking a determination in accordance with the terms of s 81A(5) of the Act, namely that it was not liable to continue making weekly payments of compensation or paying the cost of benefits.
4. A determination that compensation by way of weekly payments, or the cost of any benefits, "is not to be paid" is the relevant determination mandated by s 81A(3)(c) and (d) in the circumstances specified in those sections upon a referral by an employer pursuant to s 81A(1) of the Act. That is to say, it is the determination in a case where the referral is made by an employer before payments of weekly compensation and the cost of any benefits have been commenced.
5. On 20 January 2014, while the appellant's reference was pending, the respondent's solicitors applied to amend his claim for compensation pursuant to s 44 of the Act so as to state that his condition was caused by "pumping floodwaters from drains and/or being exposed to the risk of abrasions, cuts, puncture wounds or other types of skin vulnerability during his employment between the 9th November 2012 and 19th November 2012".
6. That application was opposed and was heard by the Chief Commissioner on 11 March 2014. On 21 March 2014, the Chief Commissioner delivered a decision allowing the amendment: Skilled Group Limited v A [2014] TASWRCT 13.
7. The appellant unsuccessfully appealed against that decision to this Court. The decision of Blow CJ in Skilled Group Limited v Anning [2014] TASSC 40 dismissing that appeal has already been referred to.
8. The appellant's reference was ultimately heard by the Chief Commissioner on 20, 22 and 27 October 2014 and was dismissed on 12 December 2014, in the decision currently under appeal, namely Skilled Group Limited v A [2014] TASWRCT 47.
9. The Chief Commissioner's decision ultimately turned on the question of whether the onus of proof on the reference was borne by the appellant or the respondent. He expressed his conclusion at [40]-[41] of his determination in the following terms:

"40 This is a difficult case in which some endeavour has been made to establish a strict timeline in order to show that the worker could not possibly have suffered his injury or abrasion to the skin to allow a portal for the bacterial infection because based on an estimation of the timeline he was not at work during that period. As noted previously this is not a matter of mathematical precision but rather involves a reasoned assessment of all the evidence and, noting the particular matters highlighted herein, considering whether it was more probable than not that the worker did not suffer the skin abrasion or injury in the course of his employment that allowed the bacteria to enter his system. Of significance is the nature of the worker's employment duties as compared to the circumstances of his home life which favours a much higher probability of this nature of injury occurring in the course of his employment.

41 Having considered all of the evidence as analysed herein, the Tribunal finds itself unable to be satisfied one way or the other. I am unable to conclude with any degree of confidence that it was more probable than not that the skin portal was not created in the course of the workers employment. The reference is therefore dismissed."

1. Counsel for the appellant, Mr Read SC, notes, citing C v Lufra Investments Pty Ltd [2008] TASWRCT 13, that the "accepted position" in relation to the onus of proof on a s 81A(5) reference has been that it is borne by the employer. He submits however that there is no binding authority to that effect. Mr Read referred to the decision of Blow J, as he then was, in GIO Australia Limited v Lovell [2000] TASSC 75 at [13] where his Honour held that upon a reference under s 81A(1) of the Act the employer has the onus of proof, but argues that the decision in that case is distinguishable because the present appeal involves a s 81A(5) reference.
2. That submission may not be entirely correct, for while the reference under consideration in GIO Australia Ltd v Lovell was a reference by an employer under s 81A(1), what Blow J said at [13] was not strictly speaking confined to s 81A(1). His honour said:

"By virtue of s 81AB, an employer is taken to have accepted liability unless it disputes liability in accordance with either ss 81AA or 81A. I think it must follow that, in s 81A proceedings, the employer bears an onus of proof. That onus was not discharged in this case in relation to the first question in such proceedings, namely whether the employer in fact disputed liability at the relevant time."

1. Be that as it may, I certainly do not regard myself as constrained in any way in considering the appellant's argument as it relates to s 81A(5). I also note that the question of onus of proof in proceedings either under s 81A(1) or s 81A(5) does not appear to have been the subject of any detailed argument by counsel before Blow J.
2. In his written submissions, counsel for the appellant argues at [3.1] as follows:

"3.1 The worker carries the onus of proof on a s81A(5) reference because:

(b) A plain English interpretation of the relevant provisions is to that effect;

(c) It accords with the purpose of the provision for the worker to carry the onus;

(d) An interpretation that the worker has the onus is not so absurd as to warrant the alternate interpretation;

(e) To so determine is to otherwise be consistent with the principles of statutory interpretation; and

(f) The general rule that the Act is to be interpreted beneficially to workers does not assist in these circumstances because there is no ambiguity or two possible constructions leading to different results."

1. None of those bald assertions were developed by counsel however, and I do not find any of them convincing. I will deal with each of them nonetheless.
2. The fact that there is no binding authority to the contrary simply begs the question of what the correct answer to the appellant's contention is.
3. I do not accept that the "plain English interpretation" of the "relevant provisions" is to the effect that a worker carries the onus of proof on an employer's reference under s 81A(5). Upon such a reference the words of the section suggest the opposite, given that the employer is disputing an existing liability to continue to pay compensation. Moreover the words of s 49(2)(b) are unambiguous in conveying that the onus of proving that a worker is no longer entitled to the payment of compensation lies on the employer. I see nothing in the words of the other sections referred to by counsel for the appellant in this regard, namely ss 49(2)(a), 81(1), 81AB, 81A(1) and 81AA that would displace the ordinary meaning of the words I have just emphasised.
4. I do not accept that it accords with the purpose of the provision for the worker to carry the onus. It should be obvious from what I have said that I regard the opposite to be the case. Furthermore, as discussed earlier, there is some authority for the proposition that the employer carries an onus upon a reference under s 81A(1) and, if that be so, I discern no "purpose" in s 81A taken as a whole that would require a reversal of that onus upon an employer's reference under s 81A(5). As I have said already, on such a reference it is the employer who seeks a determination that it does not have a liability to continue to pay compensation that it is currently liable to pay.
5. I do not regard the submission that an "interpretation that the worker has the onus is not so absurd as to warrant the alternate interpretation" as at all helpful. There is no ambiguity in the operative provisions of s 81A(5), particularly when read with s 49(2)(b). The ambiguity contended for is an artificial construct, arising only as a result of its novel assertion by the appellant.
6. The submission that "to so determine is to otherwise be consistent with the principles of statutory interpretation" does not, as a result of its generality, advance matters in the slightest.
7. There is considerable irony in the submission that "the general rule that the Act is to be interpreted beneficially to workers does not assist in these circumstances because there is no ambiguity or two possible constructions leading to different results". I agree that there is no ambiguity. I do not agree however that the unambiguous intent of s 81A(5) is that a worker should carry the onus of disproving an employer's assertion that, for reasons advanced by the employer, it does not have a liability to continue to pay compensation.
8. On behalf of the appellant Mr Read raises another argument which does not, to my mind at least, find expression in the list of submissions I have just canvassed.
9. At par [3.2] of his written submissions Mr Read advances the following contentions:

"3.2 A s81A(5) reference requires a determination of the worker's 'initial entitlement' within the meaning of section 49(2)(a) of the Act when that is put in issue by the reference because:

(a) Section 49(2) was inserted by s37 of No 16 of 1995. It says:

(a) the onus of proving an initial entitlement to a payment of compensation to a worker or the dependants of a worker lies on the worker or those dependants; and

(b) the onus of proving that a worker is no longer entitled to the payment of compensation lies on the employer.'

(b) The clause notes for the No 16 of 1995 Act said regarding section 49(2)

'paragraph (c) states the onus of proof requirements in proceedings before the Tribunal. A worker will be required to prove the initial entitlement to a claim; the employer will have to prove that a worker is no longer entitled to compensation. This provision makes no change to the current arrangements; they aim simply to clarify the law.'

(c) The law was that a worker must prove an entitlement pursuant to section 25(1) of the Act or its predecessors and the employer must prove the circumstances justifying any termination or reduction in entitlements.

(d) Section 49(2) must be interpreted consistent with the purpose that its aim was simply to clarify the position which existed before its enactment.

(e) The ordinary literal interpretation accords with that purpose.

(i) Initial means: 'of or relating to the beginning'.

(ii) Entitlement means: 'the condition of having a right to have, do, or get something.'

(iii) 'right' can be used to mean different things. In these circumstances it means 'a right to something which the law will provide an appropriate remedy.'

(iv) 'initial entitlement' means the first establishment of an entitlement to compensation in accordance with sections 25(1), 67, 69, 71 but apparently not section 75.

(v) Section 81A(5) was inserted by Act 50 of 1992 in response to Precise Timbers Pty Ltd & FAI General Insurance Co Ltd v Darrel Ian Burgess. That decision determined that an employer was unable to dispute 'liability' if it did not take action pursuant to what was the then section 81A(1).

(vi) Section 81A(5) is the only sub-section in the Act which enables an employer to dispute 'initial' liability or foundational liability under section 25(1) to pay compensation. That is, if the time limit to use section 81A(1) of the Act has lapsed.

(vii) Section 81A(5) relevantly says a referral may be made for '... an injury referred to in 81(1).'

(viii) Section 81(1) requires an employer, on receipt of a claim for compensation to pay weekly payments to a worker, without being construed as an admission of liability.

(ix) 'initial entitlement' cannot mean weekly payments paid pursuant to section 81(1) because that would mean in almost all cases the worker's 'initial entitlement' to weekly payments would be established without the worker needing to do anything.

(x) Further weekly payments paid without admission to liability are not an 'entitlement'.

(xi) Section 81AB says an employer is taken to be liable for the relevant claim where it does not dispute liability to pay compensation '... in accordance with section 81A ...'

(xii) Section 81AB is a deeming provision. Section 81AB as a deeming provision must be interpreted strictly.

(xiii) It deems a fictitious state of mind on an employer that it '... has accepted liability in respect of that claim'. The fictitious state of mind does not apply unless the factual basis for the deeming to occur is established.

(xv) Section 81AB does not say s81A(1) and there is no sufficient basis for '(1)' to be read into that section.

(xvi) Accordingly, the filing of a section 81A(5) reference meant section 81AB did not apply, which meant Mr Anning had to establish his 'initial entitlement' to compensation.

(xvii) That interpretation is consistent with sections 86 and 77AA(7). Those provisions place the onus on an employer to establish the worker is 'no longer entitled to a payment of compensation' where there has been an accepted, determined or deemed 'injury' pursuant to section 25(1) of the Act." (Footnotes omitted.)

1. As far as I can understand this argument, it has at its heart the proposition that the filing of a reference pursuant to s 81A(5), such as that in the present case, has the effect of disengaging s 81AB from the point of its inception. This appears to be advanced in two stages.
2. The first stage seems to be that s 81AB provides that an employer is taken to have accepted liability for the relevant claim where it does not dispute liability to pay compensation in accordance with s 81A, not s 81A(1) specifically, but just s 81A, and a reference under s 81A(5) disputes liability.
3. The second stage, as I apprehend it, is that s 81AB is a deeming provision, and as such, must be interpreted strictly. It deems a fictitious state of mind on an employer, namely that it "... has accepted liability in respect of the claim" and the fictitious state of mind cannot be deemed to exist unless the factual basis for the deeming to occur exists. The argument being that when a reference under s 81A(5) is made, liability is disputed and the factual basis for the deemed acceptance of liability no longer endures.
4. The result of all this, as I understand Mr Read's submissions, is that the filing of the s 81A(5) reference in the present case meant that s 81AB no longer applied so that there was no longer a presumption of an acceptance of liability by the appellant, and that in turn meant that the respondent had to establish his "initial entitlement" to compensation on the hearing of the reference. The consequence of that being that the respondent bore the onus of proof either by operation of s 49(2)(a) of the Act or, alternatively it is submitted, if s 49(2)(a) has no relevant application, then at common law.
5. I do not accept those ingenious submissions.
6. Sections 81AB and 81A respectively provide as follows:

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."

"81A Disputes of liability for weekly payments and other benefits

(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 84 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

(2) The referral of a matter to the Tribunal is to be accompanied by -

(b) all evidentiary material on which the employer intends to rely at the hearing of the matter.

(2AA) If an employer fails to lodge evidentiary material under subsection (2)(b), the employer may not rely on that material unless the Tribunal otherwise allows.

(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-

(b) the cost of any benefits payable under Division 2 of Part VI in respect of the injury to the worker.

(2B) The Registrar is to advise the Tribunal of the Registrar's determination.

(2C) The Tribunal may make an order giving effect to the Registrar's determination.

(a) if the Tribunal considers that weekly payments should be made, order the employer to make weekly payments from such date as the Tribunal determines; or

(b) if the Tribunal considers that the cost of any benefits payable under Division 2 of Part VI in respect of the injury to the worker should be paid, order the employer to pay the cost of the benefits from such date as the Tribunal determines; or

(c) if the Tribunal considers that a reasonably arguable case exists concerning the liability of the employer to pay compensation by way of weekly payments, determine that compensation is not to be paid by the employer; or

(d) if the Tribunal considers that a reasonably arguable case exists concerning the liability of the employer to pay the cost of any benefits payable under Division 2 of Part VI in respect of the injury to the worker, determine that the cost of the benefits is not to be paid by the employer.

(4) The fact that the Tribunal has determined under subsection (3) that weekly payments should be made, or that the cost of any benefits payable under Division 2 of Part VI in respect of the injury to the worker should be paid, is not to be taken into account by the Tribunal in any other proceedings under this Act.

(5) Notwithstanding that liability has not been disputed in accordance with subsection (1), an employer who wishes to dispute liability to continue to pay compensation by way of weekly payments for an injury referred to in section 81(1) or to pay the cost of any benefits payable under Division 2 of Part VI in respect of the injury may, at any time after the expiration of the period referred to in subsection (1), refer the matter to the Tribunal.

(6) For the purposes of this section, the Tribunal or the Registrar may conduct any hearing the Tribunal or the Registrar considers necessary by any appropriate means including, but not limited to, a telephone conference."

1. When an employer fails within 84 days to dispute liability to pay compensation or benefits in the manner provided for by s 81A(1), then there has been a relevant failure to dispute liability to pay compensation in accordance with s 81A, and s 81AB is engaged. The employer is then taken to have accepted liability in respect of the claim. That, in my view, is an enduring state of affairs and the employer is only relieved from it to the extent provided in s 81A(5), namely that "notwithstanding that liability has not been disputed in accordance with subsection 1" the employer has a residual entitlement to dispute liability to continue to pay compensation.
2. Section 81A(5) thus provides partial relief from the deemed acceptance of liability in respect of the claim going into the future. The filing of a s 81A(5) reference does not completely disengage the deeming effect of s 81AB from the point of its inception, and the worker is not required to prove "an initial entitlement to a payment of compensation". As was submitted by counsel for the respondent, Mr Phillips, in oral argument, it is the employer who seeks to challenge his ambulatory liability to continue to pay compensation.
3. It follows that I do not accept that a worker who is the subject of a reference to the tribunal by an employer, pursuant to s 81A(5) of the Act, is, even where the very basis of the worker's entire entitlement is put in issue by the reference, placed in the position of having to prove an initial entitlement to a payment of compensation within the meaning of s 49(2)(a) of the Act, with the consequence that s 49(2)(a) operates to place the onus of proof in the reference on the worker.
4. As can be seen above, counsel for the appellant made submissions as to what the words "initial entitlement" should mean, and what, in his submission, they could not mean within the framework of the Act. While these submissions are intriguing, the conclusions I have reached and the route by which they have been arrived at makes it is unnecessary for me to resolve any of the other issues raised by those submissions.
5. Neither, I should add, while respectfully acknowledging the decision of Blow J in GIO v Lovell, is it necessary for me to consider whether that decision should be followed as authority for the proposition that the employer and not the employee bears the onus of proof on a reference pursuant to s 81A(1) of the Act.
6. The final submission made on behalf of the appellant was an alternative submission that s 49(2) of the Act does not apply to the reference in the present case, but that the common law operates so as to place the onus of proof on the respondent.
7. Mr Read's contentions in this regard are at par[4] of his written submissions as follows:

(a) Section 49(2)(a) of the Act says: 'the onus of proving an initial entitlement to a payment of compensation...'. Section 49(2)(b) uses the same phrase: 'payment of compensation.'

(b) Section 25(1) of the Act uses the phrase 'liable to pay compensation' rather than 'payment of compensation'. That is because there is no compensation payable under section 25(1) of the Act. A worker's entitlement to compensation is governed by the auxiliary sections of the Act.

(c) There is no dispute to a 'payment of compensation' within the meaning of section 49(2) of the Act when liability pursuant to section 25(1) is disputed, which is what Skilled did in this case.

(d) Section 81AB of the Act doesn't apply, for the reasons given above.

(e) If despite these submissions it does apply, then it deems liability to pay compensation pursuant to sections 69 and 75 of the Act subject to the conditions contained in those sections or to take steps to dispute or terminate its liability.

(f) That is rather than liability in the sense of section 25(1) of the Act, which remains open for dispute.

(g) Accordingly the common law position applies with the result that the worker has the onus of proof." (Footnotes omitted.)

1. I do not accept these submissions because I do not accept the validity of the essential propositions which underpin them.
2. First, for the reasons I have already given, there is no abrogation of the operation and effect of s 81AB of the Act brought about by the appellant's referral to the Tribunal pursuant to s 81A(5).
3. Second, and in any event, it is not correct to characterise a reference pursuant to s 81A(5), even one which, as in the present case, disputes the very basis of a worker's entitlement to compensation, as a dispute as to liability to pay compensation pursuant to s 25(1) of the Act. Whatever the reach of a dispute referred under s 81A(5) may be, it remains a reference by the employer disputing liability to continue to pay compensation by way of weekly payments or the cost of any benefits payable under Div 2 of Pt VI in respect of the injury. The words I have emphasised clearly meet the description of a "payment of compensation" as used in s 49(2) of the Act, and the section is not displaced in the way contended for by the appellant.
4. Moreover, as was pointed out by Mr Phillips, in his written submissions, the submission made by Mr Read in this regard fails to pay sufficient regard to the inchoate or contingent nature of the liability to pay compensation referred to in s 25(1) of the Act and its subsequent crystallisation by payments of compensation as occurred in the present case: State of Tasmania v Parsons [2002] TASSC 59 Underwood J (as he then was), at [20], and Fishpool v Incat Tasmania Pty Ltd [2013] TASFC 6, Estcourt J at [35]. Once that liability has crystallised it cannot be said that a reference by an employer under s 81A(5) of the Act disputing a liability to continue to pay compensation relevantly involves an employee proving an "initial entitlement" to a payment of compensation. Even though the employer may dispute a continuing liability to pay by disputing the employee's foundational entitlement to compensation, it remains that the employer is seeking to prove that the employee is "no longer entitled" to the payment of compensation.
5. For completeness I should say that even if common law principles governing onus applied on the hearing of the appellant's reference in the present case, I would remain of the view that the party seeking to prove facts and opinions justifying a favourable determination under s 81A(5) was the appellant who instituted the proceedings before the Tribunal, and not the respondent.
6. On any view, the respondent did not bear the onus of proof upon the hearing of the appellant's reference to the Tribunal by reason of the operation of the principle of common law that "he who seeks must prove".
7. For the reasons I have given, I conclude that there is no merit in the sole ground of appeal argued on behalf of the appellant and I dismiss the appeal.