Does Section 289A Cure a Deficient Section 74 Notice? By Mary Karekos | March 2008 Area of Expertise | Workers Compensation
Summary Whilst Section 289A(4) of the 1998 Act confers a discretion to allow the Commission to deal with previously unnotified matters, case law suggests that the exercise of this discretion to allow an insurer to rely on a previously unnotified matter will not be undertaken lightly.
Who Does This Impact? Employers and Insurers
What Action Should Be Taken? Care should be taken to ensure that the dispute between the parties is carefully outlined and that all possible grounds of defence are raised in the Section 74 Notice.
The decision by Deputy President Roche on 21 November 2007 in Mateus v Zodune Pty Limited t/as Tempo Cleaning Services [2007] NSW WCCPD 227 dealt in part with the obligations imposed on an insurer by Section 74 of the 1998 Act and, the discretionary power invoked by Section 289A(4) to allow the Commission to deal with previously unnotified matters. In that matter the only dispute notified in the Section 74 notice was that employment was not a substantial contributing factor to the injury pursuant to Section 9A of the Act. The insurer had attached a copy of the factual report obtained to the Section 74 notice but had not disputed injury. By its Reply filed with the Commission, the Respondent disputed that the worker sustained injury in the course of employment. This issue was not raised in the insurer’s Section 74 notice as required by Section 74(1) which provides: (1) If an insurer disputes liability in respect of a claim or any aspect of a claim, the insurer must give notice of the dispute to the claimant.
Discretion Section 289A of the 1998 Act outlines the further restrictions as to when a dispute can be referred to the Commission. “ (1) A dispute cannot be referred for determination by the Commission unless it concerns only matters previously notified as disputed. (2) A matter is taken to have been previously notified as disputed if: a. It was notified in a Notice of Dispute under this Act or the 1987 Act after a claim was made or a claim was reviewed, or: b. It concerns matters, raised in writing between the parties before the dispute is referred to the Registrar for determination by the Commission, concerning an offer of settlement of a claim for lump sum compensation. (3) The Commission may not hear or otherwise deal with any dispute if this Section provides that the dispute cannot be referred for determination by the Commission. However the Commission may hear or otherwise deal with a matter subsequently arising out of such a dispute.
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(4) Despite subsection (3), a dispute relating to previously unnotified matters may be heard or otherwise dealt with by the Commission if the Commission is of the opinion that it is in the interest of justice to do so.” The Arbitrator was required to determine whether to exercise the discretion contained in Section 289A(4) to allow the insurer to rely on the previously unnotified issue, namely, the issue as to injury. Deputy President Roche endorsed the Arbitrator’s comments as to the matters relevant to the exercise of the discretion to allow an insurer to rely on a previously unnotified matter, namely; “ (a) the degree of difficulty or complexity to which the unnotified issues give rise; (b) when the insurer notified that it wished to contest any unnotified issue(s); (c) the degree to which the insurer has otherwise fulfilled its statutory obligation to notify the worker of its decision disputing liability; (d) any prejudice that may be occasioned to the worker; and (e) any other relevant matters arising from the particular circumstances of the case.” Deputy President Roche added further matters which could be considered when exercising the discretion, namely; “ (a) a decision by an insurer to dispute a claim for compensation should not be made lightly or without proper and careful consideration of the factual and legal issues involved; (b) any insurer seeking to dispute an unnotified matter is seeking to have a discretion exercised in its favour and accordingly, must act promptly to bring the matter to the attention of the Commission and all other parties; (c) any unreasonable or unexplained delay in giving notice of an unnotified matter will be relevant to the exercise of the discretion; (d) in exercising its discretion the Commission may have regard to the merit and substance of the issue that is thought to be raised; (e) in assessing prejudice to the worker it will be significant to consider when and in what circumstance the worker was first made aware of the unnotified issue that is sought to be raised; (f) though it will be relevant to the exercise of the discretion to keep in mind that the Commission must act according to equity, good conscience and the substantial merits of the case, those matters will not be determinative; and (g) the general conduct of the parties in the proceedings will also be relevant to the exercise of the discretion.”
Conclusion In Mateus, Deputy President Roche found that the factors in favour of exercising the discretion far outweighed those against. Whilst the insurer was in error in issuing the Section 74 Notice in the form it did, it acted with reasonable promptness to put the worker on notice of the injury issue. The worker was given every reasonable opportunity to meet the issue of injury, the determination of the case was not delayed, there was no relevant prejudice and the issue sought to be raised was one of substance, the interest of justice required that the
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injury issue be heard and determined. The views expressed by Deputy President Roche were followed by Anne Britton, Arbitrator, in Department of Commerce v Irene Mandoukas (18 December 2007) but with a very different result. In that case the Arbitrator refused to exercise the discretion to allow previously unnotified matters to be ventilated. This case involved the notification of a claim for industrial deafness in November 2006 for an injury alleged to have occurred over 30 years ago. In May 2007, the insurer declined liability on the basis that the degree of hearing loss found on assessment was insufficient to support a claim for compensation. Following the lodgment of an Application in the Commission in October 2007, previously unnotified issues were ventilated namely, whether the respondent was the last noisy employer, late notification of the claim (Section 65) and, whether the claimant was a worker for the purposes of the Act. It was noted that the worker was 74 years of age and that if the discretion was exercised, the time frame for resolving the matter would be extended. In short, time was not on the claimant’s side. The Arbitrator refused to exercise the discretion conferred by Section 289A(4) to allow the insurer to rely on the previously unnotified matter. Her reason for this decision was that despite being on notice of the worker’s claim for 11 months, the insurer made no attempt to contact the employer to confirm details of employment nor to request particulars and, that the insurer also failed to comply with a number of key statutory obligations.
Summary While Section 289A(4) of the 1998 Act confers a discretion to allow the Commission to deal with previously unnotified matters, case law suggests that the exercise of this discretion will not be undertaken lightly. Care should be taken to ensure that all grounds of defence are raised in the Section 74 notice.
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For more information, please contact:
Mary Karekos Partner T: 02 8257 5731 mary.karekos@turkslegal.com.au
Sydney | Level 29, Angel Place, 123 Pitt Street, Sydney, NSW 2000 | T: 02 8257 5700 | F: 02 9239 0922 Melbourne | Level 10 (North Tower) 459 Collins Street , Melbourne, VIC 3000 | T: 03 8600 5000 | F: 03 8600 5099 Business & Property | Commercial Disputes | Insurance & Financial Services | Workers Compensation | Workplace Relations
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