Wright v Dete [2004] SAWCT 50

4 One of the notices advised the worker of the employer's intention to discontinue weekly payments of income maintenance on the basis that it was satisfied that the worker had ceased to be incapacitated and that she had returned to work. The determination gave no period of notice and the employer conceded from the outset that the notice was invalid.

5 The second determination of that date advised the worker of the employer's intention to discontinue weekly payments on account of it being satisfied that the worker ceased to be incapacitated for work and it advised the worker of the intention that the notice would take effect 21 days after the determination was made.

6 It is agreed that weekly payments were in fact stopped on 28 September 2001.

7 The learned Deputy President's ruling in relation to this determination is the subject of the appeal that is before us.

8 The worker had argued before the learned Deputy President that the purported discontinuance of weekly payments on account of this determination was illegal because no adequate notice was given as required by s 36(3a) of the Act which was mandatory.

9 Mr Ikonomopoulos, counsel for the employer, suggested to the learned Deputy President that the fact that payments did not continue beyond 28 September 2001 came about as a result of an administrative error arising from the cessation of the worker's teaching contract on that date. He submitted, that any defect which arises from the fact that the proposed discontinuance took place earlier than it should have, should be excused or ignored, either on the grounds of the de minimus non curat lex principle or by reference to s 85 of the Act which requires the Tribunal to "act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal form".

10 The learned Deputy President seems to have accepted that submission.

11 Much of the debate on appeal, concerned whether the notice provision prescribed by s 36(3a) was mandatory or directory, and if it was mandatory, what consequences flowed from it.

12 The worker's counsel on appeal, Mr Lieschke, submitted that the notice provision was mandatory and a failure to give notice rendered the notice bad.

13 Mr Ikonomopoulos, submitted that if the notice provision was mandatory, the only consequence of that, was that the worker had an automatic entitlement to three weeks of income maintenance irrespective of the merits of her case.

14 As Perry J noted in Police v Lloyd [2004] SASC 54 at par 35, "While the characterisation of statutory provisions as imposing either mandatory or directory obligations is supported by a long line of authorities, more recent authority doubts the utility of the distinction". He then referred to the joint judgment of Hope, Glass and Samuels JA in Tasker v Fullwood (1978) I NSWLR 20, where at 23 - 4 they said:-

"From these sources we take the following propositions: (1) The problem is to be solved in the process of construing the relevant statute. Little, if any assistance, will be derived from the terms of other statutes or any supposed judicial classification of them by reference to subject matter. (2) The task of construction is to determine whether the legislature intended that a failure to comply with the stipulated requirement would invalidate the act done, or whether the validity of the act would be preserved notwithstanding non-compliance: the Franklin Stores Pty Ltd case [1977] 2 NSWLR 955 at 963 et seq. (3) The only true guide to the statutory intention is to be found in the language of the relevant provision and the scope and object of the whole statute: Hatton v Beaumont [1977] 2 NSWLR 211 at 220. (4) The intention being sought is the effect upon validity of the act in question, having regard to the nature of the precondition, its place in the legislative scheme and the extent of the failure to observe its requirement: Victoria v The Commonwealth [1975] HCA 39; (1975) 134 CLR 81 at 179, 180. (5) It can mislead if one substitutes for the question thus posed an investigation as to whether the statute is mandatory or directory in its terms. It is an invitation to error, not only because the true inquiry will thereby be sidetracked, but also because these descriptions have been used with varying significations. (6) In particular, it is wrong to say that, if a statute is couched in directory terms, the act will be invalid, unless substantial performance is demonstrated: the Franklins Store Pty Ltd case. A statute which, on its proper construction, does not nullify the act in question, even for total non-observance of the stipulation, is also described as directory in its terms: Victoria v The Commonwealth."

and noted that those observations were approved by the High Court in Project Blue Sky Inc and Ors v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355. In their joint judgment McHugh, Gummow, Kirby and Hayne JJ (ibid) at 516 - 7 said:-

"In our opinion, the Court of Appeal of New South Wales was correct in Tasker v Fullwood in criticising the continued use of the `elusive distinction between directory and mandatory requirements' and the division of directory acts into those which have substantially complied with a statutory command and those which have not. They are classifications that have outlived their usefulness because they deflect attention from the real issue which is whether an act done in breach of the legislative provision is invalid. The classification of a statutory provision as mandatory or directory records a result which has been reached on other grounds. The classification is the end of the inquiry, not the beginning. That being so, a court, determining the validity of an act done in breach of a statutory provision, may easily focus on the wrong factors if it asks itself whether compliance with the provision is mandatory or directory and, if directory, whether there has been substantial compliance with the provision. A better test for determining the issue of validity is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid. This has been the preferred approach of courts in this country in recent years, particularly in New South Wales. In determining the question of purpose, regard must be had to `the language of the relevant provision and the scope and object of the whole statute'."

15 In Mitsubishi Motors v Sosa (Supreme Court of South Australia unreported judgment S5084 delivered 8 June 1995), in rejecting an argument that had been put concerning the construction of s 35 of the Act, King CJ made the following observations:-

"The construction of s 35 advanced by the appellants carries with it the implication, in my opinion, that whenever the entitlement under s 35 ceases or diminishes, the Corporation or exempt employer is entitled automatically to discontinue weekly payments. That is plainly contrary to the policy of the Act. The legislature in prescribing procedures for the discontinuance or reduction of weekly payments, has recognised that injured workers are dependent for livelihood upon the weekly payments. Arbitrary cessation or reduction could cause great hardship. Procedures are set in place to protect injured workers against arbitrary cessation or reduction or their means of livelihood. The procedures in s 36, s37, s38, s39 and s41 are designed for that purpose. It is unthinkable that the legislature, having adopted those protective measures, would largely negate them by conferring in s 35 a power on the Corporation or exempt employer to discontinue or reduce weekly payments unilaterally and without compliance with the protective procedures." (emphasis added ours)

16 Parliament has plainly intended through s 36(3a) to soften the economic hardship that follows from the threatened discontinuance of weekly payments. It enables the worker some time to consider some alternatives, whether that be to accept the decision and seek work, to accept the decision and apply for social security or to challenge the decision and either secure a relieving order under s 36(4) or make other financial arrangements pending the resolution of the dispute. Consistent with the reasoning of King CJ it is unthinkable that Parliament, having gone to the trouble of enacting this provision, intended that compliance with the notice provision was an option that the compensating authority could, without sanction, choose to ignore.

17 This leads us to conclude that the compensating authority cannot decide to give effect to the decision without giving at least the 21 day notice period, and if it does so then its determination will be invalid.

18 However, it does not follow, from the mere fact that a payment of weekly payments of income maintenance was not received during the 21 day period immediately following the giving of the notice, that a decision was made for the notice to take effect before the 21 day period expired. For example, we are permitted to know that sometimes, the weekly payments of income maintenance are paid to the worker directly by the employer, in accordance with the usual pay schedule. This is particularly so for exempt employers. Although the Act talks about weekly payments of income maintenance we are permitted to know that frequently wages and therefore weekly payments are paid two weeks in arrears and sometimes monthly in arrears.

19 If at the time of the giving of the notice, the compensating authority clearly intends for the weekly payments to continue for at least 21 days after the notice was given, and the 21 day period expired at a time in the payment cycle when the worker was not then in receipt of weekly payments then, in accordance with that payment cycle, the payment was made shortly thereafter, it cannot in our view, be seriously suggested that for that reason, the notice was invalid.

20 Other examples spring to mind. The Corporation might inform a registered employer of the fact of the giving of the notice. The registered employer might misinterpret the advice given by the Corporation. It might erroneously take the view that it is no longer obliged to pay weekly payments even though it was always the Corporation's intention for the worker to continue to receive weekly payments during the period of the notice.

21 If the registered employer stopped the payment, the worker complained, and the Corporation immediately took steps to correct the registered employer's error, again, we fail to see how it could be seriously suggested that a notice given in such circumstances, could for that fact alone, be rendered invalid.

22 In our view, the critical issue, is whether, at the time of the making of the determination, the compensating authority intended to give the worker at least 21 days' notice before the decision was to take effect.

23 Absent plausible evidence to explain otherwise, the fact that payments have stopped less than 21 days after the determination is made would, in our view, be prima facie evidence that it was not the intention of the compensating authority to give the mandatory notice required by s 36(3a) and that would necessarily lead to a conclusion that the determination should be struck out as invalid.

24 In this case, the learned Deputy President seems to have treated the preliminary point before him, as in effect, an application for summary relief.

25 No evidence was placed before the learned Deputy President that would enable him to make a determination of the threshold issue that we have identified. The statement by him that the fact of the stoppage of payments came about as a result of an administrative error was not based on any evidence. It was based upon an observation made from the bar table.

26 In our respectful opinion, the worker is entitled to pursue this application.

27 In our view, the appeal should be allowed and the matter remitted back to the learned Deputy President for him to determine whether at the time of the making of the determination, the compensating authority intended that the decision would not take effect for at least 21 days.

28 It will be a matter for the parties to determine in light of these reasons, what if any, evidence, they wish to place before the learned Deputy President to enable him to determine that issue.