Workcover/Cgu (Pyrotech Fire Protection P/L) v Blocki [2000] SAWCT 92

4 One of the relevant criteria, as contained in s 42(2)(a) is:

"An agreement for the redemption of a liability under this section cannot be made unless -

(a) the worker has received competent professional advice about the consequences of redemption."

5 Through his pleadings, the respondent's assertions that he did not receive advice satisfies this criteria such that the purported redemption agreement is void ab initio.

6 In resolving to refuse the appellant's application, the learned Deputy President acknowledged that the Tribunal did not have jurisdiction to order that a worker's entitlement to compensation under the Act be redeemed and he further acknowledged that it was not a matter for the Tribunal to decide whether there should have been a redemption agreement or whether the terms of such an agreement were fair. He refused the application on the basis that all that was being sought to be agitated, through the respondent's pleading, was whether, as a matter of fact, a redemption agreement existed. The learned Deputy President concluded that the Tribunal was possessed of such jurisdiction to decide such factual issues as were necessary to determine the issues in dispute between the parties, and in this instance, that included the determination as to whether or not a redemption agreement existed.

7 One of the primary submissions advanced by Mr Rowell, counsel for the appellant, was that it was not for this Tribunal to concern itself as to whether or not particular advice given in respect of a redemption agreement was "competent" for the purposes of s 42(2)(a). In his submission the jurisdiction of the Tribunal to hear and determine disputes between a worker, an employer and compensating authority is limited by s 89(A)(1) to a decision on a claim for compensation. He submitted that the issue of the competency of professional advice was a matter that lay within the jurisdiction of the common law courts and was so far removed from the jurisdiction of the Tribunal as conferred under s 89(A)(1) as to be clear that it was not within the Tribunal's jurisdiction to entertain. He argued that in the common law forum, the provider of the advice would be represented. He submitted that if this Tribunal continued to explore and determine the matter it might come to a decision contrary to that reached by another forum in another proceeding in which other and more fulsome evidence might be presented.

8 The Tribunal clearly is established by the Act and its jurisdiction is as conferred by statute: s 79.

9 As such, it does not possess any inherent jurisdiction but can only exercise that jurisdiction which is conferred upon it by statute. But it does not follow that it is necessarily limited to that jurisdiction that is expressly conferred upon it by statute. It can be safely assumed, absent an express provision to the contrary, that Parliament intended a statutory court or tribunal to possess such jurisdiction as is necessary to properly discharge its function.

10 The approach to be adopted in determining the scope of the jurisdiction of the Tribunal was clearly stated by Lord Esher MR in Reg. v Commissioners for Special Purposes of the Income Tax (1888) 21 QBD 313, at 319:

"When an inferior court or tribunal or body, which has to exercise the power of deciding facts, is first established by Act of Parliament, the legislature has to consider what powers it will give that tribunal or body. It may in effect say that, if a certain state of facts exists and is shown to such tribunal or body before it proceeds to do certain things, it shall have jurisdiction to do such things, but not otherwise. There it is not for them conclusively to decide whether that state of facts exists, and, if they exercise the jurisdiction without its existence, what they do may be questioned, and it will be held that they have acted without jurisdiction. But there is another state of things which may exist. The legislature may intrust the tribunal or body with a jurisdiction, which includes the jurisdiction to determine whether the preliminary state of facts exists as well as the jurisdiction, on finding that it does exist, to proceed further or do something more."

11 In this case the learned Deputy President concluded, correctly in my view, that it was Parliament's intention to confer upon the Tribunal the jurisdiction to ascertain whether a certain state of facts exists, they being such facts as are necessary to resolve the dispute between the parties. I agree with his observation that the mere fact that some other court or tribunal might also possess that jurisdiction, is not conclusive.

12 In the judgment under appeal, the learned Deputy President cited some examples of this. He said:

"The issue of a construction summons out of the Supreme Court might provide an effective means of determining whether a redemption agreement exists. Similarly proceedings issued out of the Industrial Relations Commission might provide an effective means by which to determine whether there has been a dismissal for serious and wilful misconduct as no doubt would proceedings in the Family Court on the issue of whether a person was the child of a worker, now deceased."

13 Doubtless, the Workers Compensation Appeal Tribunal applied similar reasoning in WorkCover Corporation (Spastic Centres of SA Inc) v Ellis (1992) 4 WCATR 113, in acknowledging that it was part of the function of a review officer under the former dispute resolution regime to decide the appropriate award classification of a disabled worker under the relevant award in determining the extent of a worker's entitlement to income maintenance. A similar approach was adopted by the Workers Compensation Appeal Tribunal in WorkCover Corporation (Forbes Australia) v Dolan A116/96. Both cases rejected the assertion that it was beyond the jurisdiction of a review officer to delve into the issues of award interpretation and its application to the duties of a worker. Presumably such an approach was also adopted by Olsson J in WorkCover Corporation (Black Diamond Charcoal) v Spyridakos (1997) SASC 6167 (unreported delivered 30 May 1997) when he concluded that it was a matter for the Workers Compensation Appeal Tribunal to determine rights and entitlements under the New South Wales Workers Compensation Act. The Appeal Tribunal had declined to exercise that jurisdiction. Its refusal to do so was criticised by the Supreme Court. As Olsson J said, at par 69:

"It is a routine task of the Courts of this State, as the occasion demands, to consider the meaning and effect of the statutes of other States of the Commonwealth, when it is necessary to do so, because of their potential relevance to and impact upon issues arising in local litigation."

14 In directing his remarks to the Workers Compensation Appeal Tribunal, His Honour clearly recognised that this was a matter for the review officer and in turn, the Workers Compensation Appeal Tribunal, to rule upon.

15 What is raised, through the respondent's pleading, is essentially the same as was raised in Spyridakos, namely, "an ordinary process of statutory interpretation".

16 The resolution of this issue is necessary in order to resolve the issues in dispute between the parties. The learned Deputy President quite properly, in my view, refused to be dissuaded from this task. In my opinion the appeal should be dismissed and the matter should be returned to the learned Deputy President for further hearing.

17 This appeal is from the refusal of a Deputy President to strike out parts of the worker's pleadings. These put in issue the validity of a purported redemption. The redemption amounted to $49000.00. The Corporation says the Act forbids the Tribunal adjudicating upon redemptions made in accordance with s 42.

18 I take the factual circumstances giving rise to the issue before us from the worker's statement of claim. Rather than being established fact, I recognise it is assertion of fact. The worker says the Tribunal is competent to try and determine all issues raised by these pleadings.

19 On 13 November 1994, the worker suffered injury to his right elbow and right eye in his employment. His claim for weekly payments of income maintenance was accepted by WorkCover. He received weekly payments until 2 May 1995.

20 On 3 August 1995 he aggravated the right elbow disability with a second employer. His claim for weekly payments was accepted and income maintenance was paid from that date to 5 May 1997. A depression manifested subsequently and that was acknowledged by WorkCover by consent order on 27 June 1997. Due to the existence of the primary disability that acknowledgment produced only s 32 expenses for the treatment of the depression.

"13. On 1 May 1997, the applicant worker executed a redemption agreement of weekly payments of income maintenance.

14. On 1 May 1997, the applicant worker signed a redemption agreement for medical and like expenses.

15. The applicant worker did not receive competent professional advice about the consequences of redemption of weekly payments of income maintenance as required by Section 42(2)(a) of the Workers Rehabilitation & Compensation Act 1986.

(a) The applicant worker was not advised that if he suffered a further compensable disability he could be treated as receiving a continuing weekly payment of weekly payments of income maintenance and this would be deducted from any weekly payments he might otherwise be entitled.

(b) The applicant worker was not advised of the significance of agreeing to the sum of $1,037.15 and that this sum would be deducted from any future entitlements to weekly payments.

(c) The applicant worker was not given accurate advice concerning the length of any preclusion period from entitlement to Commonwealth benefits.

16. Accordingly the redemption agreement was not validly made and the applicant worker's entitlements to compensation are not limited by it.

17. The applicant worker's weekly payments of income maintenance and medical and like expenses ceased on 1 May 1997 upon the payment to him of the sum of $49,000.00 and $1,000 respectively pursuant to the redemption agreements of weekly payments of income maintenance and medical and like expenses respectively referred to in paragraphs 13 and 14 herein."

22 The pleading goes on to assert that following this purported redemption the worker remained partially incapacitated. On 13 July 1997 he obtained further employment at $724 per week. Then on 13 July 1998 he suffered another work injury and became totally incapacitated.

23 He sought weekly payments of income maintenance to compensate him for the consequent incapacity. In response, the compensating authority wrote:-

"We have determined that you are totally incapacitated for work as a result of this disability, that is, you are unable to perform any duties.

Your Notional Weekly Earnings figure has been set at $464.94. However, in 1997 you received a redemption payment from a previous claim in respect of future income maintenance. From the redemption document, under Section 35(6a) of the Workers Rehabilitation & Compensation Act, 1986, you are deemed to be earning an amount of $1037.15. In view of this we advise your current weekly entitlement is $NIL."

24 The Corporation made this determination pursuant to s 53. That section empowers it to make all necessary investigation and obliges it to resolve the claim by making a determination. (As to the nature of this obligation, see Spiel v Workers Rehabilitation and Compensation Corporation (1992) 58 SASR 45 per Olsson J at 66).

25 The scope of that obligation once a claim is made is described in Cristea v Workers Rehabilitation and Compensation Corporation [1993] SASC 4356; (1993) 61 SASR 487 at 490. King CJ states:-

"If the Corporation had decided that there was a compensable disability, it would have been obliged to determine the amount and, at least in due course, the duration of the income maintenance."

26 Mr Rowell of counsel for the appellant, bases his argument for a denial of jurisdiction on the provisions of Div 4A - Redemption; (see his outline in pars 3.1, 3.2 and 3.3). These are in the following terms:-

"42. (1) Any of the following liabilities may, by agreement between the worker and the Corporation, be redeemed by a capital payment to the worker -

(b) a liability to pay compensation under section 32;

(c) a liability to make a capital payment for loss of future earning capacity.

(2) An agreement for the redemption of a liability under this section cannot be made unless -

(a) the worker has received competent professional advice about the consequences of redemption; and

(b) the worker has received competent financial advice about the investment or use of money to be received on redemption; and

(c) the Corporation has consulted with the employer out of whose employment the disability arose and has considered any representations made by the employer; and

(d) a recognised medical expert has certified that the extent of the worker's incapacity resulting from the compensable disability can be determined with a reasonable degree of confidence.

(3) The amount of the redemption payment is to be fixed by the agreement.

(4) If the Corporation notifies a worker in writing that it is prepared to enter into negotiations for the redemption of a liability by agreement under this section, the Corporation is liable to indemnify the worker for reasonable costs of obtaining the advice required under this section up to a limit prescribed by regulation.

(5) If agreement is not reached within 3 months after redemption is first proposed (by the worker or the Corporation), either party may apply to the Tribunal for reference of the matter to a conciliation conference.

(6) The Tribunal will then appoint a conciliator, and a conciliation conference will be held, in accordance with the rules of the Tribunal.

(7) At the conciliation conference, each party must disclose information in the party's possession that may be relevant to the failure to reach agreement (including representation made by an employer about the redemption proposal).

(8) The conciliator must make every practicable attempt to help the parties to settle their differences by agreement.

(9) However, if agreement is not reached, a party cannot be compelled to agree to redemption of the liability.

(10) The Corporation may accredit professional and financial advisers for the purpose of giving advice under this section (but a worker is not required to obtain the necessary advice from an accredited adviser).

(11) However, the Corporation incurs no liability for advice given by an accredited professional or financial adviser."

27 These provisions were inserted by amending act No 35 of 1995. In Workers Rehabilitation and Compensation Corporation v. Shute (1993) 61 SASR 11 at 15, King CJ had stated in respect to the old s 42 as it was prior to 1994:-

"Mr Rowell for the Corporation argued that the Corporation has an absolute discretion and that its decision is not reviewable or appealable. I am unable to agree. I think that a decision to commute is reviewable by a Review Officer as a decision made on a claim for compensation and also is a decision to vary or discontinue weekly payments (s 95(2)). A decision not to commute is, in my opinion, reviewable by a Review Officer as a decision made on a claim for compensation. Pursuant to s 97, there is an appeal to the Tribunal against the decision of a Review Officer."

28 In 1994 and 1995, Parliament substituted provisions enabling the parties to make agreement. In the absence of agreement no other right was provided for. Refusal to enter an agreement did not give any right of review.

29 Mr Blewett, of counsel for the respondent, submitted that the primary charge under s 53 is to reckon the weekly payments once an entitlement is established. That legislative charge includes, inter alia, observing the provisions of s 35(6a). That in turn involves making a decision after due enquiries. That is a reviewable decision on a claim for compensation pursuant to s 89A. Nothing in s 42 as made by the 1994 or 1995 amendments warrants implicit repeal or narrowing of the jurisdiction granted in s 35 because the amendments were made to s 35 at the same time and did not suggest any such limitation.

30 Mr Rowell joins issue. He says s 35(6a) does not involve a decision. It is merely a mechanical provision. It is an operation by law independent of any administrative or judicial act, (appeal tr 5). As there is no decision involved, there can be no review.

31 Alternatively if Parliament by the 1994 and 1995 amendments of s 42 had the intention of taking away from the Tribunal a jurisdiction in redemption matters, then the effect of rejecting Mr. Rowell's argument would cut across the well established principle that what cannot be done directly cannot be done indirectly.

"If a liability to make weekly payments is redeemed, the worker is taken, for the purposes of this section, to be receiving the weekly payments that would have been payable if there had been no redemption."

I am not persuaded by the argument that s 35(6a) operates mechanically and does not involve the ascertainment of factual components upon which the law operates. Secondly, as a broad proposition, the indirect effect contended merely begs the question as to the proper construction and intention of the legislation: see Container Terminals Australia Ltd v Xeras (1991) 23 NSWLR 214.

33 The real question in this case is one of statutory interpretation. Moreover it is whether the enactment of s 42 in 1995 effected an implied repeal of some part of the jurisdiction that the Tribunal had to enquire and determine the matters in s 35.

34 In DJL v The Central Authority [2000] HCA 17 the majority (Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ) stated the applicable principle as follows (par 25):-

"A court exercising jurisdiction or powers conferred by statute `has powers expressly or by implication conferred by the legislation which governs it' and `[t] his is a matter of statutory construction'; it also has `in addition such powers as are incidental and necessary to the exercise of the jurisdiction or the powers so conferred', Parsons v Martin [1984] FCA 408; (1984) 5 FCR 235 at 241."

35 The decision relied on by the appellant, Della Flora v Workers Rehabilitation and Compensation Corporation of SA (unreported) Full Supreme Court S6691 delivered 26 May 1998, is no more than authority for the same. It is undoubtedly helpful as an example of approaching the task considering the statute as a whole and the nature of the scheme Parliament has established.

36 S 35 is concerned with the principles to be applied in the determination of the weekly payments of a worker who is incapacitated, totally or partially, for work: Workers Rehabilitation and Compensation Corporation v James (1991) 56 SASR 414 at 422. Thus the consideration and determination of whether liability has been redeemed is an express and indeed central charge imposed upon the decision maker by the legislation.

37 The contention of the appellant that the Tribunal has no general jurisdiction in respect to contracts is no answer. It has a jurisdiction for the specific purposes in s 35. In the process of reckoning of the average weekly earnings the decision maker must reach conclusions as to the terms and conditions of a contract, albeit a contract of employment. The ascertainment of the average weekly earnings depends upon a jurisdiction in contract.

38 Going further for example, if the employer were to contend that at the time of the claimed injury there was no contract of employment and no basis for the claim due to frustration of contract, the decision maker would have jurisdiction to investigate and conclude in respect to such matters. That is a jurisdiction in contract. It is a necessary aspect of the jurisdiction granted by the legislation in the circumstances. Many other examples could be given.

39 That does not lead to the Tribunal having any jurisdiction to set aside an agreement or grant any other remedies that might be available in the ordinary courts. The only consequence of the jurisdiction here is to determine, was there a redemption? That it might have the effect of declaring the agreement a nullity because of a failure to comply with the Act is not to the point.

40 Mr Rowell put a second contention that the Tribunal while acting wholly within the general area of its jurisdiction will fall into jurisdictional error if it does something which it lacks authority to do. I did not understand him to contend the Tribunal had in fact acted beyond its jurisdiction in considering the validity of the redemption. He based the argument on Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163.

41 I have understood this argument to amount to a submission that if the pleadings stand there is a real likelihood the process will involve inquiries beyond jurisdiction. That submission is premature. The matter before us is an appeal. We have no supervisory jurisdiction as in judicial review where powers may exist to impose limits upon hearing in advance by qualified prohibition: see R v Industrial Court (1983) 35 SASR 161 per Wells J at 188 as to prohibition quoad. As the pleadings stand they merely contend any purported redemption is by law a nullity. That properly brings into issue the competency of the legal advice. That involves no jurisdictional error.

42 I therefore find nothing in Craig's Case to aid the appellant. The examination of the redemption and whether it complied with s 42 does not entail misapprehension of the nature or limits of the decision maker's functions or powers. The fact that (6a), when observed, involves findings as to redemption is clear. As contended by Mr Blewett, (44), the matter is resolved by the direct charge of the legislation that the decision maker decide this question. This deals with the appellant's second basis of attack.

44 I agree that the appeal should be dismissed for the reasons expressed by Deputy President Judge McCusker. I would add that s 35 prescribes the entitlement to weekly payments during a period of incapacity. The worker has sought weekly payments of income maintenance for an alleged period of incapacity and seeks weekly payments to be calculated in accordance with s 35. S 35(6a) is one of a number of subsections concerned with the method of assessment of weekly payments. It is a deeming provision which commences with a qualifying statement, "If a liability to make weekly payments is redeemed ...".

45 The determination of a dispute as to the calculation of weekly payments where the Corporation has applied s 35(6a) to preclude or reduce weekly payments for incapacity necessarily includes determination of whether a liability to make weekly payments has been redeemed. In the absence of such a determination the deeming provision cannot operate to influence the level of weekly payments.

46 Whether a liability to make weekly payments has been redeemed such as to influence the level of weekly payments, will be determined by considering the particular factual context to ascertain whether the worker and the Corporation have entered into a redemption agreement, in accordance with the mandatory requirements of s 42(2).

47 The worker's pleadings raise an issue within the Tribunal's jurisdiction. The learned Deputy President correctly dismissed the Corporation's strike out application.