WorkCover Corporation/Employers Mutual Limited (Le Cavalier Hotel) v Trask [2007] SAWCT 15

"It is noted that your weekly payments have already ceased pursuant to a notice in writing to you dated 11 November 2004. This notice is intended to operate independently of that previous notice, and be a further basis upon which weekly payments will not be paid to you.

This notice will take effect 21 days from your receipt of this notice."

11 Following the issue of the notice of 14 March 2005 Ms Trask continued to be without weekly payments of income maintenance and that remained so until after the determination of this Tribunal on 22 April 2005. For reasons published on 22 April 2005 [4] the Tribunal agreed with Ms Trask's submission that weekly payments could only be discontinued in accordance with the procedures prescribed by s 36 of the Act. It found that having failed to follow those procedures WorkCover's determination was irregular and it gave her the summary relief that she sought.

12 Following that decision WorkCover made a payment of arrears of weekly payments from 11 November 2004 up to a period ending 21 days after the determination that it issued on 14 March 2005.

13 In the meantime Ms Trask instructed her solicitors to seek summary relief in relation to the determination of 14 March 2005. Amongst other things, she contended that s 36 of the Act could not be invoked unless weekly payments of income maintenance were actually being paid. She contended that as she was not in receipt of weekly payments upon receipt of the determination of 14 March 2005 that determination was voidable. She accepted, in conformity with the decision of the Full Bench of the Tribunal in Rundle v WorkCover Corporation/Vero Workers Compensation (SA) Ltd (P & O Transport Aust (SA) Pty Ltd)[5], that the Tribunal could nevertheless, by reference to s 85 of the Act,[6] not grant her summary relief. However, she submitted that in the circumstances of the case s 85 should not be invoked and that she should be entitled to the summary relief that she sought.

14 The learned Deputy President whose decision is under appeal acceded to that request.

The hearing before the learned Deputy President

15 Much of the debate before the learned Deputy President concerned the applicability of the decisions of Pitakis v SA Spastic Paralysis Welfare Association Inc[7]; Bond v WorkCover Corporation/Royal and Sun Alliance Workers Compensation (SA) Ltd (Saturno's Victoria Hotel Pty Ltd)[8] and Stevens v WorkCover Corporation/Vero Workers Compensation (SA) Ltd (G & A Taylor Pty Ltd)[9].

16 Bond (supra) is a decision of the Full Bench that concerned the relationship between s 30B and s 36(1)(e) of the Act.

17 Section 30B(2)(b) provides:-

"a disability is not compensable if it is established on the balance of probabilities that the disability is wholly or predominantly attributed to

(i) serious and wilful misconduct on the part of the worker ..."

18 However, this is qualified by s 30B(3), which provides that this exclusion "... does not apply in the case of death or serious and permanent disability".

19 Section 36(1)(e) provides that a compensating authority may discontinue weekly payments if "the worker is dismissed from employment for serious and wilful misconduct".

20 The learned Deputy President, whose decision was the subject of the appeal in Bond, found that Mr Bond had been dismissed from employment for serious and wilful misconduct. The learned Deputy President relied upon this finding in rejecting Mr Bond's claim for weekly payments of income maintenance even though Mr Bond had suffered a serious and permanent disability. He held that notwithstanding s 30B(3), WorkCover could rely upon s 36(1)(e) to defeat the worker's claim for weekly payments.

21 The Full Bench disagreed. It wrote at par 20:-

"S 36 of the Act deals with the subject of discontinuance or reduction of weekly payments. The essence of s 36 in the scheme of the Act is to specify the circumstances in which weekly payments in train to a worker in respect of an accepted compensable disability may be discontinued or reduced."

Hence it was argued, on behalf of Ms Trask, that Bond was binding authority for the proposition that s 36 can only be invoked in circumstances where weekly payments are actually being paid to the worker.

22 Stevens (supra) concerned an application for summary relief. Mr Stevens had sought and obtained compensation in October 1998 on account of an injury to his left elbow.

23 WorkCover, seemingly unaware of the fact that the worker had suffered a prior injury in respect of which he had received a lump sum payment pursuant to s 42 of the Act, accepted Mr Stevens' claim and paid him income maintenance at a rate of $416.95 per week. If it had factored the lump sum that Mr Stevens had previously received it would not have been liable to pay any weekly payments of income maintenance in respect of the later disability.

24 Having later become aware of the fact of the prior payment WorkCover, by letter dated 1 November 2002, purported to invoke s 53(7) of the Act. This provision permits a compensating authority to redetermine a claim for compensation in prescribed circumstances. In its redetermination it advised Mr Stevens that he had no entitlement to weekly payments.

25 Shortly thereafter WorkCover purported to invoke s 38 of the Act, which is a provision that enables a compensating authority to review and adjust a worker's weekly payments of income maintenance in prescribed circumstances.

26 In respect of this later determination, Mr Stevens' counsel sought summary judgment. He argued that the determination was irregular because at the time of the proposed review Mr Stevens was not in receipt of weekly payments.

27 The Tribunal granted summary relief. It concluded at par 20 that "s 38 is concerned with weekly payments that are actually being paid". It was submitted on behalf of Ms Trask that this case also supported her argument.

28 Pitakis (supra) concerned s 52 of the Workers Compensation Act 1971 being a provision similar to s 36 of the 1986 Act.

29 Ms Pitakis had sustained an injury in the course of her employment in respect of which she sought and obtained compensation pursuant to the 1971 Act_._ She was off work for a month as a result of the injury whereupon she returned to work. However six weeks later she stopped work again.

30 Her employer paid her for the first period of incapacity but not the second. Some time later it served upon her a notice pursuant to s 52(1) of the 1971 Act advising her of its intention to discontinue weekly payments.

31 Section 52(1) of the 1971 Act provided:-

"(1) Except as is expressly provided by this Act, any weekly payments payable as compensation pursuant to this Act shall not be discontinued or diminished without the consent of the worker except -

(i) a legally qualified medical practitioner has certified that the worker has wholly or partially recovered or that the incapacity is no longer a result of the injury;

(ii) the employer has given to the worker at least twenty-one days prior notice in writing of his intention to discontinue the weekly payments or diminish them by an amount stated in the notice (which notice must be accompanied by a copy of the medical certificate stating the grounds of the opinion of the medical practitioner);

(b) where the worker has failed to provide his employer with evidence in the form of a certificate from a legally qualified medical practitioner that his incapacity continues and the employer has given to the worker at least twenty-one days prior notice in writing of his intention to discontinue the weekly payments, unless the worker within that period provides his employer with such evidence;

32 Amongst other things, the Full Court of the Supreme Court dealt with the question as to whether the employer's purported reliance upon s 52(1) was "incurably bad" (supra at 311) because at the time it was issued weekly payments were not actually being made.

33 On this issue Cox J, with whom the other members of the Court agreed, wrote:-

"The word 'discontinue' means 'to cause to cease; to cease from [an action]; to break off, put a stop to, give up [soed]'. Plainly to my mind, one cannot discontinue something that has never been begun. Payments under the Workers Compensation Act fall due weekly, so I suppose it could be said, on one very literal reading, that it is never possible to 'discontinue' weekly payments. You either make the payment, or you do not. However, the meaning of s 52(1) in that respect is clear enough. Once the employer has started making weekly payments, most obviously in response to the formal s 53(1) procedure but not necessarily so, he may not stop making successive weekly payments thereafter unless so authorised by s 52 or some other provision of the Act - for instance, ss 28(1) and 58. However, I do not think that 'discontinued' in s 52 should be construed so strictly as to disentitle the employer from giving a s 52 notice if he does not happen to be making continuous weekly payments at the very time he gives the notice. In my opinion, the word is wide enough to embrace the case of an employer who has been making weekly payments and has wrongly stopped making them and later issues a s 52 notice to settle the matter. He should not have stopped making the payments unilaterally before that, and he will be liable under s 52(5), and presumably under s 53(3a) and (3c) as well, for having done so, but I would not hold that he lacked the right in such a case to serve a notice under s 52. I think it sensible to interpret the notion of discontinuance with more flexibility or liberality than that. I do not consider it inaccurate or unidiomatic, in such a context as this, to speak of 'discontinuing' periodic payments, in the sense of bringing the actuality and the legal obligation to an end, even though the continuity of payments happens already to have been suspended. I would, therefore, respectfully dissent from the Industrial Court in its rigorist interpretation of 'discontinued or diminished' in s 52, as laid down in Scazic v Reardon (1978) 45 SAIR 48, and followed in this case." (supra at 311 - 2)

34 Mr Luke, counsel for WorkCover, contended that this was highly persuasive authority and that consistent with the reasoning of the Full Supreme Court this Tribunal should hold that the actual receipt of weekly payments of income maintenance is not a condition precedent to the invocation of s 36.

The learned Deputy President's conclusion

35 The learned Deputy President resolved the conflict between these decisions at par 13 of his reasons as follows:-

"In my view the flaw in Mr Luke's submission is that Pitakis was concerned with a different statutory scheme, and one primarily focused on interim relief rather than on a final determination of rights to weekly payments. Whilst there is perhaps some remaining tension between the remarks of Cox J, and the binding authority of this Tribunal, in my view Pitakis is clearly distinguishable. In my view the reasoning of the Tribunal expressed in Bond, and Stevens, is sound and the decision of Bond is binding."

Submissions on appeal

36 The submissions made before us reflected those made before the learned Deputy President. WorkCover urged us to follow Pitakis and contended that the learned Deputy President erred in not doing so. Ms Trask contended that the learned Deputy President was correct. She urged us to adopt his reasoning and to follow Bond and Stevens.

Consideration

37 With respect, in our view, relevant authority does not cover the resolution of the issues before us.

38 The learned Deputy President was, with respect, quite right to state that Pitakis was concerned with a different statutory scheme.

39 Under s 53 of the 1971 Act upon the lodgment of a claim for compensation accompanied by a certificate from a legally qualified medical practitioner providing evidence of incapacity, a worker had an automatic entitlement to receive weekly payments unless an employer had taken certain steps. Within 14 days of the receipt of the claim the employer needed to file an application in the Industrial Court of South Australia seeking relief and it then needed to persuade the Court that a genuine dispute existed concerning its liability to pay compensation.

40 In other words an entitlement to receive weekly payments under the 1971 Act could arise on a very fragile basis. Not surprisingly, little was required to bring that entitlement to an end and to put the worker to proof. This was made clear by the decision of the Full Supreme Court in Pagliacci v General Motors-Holden Ltd.[10]

41 The approach taken by the Supreme Court in Pitakis to the meaning of the word "discontinue" in s 52 of the 1971 Act has to be looked at in that context.

42 This is in marked contrast to the scheme under the 1986 Act. Unlike the situation under the 1971 Act, the lodgement of a claim under the 1986 Act merely imposes an obligation upon the relevant compensating authority to determine the claim. Thus, weekly payments are only payable under the 1986 Act if the compensating authority has accepted that it is liable to pay the weekly payments either through its initial acceptance of the claim or its later agreement to do so, or if it has been determined either by arbitration or judicial determination that such a liability exists.

43 In other words it is much less likely for the initial receipt of weekly payments being made on a fragile footing. It might therefore be expected that some protective measures might be put in place to preserve the continued receipt of weekly payments thereafter.

44 It is notable that s 36(4) of the 1986 Act provides as follows:-

"If a worker lodges a notice of dispute disputing a decision by the Corporation to discontinue or reduce weekly payments under this section within one month after the worker receives notice of the decision -

(a) the operation of the decision is suspended, and the weekly payments must continue, or if the decision has already taken effect, be reinstated (to their previous level), until the dispute first comes before a conciliator; and

(b) the Tribunal may further suspend the operation of the decision (from time to time) to allow a reasonable opportunity for resolution of the dispute by conciliation, arbitration or judicial determination (as the case requires) without prejudice to the worker's financial position in the meanwhile."

45 The statutory schemes are so dissimilar, Pitakis is of no assistance.

46 With respect, in our view, the true ratio of Bond is as contained in par 23 of the Full Bench's reasons where they state:-

"In any event, s 30B(3) expressly preserves as compensable disabilities resulting from serious and wilful misconduct when they are serious and permanent, it would be an odd result indeed and surely contrary to the intention of Parliament if a worker's claim could none the less be defeated by the invocation of s 36(1)(e)."

47 Looked at in that light, the observations of the Full Bench at par 20 must be understood as saying that s 36 can only be relied upon in the context of a previously accepted claim for weekly payments. In other words, s 36 could not be relied upon to reject a worker's claim for weekly payments.

48 Similar reasoning underpinned the decision in Stevens (supra).

49 The effect of WorkCover's redetermination in Stevens, as made clear in Local Government Association v Delle-Donne,[11] is that it is as if the earlier determination accepting the claim had never been made.

50 Accordingly, the purported reliance upon s 38 in that case, has to be seen as having occurred in the context of a rejected claim. Consistent with what we have just said about Bond, that clearly was impermissible.

51 The issue before us has to be determined by the proper construction of the Act. When one has regard to s 36(3a) which provides "The notice must be given at least 21 days before the decision is to take effect ..." (emphasis ours) and the terms of s 36(4), it is clear to us that it was Parliament's intention that the section could only be invoked where weekly payments are being paid to the worker.

52 We accept that this construction may create some of the difficulties alluded to by Cox J in Pitakis. We can accept that there may be circumstances where the notice is issued at a point in time when the worker is not actually in receipt of a weekly payment. Sometimes, because of the way in which weekly payments are made, there may be a period of arrears.

53 We readily accept that it could not have been Parliament's intention to allow such technicalities to defeat the bona fide invocation of s 36. However, as Mr Harbord conceded, in those circumstances the Tribunal, guided as it must be by principles of equity, good conscience and the substantial merits of the case,[12] would undoubtedly decline an order for summary relief in such circumstances notwithstanding the existence of a technical irregularity.

54 In this case it would have been possible for Ms Trask to seek an order pursuant to s 36(4) from a Conciliation Officer to reinstate her weekly payments. Had she done so, for practical purposes, she would have suffered no prejudice.

55 Had there been evidence that Ms Trask had declined to seek such an order to fortify her position in relation to the application for summary relief this might have been a factor relevant to the application of s 85.

56 As it was, no evidence was led about the circumstances of Ms Trask not seeking such an order.

57 No criticism can be levelled against the learned Deputy President for not having received evidence on this topic. WorkCover elected to argue the case before him without any evidence other than the bare facts of the determination and its circumstances.

Conclusion

58 In our respectful opinion the learned Deputy President was right to conclude that WorkCover's determination was voidable because it was issued at a time when the worker was not in receipt of weekly payments. No error of law has been demonstrated in his decision to grant Ms Trask the summary relief she sought. Accordingly the appeal is dismissed.

[1] Trask v WorkCover/QBE Mercantile Mutual Worker's Compensation (Le Cavalier Hotel) [2002] SAWCT 104

[4] Trask v WorkCover/QBE Mercantile Mutual Worker's Compensation (Le Cavalier Hotel [2005] SAWCT 28

[5] [2006] SAWCT 12

[6] This section obliges the Tribunal to adopt the principles of equity, good conscience and the substantial merits of the case, excuse the irregularity and decline summary relief

[7] (1983) 33 SASR 302

[8] [2006] SAWCT 67

[9] [2005] SAWCT 68

[10] (1980) 23 SASR 126

[11] Supreme Court of South Australia S5661 unreported judgment delivered 6 June 1996