Secretary, Department of Communities and Justice v Topic

By summons filed on 25 June 2020, the Department of Communities and Justice, the plaintiff (the employer), seeks relief pursuant to s 69 of the Supreme Court Act 1970 (NSW) in respect of decisions of the second defendant, the Registrar of the Workers Compensation Commission of New South Wales (the Registrar).

On 1 April 2020 the Registrar, by his delegate, Parnel McAdam, determined that he was not satisfied that at least one of the employer’s grounds of appeal against the decision of Dr Patrick Morris, the Approved Medical Specialist (the AMS), had been made out and, accordingly, did not allow the employer’s appeal to proceed. The decision of the AMS in respect of which the employer appealed was the assessment of the % Whole Person Impairment (% WPI) of Rajka Topic, the first defendant (the claimant). The employer applied for a reconsideration of the Registrar’s decision. On 15 May 2020, the Registrar decided not to reconsider the earlier decision on the grounds that it was correct. The employer seeks relief in relation to the Registrar’s decisions made on 1 April 2020 and 15 May 2020.

The claimant is the only active defendant as the Registrar has filed a submitting appearance.

All references to legislation in these reasons are, unless otherwise stated, references to the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (the Act). The Workers Compensation Act 1987 (NSW) will be referred to as the 1987 Act.

The claimant claimed to have suffered injuries in the course of her employment on 31 October 2004. The claimant made a claim for compensation for permanent impairment pursuant to s 66 of the 1987 Act.

In 2009 the claimant was paid a lump sum following the assessment of her % WPI arising from these injuries.

On 21 November 2018 the claimant made a claim for further lump sum compensation under s 66 of the 1987 Act on the basis of physical injuries sustained on 31 October 2004 (the physical injuries claim).

On 5 February 2019 she made a further claim for permanent impairment based on an alleged psychological injury sustained as a result of the nature and conditions of her employment between 31 October 2004 and 26 January 2006 (the nature and conditions claim). The employer referred these claims to its insurer, QBE Insurance (Australia) Ltd (the insurer).

On 11 March 2019 the insurer issued a notice pursuant to s 78 of the Act (a s 78 notice) denying liability for the physical injuries claim. On 17 May 2019, the insurer issued a s 78 notice denying liability for the nature and conditions claim.

On 9 October 2019 the claimant filed in the Workers Compensation Commission (the Commission) an application to resolve a dispute relating to these two claims for lump sum compensation. The insurer filed its reply dated 30 October 2019.

On 27 November 2019 Arbitrator Perrignon made consent orders in the Commission pursuant to s 294 of the Act and a notation as follows:

On 29 November 2019 the matters in 3b and 3c above were referred to the AMS for assessment:

The AMS examined the claimant on 17 January 2020. In a certificate dated 30 January 2020, he assessed the claimant’s % WPI as a result of her psychological injury as 0% arising from the injury on 31 October 2004 and 15% due to the nature and conditions of her employment from December 2004 to January 2006.

In his reasons which were attached to the certificate, the AMS noted that he was to assess the % WPI arising from the injuries on 31 October 2004 and from the nature and conditions of employment from December 2004 to 26 January 2006. He described the documents with which he had been provided, which included the consent determination made by the arbitrator.

The AMS recorded the history of the claimant having been attacked by a resident in a house operated by the employer. He recorded that, after the attack, she was able to drive home. She saw her general practitioner the following morning. The AMS recorded:

The AMS recorded the following history for the nature and conditions injury:

In his summary, the AMS said:

In his reasons for assessment, the AMS said:

On 26 February 2020 the employer lodged an appeal against the AMS’s decision on two grounds: the assessment was made on the basis of incorrect criteria and that the Medical Assessment Certificate (the MAC) contained a demonstrable error. In substance, the employer submitted that the AMS had made findings contrary to the Certificate of Determination issued by the Arbitrator on 27 November 2019 and that, despite the orders set out in the Certificate of Determination, the AMS had failed to consider whether any % WPI flowed from the secondary psychological injury sustained by the claimant on 31 October 2004.

On 13 March 2020 the claimant lodged a notice of opposition to the appeal against the decision of the AMS, together with written submissions.

On 1 April 2020, the Registrar determined that as he was not satisfied that at least one of the grounds of appeal as specified in s 327(3) had been “made out” (as provided for in s 327(4) of the Act), the appeal was not to proceed. This is the first decision in respect of which the employer seeks relief under s 69 of the Supreme Court Act.

At the commencement of his reasons, the Registrar set out the task required to be performed in the following terms:

The Registrar proceeded to address the employer’s grounds.

The first ground was that the AMS had made findings of causation (that the Major Depressive Disorder from which the claimant suffered was caused by the nature and conditions of her employment and not by the assault on 31 October 2004) and that he was not entitled to make such findings, having regard to the terms of the consent orders. The Registrar said, at paragraph 14 of his reasons:

The Registrar referred to authorities, including Bindah v Carter Holt Harvey Woodproducts Australia Pty Ltd [2014] NSWCA 264 (Bindah), which endorse the entitlement of an AMS to make findings of causation where required to fulfil the task of assessing % WPI. At paragraph 17 of his reasons, the Registrar said:

The Registrar extracted the AMS’s reasons for concluding that the diagnosis of Major Depressive Disorder arose from the nature and conditions of the claimant’s employment from December 2004 to January 2006. He said, at paragraph 24 of his reasons:

The second ground raised by the employer was that the AMS failed to address the question of whether any secondary psychological symptoms flowed from the assault on 31 October 2004. The Registrar set out the employer’s submission as follows:

After addressing the AMS’s reasons, the Registrar said at paragraph 34:

The Registrar extracted passages from the expert reports which were before the AMS and concluded:

On 24 April 2020, the employer filed an application for reconsideration of the Registrar’s decision of 1 April 2020. The employer relied on the extensive material about the existence of the secondary psychological injury and submitted that the AMS had failed to properly consider the role played by the claimant’s secondary psychological symptoms flowing from the assault on 31 October 2004. The employer also contended that the Registrar had applied the wrong test and had purported to determine the appeal rather than to fulfil the gateway role. The claimant opposed the employer’s application for reconsideration in a response filed on 8 May 2020.

On 15 May 2020, the Registrar refused the employer’s application for reconsideration. He rejected the employer’s submission that it was necessary to decide whether a secondary psychological injury arising out of earlier circumstances could be excluded by a later primary psychological injury. The Registrar considered that because the AMS had concluded that there was no impairment attributable to the injury on 31 October 2004, this comprised a finding that there was no impairment attributable to a secondary psychological injury on that date. This is the second decision in respect of which the employer seeks relief in this Court.

At the commencement of his reasons, the Registrar identified the source of power for the reconsideration of his earlier decision: s 378 of the Act. He also considered whether he (as the original delegate, Mr McAdam) should be the person to decide the application for reconsideration. He referred to Practice Direction 17 – Reconsideration Applications and said, at paragraph 14 of his reasons:

Under the heading, “The reconsideration application”, the Registrar said:

The Registrar said further:

The delegate concluded:

On 22 June 2020, three days before the summons was filed, the Commission issued a certificate of determination in which it determined, in accordance with the assessments by Dr Crane (who assessed % WPI from physical injuries) and by the AMS, that the claimant had suffered 8% permanent impairment resulting from a physical injury on 31 October 2004 and 15% permanent impairment resulting from a psychological injury due to the nature and conditions of her employment from December 2004 to 26 January 2006. The Commission ordered the employer to pay to the claimant $3,750 in respect of further permanent impairment from the physical injury on 31 October 2004 and $20,000 in respect of the psychological injury sustained between 2004 and 2006.

It was not suggested by either party that the certificate of determination issued on 22 June 2020 affected this Court’s jurisdiction to review the Registrar’s decisions under s 69 of the Supreme Court Act.

Section 4 of the 1987 Act relevantly defines “injury” as a “personal injury arising out of or in the course of employment”. Section 4 of the Act defines injury in the same terms.

Section 65 of the 1987 Act provides:

I note for completeness that s 65(3) of the 1987 Act, which formed part of the basis for the decision of the Court of Appeal in Bindah, provided (until its repeal, which became operative on 1 January 2019) that:

This provision would not have been relevant in any event as, in the present case, it was common ground that the arbitrator had not purported to assess the degree of permanent impairment and that such assessments had been referred to the AMS for assessment.

Section 65A of the 1987 Act provides:

Section 66 of the 1987 Act relevantly provides:

Section 78 of the Act requires an insurer to give notice of any decision it makes to dispute a claim.

Section 105 of the Act relevantly provides:

It was accepted that the Commission had exclusive jurisdiction to determine whether an injury has been sustained in the course of employment. Part 7 of the Act, entitled “Medical Assessment” provides for the determination of medical disputes which are defined in s 319 which is set out below.

Section 293 of the Act relevantly provides:

Section 294 of the Act relevantly provides:

Section 319 relevantly provides:

Section 322(1) of the Act provides that the assessment of the degree of permanent impairment of an injured worker for the purposes of the 1987 Act is to be made in accordance with the guidelines issued for that purpose. It was common ground that the relevant guidelines were the NSW workers compensation guidelines for the evaluation of permanent impairment (the Guidelines).

Section 325 relevantly provides:

Pursuant to s 326 of the Act, the assessment is conclusively presumed to be correct as to certain matters, including the degree of permanent impairment as a result of an injury.

Section 327 of the Act relevantly provides:

Section 331 of the Act relevantly provides that medical assessments and appeals under Part 7 of the Act are subject to the Guidelines relating to the procedures for the referral of matters for assessment or appeal, the procedure on appeals and the procedure for assessments.

Section 350 of the Act provides:

Section 371 of the Act relevantly provides:

Section 378 of the Act relevantly provides:

The plaintiff relied on the following grounds of review, which are set out in paragraph 2 of its summons:

Because of the substantial overlap between these grounds, I propose to address them by reference to the submissions put by Mr McManamey who appeared on behalf of the employer.

The Registrar’s role in performing the statutory function conferred by s 327(4) has been described as that of a gate-keeper. In deciding whether to refer an application to an Appeal Panel, the Registrar is to look at the capacity of the appeal ground to be made out (that is, whether there is an arguable case of error) and is not to determine the appeal: Vannini v Worldwide Demolitions Pty Ltd [2018] NSWCA 324 at [83] (Gleeson JA, Macfarlan JA and Barrett AJA agreeing) and Ballas v Department of Education (State of NSW) [2020] NSWCA 86 (Ballas) at [67] (Bell P and Payne JA) and [150] (Emmett AJA).

The words in s 327(4) refer to the Registrar’s satisfaction that at least one of the grounds “has been made out”. These words are apt, in other contexts, to connote a final decision about grounds and are commonly used by appellate courts when expressing conclusions about grounds. However, it is plain from the Act as a whole and the wording of s 327 that the Registrar is merely a gateway and not the final arbiter.

Thus, a Registrar who purports to determine the appeal, when exercising the function under s 327(4), is acting in excess of jurisdiction.

In Ballas, the plurality said at [72]:

It was common ground that there were no express statutory provisions which required the Registrar to give reasons for his decision to refuse to refer the matter to the Appeal Panel or for his reconsideration of that decision. However it was also common ground that the Registrar was subject to an implied statutory obligation to give reasons for both decisions. The parties assumed that this followed from Campbelltown City Council v Vegan (2006) 67 NSWLR 372; [2006] NSWCA 284 (Vegan). It is not necessary for present purposes to decide whether this mutual assumption is correct since the Registrar did give reasons for his original decision and his reconsideration.

I also understood it to be common ground that the Registrar’s reasons would not form part of the record as they did not fall within s 69(4) of the Supreme Court Act, both because the Registrar’s decision did not constitute an “ultimate determination” and because the Registrar would not be regarded as a “court or tribunal”. Neither party contended that the Registrar’s reasons would form part of the record on the basis of the reasoning in Pham v NRMA Insurance Ltd [2014] NSWCA 22; (2014) 66 MVR 152 at [27] (Leeming JA, Tobias AJA agreeing), which depended on there being an express statutory provision (in that case, s 94(5) of the Motor Accidents Compensation Act 1999 (NSW)) which provided that the reasons were to form part of the certificate: cf. Craig v State of South Australia (1995) 184 CLR 163 at 181–3; [1995] HCA 58.

However, I understood Mr McManamey to rely on the reasons as evidencing jurisdictional error. Mr Hooke SC, who appeared with Ms Grotte for the claimant, accepted that the Registrar’s reasons could be used to detect jurisdictional error.

Basten JA in Dominice v Allianz Australia Insurance Ltd [2017] NSWCA 171 (Dominice) addressed applications for review of gateway decisions in the analogous statutory context of the Motor Accidents Compensation Act 1999 (NSW). His Honour said:

Dominice concerned a challenge to a decision by the relevant gateway officer to refer the matter for review to a panel. In the present case, the employer challenges the Registrar’s decisions (the original decision and the reconsideration decision) to refuse to refer the matter for review to a panel. In these circumstances, many of the observations made by Basten JA do not apply. However, it remains of significance that the section requires the Registrar to hold a particular belief.

Mr Hooke contended that the reasons should be read in accordance with Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259; [1996] HCA 6 (Liang) at [272]. Although the dicta in Liang are important, it is also important to recall what the plurality in Ballas said about Liang at [79]:

While there are considerable similarities between the statutory schemes under the Act and the Motor Accidents Compensation Act, there are important differences in the respective statutory wording. Importantly for present purposes, the gateway provision in the Act prohibits the Registrar from allowing the appeal to proceed unless he or she “is satisfied that, on the face of the application and any submissions made to the Registrar, at least one of the grounds for appeal specified in subsection (3) has been made out”; whereas s 63(3) of the Motor Accidents Compensation Act, the gateway provision, provides:

The words “reasonable cause to suspect” in s 63(3) constitute a lower bar than the satisfaction required in s 327(4): George v Rockett (1990) 170 CLR 104 at 115-116; [1990] HCA 26 (Mason CJ, Brennan, Deane, Dawson, Toohey and Gaudron JJ).

There are two decisions which are the subject of review: the Registrar’s original decision of 1 April 2020 and the Registrar’s reconsideration on 15 May 2020. The reconsideration is the operative decision as the Registrar’s decision confirmed the original decision: see the discussion in Navazi v New South Wales Land and Housing Corporation [2015] NSWCA 308 at [79]-[85] (Sackville AJA, Leeming JA and Adamson J agreeing).

Mr McManamey contended that the AMS had made two demonstrable errors: first, that the AMS had made findings regarding causation which were contrary to the certificate of determination issued by the Commission on 27 November 2019, which included a determination that the claimant had suffered both primary and secondary psychological injuries as a result of the events of 31 October 2004. He argued that the AMS was bound by the Arbitrator’s determination in respect of injury since the question whether a claimant has suffered an injury is for the Commission to determine: Bindah at [111] (Emmett JA, Ward JA agreeing).

Mr McManamey also contended that the Arbitrator was entitled and obliged to determine whether the psychological injury was secondary or primary and relied on State of New South Wales (NSW Department of Education) v Kaur [2016] NSWSC 346 at [22]-[23]. Mr McManamey argued that the AMS had erred in failing to appreciate that he was bound by the Arbitrator’s consent findings. He relied on the decision of the Court of Appeal in Zinc Corporation Ltd v Scarce (1995) 12 NSWCCR 566 (Scarce) in which Meagher JA (Powell JA agreeing) said at 575:

On the basis of Scarce, Mr McManamey argued that the AMS was bound to accept that in respect of each injury found by the Arbitrator, there was a “psychological condition that has a physiological effect” which interfered with the claimant’s function. Thus, he argued that the AMS was not entitled to assess % WPI without first identifying or, if need be, constructing at least some physiological effect of the primary and secondary psychological injuries found by the Arbitrator.

Scarce was not referred to by the employer in its application to the Registrar for referral to the Appeal Panel or in its application for reconsideration. In these circumstances, I am not persuaded that it could form a proper basis for a finding of jurisdictional error on the part of the Registrar: NABE v Minister for Immigration and Multicultural and Indigenous Affairs (No 2) (2004) 144 FCR 1; [2004] FCAFC 263 at [67]-[68] (Black CJ, French and Selway JJ).

The relevance of Scarce to the present case is dubious in any event. The AMS was required to determine whether the primary psychological injury or the secondary psychological injury sustained as a consequence of what occurred on 31 October 2004 resulted in a % WPI and whether the primary psychological injury sustained as a result of the claimant’s nature and conditions of work between December 2004 and January 2006 resulted in a % WPI. Thus, it was no part of his role to determine whether an injury had occurred, that being an agreed finding. Further, it does not follow from the fact of an injury that there will be any % WPI, the latter being a matter for the AMS to assess in accordance with the referral.

In oral submissions, Mr McManamey relied on the statements referred to above to the effect that it is not for the Registrar to determine the appeal, but rather to assess whether any of the grounds raised were arguable. He submitted that the Registrar had exceeded jurisdiction by purporting to determine the appeal. He sought to denigrate the role of the Registrar by arguing that because the Registrar, under s 371(2) of the Act, could delegate any function to any member of staff (without specifying any particular qualifications), I should infer that the role of gatekeeper was not a particularly important one. I reject this submission. It does not follow from the absence of a requirement, say, that a delegate must be a legal practitioner, that the role is unimportant or that the function to be performed by the Registrar under s 327(4) – whether at least one of the grounds is arguable – requires little or no judgment. Indeed, the reasons for the Registrar’s decision of 1 April 2020 which are extracted above include a reference to what Basten JA said in Vegan at [8] that the Registrar is to determine whether the ground is, on its face, “valid and credible”, which itself involves an exercise in judgment.

Further, the Registrar, in the reconsideration decision, expressly referred to Ballas, on which Mr McManamey relied for his submission. When a decision-maker expresses a task in a legally unimpeachable way, it is difficult to accept that he did not do what he said he would do, unless there is a clear indication to the contrary. I consider it to be plain from the reconsideration decision that the delegate did not consider the grounds raised by the employer to be arguable. Accordingly, the Registrar was not satisfied that any of the grounds met the threshold in s 327(4) to be allowed through the gateway to be referred to the Appeal Panel. Mr McManamey urged that the decision was wrong and argued that the AMS was obliged as a matter of law to make separate findings on the primary and secondary psychological injuries resulting from the incident on 31 October 2004 and the psychological injury resulting from the nature and conditions of the claimant’s work.

As is plain from the delegate’s decision, the Registrar considered that it was not arguable that this approach was required in circumstances where the AMS considered that there was no % WPI from either the primary or secondary psychological injury resulting from what occurred on 31 October 2004 since there was no psychiatric disorder until later when the diagnosis of Major Depressive Disorder could be made as a result of the nature and conditions of the claimant’s employment. I reject as unarguable Mr McManamey’s submission that the AMS could not have determined that there was no permanent impairment arising from the primary psychological injury caused by the events of 31 October 2004 unless and until he separately determined whether there was any % WPI as a result of the secondary psychological injury caused by the events on that day. Since there was no diagnosable disorder, the result was 0% WPI. In these circumstances, any exercise of apportionment would be no more than an arid exercise. As Mr Hooke said orally, “you can divide zero as many times as you like, you still don’t get a deductible integer”.

The questions posed by the delegate were the correct ones. The reasons disclose no jurisdictional error. I am not persuaded that it was not open to the delegate, as a matter of jurisdiction or otherwise, not to be satisfied that none of the grounds relied on by the employer was arguable. I am not persuaded that the delegate committed a jurisdictional error.

The parties have agreed that, whatever the outcome, there should be no order as to costs.

For the reasons given above, I make the following orders: