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Decisions in week ending 13 August 2010 regarding:

Mihaljcic and Linfox Australia Pty Ltd [2010] AATA 599 (13 August 2010) Melbourne

The Applicant suffered an injury described as a “temporary exacerbation of cervical disc disease and cervical root irritation” in his employment with the Respondent in December 2007. The Applicant had been incapacitated from time to time subsequently, and the Respondent had accepted liability to pay compensation until 22 September 2008. The Applicant applied for review of two reviewable decisions made by the Respondent. The Respondent contended that the decisions were not reviewable by the Tribunal and should be dismissed. It asserted that the applications should not have been instituted and relied on section37(7) of the Safety, Rehabilitation and Compensation Act 1988 (“1988 Act”).

In relation to the first application, the Respondent alleged that the Applicant failed or refused to comply with, or commence, a return to work plan which was due to commence on 22 September 2008. The Respondent prepared a further plan that was due to commence on 20 October 2008 based on a modified return to work plan prepared by the Applicant’s general practitioner. On 14 October 2008, the Respondent made two decisions, namely to (a) accept liability for weekly compensation payments for the period 29 September 2008 to 5 October 2008; and (b) deny entitlement to weekly compensation for the period 22 September 2008 to 17 October 2008. The Applicant did not commence the return to work plan on 20 October 2008. On 21 October 2008, the Respondent wrote to him directly and notified him that he had again refused or failed to undertake a rehabilitation program without reasonable excuse. It also advised that his rights to compensation and to institute or continue proceedings under the 1988 Act would be automatically suspended unless he commenced the rehabilitation program immediately or provided written reasons for his refusal or failure, as it alleged, within 14 days.

On 19 November 2008, the claims agent of the Respondent made a reviewable decision in response to the Applicant's request for reconsideration of the decision dated 14 October 2008 which affirmed the decision denying entitlement between 22 September 2008 and 17 October 2008. By its own motion, it also revoked the other decision made on 14 October 2008 to accept liability between 29September 2008 and 5 October 2008. On 1 December 2008, the Respondent issued a determination pursuant to section37(7) of the 1988 Act and decided that the Applicant had:

“...failed, without reasonable excuse, to undertake the rehabilitation programs dated 22 September and 16 October 2008. Consequently, your compensation entitlements are suspended by operation of subsection 37(7) from the date of this determination. Your rights to institute or continue proceedings under the Act are similarly suspended. No compensation can be paid to you during the period of suspension. You have a right to request Linfox to review my decision under section38 of the Act. Your rights are fully explained in the attached rehabilitation programs under section 37 of the SRC Act 1998.”

With respect to the second application, on 18 November 2008, the claims agent of the Respondent denied the Applicant’s claim for weekly compensation between 20 October 2008 and 12 December 2008, which was affirmed upon reconsideration on 17 December 2008. On 7 May 2009, the Applicant's solicitors lodged an application for review of the reviewable decision made on 17 December 2008, together with an application for an extension of time, to which the Respondent consented. On 12 June 2009, the Tribunal (differently constituted) made an Order extending the time to lodge the application pursuant to section 29(7) of the Administrative Appeals Tribunal Act 1975 (“1975 Act”).

On 21 October 2009, prior to an interlocutory hearing, the Applicant's solicitors lodged a Statement of Legal Argument. The solicitors conceded that the determination made by the Respondent on 1 December 2008 caused the Applicant's rights to compensation and to institute or continue proceedings under the 1988 Act to be suspended pursuant to section37(7) of the 1988 Act. During oral argument before the Tribunal on 10 March 2010, the Applicant's representative lodged a medical certificate as evidence of the Applicant’s incapacity from 21 December 2009 to 20 January 2010. It was contended that the certificate purporting to evidence incapacity constituted the reasonable excuse of the Applicant for failing to undertake the rehabilitation programs arranged by the Respondent.

The Respondent’s representative contended that the concession made by the Applicant in the Statement of Legal Argument amounted to an admission that both applications should not have been instituted nor should they be permitted to continue. It was also contended that the concession made by the Applicant's representative in the document of 21 October 2009 was absent any disclosure or pleading of any excuse, whether reasonable or otherwise, for the refusal or failure to participate in the rehabilitation programs.

Additionally, it was contended by the Respondent's representative that the Applicant had not personally, nor by his solicitors sought a reconsideration of the determination made by the Respondent on 1 December 2008 to suspend his rights under the 1988 Act. Therefore, a reviewable decision had not been made and the Tribunal did not have jurisdiction to review the determination. As the suspension decision, as alleged, remained operative, the Respondent argued that the Applicant was unable to proceed with the applications currently before the Tribunal and they should be dismissed.

After the hearing on 10 March 2010, the Tribunal sought further information from the Respondent's solicitors concerning the status of the Respondent and the authority of the person who made the determination of 1December 2008. Having regard to the written submissions of the Respondent's solicitors, the Tribunal was satisfied that the decision made on 1 December 2008 was lawfully made within the relevant provisions of the 1988 Act, by a person properly delegated.

The Tribunal noted that the Applicant had not made an application for reconsideration of the determination made on 1 December 2008 as required under section 62 of the 1988 Act. Consequently, a reviewable decision capable of enlivening the Tribunal's jurisdiction had not been made, having regard to section 63 of the 1988 Act. That determination, therefore, remained operative. Following this, the Tribunal noted that section 37(7) provides that if an employee refuses or fails without reasonable excuse to undertake a rehabilitation program, his rights to compensation under the 1988 Act and to institute or continue proceedings under the 1988 Act are suspended until he begins to undertake the program. The Tribunal highlighted that if a reconsideration had been sought, and subsequently affirmed by a reviewable decision, the Tribunal could, upon application, review the suspension decision and determine: a) whether there was a refusal or a failure and if there was; b) whether it was without reasonable excuse. If the Applicant received a favourable outcome upon reconsideration, he would be permitted to continue with the two applications currently before the Tribunal.

The Tribunal found that presently, the Applicant could not pursue the two substantive applications because of the operation of section 37(7) of the 1988 Act. In the absence of a reviewable decision he had denied himself the opportunity to challenge the suspension and assert that he had a reasonable excuse for any refusal or failure to undertake a rehabilitation program. It was submitted by the Respondent that the Tribunal should not have accepted the two applications. However, the Respondent did not oppose them being lodged and it consented to an extension of time to lodge the second application. In summary therefore, the Tribunal reiterated that applicants who are subject to determinations made under section37(7) of the 1988 Act are entitled to seek reconsideration. A reviewable decision must be made to enliven the jurisdiction of the Tribunal under section64 of the 1988 Act.

In terms of the substantive applications before the Tribunal, the Respondent submitted that the applications should be dismissed. However, the Respondent did not refer the Tribunal to any provision which would permit such a course. To this end, the Tribunal noted that its power to dismiss an application was set out in section42A and section 42B of the 1975 Act. The Tribunal considered it was not appropriate to dismiss the applications under sections 42A(1), (1A), (1B), (2) or (5)(b) given that the Applicant had not consented to a dismissal, nor had he indicated that he intended to discontinue or withdraw his applications. The Applicant had also appeared through his representative on all occasions when the applications were listed. He had not failed to comply with directions.

The Tribunal was satisfied that both applications presently could not proceed because the Applicant's right to continue these proceedings remained suspended by section37(7) of the 1988 Act. However, it did not follow that applications that were suspended were not reviewable. The Applicant remained entitled to seek reconsideration of the determination of 1 December 2008. Presently, both applications were suspended until the Applicant began to undertake a rehabilitation program. Alternatively, he may have argued that he had or continued to have a reasonable excuse for failing to undertake a rehabilitation program. The Tribunal noted that could only be achieved if he applied for reconsideration of the determination of 1 December 2008 and then applied for review of the reviewable decision, if it was unfavourable to him.

The Tribunal found that section 42B did not apply because the present applications before the Tribunal were not frivolous; rather, they were suspended. Furthermore, the Tribunal considered that the Applicant’s rights had not come to an end and pursing those rights would be a legitimate purpose. Significantly, the Tribunal had regard to section 42A(5)(a) of the 1975 Act which empowers the Tribunal to dismiss an application without proceeding to review if an Applicant has failed within a reasonable time to proceed with the application. In this regard, the Tribunal noted that more than 18 months had passed since the determination made under section37(7) of the 1988 Act was issued. The Applicant and, or, his solicitors had done nothing to challenge that decision. On 21 October 2009 the Applicant's solicitors conceded that the Applicant's rights to compensation and to institute and continue any proceedings were suspended. Nothing had been done subsequently to ensure that the Applicant's rights were pursued.

The Tribunal noted that the Applicant had a duty to take all reasonable steps to prosecute his applications. The Respondent was entitled to some certainty with respect to proceedings brought against it. The Tribunal was entitled to ensure that its case management objectives were satisfied. The application contemplated by section42A(5)(a) were the applications currently before the Tribunal. Despite the applications currently being suspended, the Tribunal held that the Applicant could cause them to proceed – and therefore avoid the sanction imposed – by challenging the decision made on 1 December 2008. Continuing to do nothing would not avoid the risk of the current applications being dismissed. Allowing the current applications to be suspended may have caused the Tribunal to be satisfied there had been a failure to proceed within a reasonable time, the consequence being dismissal without proceeding to review.