CSR Limited v Busbridge

1. [1]

   The plaintiff seeks judicial review of a decision made by a delegate of the WorkCover Authority of New South Wales (the second defendant) by which the first defendant (Mr Busbridge or the defendant) was found to be entitled to weekly payments of compensation in a maximum amount of $610.30 per week in accordance with s 37(2) of the Workers Compensation Act 1987 (NSW). The decision was made following a merit review of a “work capacity decision” made by the plaintiff in accordance with s 44(1)(b) of the Act.

2. [2]

   The decision was made in the context of significant amendments made to the Act in 2012. The parties agree that it is not necessary to consider in detail the history of the workers compensation system or to dwell upon the overall nature of the scheme as it exists following the amendments. The parties also agree that the current dispute is a relatively confined one. It concerns whether the delegate fell into jurisdictional error in her application of sections 32A and 35 of the Act.

3. [3]

   The plaintiff’s contention is that the delegate fell into jurisdictional error in that she failed to understand or apply properly the statutory test to be applied in assessing weekly payments under s 35 (ground 1), that she erred by taking into account irrelevant considerations (ground 2) and, in the alternative, that she failed to afford the plaintiff procedural fairness in the conduct of the merits review (ground 3).

4. [4]

   The background facts of the matter are not in dispute. Mr Busbridge worked for 17 years as a production operator. His exposure to cement dust over a number of years gave rise to an allergy or dermatitis and he developed a rash. He was unfit to work in the job he had held for 17 years. A doctor certified him to be fit for normal duties provided that he was not exposed to cement dust. However, the plaintiff was unable to provide work that did not so expose him. As a result, Mr Busbridge was unable to return to his pre-injury employment and, for a period, the plaintiff made payments of workers compensation to him in accordance with the Act. In the meantime, Mr Busbridge obtained alternative employment as an assistant miller.

5. [5]

   On 10 June 2011 the plaintiff conducted a work capacity assessment and made a work capacity decision (to use the terms of the statute) reducing Mr Busbridge’s entitlement to weekly payments to $64.50 per week under s 37 of the Act. Following the defendant’s application dated 2 July 2014, the plaintiff conducted an internal review. It notified Mr Busbridge of the result of that review by letter dated 20 July 2014. He remained dissatisfied with the outcome. On 26 August 2014, he made an application to the second defendant for a review of the decision. A delegate of the second defendant identified correctly that the nature of that review was a merits review rather than a review of the processes of the insurer. She was required to consider all of the information before her on its merits and make findings and recommendations in the light of that information. There is no dispute on the part of the plaintiff that this is what the delegate attempted to do. However, in one quite particular yet important respect, the plaintiff says that she fell into jurisdictional error. That was in respect of her assessment of the first defendant’s ability to earn income in suitable employment.

6. [6]

   Put simply, the weekly payments to which the worker was entitled was to be calculated by deducting the amount he was able to earn in “suitable employment” after the injury from his “pre-injury average weekly earnings.” Suitable employment is defined in s 32A as follows:

7. [7]

   The definition of suitable employment was inserted by the 2012 amendments to the Act and constituted a significant change to the manner in which such payments are calculated. Prior to the amendments, the post-injury earning capacity was essentially determined by the amount that the worker was actually earning. It will be seen by the matters that are now to be disregarded (such as whether the work or employment is available and the worker’s place of residence) that the calculation is now based on the worker’s capacity to undertake suitable work rather than their ability to find such work.

8. [8]

   Section 35 provides the formula by which the weekly payments are to be calculated:

9. [9]

   There was (and remains) no controversy as to Mr Busbridge’s pre-injury average weekly earnings. As the delegate put it:

10. [10]

    The controversy arises in relation to the other side of the equation, that is “E”; “the amount to be taken into account as the worker’s earnings after the injury”.

11. [11]

    The delegate had a number of sources of information available to her in relation to Mr Busbridge’s capacity for work and his incapacity to work in an environment which exposed him to cement dust. She also had information as to his successful attempt at obtaining alternative employment and a variety of employment options which were held to be, or not to be, suitable employment for the purpose of the application of s 32A and 35. The delegate analysed those options in her comprehensive and cogent reasons. The following passages of her findings are not subject to dispute:

12. [12]

    The delegate went on to find that the job of assistant miller (the job that Mr Busbridge had obtained and in which position he was actually working) was also suitable employment:

13. [13]

    The delegate then set out the entitlement periods for ongoing weekly payments and the basis upon which such entitlements were to be calculated:

14. [14]

    I have already set out the delegate’s consideration of Mr Busbridge’s pre-injury average weekly earnings in [9] above. It is clear that the delegate identified and applied correctly the legislative parameters of her statutory function. There is nothing up until that point in the delegate’s report that is controversial as between the parties to the present litigation. The difficulties and dispute arises in relation to what follows:

15. [15]

    The delegate identified three apparently conflicting bases upon which to determine the “amount the worker is able to earn in suitable employment” as a production operator. These figures came from an appendix to an amended vocational assessment report prepared by a rehabilitation consultant working for “AW Workwise”. At the lower end of that range was the award of $670.20 per week. The middle of the range was represented by what was described as the “local labour market” in which production operators were paid $1,000 per week. The high end of the range, and the figure which the plaintiff now contends ought to have guided the delegate’s application of s 35, was the “Job Markets Australia” figure of $1,389 per week.

16. [16]

    The plaintiff contends that the award wage was “not a relevant consideration” because it represented nothing more than the defendant’s minimum legal entitlement if he worked as a production operator. The plaintiff then contends that the “local labour market” figure was also an irrelevant consideration because the definition of suitable employment in s 32A excludes from consideration the worker’s place of residence. Thus, the plaintiff argues that the only relevant figure was the Job Markets Australia figure of $1,389 per week. According to the plaintiff, that was the figure that the delegate was obliged to consider in determining the rate of weekly payments to which the first defendant was entitled. The plaintiff says that by taking into account the “vastly differing amounts” (as it was put by the delegate) and thereby putting them to one side in favour of the known amount that the defendant was actually earning, the delegate took into account irrelevant considerations (the local labour market figure and the award wage). By failing to take into account the Job Markets Australia figure, the delegate failed to apply the formula required in s 35 and failed to give effect to the definition of suitable employment in s 32A.

17. [17]

    The defendant submits that the delegate performed the function required of her. He contends that the figures contained in the Work Wise report (from which those varying possible weekly earnings as a Production Operator were derived) were meaningless and without substantive content. It was said that the Job Markets Australia figure failed to take into account factors such as the nature of the industry. It was, according to the defendant, simply not known whether his skills as a Production Operator working in the cement industry were transferable to the 7,250 production operator jobs referred to in the report. According to the defendant, the only reliable figure concerning the worker’s post injury earnings was the amount that he was actually earning. All of the other figures were either less than that (in which case the definition of “E” in s 35 meant that they were irrelevant) or in the case of the higher amount, devoid of any real content. In those circumstances, it was open to the delegate to adopt the approach that she did, that is, to use the amount of the first defendant’s actual earnings in his job as an assistant miller to apply the relevant calculation. The defendant’s submission is that it is significant that the delegate found that Mr Busbridge’s job as an assistant miller was suitable employment, a finding that remains uncontroversial.

18. [18]

    The position advanced by the plaintiff as to the proper approach to an assessment of the defendant’s ability to earn in suitable employment is different to the position it took in its internal review and in its submissions to the delegate.

19. [19]

    In the letter dated 30 July 2014, the plaintiff advised of its decision following the internal review. Relevantly, it said in paragraph 2.4:

20. [20]

    On 29 August 2014, the plaintiff provided its reply to the defendant’s application for a merits review. It confirmed that it approached the matter on the basis that the “the worker has demonstrated that he is capable of earning up to and at least $1,413 per week”. It explained the basis of this conclusion as follows:

21. [21]

    While the plaintiff referred to the AW Workwise assessment that “the worker as having capacity to return to pre-injury duties as a production operator provided he is not exposed to cement dust” and that his skills were transferrable, the response made no reference to the Job Markets Australia figure ($1,389). The plaintiff did not contend that the $1,389 figure contained in the annexure to the AW Workwise report (and which had informed its original decision) was a relevant figure by which to determine the worker’s post-injury weekly earning capacity. Nor did it attempt to give content to that figure or to explain why the other figures in the report were not relevant.

22. [22]

    Essentially, the plaintiff relied on what it contended to be the defendant’s actual earnings. The delegate followed that approach. However, she took a different approach in calculating what his current weekly earnings actually were.

23. [23]

    In this Court, counsel for Mr Busbridge submitted:

24. [24]

    There is an error in this submission concerning the approach that CSR took on the merits review. From my reading of the material, the plaintiff did not mistakenly take into account the defendant’s fortnightly pay as his weekly pay. Rather, it took one particularly high earning week and contended that this represented his weekly earnings.

25. [25]

    The delegate approached her task by determining his current weekly earnings as an assistant miller by reference to the formula in s 44I of the Act:

26. [26]

    The material before the delegate concerning Mr Busbridge’s actual current earnings came in the form of 17 Pay Advices dated from November 2013 to July 2014. As the delegate correctly observed, “Mr Busbridge’s current weekly earnings fluctuate from week to week dependent upon the hours he may perform”. She calculated his earnings based on his “base rate of pay” which was $21.08. She found that he had a capacity to work 40 hours per week and calculated his ability to earn in suitable employment (as an assistant miller) thus:

27. [27]

    I do not understand the plaintiff now to contend that this calculation was wrong. However, as has been seen, the approach that the plaintiff took in the merits reviews was to take a single payslip (dated 11 June 2014) and extrapolate from the earnings for the week ending 8 June 2014. In that week, the payslip recorded Mr Busbridge’s earnings as follows:

28. [28]

    On that basis, the plaintiff put to the delegate that “the workers earnings after the injury” – “E” in s 35(1) – was $1,413 per week. On no reasonable approach could this figure be described as his “current weekly earnings” or weekly earnings after injury. The very next payslip showed that in the week ending 6 July 2014, Mr Busbridge earned just $487.20. The delegate correctly approached the matter by reference to s 44I.

29. [29]

    The plaintiff now contends that the delegate fell into jurisdictional error by failing to take into account the Job Markets Australia figure of $1,389 on the basis that this amount is “the greater amount” as between it and the current weekly earnings properly calculated.

30. [30]

    It appears (from paragraphs 57-58 of her report) that the basis upon which the delegate disregarded the Job Markets Australia figure was that the AW Workwise report contained “vastly differing amounts”. That was a reference to the variation between the Job Markets Australia figure ($1,389), the award wage ($760.20) and the local labour market average wage ($1,000). The plaintiff did not make any submission to the delegate as to how to reconcile those varying figures because it sought to rely on an actual pay period where Mr Busbridge earned more than $1,389 (ie $1,413).

31. [31]

    The defendant’s approach in this Court was to describe the Job Markets Australian figure as “meaningless”. He argued that the Job Markets Australia figure was devoid of any real content because it referred to the earnings of a “production operator” in general terms without any reference to, or identification of, any industry that might be relevant to Mr Busbridge’s history of employment and skills acquired in the particular industry in which he had worked for many years. The defendant argued that while such a generic approach might be applicable to a job such as a teacher or a nurse, it was unhelpful for a job where wages might vary greatly depending on the industry in which one worked. An analogy was drawn with a company director whose income earning capacity is entirely different depending on the industry, size of the company and other variables.

32. [32]

    The defendant made no similar submission before the delegate which is unsurprising given that the decision he sought to have reviewed made no reference to the Job Markets Australia figure (although the original decision did). The form that the defendant filled out stated simply:

33. [33]

    The delegate was placed in a difficult position in coming to a conclusion as to the worker’s earnings after the injury (“E”) for the purpose of s 35. Neither party addressed the Labour Market Analysis contained in Appendix 1 of the AW Workwise reports or contended that it was relevant. The unrepresented worker left an assessment of his weekly earnings after injury to the delegate, (“whatever that may be”). The employer, at [2.4] of the decision subject to the merits review before the delegate and in its reply to the merits review stated that the worker was “capable of securing alternative employment and [had] demonstrated a capacity to earn up to and at least $1,413 gross per week”. That figure was based on a single pay period during which the worker had made $1,413 and was not representative of his average earnings. Neither party made reference to, or relied upon, the Job Markets Australia figure of $1,389 per week figure or explained how it did (or did not) come within the terms of s 35(1)E(a) as an “amount the worker is able to earn in suitable employment.”

34. [34]

    The delegate was aware of the Job Markets Australia figure but concluded that it was difficult to use that figure in view of the “vastly differing amounts” in the same report concerning the average wage and local labour market. The plaintiff now says that the average wage was irrelevant altogether and that the local labour market was not relevant because the definition of suitable employment in s 32A excludes consideration of the worker’s place of residence. In many, if not most circumstances that submission may be correct but there is a real difficulty in asserting jurisdictional error on the part of the delegate in circumstances where the Job Markets Australia figure was not referred to in the letter of 30 July 2014 notifying Mr Busbridge of the result of its internal review or in its reply to the application for a merit review dated 29 August 2014. On each occasion the plaintiff relied on the single pay slip for 8 June 2014. Its initial decision (dated 10 June 2014) was based on the Job Markets Australia figure but by the time the matter went to the delegate it appeared to have abandoned its reliance on that figure. No explanation for this was provided to the delegate and there was no reference to the Job Markets Australia figure.

Ground one

1. [35]

   Under ground 1, the plaintiff contends that the delegate “misunderstood the statutory test to be applied in assessing weekly payments”, “erred as to her jurisdiction”, “misconceived the task” she had to perform “and/or” failed to take into account a relevant consideration.

2. [36]

   The starting point for a consideration of this ground is the recognition that not all factual or legal errors give rise to an appropriate case for judicial review. The Workers Compensation scheme, and the legislative framework under which it operates casts the responsibility of the merits review of the employer’s decision upon the WorkCover Authority and not on this Court. It is not appropriate to parse the language of the delegate or examine her reasons with a critical eye attuned to error: see, for example, Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; 185 CLR 259 at 271-272, Collector of Customs v Pozzolanic Enterprises Pty Ltd [1993] FCA 456; 43 FCR 280 at 287.

3. [37]

   In Minister for Immigration and Ethnic Affairs v Wu Shan Liang at 271-272:

4. [38]

   See also, for example, Muralidharan v Minister for Immigration & Ethnic Affairs (1996) 136 ALR 84 at 94-95 (Sackville J), Bojko v ICM Property Service Pty Ltd [2009] NSWCA 175 at [36] (Handley AJA), Campbelltown City Council v Vegan [2006] NSWCA 284; 67 NSWLR 372 at [121]-[122] (Basten JA).

5. [39]

   However, there are limits to the proposition that an administrative decision maker's reasons should be construed beneficially. Stone J in SZCBT v Minister for Immigration and Multicultrual Affairs [2007] FCA 9 at [26] said:

6. [40]

   Further, while to "fulfil a minimum legal standard, the reasons need not be extensive", "where more than one conclusion is open, it will be necessary for the [decision maker] to give some explanation of its preference for one conclusion over another": Campbelltown City Counsel v Vegan (supra) at [121]-[122] (Basten JA).

7. [41]

   On a fair reading of the delegate’s reasons, she was keenly aware of the statutory requirements of her jurisdiction. The “consideration” that the plaintiff contends that the delegate failed to take into account was the Job Markets Australia wage for Production Operator. It was submitted that the amount was “taken to be capable of earning as a Production Operator … was a mandatory consideration” as a matter of statutory construction. The distinction between a relevant consideration for judicial review purposes and relevant material was emphasised by Gleeson JA in Rodger v De Gelder [2015] NSWCA 211 at [84]-[86]. In spite of the fact that neither party sought to draw her attention to the Job Markets Australia wage (or even refer to it) the delegate did make reference to it and explained her reason for concluding that it should not be used in the calculus. Those reasons were not irrational or unreasonable.

8. [42]

   While a different decision maker may have taken a different approach, the fact that the delegate did not simply find the highest possible wage, having correctly (if implicitly) dismissed the plaintiff’s urging to take into account the amount that the defendant earned in a single pay period, did not constitute a misconception of her task or a failure to exercise her jurisdiction lawfully.

9. [43]

   Insofar as there was more than one conclusion open on the evidence, the decision maker explained her reasons for preferring the actual weekly earnings. Again, it would have been open to the delegate to come to a different conclusion, but the decision that she made was within her jurisdiction. In circumstances where the plaintiff had not contended that the Job Markets Australia figure should be used, even in the alternative, I am unable to conclude that the delegate failed lawfully to exercise the jurisdiction.

10. [44]

    I would reject ground 1.

Ground two

1. [45]

   The plaintiff contends that the references that the delegate made to the award wage and the local labour market wage meant that she took into account irrelevant considerations. That assertion may have had more substance if the delegate had settled on, or used, either of those figures directly in calculating the rate of weekly payments. However, her use of those figures was simply to highlight the anomaly, or as she put it the “vastly differing amounts” in the AW Workwise report. It raised a question in her mind as to the validity of the Job Markets Australia wage and its applicability as “an amount the worker was able to earn in suitable employment” (my emphasis).

2. [46]

   Taking these figures into account in this way did not amount to a jurisdictional error. The delegate’s reasons were transparent and the figure that she used as “E” in the equation was a figure contemplated by the terms of s 35(1)E(b).

3. [47]

   I would reject ground 2.

Ground three

1. [48]

   The third ground of appeal asserts that the plaintiff was denied procedural fairness and/or that the delegate failed to comply with procedures mandated by the Guidelines for Work Capacity Decision, Internal Reviews by Insurers and Merit Reviews by the Authority (“the Guidelines”). The Guidelines are delegated legislation issued pursuant to s 44(1) of the Act and s 376(1) of the Workplace Injury Management and Workers Compensation Act 1988 (NSW).

2. [49]

   Guideline 10.6 allows a “Merit Reviewer” (such as the delegate in this case) to determine their own procedures and provides that the rules of evidence do not apply. However, the guideline provides that the merits review is subject to the requirements of procedural fairness. To a substantial degree the content of procedural fairness is defined by the Guidelines. The plaintiff relies on 10.2 and 10.7 in particular:

3. [50]

   The plaintiff submits that the delegate breached these guidelines and in so doing breached the requirement for procedural fairness by denying the plaintiff the opportunity to be heard. The amended summons asserted that once the delegate determined that she should assess the weekly earnings in the way that she did “the second defendant should have alerted the parties to the perceived deficiency in the evidence, because it was an issue identified by the second defendant on the review, and allowed the parties to make submissions on the question or provide further evidence.” Alternatively, “the second defendant should have requested further evidence pursuant to clause 10.2.1 of the Guidelines.”

4. [51]

   The plaintiff submitted in writing that “procedural fairness and the delegated legislation required the [delegate] to alert the parties (and in particular the insurer) to the issue that it had identified and to the deficiency or ambiguity in the evidence, or to request further information in order to resolve that issue, and to make an assessment.” In the alternative, given her inquisitorial powers, the delegate should have obtained evidence herself (and provided it to the parties for comment), or requested further evidence from the parties (and allowed the parties to comment).

5. [52]

   The defendant submitted that the delegate did not identify any deficiency in the evidence. Rather, she concluded that part of the evidence was not probative and “in broad terms accepted the approach argued for by Mr Busbridge.” (The defendant also submitted that “CSR saw fit to first rely upon and then argue on the basis of the limited material contained in the AW Workwise report.” That is not correct. CSR did not rely on the amounts referred to in the annexure to the AW Workwise report. Rather, it relied on the actual earnings of the defendant in the week ending 8 June 2014.)

6. [53]

   I am unable to accept, in the circumstances of this case, that clause 10.2 made it mandatory (or “required”) the delegate to seek further evidence or further submissions from the parties or that she ought to have embarked on an evidence gathering exercise of her own. The evidence was not ambiguous and nor were the submissions of the parties. There is no suggestion that “any further information is required from either of the parties” in order for the delegate to undertake the review. There is nothing to suggest that the plaintiff did not understand the process or was denied the opportunity to be heard. The form of “reply to an application for merit review” included in part 3 the opportunity for “RESPONSE TO THE WORKER’S APPLICATION” which was explained as follows:

7. [54]

   This was an opportunity for the plaintiff to put its case, including an alternative case based on the annexures to the AW Workwise reports including the Job Markets Australia figure of $1,389. Its reply was as follows:

8. [55]

   The plaintiff had the opportunity to put its case before the delegate. It elected not to place any reliance on the Job Markets Australia figure but to rely on the higher figure that it suggested, based on a single pay slip, that the plaintiff was earning in suitable employment. As Gleeson JA said in Jamal v Director of Public Prosecutions [2013] NSWCA 355 at [39]:

9. [56]

   Similarly, in Allesch v Maunz [2000] HCA 40; 203 CLR 172 Kirby J said at [38]:

10. [57]

    Similarly, procedural fairness does not require a decision maker to disclose what she is minded to decide or to invite comment on her process of reasoning: see, for example, Hoffmann-La Roche v Trade Secretary [1975] AC 295 at 369, Re Minister for Immigration and Multicultural Affairs and Anor; Ex Parte Miah [2001] HCA 22; 206 CLR 57 at [31], Sinnathamby v Minister for Immigration (1986) 86 ALR 502 at 506, Ansett v Minister (1987) 72 ALR 469 at 499, Asiamet (No 1) v Federal Commissioner of Taxation [2003] FCA 35 196 ALR 692. In Asiamet Emmett J explained at [79]:

11. [58]

    In the present case, no additional material came before the delegate and the adverse conclusion that she reached was not one that was not obviously open on the known material. It was in effect the conclusion to which the defendant invited the delegate to come and in relation to which the plaintiff was given the opportunity to respond. The delegate was not required to disclose her mental processes or provisional views for the comment of the parties.

12. [59]

    I would reject ground 3.

Orders

1. [60]

   None of the grounds for review are established. Accordingly I make the following orders:

   1. (1)

      The summons is dismissed.

   2. (2)

      The plaintiff to pay the first defendant’s costs of the proceedings.