Bishop v Qantas Airways Ltd

1. [1]

   ADAMSON JA: I agree with McHugh JA.

2. [2]

   McHUGH JA: Mr Bradley Bishop appeals from a decision of the Personal Injury Commission (Deputy President Snell) made on 21 July 2025, the effect of which was that the respondent (Qantas) was not liable to pay the cost of a “left shoulder pyrocarbon hemi-arthroplasty”, a procedure involving a surgical prosthesis, performed on Mr Bishop.

3. [3]

   The dispositive question in the appeal is the construction of cl 8(1) of the Workers Compensation (Private Hospital Maximum Rates) Order 2024 (NSW) (the Order). Clause 8 provides:

4. [4]

   Three constructions of cl 8(1) were advanced by the parties. The effect of those constructions was as follows.

   1. (1)

      Qantas contends that:

   2. (2)

      As to (1)(b) above, Mr Bishop primarily contends that cl 8 says nothing about the maximum amount for which an employer is liable in respect of “surgical prostheses” not specified in the Prostheses List.

   3. (3)

      Alternatively, Mr Bishop contends that cl 8 purports to prohibit workers from undergoing surgery to implant surgical prostheses other than those identified on the Prostheses List. If so, it is common ground that in that respect the Order would be beyond the power said to authorise its making, namely, s 62(1A) of the Workers Compensation Act 1987 (NSW) (the 1987 Act).

5. [5]

   Senior Member Haddock in substance accepted Qantas’ construction, but found in favour of Mr Bishop on the basis that the Commission had the power to direct that Qantas was liable for an amount additional to the sum fixed by the Order, relying on ss 62(6) and (6A) of the 1987 Act.

6. [6]

   Deputy President Snell allowed an appeal in favour of Qantas, both as to construction of the Order, and as to the scope of s 62(6) and (6A). The Deputy President made an order in favour of Qantas.

7. [7]

   Mr Bishop’s primary contention as to construction of the Order is correct. The appeal to this Court should be allowed with costs.

Background

1. [8]

   Almost every aspect of this case other than the construction of cl 8(1) is a matter of common ground.

2. [9]

   Mr Bishop was employed by Qantas as a baggage handler from 1992 until April 2021, when he was made redundant. During the course of his employment with Qantas, Mr Bishop suffered various injuries for which he received medical treatment.

3. [10]

   On 15 October 2020, Mr Bishop injured his left shoulder and neck while connecting a tow bar to a motor vehicle in the course of his employment with Qantas (the Injury).

4. [11]

   On 15 August 2023, Mr Bishop underwent a cervical fusion at C4/5 as a result of the Injury. On 14 November 2023, Mr Bishop underwent a left shoulder synovectomy and left bicep tenodesis performed as a result of the Injury. The synovectomy and tenodesis were performed by Dr Wade Harper, an orthopaedic surgeon. The synovectomy and tenodesis “improved movement but [Mr Bishop] had ongoing left shoulder pain.”

5. [12]

   On 6 June 2024, Dr Harper wrote to Qantas seeking written authorisation to perform further surgery on Mr Bishop in the form of a “left shoulder pyrocarbon hemi-arthroplasty” to relieve ongoing left shoulder pain, and confirmation that Qantas accepted liability to pay all fees and costs for the procedure. On 15 June 2024, in response to questions asked of him by Qantas, Dr Harper provided a letter to Qantas describing the proposed procedure as involving an implant, being a “pyrocarbon humeral head” (the Shoulder Prosthesis). The Shoulder Prosthesis had not been approved by the Therapeutic Goods Administration. However, Dr Harper explained in his letter, “There is no other implant that I would use to resolve [Mr Bishop’s] arthritis”. Dr Harper also asserted that “the pyrocarbon hemiarthroplasty is [Mr Bishop’s] best chance of restoring pain relief and long-term function.”

6. [13]

   On 17 June 2024, Qantas declined Mr Bishop’s claim for payment of all fees and costs for left shoulder pyrocarbon hemi-arthroplasty and gave reasons for that decision.

7. [14]

   In its dispute notice pursuant to s 78 of the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (the 1998 Act), Qantas said:

8. [15]

   In order to understand the context of that decision, it is necessary to consider the legislative framework.

The legislative framework

1. [16]

   Section 60(1) of the 1987 Act is the primary provision creating a statutory liability in an employer to pay the cost of medical or hospital treatment. Section 60 relevantly provides:

2. [17]

   The basic criteria of liability — as opposed to quantum — are those found in s 60(1): whether, as a result of an injury received by a worker, it is reasonably necessary that the medical or hospital treatment be given.

3. [18]

   However, even where the s 60(1) matters are established, the 1987 Act contains various limitations on the employer’s prima facie liability. For example, s 59A provides for various time limits after which compensation is no longer payable. And s 60(2C) provides that the Workers Compensation Guidelines (made pursuant to s 376(1)(c) of the 1998 Act) may limit the kinds of treatment that an employer is liable to pay the cost of, or the amount for which an employer is liable. It is important to observe that where those limitations apply, or where it is not “reasonably necessary” that the treatment be given, the employer has no liability to pay the cost of the treatment at all. In such cases, the questions relating to quantification referred to below do not arise.

4. [19]

   In this case, it is common ground that:

   1. (1)

      the left shoulder pyrocarbon hemi-arthroplasty here was “hospital treatment” (as defined in s 59 of the 1987 Act);

   2. (2)

      it was “reasonably necessary” that that “hospital treatment be given” within the meaning of s 60(1)(b); and

   3. (3)

      that was so “as a result of an injury received by a worker”.

5. [20]

   There is no suggestion that either the s 59A time limits, or anything stated in any Guidelines, operated to restrict any liability in Qantas with respect to the Shoulder Prosthesis.

6. [21]

   It follows that the effect of s 60(1) is that Qantas is liable to pay the cost of that treatment, subject to the provisions of the 1987 Act directed to quantification.

7. [22]

   Quantification of the s 60 liability is addressed in s 62, which relevantly provides:

8. [23]

   Several matters should be noted. First, s 62 is directed to “hospital treatment” (as defined in s 59), not “medical or related treatment” (as defined in s 59).

9. [24]

   Secondly, s 62(1) provides for a default measure by which to quantify the employer’s liability in respect of hospital treatment: “the cost to the hospital of the hospital treatment”. It is worth pausing to note the central role s 62(1) plays in the basic statutory scheme with respect to hospital treatment: the combination of ss 60(1) and 62(1) creates a statutory liability in the employer to pay the cost of hospital treatment, quantified as the cost to the hospital.

10. [25]

    Thirdly, the default measure of quantification in subs (1) is, however, affected by the operation — if any in a particular case — of subss (1A) and (5).

11. [26]

    Fourthly, s 62(1A) is the provision of present relevance. This confers a power on the Authority (meaning the State Insurance Regulatory Authority constituted under the State Insurance and Care Governance Act 2015 (NSW): see s 3(1) of the 1987 Act) to fix, by order published in the Gazette, maximum amounts for which an employer is liable for hospital treatments. However, the words “(if any)” make clear that the Authority is not required to fix a maximum sum in respect of every form of hospital treatment. That is a matter of some importance in the present case. The statutory scheme does not assume that the subs (1A) power to fix a maximum amount will be exercised with respect to any particular form of hospital treatment. Instead, the scheme assumes that the measure in subs (1) (“the cost to the hospital”) will apply unless the subs (1A) power is exercised.

12. [27]

    Fifthly, s 62(1A) operates to give effect to any order made in the exercise of that power. Assuming that the s 62(1A) power has been validly exercised, the application of s 62(1A) in a given case involves the following steps.

    1. (1)

       It is first necessary to identify the “particular hospital treatment” in question, that is, the treatment for which the employer is liable under s 60(1). In the present case, that was the Shoulder Prosthesis.

    2. (2)

       It is then necessary to determine whether any order published in the Gazette made in the exercise of the s 62(1A) power fixes a maximum sum “in respect of that treatment”. For this purpose the order may, but need not, specifically single out the “particular … treatment” in question. Provided that the order fixes a maximum sum “in respect of that treatment”, for example, by describing a class of treatments within which the “particular … treatment” falls, s 62(1A) will operate to limit the employer’s liability to that sum.

13. [28]

    The second of those steps turns on the construction of the s 62(1A) order. That is the central issue in the present case.

Construction of the Order

1. [29]

   The Order was purportedly made pursuant to s 62(1A) of the 1987 Act. The dispositive question is whether, as Qantas argues, the Order fixes a maximum sum of nil in respect of the Shoulder Prosthesis. The only part of the Order which is put forward as having that effect is cl 8(1), which, as noted above, provides:

2. [30]

   It is common ground that the Prostheses List to which cl 8(1) refers is the list found in the Schedule to the Private Health Insurance (Medical Devices and Human Tissue Products) Rules (No. 1) 2023 (Cth) (Commonwealth Rules). The Court was informed that that instrument runs to somewhere in the order of 1,500 printed pages. The Prostheses List is highly specific in identifying particular “surgical prostheses” by, apparently, the particular supplier and model. For each prosthesis, the Prostheses List identifies a “minimum benefit” expressed in dollars.

3. [31]

   It is also common ground that the Shoulder Prosthesis is not on the Prostheses List.

4. [32]

   On Qantas’ case, the key words in cl 8(1) are: “Surgical prostheses are to be selected from the … Prostheses List” (emphasis supplied).

5. [33]

   Qantas acknowledges that one reading of the words “are to be selected” is that they constitute a command to select prostheses only from the Prostheses List. Expressed negatively, that command would amount to a prohibition on selecting a prosthesis other than from the Prostheses List. Qantas acknowledges that the power in s 62(1A) to issue the Order would not authorise a command or prohibition of that kind.

6. [34]

   However, Qantas submits that there is an alternative reading of the words “are to be selected” which would not be beyond power and which should therefore be preferred. Qantas argues that the words “are to be” have a “mandatory force” which must be given some effect. The effect for which Qantas contends was expressed by its Senior Counsel as follows in oral argument: “if you want an amount it has to be from this list and it will be the amount specific on the list”: Tcpt 30 April 2026 at 16.12; emphasis supplied.

7. [35]

   On Qantas’ case, the words “are to be selected from” have a great deal of work to do; indeed, too much. On Qantas’ construction, those words perform two distinct functions.

   1. (1)

      First, with respect to any prostheses that are identified in the Prostheses List, the words “are to be selected from” operate to fix, as the maximum amount for which an employer is liable, the amount specified as the minimum benefit in the Commonwealth Rules.

   2. (2)

      Secondly, with respect to any prostheses that are not identified in the Prostheses List, the same words also operate to fix, as the maximum amount for which an employer is liable, an amount of nil.

8. [36]

   Neither proposition has an express textual foundation in cl 8(1) itself. There is no language expressly referring to the employer’s liability; nor capturing the notion of a maximum amount; nor of an amount of zero.

9. [37]

   As to the first proposition, it is true that the Order expressly states that it was made “pursuant to section 62(1A) of the [1987] Act”, which is a power to fix maximum amounts. It is also true that cl 3 of the Order states that it “sets the maximum fees for which an employer is liable under the [1987] Act for any treatment provided by a Private Hospital with respect to an injured worker.” In light of that contextual material, it is open to read cl 8(1) as providing that where a prosthesis is “selected from the … Prostheses List”, the maximum amount of the employer’s liability pursuant to s 60(1) of the 1987 Act with respect to that prosthesis will be the amount of the corresponding “minimum benefit” in the List. That aspect of the construction of cl 8(1) was not in contest.

10. [38]

    It is much more difficult to find a textual basis in cl 8(1) (or elsewhere in the Order) for the second proposition. The text gives no indication of the consequence if a surgical prosthesis is not “selected from the … Prostheses List”; the text is not directed to that circumstance at all. In particular, nothing in the text states that the consequence is that the amount for which the employer is liable is nil. A liability of nil amounts to no liability at all. Given that s 62(1A) is directed to the quantification, rather than the existence, of liability, it would be surprising if cl 8(1), made pursuant to s 62(1A), had the blanket effect of relieving the employer of the liability that s 60(1) had already imposed. It would be still more surprising if that were the meaning of the words, “are to be selected from”.

11. [39]

    Nevertheless, Qantas submits that some meaning must be given to the words “are to be”; that those words have a mandatory force, which must be given effect; and that the meaning is relevantly as set out above. That argument should not be accepted.

12. [40]

    First, it should be noted that the mandatory force of the words “are to be” is qualified even in Qantas’ formulation, which began with the words, “if you want an amount”. There is a significant tension between those words, which are not express in the text of cl 8(1), and the role of s 62 in the basic legislative scheme. The words “if you want an amount” imply that unless the condition (that the prosthesis “has to be from this list”) is satisfied, the employer will have no liability to pay the cost of treatment. To construe the words “are to be selected” in that way in effect makes the Order the source of an employer’s statutory liability. But neither s 62, nor any order made under s 62(1A), creates an employer’s statutory liability to pay the cost of the hospital treatment. By operation of s 60(1), the employer’s liability already exists. As noted above, s 62(1) and (1A) acknowledge that liability and are directed only to its quantification.

13. [41]

    Secondly, to the extent that Qantas insists that the words “are to be selected from” must be given a meaning conveying their natural and ordinary mandatory force, and that what is mandatory here is selection from the List (“if you want an amount it has to be from this list”: Tcpt 16.12), the proposition should not be accepted. The use of the words “are to be” in cl 8(1) is obscure. The natural and ordinary meaning of those words bears no relation to the structure of the statutory scheme or to the source of the power in s 62(1A) pursuant to which the Order was made. In particular, the notion of any form of mandatory selection is alien to s 62.

14. [42]

    The observations of Lord Neuberger (with whom Lords Sumption and Hughes agreed) in Arnold v Britton [2015] AC 1619; [2015] UKSC 36 are apposite. That was a case about the proper approach to contractual interpretation. His Lordship said at [18]:

15. [43]

    There is no need to construct drafting infelicities in the present case. Even apart from the obscurity of cl 8(1) itself, the Order is far from a model of drafting in the exercise of the s 62(1A) power. For example:

    1. (1)

       Clause 3 states: “This Order applies to the hospital treatment of a worker at a private hospital, being treatment of a type referred to in clause 5 …”. But cl 5 does not clearly refer to any particular “type” of treatment.

    2. (2)

       Clause 5(1) then states: “An employer is not liable under the Act to pay any amount for hospital treatment provided to a worker at a facility that is not a public hospital or a private hospital as defined.” But cl 3 has already told the reader that the Order applies to treatment “at a private hospital”. It is wholly unclear why cl 5(1) is referring to what occurs at facilities to which the Order does not apply.

    3. (3)

       Moreover, whether or not the statement about liability in cl 5(1) is correct is a matter of construction of the 1987 Act, and in particular s 60. The s 62(1A) power is a power to fix a maximum sum for which an employer is liable in respect of hospital treatments. It is no part of the exercise of that power to make general statements about liability; indeed, the statement here appears to be in the nature of a practical warning.

    4. (4)

       Another example is the list of definitions in cl 4. Included within the definition of “Intensive care (level 1 or level 2)” are operative provisions regulating the basis upon which invoicing for intensive care services is to take place.

16. [44]

    That being so, the Court should not be constrained by the natural and ordinary meaning of a phrase which should not have been used in the first place — at least where there is an available construction which gives the clause some sensible work to do that is compatible with the words chosen. That approach is consistent with the line of cases to which Qantas itself referred, which encourage a practical approach to construing instruments made under statute: see Gill v Donald Humberstone & Co Ltd [1963] 3 All E.R. 180; [1963] 1 WLR 929 at 934; Environment Protection Authority v Orchard Holdings (NSW) Pty Ltd (in liq) (2014) 86 NSWLR 499; [2014] NSWCA 149 at [44]–[45]; Day v Harness Racing (NSW) (2014) 88 NSWLR 594; [2014] NSWCA 423 at [79]–[81].

17. [45]

    Thirdly, there is such a construction available, particularly when one reads cl 8(1) as a whole. Qantas’ argument overlooks the closing words of cl 8(1): “Surgical prostheses are to be selected from the … Prostheses List … at the minimum benefit rate.” It is open to read the words “are to be” as mandating not the selection of prostheses from the List, but rather the applicable (ie, maximum) “rate”. The force to be given to the words “are to be” is that when a “[s]urgical prosthes[i]s” is “selected from the … Prostheses List”, the selection is “at the minimum benefit rate”.

18. [46]

    That is the construction to be given to cl 8(1). On that construction, the clause says nothing about hospital treatments which are not on the Prostheses List. That construction gives all of the clause’s language work to do; is consistent with the exercise of the power in s 62(1A); and is also consistent with the words “(if any)” in that section. That is to say, it is entirely consistent with s 62(1A) that there may be hospital treatments for which the Order does not fix a maximum amount quantifying the employer’s liability.

19. [47]

    This construction of cl 8(1) is also consistent with the Order’s very different use of language, in other clauses, to convey that a nil amount (ie, no additional amount) is payable with respect to some aspect of a hospital treatment. When the Order sets out to do so, it uses much more direct language than that found in cl 8(1). The clearest example is cl 10, which simply states: “There is no additional fee payable for a single room.” Clause 5(3) similarly says, “The theatre fees include the costs of consumable and disposable items. Only in exceptional circumstances will additional fees be paid for high-cost consumable and disposable items on provision of evidence from the hospital that the item is reasonably necessary.”

20. [48]

    In light of this construction, cl 8 is simply not directed to the Shoulder Prosthesis. The Order therefore does not fix a maximum amount for which Qantas is liable for the Shoulder Prosthesis.

21. [49]

    In the result, pursuant to ss 60(1) and 62(1), the amount for which Qantas is liable in respect of the Shoulder Prosthesis is the cost to the hospital of that treatment.

Disposition of the appeal

1. [50]

   Ground 2 in Mr Bishop’s notice of appeal is:

2. [51]

   In light of the conclusions reached above, the appeal must be allowed pursuant to that ground. The parties provided an agreed form of order to the Court addressing that result.

3. [52]

   Ground 1 is:

4. [53]

   In light of the conclusion reached above as to the proper construction of cl 8(1), this ground, which was premised on a different construction of the Order and was in effect an alternative ground of appeal, falls away.

5. [54]

   The remaining issues also fall away. These include determining what would have been the appropriate form of relief if Mr Bishop’s argument under Ground 1 (that the Order was beyond the power in s 62(1A)) had succeeded. Those matters do not arise for consideration and were not fully argued in any event.

6. [55]

   Among the issues which it is not necessary to decide are various questions of construction of the 1987 Act upon which the parties only touched in argument and which had, at most, a tangential contextual relevance to construction of the Order. One such question is whether, when s 60A(b) provides, in the case of hospital treatment at a hospital, that a worker is not liable to pay any amount in excess of the applicable maximum “calculated as fixed under section 62(1) as the cost to the hospital of the treatment”, the reference to s 62(1) should be understood as being subject to s 62(1A). Consideration of that question should await a case in which it is necessary to decide it.

Costs

1. [56]

   The general rule is that costs follow the event: Uniform Civil Procedure Rules 2002 (NSW), r 42.1. In the absence of submissions on that issue, I would propose an order that Qantas pay Mr Bishop’s costs.

2. [57]

   However, in circumstances where the argument on which Mr Bishop succeeded was not fully articulated before the hearing of the appeal, and leave was given at the hearing to revive Ground 2 (which Mr Bishop had earlier abandoned) in order for him to advance that argument, Qantas indicated at the hearing that in the event that Mr Bishop succeeded, it might wish to be heard as to costs.

3. [58]

   It is appropriate in the circumstances to give Qantas seven days in which to decide whether to make, and if so to file and serve, any submissions as to whether some other order should be made as to costs.

Conclusion and orders

1. [59]

   The appeal should be allowed, and the determination of Senior Member Haddock restored.

2. [60]

   I propose the following orders, the first three of which are based on those the parties agreed would be appropriate in the event that Mr Bishop succeeded.

   1. (1)

      Appeal allowed.

   2. (2)

      Orders of Deputy President Snell dated 21 July 2025 are set aside.

   3. (3)

      In lieu thereof, the Certificate of Determination dated 16 December 2024 is confirmed.

   4. (4)

      In the event that the respondent does not exercise the liberty referred to in Order 5 within 7 days of the date of these orders, order the respondent to pay the appellant’s costs.

   5. (5)

      Grant liberty to the respondent to file and serve within 7 days of the date of these orders any written submissions it wishes to make as to costs, such submissions not to exceed 4 pages in length.

   6. (6)

      In the event that the respondent files submissions pursuant to Order 5, direct the appellant to file and serve within 14 days of the date of these orders responsive submissions in writing not exceeding 4 pages in length.

   7. (7)

      Any question of costs arising out of Orders 5 and 6 be determined on the papers.

3. [61]

   FREE JA: I agree with McHugh JA.