PARTIES:	BEVERLEY REGAN

		v

		DISABILITY SERVICES OF 
		CENTRAL AUSTRALIA

TITLE OF COURT:	SUPREME COURT OF THE 
		NORTHERN TERRITORY

JURISDICTION:	APPELLATE JURISDICTION OF 
		THE WORK HEALTH COURT

FILE NO:	9602941 No LA6 of 1997

DELIVERED:	11 February 1998

HEARING DATES:	6 August 1997

JUDGMENT OF:	Angel J

REPRESENTATION:

Counsel:

	Appellant:	Ms S M Gearin
	Respondent:	Mr S R Southwood

Solicitors:

	Appellant:	Carolina Scicluna
	Respondent:	Morgan Buckley

Judgment category classification:	C
Judgment ID Number:	ang98002
Number of pages:	12

ang98002

IN THE SUPREME COURT
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWIN

No. LA6 of 1997 (9602941)

		BETWEEN:

		BEVERLEY REGAN
			Appellant

		AND:

		DISABILITY SERVICES OF 
		CENTRAL AUSTRALIA
			Respondent

CORAM:	Angel J

REASONS FOR JUDGMENT

(Delivered 11 February 1998)

	This is a worker’s appeal from the decision of the Work Health Court given on the 18 April 1997.  Mr Ian Gray Chief Magistrate determined that the Employer’s notice to cancel payments was valid.  He further determined that the worker’s pain was not caused by work and that she had no injury for the purposes of the Work Health Act.

	Mrs Regan was employed by the respondent in February 1990.  She developed symptoms of her disputed injury in October of 1993, these symptoms relating to her right arm and shoulder and occurred at work.  She lodged a claim form and the respondent employer admitted liability. The worker continued to work until February of 1994 when she claimed that the pain was too severe to continue working.  Compensation was therefore paid on the basis of total incapacity.  In January 1996 the respondents gave the worker notice of cancellation of payments, including weekly compensation, household assistance and treatment expenses, due to new medical evidence, that indicated that she was no longer incapacitated and that the injury had not been caused by work.  The worker, as entitled to do under s69(1) sought review of this cancellation in the Work Health Court.  It is this decision of the Learned Chief Magistrate that is under review here.

	The grounds of appeal are as follows:
1.	The learned magistrate erred in law in finding that the Worker’s 
payments of compensation had been validly cancelled when there was no evidence to support the reasons for cancellation set out in the Form 5 notice.

2.	The learned magistrate erred in law in finding that the Worker did
not suffer an injury arising out of or in the course of employment thus disentitling her to compensation from the date of the Form 5 notice when this was not a reason for cancellation set out in the Form 5 notice.

	3.	The learned magistrate erred in law in that he failed to apply the 
correct legal test as to whether the Worker’s injury arose out of or in the course of her employment.

Ground 1
	The appellant says that there was no evidence to support the learned Chief 
Magistrate’s finding that the bases for cancellation had been made out.  Each basis needs to be looked at separately.

	The first basis stated that the incapacity suffered by the appellant did not prevent her from carrying out her normal duties.  The evidence relied on here was that of Dr Awerbuch, a consultant rheumatologist, from the North Adelaide Memorial Hospital.  He acknowledged and it was accepted by both parties that the appellant suffered from a degenerative condition of mild generalised osteoarthritis and supraspinatus tendonitis.  His Worship accepted that such a condition existed prior to the cancellation notice.  However in issue was whether this condition or any other incapacitated the worker for the type of work she did, which included keyboard and general office work.  Dr Awerbuch accepted that the appellant felt pain, but did not accept that this was the result of an organic injury.   He gave evidence that the condition diagnosed would have not caused the pain she complained of, as the condition required a positioning of the arms above 90o to cause pain, and that it would be unlikely that she would be working in such a position with the frequency required.  However when confronted by the appellant as to whether there could be another cause his evidence was not so clear.  He gave general evidence on how no pain could be incapacitating unless it was the result of tissue damage, which she did not have.  

	The appellant submitted that this was insufficient evidence to satisfy the test as set out in Morrisey v Conaust (1993) 1 NTLR 1 namely that a change of circumstances be demonstrated to establish that cancellation is valid.  See also: AAT Kings Tours Pty Ltd v Hughes 4 NTLR 185 at 189.  In Schell v NT Football League (1995) 5 NTLR 1 at 6 the Court said “ We note also that s69 is not confined to situations where there has been a change of circumstances”. Thus Morrisey is no longer definitive in this area.  The difficulty in this case is that the Court dealt with the validity of the appellant’s claim from the beginning in s69 proceedings.  That section is designed to deal with changes of circumstances and matters that are procedural in nature, not substantive.   If the respondent was concerned about the validity of the original claim, it behoved it to bring an application under section 104.

	His Worship appears to have made his decision based on the evidence and report of one doctor.  This is surprising given that another doctor, Dr Saies, held and expressed views that were contradictory to the views of Dr Awerbuch.  That called for comment.

	The second basis for cancellation dealt with whether work caused, aggravated , accelerated or exacerbated the condition alleged.  This aspect of the appeal runs into the issues raised in the third ground of appeal regarding the correct legal test to decide if a condition arose in or out of the course of employment, so I will deal with this matter first.  It is only if the answer is yes that it will be necessary to consider if there was sufficient evidence to support the learned Chief Magistrate’s finding that work did not cause the injury.

	The test set up by the legislation is that it must be an injury arising out of or in the course of employment.  This term is defined in s4.  

		“4. OUT OF OR IN THE COURSE OF EMPLOYMENT

		(1)	Without limiting the generality of the meaning of the 
expression, an injury to a worker shall be taken to arise ‘out of or in the course of his employment’ if the injury occurs while he -
			(a)	on a working day that he attends at his workplace -
				(i)	is present at the workplace; ...........”.

	Also relevant here is s53 which states as follows:

		“53.COMPENSATION IN RESPECT OF INJURIES

Subject to this Part, where a worker suffers an injury within or outside the Territory and that injury results in or materially contributes to his - 
			(a)	death;
			(b)	impairment; or
			(c)	incapacity,

there is payable by his employer to the worker or the worker’s 
dependants, in accordance with this Part, such compensation as is prescribed.”

His Worship found at p56.9:

“However the Courts task is relatively simple, to ascertain, on the 
evidence whether Mrs Regan’s employment caused or materially contributed (within the meaning of s53) to an injury which has partly or fully incapacitated her. 

		There is of course in this case a temporal relationship between the 
onset of symptoms and the workers presence at work.  But that is not enough.  There must be an injury demonstrated, that injury must arise out of or in the course of employment (within the meaning of sec 4) not merely produce symptoms at the workplace, and that injury must result in or materially contribute to incapacity.

		I am satisfied that the medical conditions suffered by Mrs Regan are 
mild generalised osteoarthritis, and degenerative bilateral supraspinatus tendonitis.  In the light of Dr Awerbuch’s evidence, I am not satisfied that either condition was caused by, aggravated by, or contributed to by the worker’s employment.  .... I am not satisfied on the balance of probabilities that this worker has suffered an injury, or an aggravation of an injury, when working for the employer, such as to lead to the incapacity that she now claims to suffer as a result of pain.  Her pain, I accept has led to ongoing restrictions in her life.  However the evidence in this case fails to demonstrate that the cause of that pain can be linked to her employment, specifically it fails to demonstrate that the cause of her pain and restrictions both in late 1993 and ever since, can be persuasively attributed to her typing/keyboard activities in her place of work in the period immediately after her return to work, October 1993 or thereafter.”

	The appellant argued that the wrong test was applied and that the right test is a temporal test not a causative test.  I agree.  The legislation contemplates a temporal test.  It is sufficient under s4 that the injury occurred at work.  If the injury has occurred at work, the next question is did such an injury cause or materially contribute to incapacity.  The learned Magistrate incorrectly acted upon the assumption that causation was needed to be shown; he himself said that the temporal connection did exist.  Given this, the second basis for cancellation must also fail, as it would appear there was evidence that the injury did occur or arise in the course of employment, and no evidence to suggest that it did not.  In addition it means that ground 3 must also be allowed to the extent that the wrong test was applied.

Ground 2

	This ground is concerned with the operation and effect of s69.  In the present case a notice of cancellation was delivered to the appellant stating the following reasons for cancellation of payments.

	“1.	That your symptoms in your shoulders, arms and hands are not such 
as to incapacitate you from performing all your normal duties as a keyboard operator/secretary/office manager in your pre-injury employment.

	2.	That the symptoms you experienced in or about October 1993 and 
subsequently in your shoulders, arms and hands did not arise out of or in the course of your employment in that they were not caused by your employment, nor were they aggravated , accelerated or exacerbated by your employment.”.

	The appellant at trial raised objection to an issue in the statement of claim, which was not given as a reason in the cancellation notice. The new basis of argument was that the appellant had never been incapacitated by an injury that arose out of or in the course of employment.  This raised issues broader than cancellation of prospective compensation; it was a question that revisited the whole issue of liability. The Chief Magistrate, in his reasons for decision made a finding that the matter could proceed with the additional ground.  The appellants argued that this process subverted the legislation, and what was the point of s69 if this could be done and the procedure of s69 ignored.

	The Chief Magistrate said:

		“The employer has responded to the allegations in paragraph 7 and 
7A in the Statement of Claim in paragraph 4 of the Answer by alleging that the worker has not suffered from any incapacity at all as a result of any injury arising out of or in the course of employment.  Thus the Work Health Court has before it issues in addition to a mere appeal against cancellation of compensation.  This case is clearly distinguishable from the case of Hunt supra and the case of Wormald International Australia Pty Ltd v Barry Leslie Aherne Supreme Court Nos 28,48,65 of 1994 Reasons for judgment 21 June 1994.

		I accept those submissions.  The pleadings go beyond the narrow 
issue of cancellation and thereby dictate that the Court deal with the wider issue of incapacity.  It scarcely needs repeating that in these applications the Court should seek to deal with the fundamental issue of substance - that is whether a worker has suffered incapacity arising in or out of the course of that worker’s employment.  This in my opinion must be the correct approach unless the parties have quite explicitly confined the issues to the validity of the cancellation only as was the case in Hunt v Collins Radio Constructors.”  pp5-6.

	The appellant argued that Wormald International Australia Pty Ltd v Barry Leslie Aherne (supra) applies here.  In that case Mildren J said:

		“The employer was not entitled in those proceedings to attempt to 
justify its position on other grounds, by attempting to put in issue, for example, whether the worker suffered injury arising out of or in the course of employment.  There would otherwise be no point to s69(b) of the act which required the employer to provide reasons for its decision to cancel payments. If there are other reasons, they must be subject of another notice if they are to be relied upon.” (p11)

	Section s69 states:

		“69. CANCELLATION OR REDUCTION OF COMPENSATION

			Subject to this Subdivision, an amount of compensation under 
this Subdivision shall not be cancelled or reduced unless the worker to whom it is payable has been given - 

(a)	14 days notice of the intention to cancel or reduce the
compensation and, where the compensation is to be reduced, the amount to which it is to be reduced; and

		(b)	a statement in the prescribed form setting out the reasons for the proposed cancellation or reduction and indicating that the worker has a right to appeal against the decision to cancel or reduce the compensation.

		(2)	Subsection (1) does not apply where - 
			.......................

(d)	the Court orders the cancellation or reduction of the
		compensation.”

	I am of the view that the learned Chief Magistrate was in error.  Wormald’s  case does apply in this case; there is no reason to distinguish it.  Clearly s69 requires all reasons relied on to be set out in the notice of cancellation, so the worker is informed as to the motivation of the cancellation.   As the Court said in Schell v NT Football League (1995) 5 NTLR 1 at 7 regarding Form 5 notices: “ Its purpose is to inform the worker of the employers decision, provide reasons for it and inform the worker of the worker’s rights under the Act.”.  The legislation sets up two modes of dealing with changes to compensation.  Section 69 is there to deal with prospective reduction or cessation of payments of compensation; it is a procedural section.  Section 104 provides an alternative for more substantive applications such as the present one, allowing the whole issue of liability to be re-opened.  Section 69 recognises this by providing in subs(2)(d) that where a Court reduces or cancels liability a form 5 notice is not required.  Clearly the legislative scheme is to choose one or the other.  The respondent, given the substantive nature of its claim should have made its application under s104.  This view is supported by the decision of Schell v NT Football League (1995) 5 NTLR 1, where the Court in considering the effects of ss85 and 87 said in regard to reagitating issues of compensation (at 6):

		“In either case, the employer could have proceeded either by means 
of a substantive application to the Court pursuant to s104 (see s69(2)(d) or by cancelling or reducing payments pursuant to s69(1).”

and held, in answer 6, that an employer deemed to have accepted liability for compensation under s87 remains so liable until the employer establishes, the burden being upon it, that the Court in the exercise of its discretion should order that it is no longer deemed to be so liable.

	The only issue in proceedings to invalidate a s69 Notice is whether the grounds stated in the s69 Notice have been made out.

	The respondent sought to argue that it was a normal consequence of the pleading process that new substantive issues may arise, and relied on Horne v Sedco Forex Australia (1992) 106 FLR 373.  Whilst this may be the case in some situations, it is not so in the present context because the proceeding is confined by the relevant legislative provision; it would render the requirements of the section otiose if further reasons could keep being produced via subsequent pleading.  The respondent should have employed s104 to raise the issues it wished to raise, not seek to raise substantial issues of injury and liability via a s69 notice which makes no mention of such issues.

	The appeal is allowed on grounds 2 and 3.  It is not necessary to determine whether there was an injury for the purposes of the Work Health Act.

	The appeal is allowed with costs.  The learned Chief Magistrate’s decision validating the cancellation notice and his finding that she did not suffer an injury arising out of or in the course of employment are set aside.  I will hear counsel as to any consequential orders.