- The parties to a pure recovery action under s 151Z(1)(d) of the Workers Compensation Act 1987 have no right to compel the worker to attend an independent medical examination.
The NSW Court of Appeal handed down its decision in Kurnell Passenger & Transport Services Pty Ltd v Randwick City Council on 20 March 2009.
On 7 July 1995, a worker was injured whilst on his way to work for Randwick City Council. His employer subsequently sought to recover its workers compensation payments from Kurnell Passenger & Transport Service Pty Ltd ("Kurnell"), which owned the bus which struck the worker.
An issue arose during the course of the s 151Z(1)(d) recovery proceedings as to whether Kurnell could compel the worker to attend an independent medical examination.
Kurnell argued that Randwick Council, as the worker's employer, had the power to arrange a medical examination under 119 of the Workplace Injury Management and Workers Compensation Act 1998.
Accordingly, Kurnell sought a stay of the proceedings until the Council had exercised its statutory power.
At first instance, Simpson J dismissed the application. Kurnell successfully sought leave to appeal to the Court of Appeal.
Court Of Appeal
The majority of the Court of Appeal agreed with Simpson J that a defendant to s 151Z(1)(d) proceedings could not obtain a stay pending the employer arranging for the worker to be medically examined.
The Court of Appeal's primary reason for dismissing the appeal was that s 119 of the Workplace Injury Management and Workers Compensation Act 1998 only permits an employer to require a worker to submit to a medical examination in claims for compensation. Given that s 151Z(1)(d) proceedings are a claim for "indemnity", not "compensation", s 119 had no operation. Specifically, Basten JA, with whom Giles JA agreed, reasoned at paragraphs 101 to 103:
"102 Section 119 comes within Ch 4 of the 1998 Act, under the heading "Workers compensation". That Chapter deals generally with claims and proceedings for compensation; it does not deal with what are now described as "work injury damages": cf Ch 7, Pt 6. Read in context, and in their own terms, the various provisions within s 119 expressly relate to claims for compensation.
"103 The difficulty for Kurnell Transport is to explain how such procedures are engaged in the present matter. As noted above, questions of entitlement to compensation are not raised in these proceedings. Rather, the reason why Kurnell Transport wishes to have the worker medically examined is for the purposes of establishing the limit of its indemnity, namely the damages which would have been payable by it in the event of proceedings brought by the worker against it. The attempt by Kurnell Transport to call in aid a provision designed for an entirely different purpose is the misconception underlying the application. The proposed purpose was, as the primary judge correctly identified, "extraneous" to the statutory purpose of s 119."
Once it was determined that the power to compel a medical examination was not available to the employer under s 119, it was held that there was no basis upon which Kurnell could seek a stay of proceedings. Specifically, Basten JA reasoned, as follows in paragraph 116:
"116 For the reasons noted above, s 119 did not permit either party to require an injured worker to undergo a medical examination for the purposes of assessing damages as the limit of Kurnell Transport's liability in indemnification proceedings under s 151Z(1)(d) of the 1987 Act. If the employer had no power to require such an examination, it followed that a stay was not an appropriate remedy at the instigation of the putative tortfeasor, as a mechanism for compelling the employer to require the worker to undergo such an examination. In this Court, Kurnell Transport abandoned any contention that a stay should otherwise have been ordered."
In dismissing the appeal, Basten JA – with whom Giles JA again agreed – rejected an argument that the trial judge's construction of the power in s 119 was unbalanced because both parties were denied the opportunity to compel the worker to attend a medical examination, insofar as the s 151Z(1)(d) recovery proceedings were concerned.
The decision in Kurnell Passenger & Transport confirms that there is currently no process by which a defendant to a s 151Z(1)(d) recovery action can compel a worker to attend a medical examination.
Indeed, the decision goes even further by deciding that even the employer / workers compensation insurer has no power under s 119 of the Workplace Injury Management and Workers Compensation Act 1998 to compel such an examination. As such, even if the workers compensation insurer and (for example) a CTP insurer agree that an examination should take place, there is no means by which the worker may be compelled to undergo the examination.
The result is that the notional assessment of hypothetical CTP damages in s 151Z(1)(d) recovery actions may continue to be assessed on inadequate – and sometimes outdated – medical opinions.
However, the dissenting Judgment by McColl JA should be noted.
In summary, McColl JA proposed that the appeal be allowed, and the stay of proceedings granted, for the following reasons:
- A construction of s 119(2) which means the employer cannot use the provision to have a worker to whom it is paying workers compensation medically examined for the purpose of establishing the quantum of the fund against which it can exercise its s 151Z(1)(d) statutory indemnity would be capricious and unjust.
- The language of s 119(2) is not so intractable as to exclude its use in s 151Z(1)(d) recovery proceedings.
- It appeared to be an oversight that the legislation did not give a defendant to a s 151Z(1)(d) recovery action the right to have the worker medically examined. However, the defendant could seek a stay of the proceedings until the plaintiff employer had exercised its powers under s 119(2) to arrange such an examination.
It will be interesting to see whether the opinion expressed by McColl JA in her Honour's dissenting Judgment motivates Kurnell to seek Special Leave to Appeal to the High Court.
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