Fairfield City Council v Arduca

THE COURT: The applicant employer seeks leave under s 353 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (the WIM Act) to appeal from a decision of a Presidential member of the Workers Compensation Commission: Fairfield City Council v Arduca [2014] NSWWCCPD 31. The right to appeal under s 353 is limited to questions of law and, in this case, leave to appeal is required as the decision below was interlocutory: s 353(1), (4).

The decision of Deputy President O’Grady affirmed two interlocutory decisions of the Commission constituted by an Arbitrator. By the first of those decisions on 11 December 2013, the Arbitrator found that the respondent was entitled to weekly compensation payments for bilateral hernia injuries resulting from a work accident that occurred on 16 October 2008. Orders were then made to enable the amount of those weekly payments to be quantified. The Arbitrator’s second determination, made on 11 February 2014, confirmed the findings of the first and fixed the quantum of those weekly payments. Although the applicant seeks leave to appeal from both determinations, the subject matter of the proposed appeal was addressed and decided by the first.

On 16 October 2008, the respondent injured his back and groin whilst lifting heavy storm water grates on to the back of a truck. Subsequent investigations showed that he had suffered bilateral inguinal hernias. From that time until he resigned his employment with the applicant on 19 April 2010, the respondent worked intermittently. He returned to work on 19 January 2010, performing ‘light duties’ as proposed by an injury management plan established by the applicant. On 8 April 2010 the respondent’s general practitioner, Dr Sanki, recommended that he cease that work. The respondent did so, resigning on 19 April 2010 “due too ill health”. That resignation was effective immediately.

On 22 April 2010 the applicant wrote to the respondent noting his decision to resign “rather than elect to continue to participate in your Injury Management & Return to Work plans, directed at returning you to your employment”. That letter continued:

Section 254 of the WIM Act provides that neither “compensation nor work injury damages are recoverable by an injured worker unless notice of the injury is given to the employer as soon as possible after the injury happened”. Section 261 then provides for the making of a claim for compensation, in the case of injury, within six months after it happened. A failure to give notice or make a claim within the time provided by these sections is not a bar to the recovery of compensation if, in the case of the notice there are “special circumstances”, and in the case of the claim, s 261(4) is satisfied.

On 1 July 2011 solicitors acting for the respondent served a notice of claim on the applicant in respect of the hernia injuries. The applicant’s solicitor gave a notice disputing liability for that claim on 13 October 2011. That notice purported to be given under s 74, subs (1) of which provides that if an insurer (which relevantly includes the applicant as a self-insurer) “disputes liability in respect of a claim or any aspect of a claim” it must give notice of that dispute to the claimant. The applicant’s letter (the relevant parts of which are set out in [29] below) stated that it disputed liability to pay medical, hospital and treatment expenses as well as lump sum compensation and relied on “Sections 57, 74, 254, 255, 260, 261 and 323” of the WIM Act.

On 14 December 2012 the respondent worker (named as applicant) referred those disputes concerning his claims for weekly benefits compensation and compensation for permanent impairment to the Commission for determination, as provided by s 288 of the WIM Act.

Before the Arbitrator the applicant resisted the respondent’s claim on several bases. One was that the respondent had failed to comply with his obligations under an injury management plan, with the result that by the operation of s 57(1) he lost his entitlement to ongoing weekly payments of compensation. The Arbitrator rejected that argument. In its appeal to the Deputy President the applicant contended that it had been denied natural justice because in rejecting that argument the Arbitrator decided that it had not provided the respondent with suitable work duties, thereby addressing an issue which was not raised between the parties. The Deputy President rejected that aspect of the appeal. His decision to do so is the subject of proposed grounds of appeal 1 and 2.

The applicant also argued before the Arbitrator that the respondent had not given notice of his injury in accordance with s 254. One of the applicant’s grounds of appeal to the Deputy President was that the Arbitrator failed to consider this argument. The Deputy President accepted that the Arbitrator had overlooked this argument due to a “misconception” of the applicant’s submissions: [2014] NSWWCCPD 31 at [73]. He then proceeded to deal with the question (which also was not addressed by the Arbitrator) whether the applicant had given a notice complying with s 74 in relation to its reliance upon s 254. He noted that before the Arbitrator and on the appeal, the respondent had relied upon the absence of such a notice in answer to the applicant’s reliance upon s 254. Addressing that question, the Deputy President concluded that s 74 had not been complied with in relation to that basis for disputing liability for the hernia injuries. That decision is the subject of proposed grounds of appeal 3 and 4.

Section 57(1) provides:

It was agreed by counsel for the applicant that the relevant Chapter requirement was imposed by s 47(2) and was that the worker “comply with obligations imposed … by or under any injury management plan for the worker”. Such a plan is defined in s 42(1) as:

The Arbitrator accepted that, by its letter dated 22 April 2010, the applicant had provided adequate notice of its contention that s 57 disentitled the respondent to ongoing weekly payments. The Arbitrator correctly formulated the question which then arose as being whether the applicant had successfully discharged its onus of establishing that ‘the [respondent] failed unreasonably to comply with the [applicant’s] injury management and return to work plans’: [192].

The Arbitrator concluded this issue in favour of the respondent worker, reasoning as follows:

Before the Deputy President the applicant argued that the Arbitrator’s conclusion at [200] involved a denial of procedural fairness because the question of whether the applicant had provided “suitable duties” for the respondent was not raised as an issue before the Arbitrator. The applicant argued that it was not given the opportunity directly to address that issue and lead evidence contesting the respondent’s position that he was unable to perform the light duties required of him under his injury management plan.

The Deputy President rejected this argument, concluding at [59]:

Before this Court the applicant contended that the Deputy President’s failure to hold that it had been denied procedural fairness before the Arbitrator involved an error of law because it revealed a failure to understand the requirements of procedural fairness.

To establish that the respondent was not entitled to weekly payments of compensation after 19 April 2010 the applicant had to establish that he had failed unreasonably to comply with its injury management plan.

Notwithstanding that it bore that onus, the applicant did not lead any evidence as to what its injury management plan required of the respondent or address the alleged unreasonableness of the respondent’s actions in resigning rather than continuing to undertake the tasks that plan required. Indeed the applicant’s submissions before the Arbitrator disavowed any criticism of the respondent’s decision to retire, relying instead on the mere fact that he had elected to do so (tcpt 18/11/13, p 19):

That submission ignores the requirement that the worker’s conduct be unreasonable and was made in the face of the respondent’s evidence, and that of Dr Sanki, that he could not perform the light duties assigned to him without experiencing physical discomfort and further injury.

The respondent, by his statement of 27 November 2012, gave the following evidence:

Dr Sanki’s evidence, by his short letter dated 8 April 2010, was:

This evidence, and the respondent’s submission that he had made “genuine efforts to comply with the return to work programme” (tcpt 30/09/13, p 5) raised an issue as to whether the respondent was able to comply with his obligations under the injury management plan without aggravating his hernia condition. If he was not able to do so, it could hardly be said that his failure to comply was unreasonable. The respondent’s evidence, supported by that of Dr Sanki, was that he could not perform the ‘light duties’ which his work required without further aggravating that condition.

Counsel for the applicant accepted that the respondent’s capacity to comply with the injury management and return to work plan without injuring himself was in issue and that the Arbitrator was entitled to make the findings he made at [197] and [199] (extracted in [13] above). Those findings were that the worker was unable to perform the duties which had been assigned to him safely so as not to aggravate his existing conditions or cause further injury. The applicant maintained, however, that it had nevertheless been denied procedural fairness because there was never an issue flagged as to whether it had provided “suitable” work.

The Arbitrator may have confused matters by referring to “suitable employment”, as defined, until its repeal in 2012, by s 43A of the Workers Compensation Act 1987 (NSW), and by framing his findings in those terms. However, his conclusion that he was not satisfied that the applicant had provided the respondent with “suitable duties” was another way of stating that the duties which the respondent was required to perform under the injury management plan aggravated his existing injuries, thereby rendering the respondent’s failure to continue in that employment not unreasonable in the terms of s 57.

The rules of procedural fairness required that the applicant be given the opportunity of ascertaining the relevant issues and addressing them by evidence. That happened before the Arbitrator. The ultimate issue was whether the respondent’s failure to continue in his employment was not unreasonable. That issue turned on whether he could do so without further injury. The employer bore the burden of proof, and despite the evidence adduced by the respondent that he could not continue in his employment, the applicant led no evidence that really contradicted it. In the course of addressing that issue there was, at worst, a minor infelicity of expression in the Arbitrator’s reference to “suitable duties”. It necessarily followed from his earlier conclusions that the respondent’s refusal to continue in that work was not unreasonable. There was no denial of procedural fairness and no error on the part of the Deputy President in so concluding.

Leave to appeal on proposed grounds 1 and 2 should be refused.

As we have explained above, the Deputy President addressed whether the applicant was able to rely upon an asserted failure of the respondent to give notice of the hernia injuries in accordance with s 254 of the WIM Act. The respondent argued that this question must be answered in the negative because that ground for disputing the applicant’s liability to pay compensation for those injuries had not been the subject of a notice complying with s 74. It was accepted between the parties in this Court that if the employer did not give such a notice sufficiently promptly, the employer could not dispute the worker’s claim on the basis of non-compliance with s 254. Accordingly, whether that position correctly states the effect of s 74 does not arise.

Section 74 relevantly provides:

The applicant relied upon a letter from its solicitors to the respondent’s solicitors dated 13 October 2011. Referring to the respondent’s notice of claim dated 1 July 2011, that letter stated:

The Deputy President concluded that this letter did not satisfy s 74 in relation to the appellant’s reliance upon any failure of the respondent to give notice under s 254. He reasoned as follows:

The applicant argues that the Deputy President “appears to have overlooked the express reference to failure to give notice in accordance with the requirements of the legislation, on the first page” of the letter dated 13 October 2011 in the paragraph numbered 8. It is submitted that in doing so the Deputy President failed to engage with the substance of its argument and thus erred in law.

In our view, it cannot be concluded that the Deputy President overlooked the contents of this paragraph. The reference in the introductory words in [75] of his reasons to a ‘very broadly stated notice’ is reasonably understood as being to the whole of the notice including the very general statements on the first page. Those statements recite most, if not all, of the possible reasons for declining a claim of liability to pay workers compensation. Several of them could not have applied to the respondent’s claim. For example, there was no issue as to his not having sustained any injury. That paragraph of the Deputy President’s reasons then correctly records that the only reference to any failure to give notice of injury in accordance with s 254 (described as one of the issues “identified above”) is in the “catch all” paragraph at the top of the second page. It is then observed at [76] of the reasons that the question of “notice of injury” had not “otherwise” been specifically raised. That language also indicates that the Deputy President has made a finding having regard to the whole of the letter.

Accepting that a notice given under s 74 must be “expressed in plain language” (s 74(2B)), what the Deputy President was concerned with was whether the notice was in boilerplate form and did not specifically flag the issue or issues on which the applicant wished to rely, notwithstanding that in March 2009 it had admitted liability to pay compensation for the hernia injuries.

If, contrary to our view, the Deputy President overlooked the terms of paragraph 8 when considering the efficacy of the notice, there was no error in his ultimate conclusion that it did not comply with s 74. Although paragraph 8 referred to the respondent not having given “notice of injury”, it did not specify the injury referred to. That was significant in relation to the respondent’s claim because it referred to two injuries:

The failure of the applicant’s letter to specify the injury for which timely notice had not been given was problematic. The applicant Council was a self-insurer from 1 July 1996. It had, until April 2010, unconditionally accepted liability to pay compensation for the hernia injuries. Although the applicant’s letter of 13 October 2011 was expressed as directed to its liability as a self-insurer, in the light of its prior admission of liability for those injuries it was not obvious that it was now denying liability because notice of them had not been given “as soon as possible” and asserting that there were no “special circumstances” falling within s 254(3). As Deputy President Roche observed in Mateus v Zodune Pty Limited t/as Tempo Cleaning Services [2007] NSWWCCPD 227; 6 DDCR 488 at [45], an employer’s obligations under s 74 are not satisfied by a document that leaves “the worker to work out exactly which issues are disputed”.

There are two further matters which are relevant to whether the applicant can successfully rely upon a failure to comply with s 254(1). For that reason, they are also relevant to whether leave to appeal should be granted. The first is that the Arbitrator found the respondent had given oral notice of his injury to the applicant on 16 October 2008, which is prior to the notification on 13 February 2009 that the applicant argues was too late: first determination at [46], [184]. The second is that, even if the applicant established that there was a failure to give notice under s 254(1), that non-compliance may not be a bar to recovery of compensation, given that the applicant subsequently admitted liability and does not appear to have been prejudiced by any delay: s 254(3). These factors weigh strongly against any grant of leave to argue grounds 3 and 4.

Leave to appeal on those grounds also should be refused.

The orders of the Court are: