Workcover/Mmi (Rexco P/L) v Snell [2000] SAWCT 137

3 The Corporation contends the learned Deputy President was correct in concluding that there was a breach of mutuality but that he erred in law in concluding that mutuality had revived as at 30 April 1998 on the basis that there was no evidence to support that finding.

4 The worker was employed by a labour hire firm, Rexco Pty Ltd ("the employer"). He was assigned to work as a machine operator with a company called Plastec in January 1997 working on a moulding machine unloading plastic from the mould and occasionally performing trimming work. On 22 January 1997 he developed a condition in his right forearm which was found by the learned Deputy President to be the medical condition known as De Quervain's tenosynovitis. The learned Deputy President found that this condition arose out of the worker's employment with the employer and that it had resulted in him being partially incapacitated for work from that time.

5 During 1996 and 1997 various fraud charges were laid against the worker. On 29 October 1996 he was convicted of 45 counts of obtaining benefits by dishonest means and was given a suspended sentence of 20 months imprisonment and was ordered to pay $28000 by way of costs and reimbursement of compensation received.

6 These did not directly concern the claim for compensation before the learned Deputy President. A further prosecution taken against him was listed for hearing on 15 September 1997. Ultimately this did not proceed and the charges were dismissed but understandably this was a cause of profound stress to him, as were the severe matrimonial problems that he was experiencing. The learned Deputy President made a finding of fact that as from 8 September 1997 the worker was, as a result of his stress, totally incapacitated for work. This led him to conclude thus:-

"I agree with Mr Cole's submission (320) that as from 8 September 1997 until these effects resolved, the worker did not have mutuality sufficient to create an ongoing liability for compensation: see Hartwell v The Electricity Trust (1982) 29 SASR 365 per King CJ at 366".

7 By letter dated 30 April 1998, the worker's solicitors wrote to the employer in terms which included the following:-

"If our client's employment has not been terminated, then he instructs us that he is ready, willing and able to undertake whatever suitable duties are available to him within his medical restrictions. We advise that our client continues to be only fit for modified duties as a result of the compensable disabilities sustained to his right arm in the course of his employment with you."

8 The learned Deputy President found that mutuality revived as from the date of that letter.

9 The terms of s 36, insofar as they impact upon the issues agitated on appeal relevantly provide as follows:-

36. (1) Subject to this Act, weekly payments to a worker who has suffered a compensable disability must not be discontinued unless -

(f) the worker breaches the obligation of mutuality; or

(1a) A worker breaches the obligation of mutuality if -

(a) the Corporation has, by written notice to the worker, required the worker to submit to an examination by a recognised medical expert nominated by the Corporation and the worker fails to comply with the requirement within the time allowed in the notice or obstructs the examination; or

(b) the Corporation has, by written notice to the worker, required the worker to submit to the Corporation a certificate from a recognised medical expert certifying that the compensable disability continues, and the worker fails to comply with the requirement within the time allowed in the notice; or

(c) the worker refuses or fails to submit to proper medical treatment for the worker's condition; or

(d) the worker refuses or fails to participate in a rehabilitation program under this Act or participates in a way that frustrates the objectives of the program; or

(e) the worker fails to comply with an obligation under a rehabilitation and return to work plan under this Act; or

(i) to undertake work that the worker has been offered and is capable of performing; or

(ii) to take reasonable steps to find or obtain suitable employment,

or having obtained suitable employment, unreasonably discontinues the employment; or

(g) the worker does anything else that is, apart from this subsection, recognised as a breach of the obligation of mutuality.

(1b) However, a worker does not breach the obligation of mutuality -

(a) by reasonably refusing surgery or the administration of a drug; or

(b) where there is a difference of medical opinion about the appropriate treatment for the worker's condition, or the possibility of choice between a number of reasonable forms of treatment - by choosing one form of treatment in preference to another.

(3) Where the Corporation decides to discontinue or reduce weekly payments in pursuance of this section, the Corporation must give notice in writing to the worker containing such information as the regulations may require as to the reasons for the Corporation's decision and informing the worker of the worker's right to have the decision reviewed.

(3a) The notice must be given at least 21 days before the decision is to take effect in any of the following cases:

(a) where a decision to discontinue weekly payments is made, without the consent of the worker, on the ground that -

(iv) the worker has breached the obligation of mutuality; ...".

10 The determination by which the Corporation relied upon in bringing the issue of a breach of mutuality before the Tribunal was contained in its letter of 18 September 1997 which relevantly provided as follows:-

"This letter is to advise you that we have received medical certificates from Drs Narendranathan and Whittle, which certify that you are currently incapacitated for work due to a non-compensable condition.

This condition now prevents you from meeting the Jobsearch and weekly canvassing and applications for positions requirements of the rehabilitation and return to work plan commenced 28/08/97 and also prevents you from undertaking suitable duties provided by the employer at Detmold Packaging (resale area, applying identification stickers to Xmas wrap) and further duties now available at Barr Engineering (driving and cleaning duties).

Your pre-injury employer has made several attempts to offer these duties to you, including 02/09/97, 03/09/97, 09/09/97 at which times you did not return their phone calls or advised that you were unable to attend work due to the non-work related condition.

MMI Workers Compensation (SA) Ltd has therefore determined to cease your weekly payments of income maintenance pursuant to sections 36(1)(f), (1a)(e) and (1a)(f)(i) of the Workers Rehabilitation and Compensation Act, 1986 (as amended), on the grounds that you have breached your obligation of mutuality. ...".

11 As was noted in Griffin v WorkCover Corporation/MMI Workers Compensation (SA) Ltd (JD58/1997):-

"The concept [of mutuality] was developed through a series of decisions to enable a provision which deems a partial incapacity to be total, to be applied fairly, in circumstances where if the concept did not apply, it would impose an unreasonable obligation upon an employer to provide suitable duties to an injured worker, or would entitle a partially incapacitated worker to the benefit of the deeming provision, when it would be patently unjust for that to occur: RJ Brodie (Holdings) Pty Ltd v Pennell (1968) 1C [1968] HCA 73; 117 CLR 665: Electric Power Transmission Pty Ltd v D'Urso [1970] HCA 40; (1970) 124 CLR 338: Stavrou v General Motors Holden (1982) 49 SAIR (Part 2) 381: and Hartwell v Electricity Trust (SA) (1982) 29 SASR 365."

12 As was also observed in that case, the effect of the enactment of s 36(1)(f) is that a breach of mutuality now can be relied upon by a compensating authority to discontinue weekly payments of income maintenance for breach of mutuality if established, rather than performing the more limited role that it played during the course of its development, namely depriving a partially incapacitated worker of the deeming provision in the relevant legislation for the purposes of the computation of his or her entitlements to weekly payments.

13 It was argued in that case, and in the later case of Jones v WorkCover Corporation/Royal and Sun Alliance Workers Compensation (Interactive Personnel International Pty Ltd) (JD11/1998) that where s 36(1a)(g) speaks of a "recognised breach of mutuality" it only relates to situations where there is specific conduct on the part of the worker and does not apply where there has been a change in circumstances over which the worker has no control.

14 Although, as was observed in both of those decisions, the contrary interpretation might lead to a result which might be regarded as surprising Parliament has made its intention clear, and that is, that the expression "breach of mutuality" as it is conventionally understood, applies.

15 It is clear law, that if a worker is not ready to, is unwilling or is unable to undertake suitable employment, there is a breach of mutuality: Dowell Australia Ltd v Archdeacon [1975] HCA 29; (1975) 132 CLR 417.

16 Thus, if the facts demonstrate that by reason of a non-compensable disability the worker is unable to perform suitable duties the compensating authority is entitled to rely upon s 36(1)(f) to discontinue the worker's weekly payments of income maintenance.

17 At the time of the issue of the notice under consideration here, reg 17 of the Workers Rehabilitation and Compensation (General) Regulations provided:-

"Pursuant to sections 36(3), 39(3) and 45(7) of the Act, the following information must be included in a notice under any of those sections:

(a) a statement of the decision that has been made to discontinue, reduce, suspend or adjust weekly payments; and

(b) a reference to the provision of the Act and, if relevant, the regulations made under the Act, on which the Corporation is relying to discontinue, reduce, suspend or adjust weekly payments, and the text of that provision; and

(c) the general basis on which the Corporation has made its decision."

18 The medical certificates referred to in the determination comprised of a Certificate of Sickness dated 4 September 1997 completed by Dr Narendranathan which certified that the worker was unfit for work for a four day period as a result of a "medical condition" and a Certificate of Sickness from Dr Whittle dated 9 September 1997 which certified the worker unfit for a period from 9 September 1997 to 13 September 1997 again, in respect of a "medical condition". It is notable that the section in the later certificate detailing the date upon which it was anticipated that the worker could return to work was left blank.

19 The worker contends that in the circumstances, he had not fairly been put on notice that the Corporation was asserting that he was suffering from a psychiatric condition which was non work related and which totally incapacitated him for work in circumstances that amounted to a breach of mutuality for the purposes of the Act.

20 Clearly, the worker was in a position to know what the description "medical condition" referred to. After all, he was the one that consulted with Dr Narendranathan and Dr Whittle and he was the one that obtained the certificates from them. It has not been suggested that the worker was taken by surprise in the course of the hearing before the learned Deputy President that it was being suggested that the medical condition comprised of a psychological disability.

21 It is true that by the time the matter came for hearing before the learned Deputy President the compensating authority was relying upon stressors and asserting a more serious psychological condition than that which was the case as at the time of its determination of 18 September 1997. But, that of itself does not render the notice bad. At the time the notice was issued, the Corporation had no reason to assume that the psychological disability would continue for a long period of time. But it does not follow that it did not accrue an entitlement to effect the discontinuance pursuant to s 36 of the Act. Independently of the challenge issued by the worker by the lodgment of his notice of dispute, it was open for him to subsequently assert that mutuality had been revived and that failing an offer of suitable employment he had an entitlement to weekly payments of income maintenance. Indeed, albeit somewhat later, this is precisely what occurred.

22 It is implicit that the learned Deputy President found that the requirements of reg 17 had been met. Nothing that has been put to us, would suggest that His Honour made an error of law in reaching that conclusion.

23 As to the assertion that the learned Deputy President should have found that there was a work related aspect to the worker's stress such that it could not be relied upon as a breach of mutuality, it is sufficient for us to refer to the decision of Vanderdoes v WorkCover Corporation/VACC Insurance (WorkSafe) Seanco Pty Ltd (JD68/1998). The fact that part of the worker's stress concerned issues that arose under the Act, did not of itself mean that he has sustained a compensable disability for the purposes of the Act. Ultimately, it was a matter for the learned Deputy President to make a finding as to the cause of the worker's stress and on the evidence as presented to him, it was clearly open for him to find, as he did, that the worker's stress did not occur in compensable circumstances.

24 For these reasons, the worker's challenge to the decision of the learned Deputy President must fail.

25 We now turn to consider the Corporation's challenge.

26 Our primary concern in relation to this aspect of the appeal is whether it raises a question of law. As was noted by Brennan J (as he then was) in Waterford v The Commonwealth [1987] HCA 25; (1987) 163 CLR 54 at 77:-

"There is no error of law simply in making a wrong finding of fact."

27 However, for the reasons which we will now develop, it is our view that there is no evidence that even faintly supports a finding that the worker had ceased to be totally incapacitated as a result of non work related stress, as at 30 April 1998. Having made a finding in the absence of evidence the learned Deputy President made an error of law: Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 64 ALJR 462 at 477/8; WorkCover Corporation/MMI Workers Compensation (SA) Ltd (Griffin Press Ltd) v Gibson [2000] SAWCT 33, which we are obliged to correct.

28 The worker's counsel contended that the letter of 30 April 1998 was, of itself, evidence that the worker was sufficiently recovered from his psychological problems to be able to resume work. Next it was said that in any case, it was never put to the worker that that letter was a sham. Finally it was submitted that there was no reason to assume that the stressors that the learned Deputy President found to be the cause of the worker's psychological problems as at September 1997 would be ongoing or would be productive of long term psychiatric disabilities.

29 These submissions have to be considered in light of the evidence that was placed before the learned Deputy President, none of which suggested that as at that date the worker had recovered sufficiently from his psychological problems to be able to work.

30 For example, there was this exchange between the worker and the Corporation's counsel during the hearing before the learned Deputy President (tr205):-

"Q. And you haven't been able to come down to a satisfactory level of stress to even consider doing work or employment.

A. No, I have ups and downs. Do you know what I mean? I feel that I'm getting on top of things and then I'm overwhelmed again."

31 As for the medical evidence, a medical certificate issued by Dr Griffin on 16 April 1998 records that as at that date the worker was suffering from major depression, a pain disorder and multiple losses consequent to injury at the workplace, and that he was totally incapacitated for work at least until 16 May 1998 with no scheduled date of a return to work. A medical certificate issued by Dr Wright on 20 May 1998 records:-

"Fit to work along lines described in employment targeting. He has been separately certified unfit to work on psychiatric grounds."

32 The learned Deputy President could only have found that mutuality had been restored by the letter of 30 April 1998 if there was evidence that supported a finding that the worker had ceased to be totally incapacitated as a result of non work related stress. An analysis of the worker's evidence, the medical evidence and the notes taken by Dr Griffin on 16 April 1998 and 4 May 1998 (pp 265 and 266 of the transcript) make it clear that there had been no recovery in the worker's psychological state as at 30 April 1998 or indeed at any other time up to and including the time at which the worker gave evidence. That being so the Corporation's challenge to the learned Deputy President's finding must succeed.

33 The Corporation contends that having reached that conclusion, we ought to simply substitute a finding that mutuality has not been restored. Our difficulty in respect of that proposal is that it assumes that there continues to be a lack of mutuality. That may or may not be so. The evidence before the learned Deputy President indicates a readiness and willingness to return to work. What was lacking at the time of the hearing was an ability to return to work. If the worker's mental state has recovered sufficiently since that time for him to be able to return to work, mutuality may have been revived as may have the worker's entitlement to weekly payments.

35 We dismiss the worker's appeal. We allow the Corporation's appeal. We set aside the finding of the learned Deputy President that mutuality has been revived as at 30 April 1998 and determine in lieu thereof that as at the date of the conclusion of the hearing before the learned Deputy President mutuality had not been restored.