Issue 7: July 2016

Sabanayagam v St George Bank Ltd [2016] NSWCA 145

NB: This headnote substantially follows the headnote issued by the Court of Appeal with this decision.

WORKERS COMPENSATION – jurisdiction of the Workers Compensation Commission – whether an insurer’s decision to terminate weekly compensation payments after 130 weeks was a “work capacity decision” – whether Commission deprived of jurisdiction to determine the worker’s challenge to the decision by s 43(1) and (3) of the 1987 Act – whether insurer was authorised to make the decision – whether the decision was a “decision to dispute liability” within s 43(2)(a) of the 1987 Act or a “decision that can be the subject of a medical dispute” within s 43(2)(b)

NSW Court of Appeal

27 June 2016

Facts:

In 2006 the appellant (the worker), who was then employed by the respondent (the Bank), suffered an injury when leaving the Bank’s premises. The worker was paid weekly compensation by reason of her incapacity to work, pursuant to the 1987 Act and the 1998 Act.

On 20 March 2015, the Bank’s insurer (the Insurer) sent a notice to the worker (Notice), advising her that liability to continue paying the weekly compensation was denied. The Notice stated that the worker’s alleged injury had been resolved and that she did not continue to suffer from any injury within the meaning of s 4 of the 1987 Act. In response, the worker filed an Application to Resolve a Dispute in the Commission (Application), seeking a resumption of her payments. A Senior Arbitrator of the Commission determined that the Commission had no jurisdiction to deal with the Application by reason of s 43(3) of the 1987 Act and consequently the worker’s weekly compensation payments were not restored.

The worker appealed to the Commission constituted by the Deputy President. The Deputy President found that a “work capacity decision” under s 43(1) of the 1987 Act had been made before the Notice had been served, and therefore the Commission did not have jurisdiction. The worker appealed to the Court of Appeal pursuant to s 353(1) of the 1998 Act. Such an appeal is limited to a decision of the Deputy President in point of law.

The issues in dispute on appeal were:

(a)    whether the Deputy President erred in inferring that a work capacity decision had been made before service of the Notice;

(b)    whether the Deputy President had erred in failing to find that the Senior Arbitrator erred in holding that the Notice constituted a work capacity decision under s 43 of the 1987 Act;

(c)    whether the Notice constituted “a decision to dispute liability for weekly payments of compensation” within s 43(2)(a) of the 1987 Act (and therefore did not constitute a “work capacity decision”); and

(d)    whether the Notice constituted “a decision that can be the subject of a medical dispute under Part 7 of Chapter 7 of the [1998 Act]” within s 43(2)(b) of the 1987 Act (and therefore did not constitute a “work capacity decision”).

The respondent filed a Notice of Contention submitting that the Deputy President’s decision should be upheld on the ground that the Insurer’s decision on 20 March 2015 was a “work capacity decision” within s 43(1)(a) (being “a decision about a worker’s current work capacity”) and s 43(1)(f) (being “any other decision of an insurer that affects a worker’s entitlement to weekly payments of compensation”).

Held: The Deputy President’s determination was set aside and the matter was remitted to an Arbitrator for re-determination.  

Sackville AJA (Beazley P agreeing)

1. If the Deputy President intended to find that the Insurer made a work capacity decision prior to 20 March 2015, that finding was in error. There was simply no evidence to support a finding that the Insurer made a decision to terminate the worker’s continued entitlement to weekly compensation payments other than the decision of 20 March 2015 (made by Ms Boyd on the Insurer’s behalf). The making of findings and the drawing of inferences, in the absence of any evidence to support them, is an error of law (Australian Broadcasting Tribunal v Bond [1990] HCA 33; 170 CLR 321 at 355–356 (Mason CJ, Brennan and Deane JJ agreeing); Bruce v Cole (1998) 45 NSWLR 163 at 187–188 (Spigelman CJ, Mason P, Sheller and Powell JJA agreeing)). Thus to the extent that the Deputy President found that the Insurer had made a work capacity decision prior to 20 March 2015 (other than those made in 2013 and 2014), he erred in point of law [118]–[119].

Section 43(1)(a)

2. Division 2 of Pt 3 of the 1987 Act (ss 32A–58) does not confer a general or comprehensive power on insurers to decide whether workers are entitled to weekly compensation or to a continuation of weekly compensation after the expiry of the second entitlement period. They are not given power, for example, to decide that a worker no longer has a “total or partial incapacity” and thus no longer satisfies the requirements of s 33 of the 1987 Act. Nor are insurers given power to decide that a worker is no longer suffering from an injury arising out of or in the course of his or her employment and thus no longer satisfies s 4 of the 1987 Act. Furthermore, in exercising their statutory functions and powers, insurers must apply the criteria laid down by the legislation. Thus an assessment of whether a worker has “no current work capacity” requires the insurer to determine whether the worker has “a present inability arising from an injury such that the worker is not able to return to work, either in the worker’s pre-injury employment or in suitable employment” [142]–[143].

3. The difficulty confronting the Bank in the present case was that the only evidence of any relevant assessment made by the Insurer was the Notice. There was nothing in the Notice to indicate that the Insurer was exercising or even purporting to exercise the powers conferred on it by Div 2 of Pt 3 of the 1987 Act [144].

4. There were other indications that the Insurer was not purporting to make a decision about the worker’s current work capacity. The Insurer did not comply with the fair notice provisions of the Work Capacity Guidelines applicable to work capacity decisions. Nor did the Insurer give notice of its decision in the manner required by the Work Capacity Guidelines for a work capacity decision. Instead it gave a notice that was said to comply with s 74 of the 1998 Act. But that provision, as s 74(6) suggests, is not concerned with notification of a dispute based on a work capacity decision made by an insurer pursuant to Div 2 of Pt 3. It was also relevant that the Insurer did not exercise its power under s 44A(1) of the 1987 Act to conduct a work capacity assessment of the worker [145]–[146].

5. In purporting to make decisions about whether the worker no longer suffered an injury arising out of or in the course of her employment with the Bank within the meaning of s 4 of the 1987 Act; and whether the worker was no longer a person who was totally or partially incapacitated within the meaning of s 33 of the 1987 Act, the Insurer was not making decisions “about a worker’s current work capacity” [147].

Section 43(1)(f)

6. The expression “any other decisions of an insurer that affects a worker’s entitlement to weekly compensation” in s 43(1)(f) is a reference to any other decision affecting such an entitlement that Div 2 empowers an insurer to make. Section 43(1)(f) cannot convert a purported decision by an insurer that it has plainly no authority to make under Div 2 of Pt 3 into a decision that is subject to the privative clause or to s 43(3) [151].

7. The decision purportedly made by the Insurer on 20 March 2015 was not a work capacity decision within s 43(1) of the 1987 Act. The Bank therefore could not rely on the privative clause in s 43(1) or s 43(3) to support its contention that the Commission did not have jurisdiction to hear and determine the worker’s Application. Accordingly, the worker’s appeal to the Court was allowed [155].

Section 43(2)(a)

8. If s 43(2)(a) of the 1987 Act is construed so as to encompass any decision by an insurer that adversely affects a worker’s claim to weekly compensation payments or the worker’s entitlement to continuing weekly payments, there would be little room for s 43(1) or s 43(3) to operate. The latter provisions are intended to preclude a worker adversely affected by a “work capacity decision” from challenging that decision otherwise than by the procedures specified in s 43(1) (that is, review under s 44BB or judicial review). A broad interpretation of s 43(2)(a) that equates a decision to dispute liability with a decision to refuse a claim or to terminate an entitlement to weekly compensation would effectively negate s 43(1), at least in relation to claims by workers to weekly compensation payments. The broad interpretation was also inconsistent with the Court’s decision in Inghams Enterprises Pty Ltd v Sok [2014] NSWCA 217; 87 NSWLR 198 at [136] [160].

9. Whatever the true scope of s 43(2)(a), Sackville AJA did not think that it excludes from the definition of “work capacity decisions” a decision by an insurer in the exercise of its powers under Div 2 of Pt 3 of the 1987 Act that results in the termination or reduction of a worker’s existing entitlement to weekly compensation payments. The reference in s 43(2)(a) to a “decision to dispute liability for weekly payments of compensation” was, in his Honour’s view, a reference to a decision of a different character. A decision may be made, for example, to dispute liability to make weekly compensation payments on the ground that the claimant was never a “worker” or had never sustained an injury in the course of his or her employment [161].

10. In the absence of s 43(2)(a), a decision by an insurer to dispute liability on grounds such as his Honour had identified might be said “to affect a worker’s entitlement to weekly payments of compensation” within the meaning of s 43(1)(f). Section 43(2)(a) is intended to make it clear that a decision of this kind is not to be regarded as a work capacity decision [162].

11. This construction received support from the terms of s 74(6) of the 1998 Act (which says that an insurer is not required to give an s 74 notice of “a dispute based on a work capacity decision”). Section 74(6) contemplates that such a dispute, unlike other disputes, will be dealt with in accordance with the procedures laid down in Div 2 of Pt 3 of the 1987 Act, rather than those laid down in Pt 4 of Ch 7 of the 1998 Act [163].

12. Had his Honour held that the Insurer made a “work capacity decision” within s 43(1) of the 1987 Act, his Honour would have rejected the worker’s submission that the decision was taken out of the definition by s 43(2)(a) [164].

Section 43(2)(b)

13. Had Sackville AJA concluded that the Insurer’s decision in the present case was a “work capacity decision” within s 43(1) of the 1987 Act, he would not have accepted the worker’s submission that the decision was excluded from the definition by s 43(2)(b). A decision about a worker’s current work capacity may involve a work capacity assessment and an evaluation of medical opinions as to the worker’s ability to undertake work. But the decision is not one that can be the subject of a medical dispute under Pt 7 of Ch 7 of the 1998 Act. The resolution of a medical dispute, such as a worker’s fitness for employment, serves a different purpose than a decision made by an insurer under Div 2 of Pt 3 of the 1998 Act and is subject to a different regime [167].

Beazley P

14. As Basten JA made clear at [13], the term “jurisdiction” may refer to a number of concepts. However, the President did not share Basten JA’s misgivings about its use in this case. The question as to whether a statutory power is enlivened in a particular situation may, as Basten JA pointed out, not always be a question of law. It may, for instance, turn only on whether a precondition to the exercise of that power has, as a matter of fact, been satisfied. Whether that is “usually” the case is not to the point, and may be apt to mislead. The only relevant question is whether it is so in a particular case. If, in the present case, the Deputy President’s error cannot be characterised as being “in point of law”, then the appeal to the Court must be dismissed [3], [5].

15. However, the President did not share Basten JA’s misgivings on that point. Rather, her Honour agreed with Sackville AJA, at [119], that in finding that the Commission had no jurisdiction to hear the dispute on the basis (or the apparent basis) of an inference that a work capacity decision had been made prior to 20 March 2015, the Deputy President committed an error of law [6].

Basten JA (Beazley P agreeing)

16. The decision of 20 March 2015 was not a “work capacity decision” because, amongst other reasons, it purported to be a “decision to dispute liability for weekly payments of compensation” thus falling within s 43(2)(a), because it gave notice pursuant to s 74, and because there was a failure by the Insurer to consider the worker’s ability to return to work in suitable employment. Therefore both the Arbitrator and the Deputy President were wrong to hold that the Commission had no jurisdiction [20]–[25].

17. His Honour added that “a decision to dispute liability for weekly payments of compensation” is not a work capacity decision. The various sections work coherently if a work capacity decision is construed not to include a decision rejecting any degree of incapacity arising from an injury [24].

Inghams Enterprises Pty Ltd v Belokoski [2016] NSWWCCPD 31

Interlocutory decision; procedural fairness; drawing inferences from issues not raised at hearing; whether voluntary payments of compensation can constitute binding admissions; defective s 74 notice; application of principles discussed in Stead v State Government Insurance Commission [1986] HCA 54; 161 CLR 141

Keating P

7 June 2016

Facts

The worker worked as a process worker. He injured his neck and left shoulder while carrying a 25 kg bag of marinade. He also alleged that, as a result of the injury to his neck, he suffered a consequential condition in his right shoulder.

The worker claimed lump sum compensation and medical expenses in respect of his permanent impairment arising from the injury. The employer denied the claim.

The Senior Arbitrator found that the worker injured his neck and left shoulder and that he suffered a consequential right shoulder condition. The employer appealed the Senior Arbitrator’s determination.

The issues on appeal were whether the Senior Arbitrator erred in:

(a) finding that the voluntary payment of compensation for the neck was a binding admission that the worker suffered an injury to his neck;

(b) failing to provide procedural fairness before making a Jones v Dunkel [1959] HCA 8; 101 CLR 298 (Jones v Dunkel) inference, and

(c) failing to provide procedural fairness before criticising a s 74 notice.

As the above issues had not been the subject of evidence or submissions, it was alleged that the Senior Arbitrator denied the appellant procedural fairness by failing to indicate her intention to make such findings and afford the appellant the opportunity to address them.

The appellant also raised issue with the Senior Arbitrator’s finding on injury. However, for the reasons discussed below, it was unnecessary for the President to consider that matter.

Held: The Senior Arbitrator’s determination was revoked and remitted for re-determination by another Arbitrator.    

Voluntary payments and admissions

1. The appellant submitted that the Senior Arbitrator erred in stating that the voluntary payment of compensation for the neck was an admission by the appellant that the worker suffered an injury to his neck which “binds it in these proceedings” [88]–[89].

2. The President observed that, the fact that provisional acceptance of liability is expressly stated in the 1998 Act not to constitute an admission of liability, is a powerful reason for not elevating the acceptance of liability under s 274 to something more than it has always been, namely, an admission (Begnell v Super Start Batteries Pty Ltd [2009] NSWWCCPD 19) [100].

3. The President found, and the respondent conceded, that the Senior Arbitrator erred in elevating the admission to a binding admission. Noting that the worker had not relied on the voluntary payment of compensation as an admission in his favour, the Senior Arbitrator’s error was compounded by her reliance on the purported admission without having ventilated her intention to do so [104]–[105].

4. The President observed that where a court, or in this case the Commission, determines a matter on a basis that was not in issue or argued in the proceedings there will have been a denial of procedural fairness: Stead v State Government Insurance Commission [1986] HCA 54; 161 CLR 141. In circumstances where an Arbitrator seeks to decide a case on a basis not argued, he or she must inform the parties before doing so (Seltsam) [106].

5. The President accepted the appellant’s submission that had the issue been raised at the arbitration hearing it may have been something that would have been the subject of enquiry, discussion or evidence. The appellant was clearly denied that opportunity [109].

6. It followed that the Senior Arbitrator denied the appellant procedural fairness by making findings regarding the nature of any admission arising from the payment of voluntary compensation, without foreshadowing her intention to do so or affording the parties an opportunity to address that issue [110].

Jones v Dunkel inference

7. The Senior Arbitrator noted that the worker had been referred to a neurosurgeon who recommended treatment but that a report from that doctor was not in evidence. Relying on the principle in Jones v Dunkel the Senior Arbitrator drew a conclusion that the evidence of the neurosurgeon would not have assisted the appellant [66].

8. The parties did not address on the lack of evidence from the neurosurgeon and the Senior Arbitrator did not raise that issue with them. This was a breach of the rules of procedural fairness for an Arbitrator to determine a case on a basis not argued (Workers Compensation Nominal Insurer v Al Othmani [2012] NSWCA 45) [74].

9. The Jones v Dunkel inference was one of the reasons the Senior Arbitrator gave for the conclusions she reached. The President was satisfied that, by deciding the case on a basis that the parties had no opportunity to address, the Senior Arbitrator denied the appellant procedural fairness (Seltsam Pty Ltd v Ghaleb [2005] NSWCA 208; 3 DDCR 1 (Seltsam)) [75]–[76].

Injury and the s 74 notice

10. The appellant submitted that the Senior Arbitrator failed to explain the basis of her criticism that a s 74 notice disputing injury did not comply with the requirements set out in Mateus v Zodune Pty Limited [2007] NSWWCCPD 227 (Mateus). It was also submitted that this was not an issue on which the parties made submissions and not an issue the Senior Arbitrator drew to the parties’ attention [77]–[79].

11. The President observed that the Commission has said on numerous occasions that a s 74 notice must state in plain language in the body of the document reasons for disputing liability and the issues relevant to the decision: Mateus; Irvin v LA Logistics Pty Ltd [2010] NSWWCCPD 40. The subject s 74 notice did not come close to conforming with those requirements. It merely identified a range of issues in general and referred to multiple sections of the 1987 Act and 1998 Act without making any attempt to identify what the real issues for disputing liability were [84].

12. The President accepted the worker’s submissions that the Senior Arbitrator’s remarks regarding the s 74 notice were made following her findings on injury and therefore played no part in the decision making process. The Senior Arbitrator’s remarks were valid and warranted. It followed that the Senior Arbitrator’s observations in relation to the s 74 notice did not amount to a breach of procedural fairness [86]–[87].

The effect of the denial of procedural fairness

13. When a breach of procedural fairness occurs, the question that must be asked is a practical one, namely, whether the opportunity to make submissions could have made “no possible difference to the result” (Stead; Toll Pty Ltd v Morrissey [2008] NSWCA 197; 6 DDCR 561; Boral Besser Masonry Limited v Jabarkhill [1999] NSWCA 476; 19 NSWCCR 227) [111]–[113].

14. The parts of the Senior Arbitrator’s decision challenged under the appeal related to her findings that the worker suffered a neck injury. The Senior Arbitrator’s reasons included a careful and thorough analysis of all the evidence. However, notwithstanding the considerable evidence to support her finding in favour of the worker, the Senior Arbitrator’s analysis was founded, at least in part, on the Jones v Dunkel inference and her conclusion that the appellant was bound by an admission of injury by reason of the voluntary payments of compensation. These findings each involved an error of law. Therefore, it was not possible to conclude that the Senior Arbitrator would have reached the same conclusion on the injury issue had those issues not been taken into consideration [115]–[117].

15. Given the cumulative effect of the errors found, upon which the Senior Arbitrator’s decision depended, the President was not satisfied that the errors could not have possibly affected the result. It followed that the appeal was allowed and the Senior Arbitrator’s decision was revoked [118]–[119].

Super IP Pty Limited v Mijatovic [2016] NSWWCCPD 33

Psychological injury; employment dispute and alleged unlawful discrimination; complaint to Australian Human Rights Commission discontinued upon execution of deed of release; whether the worker recovered damages; ss 149 and 151A of the 1987 Act; meaning of monetary compensation

Keating P

28 June 2016

Facts

The worker suffered a psychological injury which she claimed was due to bullying and harassment in the course of her employment. There were three specific events which gave rise to the injury: the conduct of a supervisor towards the worker; the employer’s decision to terminate the worker’s flexible working from home arrangements, and the decision to decline the worker’s request for a pay rise and a variation to her role.

The worker lodged a complaint with the Australian Human Rights Commission alleging discrimination and victimisation. That complaint was resolved on payment of $8,700 and the execution of a Deed of Release. The deed detailed the psychological injury and the three specific events which gave rise to the injury in the Recitals. The deed also purported to exempt workers compensation benefits from the releases it secured.

The worker subsequently brought a claim for permanent impairment compensation in respect of a psychological injury relying on the same circumstances. The employer claimed that pursuant to the deed the worker had recovered damages in respect of the psychological injury subject to the claim for permanent impairment compensation. On that basis it pleaded a defence under s 151A of the 1987 Act, which prevents a person from obtaining compensation under that Act in respect of the injury when that person recovers damages in respect of the injury concerned.

The Arbitrator interpreted the deed and found that the payment of $8,700 did not constitute damages within the meaning of s 151A of the 1987 Act. Therefore, the worker was able to pursue her claim for lump sum compensation.

The employer appealed the Arbitrator’s determination.

The issue on appeal was whether the payment made pursuant to the deed constituted damages in respect of the same injury, such that the worker was precluded by the operation of s 151A of the 1987 Act from any further entitlement to compensation.

Held: The Arbitrator’s determination was revoked and an award for the respondent was substituted.    

The Arbitrator’s findings in relation to the s 151A defence

16. The Arbitrator failed to make any finding in respect of whether the damages recovered by the worker were in respect of an injury and, if so, what that injury was. In order to determine the pleaded defence under s 151A the Arbitrator was required to determine if the damages recovered pursuant to the deed were damages for the same psychological injury the subject of the application before the Arbitrator. The Arbitrator did not do that and that was an error [50].

17. It was necessary and appropriate to look to the terms of the deed to determine whether the damages recovered were in respect of an injury and if so what that injury was. However, the Arbitrator focussed on a construction of the deed rather than applying the statutory language of s 151A to determine whether the amount paid to the worker pursuant to the deed was “damages in respect of an injury” (Adams v Fletcher International Exports Pty Ltd [2008] NSWCA 238 (Adams) applied) [52].

The correct finding of fact argued for by the appellant

18. It did not matter that the deed purported to exempt from the releases the worker’s entitlement to statutory benefits. That was because the deed could not have affected the worker’s rights to compensation because s 234 of the 1998 Act provides that the workers compensation acts apply “despite any contract to the contrary”. The worker’s difficulties flowed not from the deed but from her acceptance of the $8,700 (Adams applied) (67).

19. It was not controversial that the worker was paid and accepted the sum of $8,700, in accordance with the terms of deed. Given the wide definition of damages in s 149, namely “any form of monetary compensation”, it was open to the Arbitrator to find that the payment constituted “damages” within the meaning of s 149 of the 1987 Act. That finding was correct. The fact that the deed did not refer in terms to “damages” was not determinative given the width of the definition of damages in s 149 [68].

20. The President was satisfied that the injury the subject of the present proceedings was the same injury, namely, the psychological injury caused by the worker’s perception of events in the course of her employment described in the Recitals contained in the deed and for which she accepted $8,700. This finding was supported by the fact that the discrimination complaint was supported by a psychologist’s report which was undoubtedly a reference to the same report relied upon in support of the current application. That report referred extensively to the worker’s psychological injury being caused by workplace bullying and victimisation [71]­–[74].

21. The fact that within a few weeks after sustaining the psychological injury complained of the worker lodged the workers compensation claim and the discrimination claim on the same day, each alleging a psychological injury, reinforced the President’s conclusion [75].

22. The President rejected the submission that a proper construction of the deed demonstrated that it was the contractual intention of the parties to keep the worker’s workers compensation entitlements open. That is because the meaning of the deed could not be determined by the parties’ subjective beliefs (Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; 149 CLR 337) [78].

23. It followed that as the worker recovered damages in respect of the injury the subject of the proceedings the effect of s 151A of the 1987 Act was to disentitle her to any further compensation under the Act [76].

Broadspectrum Australia Pty Ltd v Skiadas [2016] NSWWCCPD 34

Fresh evidence on appeal, s 354(6) of the 1998 Act; ability to earn in suitable employment as defined by s 32A of the 1987 Act

Keating P

30 June 2016

Facts

This appeal concerned a claim for weekly compensation under Pt 3 Div 2 of the1987 Act, amended by the Workers Compensation Legislation Amendment Act 2012. It specifically concerned whether the Arbitrator erred in finding that from 12 February 2015 the worker has “no current work capacity” as defined by s 32A of the 1987 Act.

The worker worked as a cleaner for the appellant. She was required to vacuum, dust, polish, use a buffing machine, and undertake other cleaning duties. Her work history was limited to work as a machinist, process worker, and industrial cleaner.

It was not disputed that the worker suffered an injury to her back and neck in the course of her employment with the appellant. However, the employer disputed that the worker continued to suffer an incapacity as a result of the compensable injury to her neck.

The Arbitrator entered an award for the worker for the payment of weekly compensation. The employer appealed the Arbitrator’s determination.

The issue on appeal was whether the Arbitrator erred in finding that:

(a) the worker has had and continues to have no capacity for work from 12 February 2015 onwards.

Held: The Arbitrator’s determination was confirmed.

Consideration

1. The President found that the appellant’s submissions failed to identify any error. The appellant’s submissions merely sought to re-agitate the merits of the matter before the Arbitrator and cavil with her conclusions with respect to the worker’s capacity for work (Whiteley Muir & Zwanenberg Ltd v Kerr (1966) 39 ALJR 505; Raulston v Toll Pty Ltd [2011] NSWWCCPD 25 applied) [58]–[60].

2. It was not disputed that the worker was unable to return to her pre-injury duties. While the Arbitrator accepted that it was arguable that the worker had some residual work capacity, having analysed the evidence having regard to the factors in s 32A she concluded that the worker had “no current worker capacity” beyond 12 February 2015. In reaching this conclusion the Arbitrator specifically considered the medical evidence having regard to the nature of the worker’s incapacity, the worker’s age, education, skills and work experience. The Arbitrator’s finding was available on the evidence [61]–[62].

3. The President did not accept the employer’s submission that the Arbitrator was required to inquire into and explain her acceptance of the general practitioner’s certification of the worker as having no current work capacity for any employment as at 12 February 2015. The general practitioner was required to assess the worker’s “current” capacity and that is clearly what he did. The Arbitrator was entitled to rely on that evidence [63].

4. The Arbitrator’s task was to identify whether there were any “real jobs” (Giankos v SPC Ardmona Operations Ltd [2011] VSCA 121) which, having regard to sub-s (a) of the definition of “suitable employment” under s 32A, the worker was able to do, regardless of whether those jobs were “available” (Wollongong Nursing Home Pty Ltd v Dewar [2014] NSWWCCPD 55 (Dewar)). That is what she did [67].

5. The Arbitrator’s conclusion with respect to the worker’s capacity for work was consistent with the medical evidence that given her physical restrictions, her employment history being limited to manual employment, her age, and lack of administrative skills she was “realistically unemployable”. That conclusion was reached having regard to the worker’s incapacity for physical and manual work involving heavy lifting, frequent bending, prolonged stooping or work in awkward situations or activities that might result in significant jolting or jarring to her cervical or lumbar spine. It was difficult to conceive of any work the worker could perform given those restrictions [65].

6. Medical evidence that suggested that the worker could work as a school cleaner if she could obtain permanently modified duties where she can work with an off-sider to manage the heavier task was not “real work in the labour market” (Dewar) [67].

7. Contrary to the employer’s submissions, it was open for the Arbitrator to conclude that clerical or administrative work was not “work for which the worker is currently suited”. This was because there was no evidence that the worker had the education or skills necessary to equip her to undertake such work [68].

8. It followed that the appeal failed [71].

Cleland v Carter [2016] NSWWCCPD 29

Section 60AA(1) of the 1987 Act; use of WorkCover Guidelines in construing the Workers Compensation Acts; application of Fletcher International Exports Pty Ltd v Barrow [2007] NSWCA 244; 5 DDCR 247 and Tan v National Australia Bank [2008] NSWCA 198; 6 DDCR 363; construction of s 60AA(1)(c) of the 1987 Act

Snell DP

1 June 2016

Facts:

On 14 July 2000, the worker suffered compensable injury when a railway sleeper fell on his right great toe. This set in train a series of medical consequences. A claim was made in the Commission pursuant to s 60AA of the 1987 Act in respect of gratuitous domestic assistance.

On 3 February 2016, a Commission Arbitrator made an award for the cost of gratuitous domestic assistance and care, for six hours per week, for a period of three months from 30 September 2004, at $28.99 per hour, totalling $2,087.28. This was pursuant to s 60AA(2) of the 1987 Act, which deals with assistance “provided on a temporary basis”. The award for domestic assistance was for six hours per week for three months, from when the claim commenced, on 30 September 2004. The payment then resumed, at a rate consistent with the Arbitrator’s factual findings, from when whole person impairment was assessed by the AMS in the MAC dated 9 January 2014. The worker appealed.

The grounds in dispute on appeal were that:

(a)   the Arbitrator erred in the construction she adopted of s 60AA of the 1987 Act, an otherwise beneficial provision. It was submitted that she failed to properly construe this section, instead incorrectly determining that clauses 6.1 and 6.4 of the WorkCover Guidelines for the Provision of Domestic Assistance 2004 (the Guidelines) evinced legislative intent to allow for entitlement “on a limited temporary basis until the date 15% WPI is determined”, and

(b)    when purporting to construe s 60AA, the Arbitrator incorrectly construed clauses 6.1 and 6.4 of the Guidelines so as to take precedence over s 60AA generally, particularly sub-sections (1)(c) and (d) and (2)(a) and (b). It was submitted that clauses 6.1 and 6.4 of the Guidelines had “no apparent proper statutory basis for their existence and ought not to have taken precedence.”

At issue was the entitlement to a weekly payment pursuant to s 60AA of the 1987 Act, during a period from 1 January 2005 to 8 January 2014. The entitlement during the period from 30 September 2004 to 31 December 2004 also arguably should have been higher, not necessarily being restricted to six hours per week.

Held: The Arbitrator’s determination was confirmed.

Was the construction of s 60AA(1)(c) in error

1. For compensation to be payable pursuant to s 60AA of the 1987 Act, other than on a ‘temporary basis’, it is necessary that all of the requirements of s 60AA(1) be satisfied: Hesami v Hong Australia Corporation Pty Ltd [2011] NSWWCCPD 14; 10 DDCR 142 (Hesami) at [46]. The findings of the Arbitrator relevant to sub-sections (a), (b) and (d) were not at issue in this appeal [51].

2. For compensation other than on a ‘temporary basis’, s 60AA(1)(c) requires that “the injury to the worker has resulted in a degree of permanent impairment of the worker of at least 15%”. Section 60AA does not provide for the consequences where, as in this matter, there was not evidence about permanent impairment, or agreement between the parties on the issue, until after care has been provided. In this regard, there was ambiguity in the meaning and operation of the section [52].

3. The Arbitrator’s approach to the construction issue involved construing s 60AA(1) by reference to the content of the Guidelines. Treated in this way, she concluded there was not ambiguity when s 60AA(1) was read with the Guidelines. The appellant argued that this approach was erroneous [54].

4. Section 60AA of the 1987 Act has been the subject of limited Presidential consideration. In Kajic v Hawker De Havilland Aerospace Pty Ltd [2009] NSWWCCPD 136; 8 DDCR 228 (Kajic), Keating P dealt with an argument about whether the compensation recoverable, in respect of gratuitous domestic assistance, was limited by reference to what the provider of the assistance would probably have been earning had the worker not been injured, and had the provider continued earning what she had prior to the injury [61].

5. Section 60AA(4) was “concerned with the quantum of compensation payable for gratuitous domestic assistance” (Kajic at [68]). This was set by reference to “such sum as may be applicable under s 61(2) in respect of the assistance concerned”. Section 61(2) of the 1987 Act provided for the Authority to set a maximum amount for any particular “medical or related treatment”. Clause 7.4 of the Guidelines went to such quantification. There was no issue in Kajic going to whether the requirements of s 60AA(1) were satisfied [66], [68].

6. Section 60AA was also considered by Roche DP in Hesami. Section 60AA(1)(d) provides a requirement that gratuitous domestic assistance be “provided in accordance with a care plan established by the insurer in accordance with the WorkCover Guidelines”. The worker’s solicitors, on 19 August 2008, made a claim on the insurer pursuant to s 60AA. It was ignored. On 8 December 2009 the insurer, in Commission proceedings which were discontinued, agreed to establish a care plan in accordance with the Guidelines. A plan was established by the insurer on 29 January 2010 [69].

7. Section 60AA(1)(c) provides, as one of the four requirements of s 60AA(1), that the injury to the appellant have resulted in a degree of permanent impairment of at least 15 per cent. The section is silent as regards when that provision needs to be satisfied. The section is silent as regards the consequences of establishing that level of impairment, at some point in time after the gratuitous domestic assistance has been provided. There was ambiguity in this regard [75].

8. The Deputy President was of the view that the manner in which the Arbitrator construed s 60AA(1)(c) of the 1987 Act demonstrated error. There was ambiguity in the subsection. To solve that ambiguity by reference to the Guidelines was inconsistent with the decisions of the Court of Appeal in Fletcher International Exports Pty Ltd v Barrow [2007] NSWCA 244; 5 DDCR 247 (Barrow) and Tan v National Australia Bank [2008] NSWCA 198; 6 DDCR 363 (Tan) [76].

9. The Explanatory Note to the Guidelines said that they explained the operation of the legislation, and set out ‘procedures to be followed’ relating to the provision and verification of domestic assistance services. It said the Guidelines were ‘primarily intended to assist insurers, medical practitioners, rehabilitation providers, injured workers and their carers’. As was observed in the passage from Tan at [34], they do not purport to affect the proper construction of the Act. The Deputy President noted the statement of Mason P in Barrow at [44], in relation to the Guidelines at issue there, that the “idea that the Guidelines could dictate the effect of the statute would itself be misconceived” [77].

10. Although the Deputy President did not rely on it in reaching the view that he did, he noted that the final two paragraphs of clause 6.4 of the Guidelines were not inconsistent with the proposition that payments in respect of paid domestic assistance may be recoverable, if the 15 per cent threshold is attained after such care is supplied [78].

What is the preferred construction?

11. The appellant referred to the threshold of 15 per cent in s 151H(1) of the 1987 Act, relating to the availability of an award of modified common law damages pursuant to Pt 5 of the 1987 Act. If that threshold is met, damages can then be awarded in respect of periods “both before and after the date of assessment or agreement as to WPI”. The appellant submitted that “[t]here is no good reason to consider that s 60AA was intended to operate differently.” The Deputy President did not accept that submission. It is necessary to consider the provisions in context. Section 151H(1) of the 1987 Act prevents the awarding of modified common law damages unless the relevant injury resulted in death, or permanent impairment of at least 15 per cent [83]–[84].

12. A dispute about whether a worker has 15 per cent permanent impairment is a ‘threshold dispute’ (s 314 of the 1998 Act). If there is a ‘threshold dispute’ the worker cannot serve a pre-filing statement until the degree of permanent impairment has been assessed by an AMS (s 313 of the 1998 Act). Court proceedings for the recovery of ‘work injury damages’ cannot be commenced if a pre-filing statement is not served (s 315 of the 1998 Act). There is a statutory regime in place governing the procedure for establishing the existence of the threshold of 15 per cent permanent impairment [85].

13. Once the threshold is established, there is a statutory regime in Ch 7, Pt 6 of the 1998 Act, governing the procedures to be followed. The damages which are recoverable in an action for ‘work injury damages’ are subject to the provisions in Pt 5, Div 3 of the 1987 Act [86].

14. The regime which governs ‘work injury damages’, and the associated 15 per cent permanent impairment threshold, is quite different to the operation of s 60AA. The analogy which the appellant sought to draw, between s 151H(1) and s 60AA(1)(c), was not appropriate. The statutory context of the two provisions is quite different [87].

15. Deputy President Snell agreed with the views of both Keating P (in Kajic) and Roche DP (in Hesami) that s 60AA of the 1987 Act is beneficial, and should be construed on that basis (see Kajic at [66] and Hesami at [44]).

16. The natural meaning of the words in s 60AA(1)(c) is that payments of compensation pursuant to s 60AA(1) (other than on a temporary basis) are to be restricted to workers whose injury has resulted in a degree of permanent impairment of at least 15 per cent. In some matters, for example traumatic amputation, the ultimate degree of permanent impairment may be in place almost immediately after an injury occurs. In other matters, there may be a lengthy period over which the level of permanent impairment develops and increases. There may be matters where the level of permanent impairment is modest initially, but increases substantially, for example due to events such as post-operative infections [92].

17. Two workers, with the same level of permanent impairment, both less than 15 per cent, might each receive the same level of domestic assistance. Compensation in respect of that assistance, pursuant to s 60AA(1), might then be recoverable by one worker (whose level of impairment later increased) but not by the other. This would, in the Deputy President’s view, be an unjust or capricious result which should be avoided: Tickle Industries Pty Ltd v Hann [1975] HCA 5; 130 CLR 321 at [40] per Barwick CJ [94].

18. An appropriate construction of s 60AA(1)(c) was that it is satisfied if a worker has a degree of permanent impairment of at least 15 per cent, at the time when the relevant domestic assistance is provided for the worker. This was consistent with the words of the section. It was consistent with the legislative intent to meet “the long-term care needs of the most seriously injured workers”. It was consistent with the system objective in s 3(c) to provide “payment for reasonable treatment and other related expenses”. It was, in general terms, consistent with the approach taken in Hesami [95].

The validity of clauses 6.1 and 6.4 of the Guidelines

19. Because of the view that the Deputy President took, on the effect of Barrow and Tan on the construction of s 60AA of the 1987 Act, it was unnecessary that the argument going to whether the Guidelines were validly issued be dealt with [96].

The effect of the found error

20. To recover compensation pursuant to s 60AA (other than on a temporary basis) it is necessary that a worker establish each of the four requirements in s 60AA(1). The onus is on the worker to do so (Hesami at [45]–[46]). On the construction which Deputy President Snell reached, relevant compensation is potentially recoverable, during the period at issue on this appeal (30 September 2004 to 8 January 2014), providing the appellant can establish that he had at least 15 per cent whole person impairment, for the whole or part of the period [98].

21. Where there is a dispute in a ‘work injury damages claim’, in respect of whether the 15 per cent threshold has been achieved, it is necessary that the degree of permanent impairment be assessed by an approved medical specialist (s 313 of the 1998 Act). There is no similar requirement in s 60AA(1)(c). However, a worker claiming compensation pursuant to s 60AA still requires evidence to discharge his or her onus, on the probabilities, that the 15 per cent threshold was satisfied, at the time relevant domestic care was provided [99].

22. Even if the Arbitrator had applied what the Deputy President concluded was an appropriate construction of s 60AA(1)(c) of the 1987 Act, she could not, on the evidence before her, have been satisfied that the appellant suffered at least 15 per cent permanent impairment, prior to the date of Dr Crane’s MAC. If she had applied the construction which Deputy President Snell found to be correct, it could not have affected the result. It followed that the appeal did not succeed [104], [106].

Whaley v Upper Hunter Shire Council [2016] NSWWCCPD 32

Previously unnotified matter – requirement for leave under s 289A(4) of the 1998 Act; procedural fairness

Snell DP

8 June 2016

Facts:

The worker was employed by the respondent as a full-time stores and purchasing officer. Additionally, he performed casual work for the respondent as a life-guard at a local swimming pool. He was also a retained fire fighter with an entity other than the respondent.

On 31 October 2014, the worker slipped while descending steel steps on a fuel tanker, landing heavily on his right side. The worker had a period off work and returned to light duties on 8 December 2014.

Prior to the worker’s injury, changes had been foreshadowed to make his job, as stores and purchasing officer, a permanent part-time role. Subsequent to his injury, the worker was informed that this job would become one for 20 hours per week.

The respondent disputed liability to make payments as from 6 March 2015, in a s 74 notice of the same date. It raised issues going to ‘injury’, s 9A of the 1987 Act, incapacity, causation and the reasonable necessity of medical and related treatment. A review notice dated 3 September 2015 raised similar issues.

A Commission Arbitrator found that the worker had suffered an injury and that proposed surgery to the worker’s right knee and to repair the worker’s right inguinal hernia was reasonably necessary. The Arbitrator referred to s 44D(2) in his reasons, which was not notified in the s 74 notice. The Arbitrator accepted the pre-injury average weekly earnings (PIAWE) figures submitted on by the respondent and entered a weekly award consistent with those. The worker appealed.

The grounds of appeal were:

(a)    that the Arbitrator erred in permitting the respondent to raise s 44D(2) of the 1987 Act. It was an ‘unnotified issue’, requiring leave pursuant to s 289A(4) of the 1998 Act, and no application for leave was made. There was no proper basis for it to be raised at the hearing. It was submitted that raising this ground in the circumstances involved “procedural unfairness”;

(b)    the Arbitrator’s construction of s 44D(2) of the 1987 Act was erroneous;

(c)    the Arbitrator made a factual error in finding that the worker had “voluntarily altered his ordinary hours of work”, and

(d)    the Arbitrator reversed the onus of proof, in dealing with whether the worker voluntarily altered his ordinary hours of work.

Held: The Arbitrator’s determination was revoked in part.  

Ground 1 – permitting the respondent to conduct its case on the basis of s 44D(2) of the 1987 Act

Was the Section 44D(2) Issue Properly Before the Commission?

1. The issue pursuant to s 44D(2) of the 1987 Act was not raised in the s 74 notice. The respondent submitted that there was good reason for this, the s 74 notice raised a liability issue based on the medical evidence. There was not, at that time, an issue going to the rate of weekly payments. The respondent further stated that the issue did not become apparent until the applicant served an amended wages schedule, attached to the Application to Admit Late Documents dated 19 February 2016. The factual accuracy of this sequence was not challenged by the worker. The Deputy President accepted it [44].

2. When the respondent addressed in submissions before the Arbitrator on the basis that s 44D(2) was relevant in the circumstances, the worker’s counsel, quite properly, referred to the fact that it was not raised in the s 74 notice. This “matter” was not “notified as disputed” within the meaning of s 289A(2) of the 1998 Act. Consequently, s 289A(3) of the 1998 Act precluded the Commission from hearing or otherwise dealing with it [45].

3. The effect of s 289A of the 1998 Act, as explained in Cabra-Vale Ex-Active Servicemen’s Club Ltd v Thompson [2013] NSWWCCPD 49 at [59]–[61] and University of New South Wales v Kurup [2014] NSWWCCPD 19 at [75]–[76], is that the issue pursuant to s 44D(2) was not a matter which was properly before the Commission, in the absence of leave being granted pursuant to s 289A(4) [48].

4. The difficulty was raised by the worker’s counsel before the Arbitrator, to no avail. The respondent continued addressing on the basis that s 44D(2) was an issue before the Commission. There was no application pursuant to s 289A(4). When the worker’s counsel commenced addressing, he raised the point again [49].

5. At that point, no application pursuant to s 289A(4) had been made by the respondent, and the Arbitrator had heard no submissions on the granting of leave. The respondent’s counsel indicated that he would make an application if it was necessary. The Arbitrator indicated that, if the worker’s counsel was “going to insist”, he would grant such an application. At that time there was no application for leave pursuant to s 289A(4) before the Commission, and neither party had been heard on the topic [50].

6. Mateus v Zodune Pty Ltd t/as Tempo Cleaning Services [2007] NSWWCCPD 227; 6 DDCR 488 contains well known principles, which are regularly applied in the Commission, going to the exercise of the discretion pursuant to s 289A(4). There had not been submissions directed to those principles, or to the extent to which competing considerations favoured the granting or refusal of leave. Against that background, as was observed in the respondent’s submissions, the worker did not insist [51].

7. The Commission’s power to “hear or otherwise deal” with the dispute about s 44D(2) of the 1987 Act was, in the circumstances, dependent on the existence of leave pursuant to s 289A(4). There was no such grant of leave. It flowed from the above that the possible application of s 44D(2) to the worker’s weekly entitlement was not a matter properly before the Commission at the arbitration hearing. It constituted error that the matter was heard, and the weekly entitlement decided, applying s 44D(2) of the 1987 Act. This was sufficient to deal with Ground 1 of the appeal, which succeeded [52].

8. For completeness, the Deputy President noted that he accepted that there was associated procedural unfairness. The potential application of s 44D(2) had not been an issue between the parties until at, or shortly prior to, the arbitration hearing. The worker’s statements, in those circumstances, did not specifically deal with whether there had been a voluntary alteration of his ordinary hours of work, so as to reduce his ordinary earnings, the relevant issue pursuant to s 44D(2) [53].

9. It was not as simple as leading some oral evidence from the worker on the issue (which in any event would require leave, which is discretionary: Aluminium Louvres & Ceilings Pty Limited v Xue Qin Zheng [2006] NSWCA 34; 4 DDCR 358). There was at least the possibility that other evidence could be relevant to the issue [54].

10. The Arbitrator said that he would not grant the worker an adjournment, before any adjournment application had been made or addressed on. He said that he would grant leave pursuant to s 289A(4) of the 1998 Act if an application were made, in the absence of such an application, and without hearing submissions on the issue [55].

Grounds 2, 3 and 4

11. The Deputy President concluded that the issue pursuant to s 44D(2) was not properly before the Commission, and that the Commission accordingly did not have jurisdiction to hear or deal with that dispute, consistent with s 289A(3) of the 1998 Act. It was inappropriate that he, in considering this appeal, further consider the construction of s 44D(2) and its potential application to the matter [56]–[57].

Orders disposing of the appeal

12. What remained outstanding was the issue of the worker’s weekly entitlement from 6 March 2015. It could not be concluded that “a properly conducted trial could not possibly have produced a different result”. The interests of justice, in the Deputy President’s view, favoured the remitter of the matter for redetermination, by another Arbitrator, limited to the issue of the quantum of the worker’s weekly entitlement from 6 March 2015 (Stead v State Government Insurance Commission [1986] HCA 54; 161 CLR 141 at [16] and Boral Besser Masonry Limited v Jabarkhill [1999] NSWCA 476; 19 NSWCCR 227 at [12] applied) [58], [62].