Victorian WorkCover Authority v Brewster; Victorian WorkCover Authority v Mackay; Victorian WorkCover Authority v Pintar [2001] VSCA 30

Victorian WorkCover Authority v Brewster; Victorian WorkCover Authority v Mackay; Victorian WorkCover Authority v Pintar [2001] VSCA 30 - VSCA 2001 case summary — Zoe

[9]

The particular circumstances attending these three proceedings may be briefly described. In Brewster, the worker who was born on 9 March 1945, was employed by Freehouse Pty. Ltd. as an administration manager for a number of years. Allegedly because of injury sustained in the course of her employment and as a result thereof, she ceased work on 2 December 1997 and on 5 December she lodged a claim for compensation, with supporting medical certificates. On 30 December 1997 Ms Brewster was examined by Dr. Grainger-Smith who reported to the authorised insurer and on 8 January 1998 the authorised insurer, FAI Workers Compensation (Vic). Pty. Ltd., gave notice of rejection of the worker's claim. On 2 April 1998, Ms Brewster filed a complaint in the Magistrates' Court seeking compensation for "injury to the back [and] psychological disturbance manifested by anxiety and depression, pain, distress and anxiety", and almost a year later, on 17 March 1999, the complaint came on for hearing. The defendant, the authorised insurer, sought to have the plaintiff prove her entitlement generally to compensation under the statute but the magistrate held that the notice of rejection had been ineffective because it contained what he called a "gross misrepresentation" of the contents of Dr Grainger-Smith's report. In consequence, it was held, s.109(1) was called into play so that the plaintiff's claim was "deemed to have been accepted" and accordingly, without requiring further proof, the magistrate made an order for weekly payments under s.109(1) as from 5 December 1997. Medical expenses, too, were ordered to be paid, and costs. On 25 May 1999, the authorised insurer commenced an appeal to the Trial Division of this Court and that appeal was heard in September. On 15 October 1999 the judge upheld the decision of the magistrate, dismissing the appeal with costs. By notice dated 29 October 1999 the authorised insurer purported to appeal to this Court alleging that the notice of rejection had not been ineffective and that anyway, despite s.109, the worker should have been required to prove an entitlement to compensation generally under the Act.

[16]

Before us, the argument for the appellant was put very differently. At the outset, Mr. Maxwell for the Authority accepted that the obligation created and imposed by s.109(1) to make weekly payments when the claim for compensation was deemed to have been accepted under paragraph (a)was not qualified by the need for the worker first to demonstrate an entitlement to compensation generally under the statute; such a need was not said to arise from the concluding words of sub-s.(1)(b) or otherwise. Counsel accepted that on day 29, as he put it, the obligation to make those weekly payments arose in the Authority under s.109 when the claim was "deemed to have been accepted" under sub-s.(1)(a). But the obligation imposed by s.109 was, he said, an obligation to make weekly payments on an interim basis. That was because the worker's entitlement to weekly payments under s.109(1) had to be regarded as subject to termination under s.114 after notice duly given in accordance with that section and, as s.114(2)(b)(i) justified termination on the ground that "the worker is not entitled to compensation under Division 1 or 2 [of Part 4]", the entitlement to weekly payments under s.109(1) must be without prejudice to the issue of entitlement to compensation generally under the Act. Mr. Maxwell accepted, and indeed argued, that the Authority could raise the question of such entitlement generally by giving notice to terminate weekly payments under s.114 on any of the grounds specified in s.114(2)(b), but only, he said, once such weekly payments had commenced; for the notice was to terminate payments, he said, not entitlement to payments (and he relied in this regard on the wording of sub-ss.(2) to (12) of s.114 in contrast to the wording of sub-s.(1)). In the cases now under appeal weekly payments had not commenced and that, counsel contended, was a critical point of distinction; for, weekly payments not having commenced, no notice of termination under s.114 was needed in order for the defendant, be it the employer or the authorised insurer, to raise for determination the issue of entitlement generally.

[18]

Instead, the appellant submitted that the right to enforce the obligation which fell nowadays on the Authority standing in place of the authorised insurer was probably of little practical significance because the Authority, as a responsible body under statute, could be relied upon to act bona fide and in accordance with law. For one reason or another in these three cases weekly payments had not been made as required by s.109(1)(b) but, he said, there had been cause for this even if, on examination, the supposed cause had not been upheld. Ordinarily, he said, the Authority could be relied upon to make the weekly payments required by s.109 and where weekly payments were made under s.109 there would be no need for the worker to seek an order to enforce the statutory obligation. But however satisfactory this reading of the Act may be when weekly payments are made, it does not seem to me a very satisfactory solution to the problem when weekly payments are not made although, at least arguably, required by s.109(1). The right to weekly payments under s.109(1) is, I think, an important one; all counsel seemed to accept that s.109(1) was there to prevent undue financial hardship to a worker whose claim to compensation, for whatever reason, had not been either accepted or rejected within the time described by the subsection. Parliament had been concerned, it seems, to see that the worker was not disadvantaged by undue delay on the part of those who had the responsibility for accepting or rejecting a claim: the making of weekly payments in the interim was salutary and, if without prejudice to the ultimate question of entitlement to compensation generally (as the Authority argued), it scarcely disadvantaged the employer or its insurer. What was important was to maintain a proper cash flow for the worker and his family who might be struggling to make ends meet through the incapacity of the breadwinner and, if the obligation created by s.109(1) was not performed in accordance with that subsection, some means of enforcing the obligation was obviously appropriate[1].

[19]

In order, then, to sustain the submission that in these three cases the plaintiff had not been suing to enforce the obligation created by s.109(1) to make weekly payments but had been seeking compensation on the wider and more general basis dependent upon entitlement under provisions such as s.82, counsel for the Authority took us to the pleadings. In Brewster the plaintiff had alleged employment, injury arising out of or in the course of employment, the lodging of a claim for compensation, its rejection on 8 January 1998 by a notice which was alleged to be invalid and finally, the necessary reference to conciliation without which a proceeding cannot now be commenced. According to the prayer for relief, the plaintiff was claiming "weekly payments of compensation pursuant to Section 93", a declaration that the rejection of the claim for compensation was invalid and an order for payment of medical and like expenses. Mr. Maxwell contended that both the claim for compensation under s.93 and the claim for medical and like expenses made it plain enough that the claim was for compensation generally under the statute, and not simply for weekly payments under s.109. One difficulty with this argument, of course, lay in the plea in Brewster that the notice of rejection was invalid; for the invalidity of the notice of rejection was relevant only to a claim under s.109(1) where it might lead to deemed acceptance of the plaintiff's claim. When this was pointed out in the course of argument, Mr. Maxwell suggested that if and in so far as the pleading should therefore be taken to foreshadow a claim for weekly payments under s.109(1) it was no more than an interim claim pending the hearing and determination of the main claim which remained one for compensation generally after its rejection by the authorised insurer, notice of which had served effectively to put in issue for determination the worker's entitlement generally - a step which, he said, could not simply be ignored. Yet that is not how the case proceeded, the magistrate himself pointing to the significance of s.109(1) in deeming the claim to have been accepted if there was no valid notice of rejection and then, after ruling that the notice was invalid, ordering weekly payments by reference to s.109 without requiring further proof from the plaintiff.

[25]

That brings me to what I regard as the main argument of the Authority: that no orders should have been made under s.109(1) because the obligation under that subsection, to make weekly payments upon deemed acceptance of a worker's claim, had come to an end by the time of the hearing of the plaintiff's proceeding which, at least as framed, was brought for compensation generally. It was common ground that the making of weekly payments under s.109 is something which lasts only for the time being: it is subject to termination when notice is duly given under s.114. (I express no opinion on whether notice under s.114 may be given, as Mr. Maxwell suggested, only after weekly payments have commenced or, as Mr. Gorton suggested, either before or after; that point was not argued.) I have mentioned already that weekly payments under s.109 were described in argument as interim (not unlike perhaps the "voluntary payments" made in earlier days under workers compensation legislation, before any award[2]), it being accepted in argument that s.109(1) was intended to relieve against hardship in cases where there was delay in the processing of the claim made by the worker. From this it was argued for the Authority that the obligation created by s.109(1)(b) to make weekly payments to the claimant should be read and understood as an obligation pending - and so not extending beyond - the consideration and determination of the claim by the authorised insurer, the Authority or the self-insurer (as the case may be). Whether payments are made or not under s.109, it was submitted, there remained the obligation on an authorised insurer to consider the worker's claim and to decide whether to accept it or reject it, and to do so as soon as may be; and it was only pending that decision and notification of that decision that weekly payments were required under s.109 in order that the worker be not prejudiced in the meantime - or at all events not prejudiced or disadvantaged beyond an initial period (of 28 days, according to s.109(1), although see also s.108(4)).

[27]

The argument was put by Mr. Maxwell most attractively, if I may say so, but I am not persuaded that it does properly represent the scheme of the legislation. It seems to me that in truth that scheme is as follows. If the claim is accepted within the time marked out by ss.108 and 109, weekly payments will follow, as indeed will other forms of compensation. Weekly payments may of course be subject to termination in accordance with s.114 (although, as appellant's counsel was apt to concede, after actual acceptance of the worker's claim notice of termination would probably be given only if further facts came to light). On the other hand, if the worker's claim was not accepted but was rejected within the time marked out by s.109(1), no compensation of any kind would be paid but the worker, armed with a statement of the reasons for the rejection (as required by s.109(2)), could commence proceedings after gathering evidence to meet the grounds of rejection. Between these two there lies the case created by s.109, when the worker's claim is neither accepted nor duly rejected within the time marked out by s.109(1). When that occurs, the worker's claim must be deemed to have been accepted by virtue of s.109(1) and, as I apprehend it, that means that the worker is to be treated as though his claim had been actually accepted, contrary to the fact. Once again, such deemed acceptance (as indeed actual acceptance) is no doubt subject to termination in accordance with s.114 (although, there having been no actual acceptance, there is no reason to suppose that notice of termination would be given only by reference to facts emerging after that deemed acceptance). Should the worker wish to enforce the obligation created by s.109 to make weekly payments, he or she would have to prove the making of a claim apparently regular on its face and its deemed acceptance under and by virtue of s.109(1)(a), but perhaps little more than that. Weekly payments which were justified under s.109 could be ended only by notice duly given under s.114, when again the worker would be given reasons for the notice and hence, in case of disagreement, be in position to dispute with knowledge of what was being said against the claim.

[28]

Thus far, there seems to me little if any dispute about the scheme of the legislation, but the Authority points to the fact that once notice of rejection is given, even if beyond the time marked out by s.109(1), the worker then has the reasons for rejection and so is in the same position to commence proceedings or not as when notice of rejection is given within the time marked out by s.109(1). Moreover, it is said, the purpose of s.109(1) has been "overtaken by events" in that there has been a decision on the claim and that decision has been notified to the worker, and determination of the disputed claim will then meet all that is required; the making of weekly payments in the meantime, being themselves subject to the final determination of entitlement shortly to be made, is unnecessary and indeed inappropriate. Yet to my mind that is not what Parliament has provided. No reference is made in s.109(1) to the making of weekly payments under that section (that is, on an interim basis) only until the claim is accepted or rejected; and that that should be so seems to me quite inconsistent with the fact accepted by the Authority that, at least if once commenced, weekly payments may be ended only by notice under s.114. Indeed, the appellant's arguments seemed to me to undervalue the worker's right to weekly payments under s.109, even on an interim basis. When a workers' claim for compensation is actually accepted, payments will doubtless commence and they will then continue unless and until terminated by notice duly given under s.114 - and to my mind Parliament intended no less when the claim was "deemed to have been accepted" in terms of s.109(1)(a). It would be inconsistent then to allow that a notice of rejection, although out of time according to s.109(1), ended weekly payments being made under s.109(1)(b) or, I would add, an entitlement to weekly payments under that subsection. I do not overlook that Mr. Maxwell was contending that it should be so only in a case where weekly payments had not yet begun, but what inducement is there then for the Authority (standing now for the authorised insurer) to see that payments commence as s.109 seems to require? There is none; for the Authority could simply wait, without making those payments, and when sued defend by raising the issue of entitlement generally under the statute.

[29]

Nor do I see it as enough to say that once notice of rejection has been given, albeit after the time marked out by s.109, the worker has all that he would have if weekly payments had begun and then been terminated shortly thereafter by notice under s.114. True it is that either way the worker will probably have the reasons for the rejection of his claim; for it was further contended that as the commencement of proceedings by the worker can only follow conciliation, through that process and then the pleadings the issues will have become well-enough defined by the time of the hearing for the worker to proceed without difficulty or embarrassment. Perhaps that is so, but requiring weekly payments to commence and then to continue subject to a notice under s.114 might have other consequences beyond simply informing of the reasons for the notice. First there is the onus of proof in relation to entitlement otherwise than under s.109, about which it seems, from what was said to us in argument, that views might vary[3]. Then there is the matter of recovering weekly payments which have been made under s.109 if later it is seen that the worker had no entitlement to compensation under the Act - and on that too it seems that more than one view might be open. Under s.114F recovery depends upon its being established that there was no entitlement in the worker and even if notice under s.114(2)(b)(i) that "the worker is not entitled to compensation" may operate (as seems likely[4]) to raise the question of entitlement ab initio, does it follow if entitlement to compensation generally cannot be established that he or she must repay weekly payments made under s.109(1) by virtue of a deemed acceptance of the claim, or is an entitlement under s.109(1), if only for the time being, enough to deny operation to s.114F? These are questions which do not fall now for determination, the argument in this regard not having been developed to any significant extent, and I say no more about them. I mention them only to show that requiring weekly payments to be commenced and continued under s.109 until notice of termination has been given under s.114 might have consequences beyond merely conveying information about the reasons for the rejection of the main claim.

[48]

Before turning, however, to the remaining aspect of these cases, let me add this. I emphasise that it was a matter of discretion for the court at first instance how to proceed in these three cases, and I should not be taken from my conclusion that there was no appealable error in that regard to be dictating the course that should be followed in other like situations. In these three cases the workers' right to an order under s.109(1) upon deemed acceptance of the claim for compensation did seem to emerge only in the course of the hearing at first instance, a hearing of what until then was cast as a claim for compensation generally under the Act, based upon notice of rejection given by the authorised insurer. The worker did not come to court to establish an entitlement to compensation after hearing nothing at all from the insurer; the worker was scarcely ignorant of the attitude of the defendant, for that had been made clear and presumably the grounds made known. In those circumstances, it would not have been surprising, I think, if the general discretion over procedure had been exercised at first instance in favour of the court's proceeding with the proofs of entitlement on the main claim, not only so as to justify an order, as sought by the plaintiff, for payment of medical and like expenses under s.99 (which, as I have said, could not be justified under s.109(1) itself), but also to justify a final determination of the employer's liability which, it is common ground, was not established merely upon the deemed acceptance of the claim for compensation under s.109(1). As Mr. Maxwell argued and as I think all counsel were disposed to accept, entitlement under s.109(1) is somewhat ephemeral, being subject to proof of entitlement generally if and when notice of termination is given under s.114(2) and it must therefore be open to a worker at any time to seek to establish entitlement once and for all. In these three cases, where the plaintiff appears to have commenced the proceeding in reliance upon a notice of rejection from the authorised insurer, it is difficult to see what was to be lost by the court's pressing on with the main claim, and much time could have been saved.

At a glance

Court

Decision date

Before

Source

Judgment (84 paragraphs)