JUDGMENT OF: His Honour Deputy President Judge P D Hannon

Referral of agreed issues to a Full Bench - Whether in undertaking an assessment of the worker and prior to making a decision under s 35B of the Workers Rehabilitation and Compensation Act 1986, the compensating authority was obliged to afford the worker procedural fairness - Held that the compensating authority is obliged to provide procedural fairness in such circumstances, and that in this case, the compensating authority was in breach of that obligation due to its failure to conduct a s 38 review in the time required before embarking upon the s 35B assessment - Held that the breach of the obligation to afford procedural fairness rendered the disputed determination voidable - Parties to be heard further on whether in the circumstances the Tribunal should exercise its discretion to set aside the determination as invalid - Sections 3, 35, 35A, 35B, 35C, 36, Part 6A and Part 6C of the Workers Rehabilitation and Compensation Act 1986; Workers Rehabilitation and Compensation (Scheme Review) Amendment Act 2008; Regulation 7 of the Workers Rehabilitation and Compensation (General) Regulations 1999.

Kiao v West [1985] HCA 81; (1985) 159 CLR 550

Annetts v McCann [1990] HCA 57; (1990) 170 CLR 596

Re Minister for Immigration and Multicultural Affairs and Another; Ex parte Miah (2001) 206 CLR 57

Saeed v Minister for Immigration and Citizenship [2010] HCA 23; (2010) 241 CLR 252

Plaintiff No M61/2010 v Commonwealth of Australia and Ors [2010] HCA 41

Creek v WorkCover Corporation/Employers Mutual Limited (GI Pty Ltd) [2010] SAWCT 22

Yaghoubi v Employers Mutual Limited (BDS People Pty Ltd) [2010] SAWCT 26

Mitsubishi Motors Australia Ltd v Sosa [1995] SASC 5084

Twist v Randwick Municipal Council [1976] HCA 58; (1976) 136 CLR 106

Mitsubishi Motors Australia Ltd v Kowalski [2004] SASC 302

South Australian Fire and Emergency Services Commission v Workers

Compensation Tribunal & Anor [2009] SASC 213.

Salemi v MacKellar (No 2) [1977] HCA 26; (1977) 137 CLR 396

Robbins v Harbord [1994] SASC 4571; (1994) 62 SASR 229

Staines v WorkCover/Allianz Australia Workers Compensation (SA) Ltd [2004] SAWCT 127

Rundle v WorkCover Corporation/Vero Workers Compensation (SA) Ltd [2006] SAWCT 12

WorkCover Corporation/CGU Workers Compensation (SA) Pty Ltd (Duell's Furniture Removals Pty Ltd) v Davidson [2000] SAWCT 32

Earl v Slater and Wheeler (Airlyne) Ltd (1973) 1AllER 145

Trittenheim v H & H Gill Nominees (1994) 63 SASR 434

1. This dispute was referred to a Full Bench of the Tribunal for determination pursuant to s 94A(2) of the Workers Rehabilitation and Compensation Act 1986 ("the Act"). It arises from a determination by Employers Mutual Limited as agent for WorkCover Corporation ("the compensating authority"). The determination was that Malcolm Lloyd Davey ("the worker") had a "current work capacity"[1] and that as a result his weekly payments of income maintenance would cease under ss 35B(1) and 36(1)(i) of the Act upon the expiration of a thirteen week notice period. At that time the worker was in receipt of income maintenance at the rate of 80% of his average weekly earnings.
2. The worker lodged a notice of dispute with respect to the determination. One of the grounds of the notice asserts that the determination is defective for the reason that the compensating authority denied the worker procedural fairness by failing to provide him with the opportunity to make submissions before the determination was made.

1. The parties agreed that the issues for determination on this referral are:
   1. When undertaking an assessment and prior to making a decision under s 35B of the Act, is a compensating authority required to afford a worker procedural fairness?
   2. If there is such a requirement, does a failure to afford a worker procedural fairness render a subsequent determination by reference to the s 35B assessment void or voidable?
   3. Is there an interrelationship between s 38 and an assessment under s 35B? If so, how does a failure to comply with s 38(1a) in the year prior to an assessment pursuant to s 35B affect the assessment and any decision purportedly made under s 35B in consequence of that assessment?

1. On 27 November 2006 the worker made a claim for compensation with respect to a condition of anxiety and depression which he alleged arose on that day as a result of events at work and difficulties in his dealings with another employee. The claim was initially disputed but was resolved on terms recorded in a consent order dated 14 March 2008 which included an acceptance by the compensating authority of liability to make weekly payments from the date of the claim on an ongoing basis. The quantum of average weekly compensation was fixed at $1968.02, and it was agreed that upon the first anniversary of incapacity, the amount of the weekly payment would reduce to 80% of the difference between notional weekly earnings and the amount he was earning or could earn from suitable employment.[2]
2. On the second anniversary of the commencement of the incapacity, the compensating authority conducted a review of weekly payments under s 38 of the Act.[3] It issued a determination under s 38(7) of the Act on 24 November 2008 to the effect that the weekly payments then being made to the worker were to remain unchanged on the basis that the worker was "currently partially deemed totally incapacitated for work".[4] The worker's weekly payment entitlement was calculated in the amount of $1714.34, being 80% of his notional weekly earnings.
3. The compensating authority did not conduct a further review under s 38 of the Act in the year of incapacity following the review of 24 November 2008, despite its statutory obligation to do so. Nevertheless, the worker continued to receive weekly income maintenance payments on the basis of the entitlement determined by the 2008 s 38 review, with economic adjustments in accordance with s 39 of the Act.[5]
4. On 3 May 2010 the compensating authority issued a written determination following the conduct of what it described as a "work capacity review" under s 35B of the Act.[6] The compensating authority was entitled to conduct a review of this nature given that the worker had passed the end of his "third entitlement period" by the week ending 19 September 2009.[7] As observed above, the compensating authority assessed the worker to have a "current work capacity" and gave notice of cessation of his weekly payments. The notice advised the worker that as he was not in employment immediately prior to the end of his third entitlement period, and was in receipt of weekly payments on the basis that he had no current work capacity, his weekly payments would cease thirteen weeks from receipt of the decision pursuant to s 35B(6) of the Act.[8]
5. The determination set out a statement of reasons for decision. The statement advised that the decision was reached on the basis of a review of the worker's claim file and a consideration of information contained in documents which were then individually described. Copies of the documents were enclosed with the notice. The documents included the claim for compensation and various medical certificates, medical reports, vocational rehabilitation reports and other material relating to the worker's employment profile and job seeking record. The determination asserted that the worker was vocationally suited and medically fit to undertake work as a senior or general accountant, and that the documentary information demonstrated that, although the worker was not able to return to his pre-injury work with his pre-injury employer, he had a capacity to return to work as an accountant with an alternative employer.
6. Accordingly, the compensating authority concluded that the worker could not meet the criteria in s 35B(1) of the Act,[9] and was therefore not entitled to continuing weekly compensation. As noted above, the worker lodged a notice of dispute. In addition to the ground of dispute asserting a denial of procedural fairness, the notice asserted that the worker had no current work capacity and was likely to continue indefinitely to have no current work capacity.
7. It was agreed that prior to the assessment leading to the disputed determination, the compensating authority did not give the worker notice that it proposed to conduct an assessment under s 35B of the Act or invite him to make any submissions in that regard.

1. The question as to whether a person or statutory body which is empowered to make decisions affecting the legal rights, interests or legitimate expectations of individuals is obliged to afford natural justice or procedural fairness has been addressed in a series of decisions of the High Court including Kioa v West,[10] Annetts v McCann[11] and Re Minister for Immigration and Multicultural Affairs and Another; Ex Parte Miah.[12] There are two questions in this regard: the threshold question, being whether the exercise of power is conditional upon the observance of the principles of natural justice; and if so, the subsidiary question as to what the principles of natural justice require of the decision-maker in the particular circumstances.
2. In Annetts, the majority[13] summarised the approach to the threshold question in the following terms:

"It can now be taken as settled that, when a statute confers power upon a public official to destroy, defeat or prejudice a person's rights, interests or legitimate expectations, the rules of natural justice regulate the exercise of that power unless they are excluded by plain words of necessary intendment...an intention on the part of the legislature to exclude the rules of natural justice [is] not to be assumed nor spelled out from 'indirect references, uncertain inferences or equivocal considerations'.[14] Nor is such an intention to be inferred from the presence in the statute of rights which are commensurate with some of the rules of natural justice...In Kioa v West...Mason J said...that the law in relation to administrative decisions 'has now developed to a point where it may be accepted that there is a common law duty to act fairly, in the sense of according procedural fairness, in the making of administrative decisions which affect rights, interests and legitimate expectations, subject only to the clear manifestation of a contrary statutory intention.' "

1. It has been recognised that the above principle was stated in slightly different ways by Mason J and Brennan J respectively in Kioa, but as Gaudron J said in Miah, the ultimate question, whether the rules of natural justice derive from the common law or are implied by the common law, is whether the legislation which is the source of the statutory power, on its proper construction, relevantly and validly limits or extinguishes the obligation to afford procedural fairness.[15]
2. Broadly speaking, the High Court has taken the view that it is seldom possible to say that the legislature has intended to exclude the observance of natural justice in the exercise of a statutory power apt to affect individual interests.[16] Because the obligation to conform to the rules of natural justice is so deeply entrenched in the assumptions in which Australian law is based, it can normally be treated as implied in legislation enacted by Parliament.[17]
3. In Kioa, Mason and Brennan JJ separately expanded upon the range of rights, interests and legitimate expectations to which the rules of natural justice might apply. Mason J said that the reference to the "right or interest" was to be understood as relating to "personal liberty, status, preservation of livelihood and reputation, as well as to proprietary rights and interests",[18] and that the reference to "legitimate expectations" made it clear that the doctrine applied in circumstances where the order will not result in deprivation of a legal right or interest, but where a person concerned may nevertheless have a legitimate expectation extending beyond enforceable legal rights, providing they are reasonably based.[19] Brennan J said that the protection afforded in this regard extends well beyond legal rights, to encompass "interests" and "legitimate" or "reasonable" expectations, including privileges and benefits provided they have some reasonable basis.[20] The majority in Annetts noted the continuing expansion of the range of interests falling within the protection of the rules of natural justice over the three decades prior to the time of that decision.[21]
4. The application of the doctrine of procedural fairness depends on the construction of the statute and the circumstances of the case, including the nature of the inquiry, the subject matter, and the rules under which the decision-maker acts. If the outcome of that consideration is that the legislature did not intend to exclude observance of the principles of natural justice in the exercise of the relevant statutory power, the subsequent question as to what the principles of natural justice require is decided in the context of a flexible obligation to adopt fair procedures which are adapted to the circumstances of the particular case.[22] There is no all encompassing rule in this regard. The answer can only be arrived at by a close examination of the circumstances of each particular case. The principles have a "flexible quality which, chameleon-like, evokes a different response from the repository of a statutory power according to the circumstances in which the repository is to exercise the power".[23] The question is directed to what the duty to act fairly requires in a particular case; a question which requires one to construe the statute to ascertain whether there are any special procedural steps which extend or restrict what the principles of natural justice would otherwise require.[24]
5. The continuing applicability of the general principles set out above was recently confirmed by the High Court in both Saeed v Minister for Immigration and Citizenship[25] and Plaintiff No M61/2010 v Commonwealth of Australia and Ors.[26]

1. The worker contended that the determination under s 35B of the Act was an administrative decision by the repository of a statutory power which affected his rights, interests or legitimate expectations, and that the compensating authority as the repository of that power, had a duty to afford him procedural fairness before making that decision. He contended that there was no clear manifestation of a contrary statutory intention.
2. The worker submitted that he had a legitimate expectation to be heard before the making of the s 35B assessment, particularly given the potential for financial hardship between the time the decision to discontinue payments took effect, and any subsequent review of the decision. He submitted that the failure to provide him with an opportunity to be heard before the conduct of the assessment meant that he was unable to alert the decision maker to relevant material supportive of his contention that he continued to have no current work capacity.
3. The worker submitted that the obligation to afford him procedural fairness in this way was heightened by the fact that the assessment under s 35B was made by the compensating authority in the context of its failure within the preceding year to comply with its obligation to conduct a s 38 review, as a result of which he was given no opportunity to avail himself of his statutory right under s 38(3) to make representation on such a review with respect to his then level of incapacity. It was contended that in these circumstances the fact that s 35B contained no explicit obligation to afford procedural fairness in similar terms to s 38 did not mean that the legislature had excluded a right to procedural fairness with respect to a s 35B assessment. The worker contended that to the extent that the decision of a single member in Creek v WorkCover Corporation/Employers Mutual Limited (GI Pty Ltd)[27] suggested to the contrary, it was wrong.
4. The worker contended that the failure to afford procedural fairness with respect to the s 35B assessment was an error of law which rendered the determination void.
5. The compensating authority contended that in construing the statute in order to ascertain whether the exercise of the statutory power in question is conditioned on the observance of the principles of procedural fairness, it is necessary to consider the nature of the body on which the power is conferred, the language in which the power is conferred, and the appeal or review rights in relation to the exercise of the power. It contended that these considerations overwhelmingly indicated that the compensating authority was not obliged to afford a worker procedural fairness in undertaking an assessment pursuant to s 35B.
6. The compensating authority focused on two particular factors. One was the unfettered nature of the dispute resolution process contained in Part 6A of the Act. Considered in context, and by reference to various factors outlined by McHugh J in Miah, it submitted that the nature of the review rights with respect to a disputed s 35B determination indicated a clear intention on the part of the legislature either that there was no obligation to provide procedural fairness in making a s 35B assessment, or that any breach in that regard was to be addressed solely through the review process. The other factor relied upon was the contrast between the provisions of s 35B and s 38 respectively, which reveals that the latter provision, unlike s 35B, gives a worker a specific right to make representations on a s 38 review. This was said to be of added significance when it was appreciated that s 35B had only recently been inserted in the Act, and that Parliament must have been mindful at the time of the contrasting provisions of s 38, given that some amendments were made to that section at the same time.
7. The compensating authority contended that it would be contrary to the scheme of the Act to conclude that a failure to comply with a requirement to accord procedural fairness at the determination stage, if there was such a requirement, had the effect of rendering the s 35B assessment void or invalid.

1. The worker founded his submission of a denial of procedural fairness in part upon the premise that recent amendments to the compensation entitlement and discontinuance provisions of the Act heightened the need for workers to be afforded the opportunity to make representations to a compensating authority before action was taken to discontinue or reduce income maintenance entitlements, at least with respect to s 35B. To provide the necessary context for this aspect of the worker's submissions, I now summarise the entitlement and discontinuance provisions of the Act as they stood before the recent amendments and the provisions as they now stand. The relevant provisions were and are now contained in Part 4 Division 4 of the Act under the heading "Compensation by way of income maintenance".
2. The Act was amended recently by the Workers Rehabilitation and Compensation (Scheme Review) Amendment Act 2008 ("the Scheme Review Act"). The amendments were proclaimed on a graduated basis from 1 July 2008. Of particular significance for present purposes is the replacement of s 35 of the Act ("the old entitlement provisions") with ss 35, 35A, 35B and 35C ("the new entitlement provisions"), together with concomitant amendments to the provisions for discontinuance and reduction of weekly payments in s 36 of the Act.[28] Schedule 1 cl 4(2) of the Transitional Provisions of the Scheme Review Act provides that the new entitlement provisions will apply if a worker has, before the relevant day,[29] gone past the end of the first two years of incapacity referred to in s 35(2) of the Act as in existence immediately before the introduction of the new s 35, and if the worker is still in receipt of weekly payments of compensation on the relevant day. In this case the worker meets these conditions, and thus the new entitlement provisions apply to him notwithstanding that his compensable disability occurred before 1 July 2008.

1. Under the principles set out in s 35 of the old entitlement provisions, a worker suffering from a compensable disability that resulted in either total or partial incapacity for work, subject to various qualifications, was entitled to weekly payments of income maintenance equal to the worker's notional weekly earnings, or the difference between the notional weekly earnings and the weekly earnings the worker was earning or could earn in suitable employment. Such an entitlement could continue until the worker reached the statutory "retirement age".[30]
2. The entitlement to weekly payments was subject to discontinuance or reduction on a variety of grounds which, for the most part, were set out in s 36 of the Act.[31] A discontinuance could only be effected if the compensating authority gave notice in writing to a worker containing information and advice required by s 36(3) of the Act and the Regulations.[32] At least 21 days notice of discontinuance had to be given in most instances. The entitlement to weekly payments was also subject to review under s 38 of the Act, which required the compensating authority to adjust or discontinue weekly payments if a finding was made on review that a worker's entitlement had ceased, or increased or decreased. Any decision to discontinue consequent upon a review under this section had to be effected through the procedures provided by s 36 of the Act.[33]
3. It has long been recognised that compliance with the statutory procedures allowing for discontinuance of income maintenance payments by notice under s 36 of the Act is of great importance given the potential for hardship in the event of the arbitrary cessation of such payments.[34] Section 36 contained provisions which provided some relief to a worker from the immediate effect of a notice of discontinuance in the event that the notice was disputed. Under s 36(4) of the Act, if a worker lodged a notice of dispute within one month after receipt of a notice of discontinuance, the operation of the decision upon expiration of the statutory notice period was suspended at least until the dispute first came before a conciliator. Moreover, the Tribunal was empowered to further suspend the operation of the decision from that time to allow a reasonable opportunity for resolution of the dispute by conciliation, arbitration or judicial determination, without prejudice to the worker's financial position in the meanwhile.
4. The worker contended that the practical effect of this provision was that a worker, having been served with a notice of discontinuance, could usually have the effect of the discontinuance decision suspended until the resolution of the dispute. This proposition was not contested by counsel for the compensating authority. Nor was it disputed that in many cases the result was that weekly payments might continue for a prolonged period of time after service of the notice of discontinuance depending upon the complexity and longevity of the dispute resolution process.
5. Section 36 did not require that a worker in receipt of weekly payments be given prior notice by the compensating authority of an intention to exercise its right to issue a notice of discontinuance, or that a worker be given an opportunity to make representations before such notice was given. The only provision in Part 4 Division 4 which expressly imposed any obligation on the compensating authority to afford a worker a right to be heard before a decision was taken which might result in an adjustment or discontinuance of weekly payments was that contained in s 38 of the Act. Section 38(1a) required that if a period of incapacity continued for more than one year, the compensating authority must review the amount of the weekly payments made to a worker in the second year of incapacity and every subsequent year of the incapacity. Before such a review began, the compensating authority was obliged under s 38(3) to give the worker notice of the proposed review, and to invite the worker to make written representation on the subject of the review within a reasonable time specified in the notice.
6. A decision to discontinue weekly payments was subject to review in accordance with the dispute resolution provisions of Part 6A of the Act. The review scheme provided for a de novo hearing of any disputed decision without regard to decisions taken in earlier proceedings.[35]

1. Under the new entitlement provisions, a worker with an incapacity for work as a result of a compensable disability is entitled to receive income maintenance, in varying amounts, over three entitlement periods in respect of which the worker is incapacitated and is entitled to the payment of compensation on that account. Those periods are described as the first, second and third entitlement periods respectively.[36] The first entitlement period is an aggregate period not exceeding thirteen weeks, the second entitlement period is an aggregate period of a further thirteen weeks commencing after the end of the first entitlement period, and the third entitlement period is an aggregate period not exceeding 104 weeks commencing after the end of the second entitlement period.
2. The weekly payment entitlement with respect to each of these periods is set out in s 35A of the Act, with the quantum payable dependent upon whether the worker has "no current work capacity" or a "current work capacity". These concepts replace but are equated respectively to the conditions of "total incapacity" and "partial incapacity" under the pre-amendment provisions, as indicated by s 3(10) of the Act. This subsection provides that total incapacity for work is the incapacity for work that is represented by a worker having "no current work capacity" within the meaning of the Act, and that partial incapacity for work is the incapacity for work that is represented by a worker having a "current work capacity" within the meaning of the Act.
3. An amendment of particular significance for present purposes is that which introduced s 35B of the Act. Subject to s 35C and other provisions of the Act, s 35B provides that a worker's entitlement to weekly payments under Part 4 Division 4 of the Act ceases at the end of the third entitlement period unless the worker is assessed by the Corporation as having no current work capacity, and as likely to continue indefinitely to have no current work capacity.
4. It is helpful to set out relevant parts of this section:

"35B - Weekly payments after expiry of designated periods - no work capacity

(1) Subject to section 35C (and to the other provisions of this Act), a worker's entitlement to weekly payments under this Division ceases at the end of the third entitlement period under section 35A (unless brought to an end before this time) unless the worker is assessed by the Corporation as -

(b) likely to continue indefinitely to have no current work capacity.

(4) In connection with the operation of subsection (1), a worker who, immediately before the end of a third entitlement period, is in receipt of weekly payments under paragraph (a) of section 35A(3) is entitled to continue to receive weekly payments at the rate prescribed by that paragraph unless or until the Corporation has assessed whether the worker falls within the category of a worker who may be considered as -

(b) likely to continue indefinitely to have no current work capacity.

(5) An assessment under subsection (4) may be made before or after the end of the third entitlement period.

(6) Despite section 35A, the Corporation must not discontinue weekly payments to a worker who is subject to the operation of subsection (4) until it has given the worker at least 13 weeks notice in writing of the proposed discontinuance (and the requirements of section 36 will not apply with respect to this notice).

1. The discontinuance now in issue was effected under these provisions. As observed above, the worker had reached the end of the third entitlement period by 19 September 2009. Although his entitlement to income maintenance payments then ceased in accordance with s 35B(1), his payments continued until the notice of discontinuance took effect following an assessment by the compensating authority in about May 2010. In giving notice of its intention to discontinue weekly payments, the compensating authority proceeded upon the basis that the worker fell within the provisions of s 35B(4) of the Act. That is, that immediately before the end of the third entitlement period he was in receipt of weekly payments under para (a) of s 35A(3) of the Act upon the basis that he had no current work capacity. This meant that the worker was entitled to receive weekly payments notwithstanding the end of the third entitlement period unless or until the compensating authority assessed him as having a "current work capacity", and in that event, payments were not to be discontinued until the worker received at least thirteen weeks notice in writing to that effect in accordance with s 35B(6).
2. Subject to the longer notice period prescribed by s 35B(6), a discontinuance upon the basis of a s 35B assessment must be effected in accordance with s 36 of the Act. That is clear given the terms of s 36(3a)(bb), introduced by the Scheme Review Act, which provides that before any decision to discontinue takes effect, notice of the proposed discontinuance must be given for the prescribed number of days, including where the decision to discontinue is made on account of the end of the third entitlement period under s 35A.
3. Section 36 was also amended by the Scheme Review Act to remove the former subs (4) which, as explained above, provided that the operation of any decision to discontinue would be suspended at least until the dispute first came before a conciliator, and beyond that period if so ordered by the Tribunal. The Scheme Review Act introduced a new s 36(4) which provides that, subject to compliance with the requirements for giving the prescribed number of days of notice before a decision to discontinue payments takes effect, a discontinuance or reduction of payments under s 36 is to take effect in accordance with the terms of the notice. In addition, under the new s 36(5), the effect of a decision to discontinue weekly payments is not affected by the worker lodging a notice of dispute under Part 6A.
4. A facility for the worker to obtain potential relief from the discontinuance of payments after receipt of a s 36 notice is available, although in an altered form, under the provisions of s 36(15) of the Act which were introduced by the Scheme Review Act. This subsection allows a worker to apply to the WorkCover Ombudsman for a review of a decision to discontinue weekly payments. The WorkCover Ombudsman has power to suspend the operation of the decision to discontinue weekly payments if the Ombudsman forms the view that it was not reasonably open to the compensating authority to decide to discontinue payments having regard to the circumstances of the case.
5. The worker contended that the operation of this provision would achieve a suspension of the operation of a decision to discontinue weekly payments in a significantly lesser number of cases than was the situation under the former s 36(4). This was not disputed by the compensating authority.
6. The s 38 review provisions remain the same as previously apart from some minor procedural amendments. The section relevantly provides:

(1) Subject to subsection (2), the Corporation may on its own initiative and shall if requested by a worker or an employer review the amount of the weekly payments made to a worker who has suffered a compensable disability.

(1a) If a period of incapacity continues for more than one year, the Corporation must conduct a review under this section in the second year of incapacity and in each subsequent year of the incapacity.

(1b) A request by a worker or employer must be made in a designated manner and a designated form.

(2) The Corporation is not required to comply with a request for a review under subsection (1) if the request is made within three months from the completion of an earlier review.

(3) Before the Corporation begins a review under this section, the Corporation must give the worker notice, in a designated form -

(a) informing the worker of the proposed review; and

(b) inviting the worker to make written representation to the Corporation on the subject of the review within a reasonable time specified in the notice.

(4) If the Corporation finds on a review under this section that the worker's entitlement to weekly payments has ceased, or has increased or decreased, the Corporation must adjust or discontinue the weekly payments to reflect that finding.

For example, if the Corporation finds on the review that there has been a change in the extent of the worker's incapacity with a consequent change in the amount the worker is earning or could earn in suitable employment, the Corporation must adjust the weekly payments to reflect the change in entitlement.

(7) On completing the review, the Corporation must give notice, in a designated form, setting out the Corporation's decision on the review, and the rights of review that exist in respect of the decision, to -

(b) the employer from whose employment the compensable disability arose."[37]

1. The dispute resolution provisions under Part 6A of the Act were not amended in any relevant manner for present purposes by the Scheme Review Act. The review procedure continues to provide for an unfettered de novo review of a disputed decision.[38] However, the scope of the operation of the dispute resolution procedures of the Tribunal has been encroached upon in a manner and degree yet to be clarified by the introduction through the Scheme Review Act of a new Part 6C of the Act relating to Medical Panels.
2. In the event of a worker claiming compensation under the Act, or being in receipt of weekly payments of compensation, Part 6C appears to allow either the compensating authority or the Tribunal to refer medical questions arising in that context to a Medical Panel. There is a very broad definition of the range of matters which might constitute a medical question.[39] An opinion of a Medical Panel on such a question is to be adopted and applied by any body or person acting under the Act, and is to be accepted as final and conclusive. These provisions may well have an impact which restricts the scope of the dispute resolution process under Part 6A as it stood unaccompanied by Part 6C under the pre-amendment provisions.[40]

1. There was no issue that, subject to the construction of the Act, the obligation to afford procedural fairness is capable of applying to a decision of the compensating authority under s 35B of the Act if it affects the rights, interests or legitimate expectations of a worker.
2. I consider that it is clear that the statutory power conferred on the compensating authority to discontinue a worker's income maintenance payments is a power to destroy, defeat or prejudice a worker's interests or legitimate expectations. Such a view is consistent with the observations of King CJ in Mitsubishi Motors Australia Ltd v Sosa, albeit they were made with respect to the different circumstance of an arbitrary discontinuance of payments without any attempt to comply with s 36 procedures:[41]

"The legislature in prescribing procedures for the discontinuance or reduction of weekly payments, has recognized that injured workers are dependent for livelihood upon the weekly payments. Arbitrary cessation or reduction could cause great hardship. Procedures are set in place to protect injured workers against arbitrary cessation or reduction of their means of livelihood. The procedures in ss 36, 37, 38, 39 and 41 are designed for that purpose. It is unthinkable that the legislature, having adopted those protective measures, would largely negate them by conferring in s 35 a power on the Corporation or exempt employer to discontinue or reduce weekly payments unilaterally and without compliance with the protective procedures."

1. An assessment under s 35B will only be undertaken if it has been established or accepted that a worker has an incapacity and an entitlement to payment of compensation on that account up to the end of the third entitlement period. A s 35B assessment undertaken in this context is clearly capable of adversely affecting the interests or legitimate expectations of a worker with respect to ongoing payments of compensation. The outcome of the assessment will result in a discontinuance of weekly payments of compensation unless the worker falls within a limited category of workers so disabled as to have "no current work capacity", or unless the worker is in employment and qualifies for some ongoing "make up" compensation under s 35C of the Act. The consequence of an assessment of "current work capacity" as opposed to "no current work capacity" has great significance. It will permanently end, for all intents and purposes, subject to review, any right to ongoing income maintenance payments after 130 weeks of incapacity. It is a profoundly significant procedure and was intended to be so by the legislature in amending the Act to introduce the new entitlement provisions. At the very least, the worker must be accepted as having an interest or a legitimate expectation that the potential benefit of or entitlement to ongoing payments will not be removed, unless the statutory authority either exercises its power to do so by adopting fair procedures appropriate to the circumstances at the time of the initial decision, or provides for an appropriately transparent appeal or review process capable of remedying any denial of procedural fairness at the initial stage.
2. Accepting the above, one must then turn to the construction of the statute to determine what the position is. The compensating authority submitted that the most important consideration in this regard was the review procedure under Part 6A of the Act. It contended that the comprehensive and unfettered nature of the review procedure for a disputed determination excluded the obligation to afford procedural fairness to a worker at the time the decision to discontinue payments was made. It pointed to the approach taken in Twist v Randwick Municipal Council,[42] where the High Court held that the broad nature of the right of appeal to a District Court against an administrative decision excluded the requirement to afford natural justice at the stage the decision complained of was made. Alternatively, the compensating authority contended that if there was any breach of an obligation to afford procedural fairness at the determination stage, the unfettered review procedure under Part 6A of the Act provided the exclusive remedy for addressing any such breach, a proposition said to be reinforced by reference to the factors enumerated by McHugh J in the High Court decision in Miah.
3. McHugh J there identified seven factors relevant to determining whether a right of appeal or review excludes or limits the rules of natural justice. It is useful to assess the compensating authority's contention by reference to each of the seven factors enumerated by McHugh J.[43] I set these out below, with a summary of McHugh J's observations followed by my view as to the significance, if any, of each particular factor in the circumstances of the present case.
4. Nature of the original decision: preliminary or final. McHugh J observed that natural justice requirements are less likely to attach to decisions that are preliminary in nature, such as a decision to lay charges to commence disciplinary proceedings, and that the closer a decision is to having finality and immediate consequences for the individual, the more likely it is that natural justice requirements apply. The nature of the decision under consideration in Miah was whether an applicant for a visa was a refugee. The original decision was categorised as a decision on the ultimate question in issue, it being complete, effective and valid until set aside.
5. In this case the decision was complete upon the making of the determination that the worker had a current work capacity and the issuing of the notice of discontinuance. The decision took effect at the expiration of three months from 3 May 2010. It is a decision on the ultimate question in issue, and remains in force unless set aside on review after the issue is considered afresh. The likelihood of prejudice to a worker arising from a decision of this nature taking effect before the ultimate review process is finalised is a consideration in favour of the worker's contention that a right to be heard should be afforded before the initial decision is made.
6. Original decision made in public or private. A decision made in private that does not affect reputation may not call for natural justice. On the other hand, if the decision is one affecting livelihood, as McHugh J considered was the case with the claim for refugee status in Miah, it may be so important that the fact that the decision is made in private should not constitute a reason for holding that the rules of natural justice are excluded.
7. The same considerations apply here. The decision under s 35B was made in private, and whilst it does not affect the worker's reputation, it does affect his livelihood, although in all probability to a lesser extent than in the case of a person subject to deportation through a refusal to grant refugee status. Overall, the privacy of the s 35B decision ought not to be a reason for holding that the rules of natural justice are excluded.
8. Formalities required for the original decision. Formalities required in the process of making the original decision are relevant. In Miah, there were formal procedures in place for dealing with applications for refugee status, and in particular a requirement to give reasons. McHugh J considered that this made it harder to say that the existence of an appeal right was intended to limit the requirements of natural justice at an earlier level. On the other hand, if, as in Twist, there is no formal procedure and no obligation to give reasons, the inference is that the right of appeal excludes the rules of natural justice.
9. There is no formal procedure for the conduct of an assessment under s 35B of the Act. As is evident from the terms of the s 35B notice, the process undertaken was a review of the material on the claim file. Formalities applied only upon the making of a decision to discontinue upon the basis of the assessment. Written notice of the decision had to be given within a prescribed time and the notice had to contain certain information in accordance with the requirements of the Act.[44] The notice was required to contain a statement of the decision and the general basis upon which it was made, and to provide advice as to the worker's right to apply for review of the decision. It was also required to make reference to the provisions of the Act upon which the compensating authority had relied for its decision, and to include the text of those provisions.
10. Thus there was some formality required with respect to the content of the written notice of decision and the time of notification as to its effect, but less than required by an obligation to publish reasons for decision. These considerations are somewhat equivocal in terms of their weight either for or against the exclusion of the rules of natural justice in the present case.
11. Urgency of the original decision. The greater the urgency of the decision, the more likely it is that natural justice need not be afforded at the initial decision making stage. It was not a consideration in Miah, where the decision was not made until more than 14 months after the application.
12. In this case the compensating authority submitted that there was a degree of urgency in the sense that it was incumbent upon the compensating authority, acting in the interest of the compensation fund and in accordance with its obligation to ensure compensation is paid or not paid in accordance with the law, to make decisions under s 35B quickly. That may be so, but given that the decision was not made until May 2010, over eight months after the worker came to the end of the third entitlement period, and that a s 35B assessment could have been undertaken even before that time,[45] this consideration adds nothing to the compensating authority's position.
13. Nature of the appellate body - judicial, internal, "domestic". If the appellate body is a court, it is easier to infer that the right of appeal is intended to limit or exclude the rules of natural justice at the earlier level. This consideration was significant in Twist, where the appeal body was the District Court. The contrary inference arises if the appeal body is of a nature which does not suggest it is independent.
14. The Workers Compensation Tribunal is a court, or at least is accepted to be required to proceed as a court.[46] This is a factor which clearly favours the position of the compensating authority. However, the strength of this factor is diminished somewhat by the introduction by the Scheme Review Act of Part 6C. As observed above, the provisions of this Part appear to allow medical questions to be referred to a Medical Panel in circumstances where, under s 98H(4) of the Act, the Tribunal is arguably required to adopt and apply opinions of the Panel, including opinions on medical questions relevant to a s 35B assessment.[47] Such opinions might dictate the outcome of a disputed s 35B assessment depending upon the proper construction of s 98H(4) of the Act.[48]
15. Whilst a Medical Panel can be taken to be required to afford natural justice to a worker in forming an opinion on a medical question, the Medical Panel procedures do not provide a degree of transparency equivalent to that of the dispute resolution procedures of the Tribunal. There are no appeal or review rights in relation to the opinion of a Medical Panel. At the very least, the inclusion of the Medical Panel process in the dispute resolution scheme, as an alternative either in part or in whole to the Part 6A dispute resolution procedure, weakens the position of the compensating authority in relation to this factor and the next one to which I now turn.
16. Breadth of appeal - de novo or limited. If there is a complete de novo appeal on the merits of the case, it is easier to infer from the rules or circumstances applicable at first instance that the requirements of natural justice were intended to be excluded or modified. McHugh J's view nevertheless was that the existence of a de novo right of appeal would not always be determinative of the issue.
17. Counsel for the compensating authority made reference to the importance of the de novo right of appeal in Twist. In that case a municipal council, in accordance with powers afforded to it by legislation, ordered a building owner to demolish a dilapidated building. The owner was entitled to appeal to the District Court against the making of the order. It was held by the majority of the High Court that the terms of the legislation, and in particular the unfettered nature of the de novo appeal rights against the order, showed that the owner did not have a right to be heard by the council before the making of the order for demolition. Barwick CJ considered the legislative intention to be unambiguously clear, it being a relevant consideration that the appeal provisions allowed the owner the opportunity to be heard "before his rights are finally affected".[49] That phrase and the subsequent discussion of the appeal process by Barwick CJ, indicate that it was a relevant consideration that an order of the nature in question would not be acted upon in the event of an appeal, as the appeal called for an examination of the facts and for the exercise of a primary discretion as to "whether or not an order for demolition should be made".[50] A successful appeal would be nugatory were that not so in the case of a demolition order.
18. The situation in the present case is materially different. The discontinuance of weekly payments of income maintenance takes effect upon the expiration of the notice period unless it falls within a minority of cases where the WorkCover Ombudsman considers there are grounds to suspend the order. Given the time it takes for a de novo review to be conducted and come to finality, it will inevitably mean that most workers the subject of a s 35B assessment which is disputed will lose their entitlements to weekly payments for some time at least, which in turn may expose some of them to financial distress and loss of assets and possibly to psychological and relationship difficulties. An outcome to review proceedings favourable to a worker who suffers these consequences may not necessarily remedy the prejudice.
19. As observed above, the strength of the de novo appeal factor as a support for the compensating authority's position is diminished by the introduction of an alternative and less transparent method of dispute resolution through Medical Panel opinions on s 35B medical questions.
20. Nature of the interest and subject matter. In Miah, the nature of the interest was the personal security of the applicant for refugee status, or as Kirby J put it, his protection from persecution. The consequences of rejection of his application possibly involved him facing serious threats to his personal security or life upon a return to his country of origin. The subject matter of the legislation involved the enactment of Australia's international obligations towards some of the world's most vulnerable citizens. These matters clearly weighed against a conclusion that Parliament intended that the delegate deciding the refugee application was not required to act in accordance with the rules of natural justice.
21. In the present case the nature of the interest and the subject matter are not as starkly in favour of the affording of natural justice as in Miah. Nevertheless, they remain important indicators in favour of the worker's position. So much is clear from the comments of King CJ in Sosa cited above. The subject matter, being remedial legislation providing workers with rights and benefits in the event of workplace injury, is of fundamental importance to the community generally.
22. The compensating authority contended that a consideration of all of the factors mentioned by McHugh J favoured the exclusion of the rules of procedural fairness in relation to the conduct of an assessment under s 35B by the compensating authority. I do not agree. The strongest factor in favour of the compensating authority's position is the existence of the de novo appeal process. But as has been explained, this is diminished by the fact that the decision to discontinue will take effect in most cases before the outcome of the review process, and by the presence of the new alternative method of dispute resolution for s 35B issues through the Medical Panel process.
23. Before determining the issue however, a specific consideration arising from the statutory scheme must be addressed. This involves the contrast between the provisions relating to the review process under s 38 and the assessment process under s 35B. Before a compensating authority begins a s 38 review, it must give the worker notice of the proposed review, and must invite the worker to make written representation on the subject of the review. The absence of similar provisions in s 35B was submitted by the compensating authority to be a clear indication that the legislature did not intend similar rights to be implied with respect to a s 35B assessment, particularly given that the legislature, in enacting the Scheme Review Act, was to be taken to have turned its attention to s 38 but to have chosen to leave it unaltered except for minor amendment.
24. Support for this position was drawn from the observations of Gilchrist DPJ in Creek as follows:

"It does seem incongruous that Parliament would through s 38 create a process that requires the compensating authority, when reviewing weekly payments payable to workers who have been incapacitated for work for more than a year, to give the worker an opportunity to be heard prior to any decision being made, to take reasonable steps to obtain all relevant evidence and to reach its conclusion in a fair and unbiased way,[51] and yet would not put in place a similar process where issues of work capacity are being assessed that could lead to the discontinuance of weekly payments for workers who have been in receipt of weekly payments for over two years. However the clear words of the section cannot be ignored. Had Parliament intended a process similar to that provided for by s 38 or that s 38 itself had to be invoked in connection with the assessment of a worker's work capacity under s 35A(1) it would have said so."[52]

1. In making these observations, the learned Deputy President was addressing his understanding of a contention, which he rejected, that an analysis of the provisions of s 35B and s 38 respectively should lead to the conclusion that any assessment under s 35B(1) had to be conducted in accordance with the s 38 review procedure, with the worker being given notice of the impending assessment and an opportunity to make representation beforehand. The learned Deputy President's comments as to the conclusions to be drawn from a contrast between the provisions of ss 35B and s 38 in the context of the Scheme Review Act were open to him in the context of the submission which he addressed. But those conclusions are not determinative of the more complex natural justice argument raised in these proceedings.
2. In light of the legal principles cited above as to the obligation to afford natural justice, it is not appropriate to approach the issue solely by consideration of what the clear words of Parliament might indicate by reference to ss 35B and 38 of the Act alone. Certainly it may be said that the contrast between the two sections is a factor favouring a conclusion that a worker undergoing a s 35B assessment has no right to prior notice or to an opportunity to be heard. But regard must be had also to the subject matter, the interests affected, the scheme and administrative framework of the Act,[53] and the history and apparent purpose of relevant amendments.[54]
3. The importance such wider considerations may have is illustrated in Kioa, where the provision of the Migration Act 1958 (Cth) in question (s 18) did not contain any prescribed procedures to protect the interests of prohibited immigrants. The Commonwealth sought to support its position that there was no right to natural justice with respect to any decision made under s 18 by contrasting the provisions of that section with other sections of the Migration Act which did prescribe procedures to protect the interests of "aliens". The disparity was accepted as a factor tending to displace any presumption that the power conferred under s 18 was conditioned on the observance of the principles of natural justice.[55] But this was ultimately outweighed by other factors to the contrary.

74 Kioa also illustrates the necessity to closely consider whether amendments to the legislation in question may now give rise to a presumption that natural justice be observed although that presumption was previously considered to be displaced. Two previous cases had held that the presumption was displaced in the case of the Migration Act having regard to the overall statutory scheme as it then was.[56] The majority in Kioa took the view that subsequent amendments to the Migration Act and related legislation weighed in the balance towards a different outcome.

1. I make some general observations on the overall statutory scheme. The objects of the Act include, among others, the achievement of a reasonable balance between the interests of employers and of workers; fair compensation for employment related disabilities; the efficient and effective administration of the scheme; and the reduction of litigation and adversarial contests to the greatest possible extent.[57]
2. The provisions of the Act in relation to rehabilitation and return to work indicate that early intervention and continued monitoring of the worker's recovery and ongoing capacity for work is of great importance.[58] As part of that process the ongoing level of a worker's capacity for work and entitlement to compensation is regularly reviewed.[59] The compensating authority can be expected to carry out any of its obligations under such review procedures in accordance with its duty to discharge its functions in a manner which does not involve it in simply considering its own interests: Robbins v Harbord.[60] Thus, as counsel for the compensating authority contended, "it is to be assumed for the purposes of construction of the Act that the decision-maker will exercise the power conferred by s 35B in accordance with the objects of the [A]ct and not solely in the interests of the compensating authority".[61]
3. However, the compensating authority cannot invoke this consideration solely by reference to the manner in which it can be expected to conduct a s 35B assessment. It must also be assumed that the compensating authority will comply with other review and assessment obligations under the Act, including a review process which is related to or may influence the range of material able to be considered on a s 35B assessment. The legislature must be taken to have contemplated that the compensating authority would so act when it inserted s 35B into the Act in its current form. Thus it is to be assumed that, at an appropriate time no more than twelve months before a s 35B assessment, the compensating authority will have complied with any statutory obligation to conduct the annual s 38 review of the worker's entitlement to weekly payments having regard to any changes in the extent of the incapacity, in the context that the worker would have been given prior notice of that review and an opportunity to make representation.
4. It can also be expected that any worker who is approaching or has passed the end of the third entitlement period, and who considers that he or she should be entitled to continue to be compensated on the basis of having no current work capacity, would take up any opportunity made available by s 38 of the Act before a pending s 35B assessment to make representation and provide up to date medical or other information bearing on the extent of the incapacity. It could also be expected that a worker dissatisfied with any such review would dispute it and have the position clarified by de novo review. Any information put forward in the de novo review process of the Tribunal could be expected to be considered on any subsequent s 35B assessment.
5. In this case the compensating authority failed to comply with its obligation to conduct a s 38 review by November 2009, such that by the time the s 35B assessment took place, the last s 38 review had taken place eighteen months before. The worker was thus denied the opportunity of putting forward more recent information which may have been relevant to a subsequent s 35B assessment. The conduct of a s 35B assessment in these circumstances is not consistent with the obligations of the compensating authority under the Act.
6. Bearing in mind the various other considerations dealt with above, the relationship between s 35B and s 38 leads to the conclusion that a worker is entitled to be afforded procedural fairness in the conduct of a s 35B assessment.
7. That then leads to the question as to what is required in the circumstances to discharge the obligation to afford procedural fairness. It is well accepted that what is required is variable. As Brennan J observed in Kioa, the content of the obligation at times may be reduced to "nothingness".[62] This was said in a particular context, where it might be thought that giving prior notice of a deportation order could cause the subject of the proposed order to go into hiding, thus frustrating the purpose for which the statutory power was conferred. But the general notion applies in the present circumstances, in that compliance with statutory obligation to conduct a review in accordance with s 38 before a s 35B assessment may reduce the extent of what needs to be done to afford procedural fairness on a s 35B assessment, compared to the position where there has been a failure to conduct a s 38 review as required by s 38(1a) of the Act.
8. Thus, if a s 38 review takes place as and when it should before a subsequent s 35B assessment, the worker, whilst entitled to be afforded natural justice on the s 35B assessment, arguably may have no right to be notified or heard further beyond the right already afforded under the s 38 review. Whether that is so or not may depend, in part, on the extent, nature and import of any additional material relevant to the worker's capacity for work which has come to hand since the last s 38 review, and which is either relied upon by the compensating authority or could have been brought to its attention by the worker for the purposes of the s 35B assessment. It is not appropriate to comment further as each case will depend on its own circumstances. What can be decided is that in the present case, the obligation to provide procedural fairness with respect to the s 35B assessment of the worker has not been met due to the failure of the compensating authority to comply with its antecedent obligation to conduct a s 38 review when required and to thus provide an opportunity to the worker to make representation at that stage.
9. The worker should have been given notice of the pending s 35B assessment and an opportunity to make representation in the same way that he would have been on the s 38 review which should have been conducted by November 2009. In failing to provide the worker with this opportunity, the compensating authority contravened its obligations under s 35B with respect to the assessment. This is no theoretical detriment to the worker. It can be seen from the content of the s 35B determination that the medical, vocational and employment material considered by the decision-maker ranged from dates between February 2007 and September 2009, with much of the information being somewhat dated. Had a further s 38 review been undertaken in November 2009, there was an obvious opportunity for the worker to provide additional up to date material on the extent of his incapacity.
10. It is not relevant in coming to a decision on the alleged denial of procedural fairness to embark on a consideration of the extent to which the material considered by the decision-maker was supportive of the determination made, or whether and to what extent the worker may have been able to provide updated material which pointed to a different conclusion. As Deane J said in Kioa, in relation to the making of a deportation order:

"...the mere circumstance that there is no apparent likelihood that the person directly affected could successfully oppose the making of a deportation order neither excludes nor renders otiose the obligation of the administrative decision-maker to observe the requirements of procedural fairness. Indeed, the requirements of procedural fairness may be of added importance in such a case in that they ensure an opportunity of raising for consideration matters which are not already obvious."[63]

1. Before proceeding to consider the consequences of the breach of the obligation to provide procedural fairness, I deal with a further issue raised by the compensating authority. It submitted that if a requirement to afford procedural fairness arose in relation to a decision under s 35B, it would necessarily imply the same requirement in relation to any decision to discontinue payments under s 36. It contended that it was improbable that the legislature intended such a requirement, and that decisions in relation to a claim for compensation were like many other administrative decisions that affected people individually, and which did not require that natural justice be afforded at the time of the initial decision - for example, eligibility for social security benefits, assessment of taxation returns, and evaluation of employment applications.
2. I reject that submission. My decision that the compensating authority was in breach of its obligation to provide procedural fairness in the circumstances of this case is confined to the particular facts, and will not necessarily extend to other s 35B assessments following a timely s 38 review. Even more so, my decision will not necessarily have any implications for other discontinuances effected under s 36, the grounds for which may arise from a variety of situations as set out in s 36(1) of the Act. Moreover, in some circumstances the grounds upon which discontinuance takes place might be remedied by the worker with the result that weekly payments might resume.[64] That is not the case with a s 35B assessment, barring an unforeseen deterioration in a worker's condition, given it is founded on a potential loss of entitlement due to the effluxion of time and the extent of incapacity. An assessment of current work capacity, will permanently end any further income maintenance entitlement subject to review or the application of s 35C of the Act.

1. The worker contended that the failure of the compensating authority to afford procedural fairness rendered the determination invalid. He referred to the Full Bench decision of Staines v WorkCover/Allianz Australia Workers Compensation (SA) Ltd[65] with respect to the consequences of a failure to afford procedural fairness under s 38(3) of the Act. It was found that such a failure rendered the decision on a s 38 review invalid. The worker contended that the same approach should be taken where an assessment under s 35B is conducted in breach of the obligation to provide procedural fairness, particularly in circumstances where the decision to terminate payments is not suspended pending the decision of the Tribunal with a resultant potential for financial hardship which might not be able to be remedied by a successful outcome before the Tribunal.
2. The compensating authority contended that the Tribunal had no power to declare the determination invalid in the event of a conclusion that there was a failure to afford natural justice. It contended that what was being alleged here was a failure to observe a common law obligation to afford procedural fairness, and that the remedy sought was a declaration of invalidity in the exercise of a supervisory jurisdiction over the operations of the compensating authority, a remedy only available by way of an application for judicial review by the ordinary courts. As an adjunct to this submission, the compensating authority contended that the decision of the Full Tribunal in Rundle v WorkCover Corporation/Vero Workers Compensation (SA) Ltd,[66] to the extent that it accepted the Tribunal was empowered to determine that a determination was invalid, was wrongly decided. This was not a submission which was fully argued before us, and neither the Tribunal nor the worker were given notice of the submission before it was made in the course of oral submissions. In the circumstances I would decline to enter into a reconsideration of the approach taken in Rundle.
3. In my view the situation now presented to the Tribunal is no different from that in any other case where a determination to discontinue is made in breach of specific statutory procedural requirements. In those instances, where for example a notice of discontinuance fails to give the prescribed period of notice before the discontinuance takes effect, the determination is voidable on the authority of Rundle. In the present circumstances, the existence of the obligation to afford procedural fairness is determined by reference to whether it is excluded by the terms of the statute. There is no right to be afforded natural justice which exists independently of statute.[67] If an analysis of the statutory provisions produces the outcome that the obligation to afford procedural fairness is not excluded, then a failure to comply with procedural obligations implicit in the statute, in my view, does not have any different character than a failure to comply with procedural obligations expressly set out in the statute.
4. Accordingly the outcome of the breach of procedural fairness should be determined in accordance with the approach taken in Rundle. The failure to comply with the obligation to afford procedural fairness in the circumstances of the present case renders the disputed determination voidable. As stated in Rundle, such a conclusion will not necessarily result in the determination being set aside as invalid. Whether that outcome should follow involves the Tribunal in the exercise of a discretion as to whether in the particular circumstances of the case it is appropriate or not to grant such relief. The relevant considerations in this regard are set out in Rundle.[68] Given the limited scope of the issues referred to the Full Tribunal in this matter, I do not consider it is appropriate to decide at this stage whether the voidable determination should be set aside as invalid. The parties should have the opportunity to address us further on that question.

1. I return to the agreed issues for determination set out above.[69]
2. The compensating authority is required to afford a worker procedural fairness when undertaking an assessment and prior to making a decision under s 35B of the Act. What must be done to discharge that obligation will vary depending upon the circumstances. If before that time the compensating authority has given a worker an opportunity to make representation on the level of incapacity as and when required by s 38 of the Act, and if the s 35B assessment is conducted having proper regard to relevant historical and contemporaneous material, including any material supplied by the worker on the most recent s 38 review, then it may not be necessary that the worker be given specific notice of the impending s 35B assessment or the opportunity to make representation with respect to it. However, the fact that a timely s 38 review process has taken place will not necessarily be determinative of the issue. Each case must be considered in light of its own facts.
3. In the present case, the s 35B assessment was conducted in the context of a failure by the compensating authority to give the worker the opportunity of making representation on a s 38 review which should have preceded the s 35B assessment. This resulted in a breach of the compensating authority's obligation to afford the worker procedural fairness with respect to the s 35B assessment. I would find that this breach renders the subsequent determination voidable.
4. As is evident from the above conclusion, there is an interrelationship between the review procedure under s 38 and the assessment process under s 35B, such that a failure to comply with s 38(1a) in the year prior to an assessment pursuant to s 35B, may of itself render such an assessment voidable on account of a denial of procedural fairness.
5. In the circumstances I would conclude that the disputed determination is voidable, and that the parties should be given the opportunity to address us further on whether as a result the determination of 3 May 2010 should be set aside as invalid.

1. I agree with the reasons for decision and conclusion of Deputy President Judge Hannon.

1. The facts and issues involved in this referral are set out in the judgment of Deputy President Judge Hannon.
2. I agree, for the reasons given by DPJ Hannon, that a compensating authority is required to afford a worker procedural fairness when undertaking an assessment and prior to making a decision under s 35B of the Act.
3. Absent clear expression in the legislation of Parliament's intention to exclude the need to observe the principles of natural justice in the exercise of granted powers, the courts will presume that the legislature intended those principles to be observed.[70]
4. Such clear expression of Parliament's intention is rarely seen. In my view, it is missing here. Moreover, having regard to the general scheme and objects of the Act it can, in my view, be readily inferred that the compensating authority is required to discharge its statutory functions in a fair and even handed way that takes into account the rights and interests of the worker.[71]
5. The more difficult task is to identify what must be done to discharge the obligation in the circumstances of any case.
6. Mason J in Kioa said[72]:

"Where the decision in question is one for which provision is made by statute, the application and content of the doctrine of natural justice or the duty to act fairly depends to a large extent on the construction of the statute. In Mobil Oil Australia Pty Ltd v Federal Commissioner of Taxation, Kitto J pointed out that the obligation to give a fair opportunity to parties in controversy to correct or contradict statements prejudicial to their view depends on 'the particular statutory framework'. What is appropriate in terms of natural justice depends on the circumstances of the case and they will include, inter alia, the nature of the inquiry, the subject-matter, and the rules under which the decision-maker is acting: Reg v Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group; National Companies and Securities Commission v News Corporation Ltd.

In this respect the expression 'procedural fairness' more aptly conveys the notion of a flexible obligation to adopt fair procedures which are appropriate and adapted to the circumstances of the particular case. The statutory power must be exercised fairly, ie in accordance with procedures that are fair to the individual considered in the light of the statutory requirements, the interests of the individual and the interests and purposes, whether public or private, which the statute seeks to advance or protect or permits to be taken into account as legitimate considerations: cf Salemi [No 2], per Jacobs J.

When the doctrine of natural justice or the duty to act fairly in its application to administrative decision-making is so understood, the need for a strong manifestation of contrary statutory intention in order for it to be excluded becomes apparent. The critical question in most cases is not whether the principles of natural justice apply. It is: what does the duty to act fairly require in the circumstances of the particular case? It will be convenient to consider at the outset whether the statute displaces the duty when the statute contains a specific provision to that effect, for then it will be pointless to inquire what the duty requires in the circumstances of the case, unless there are circumstances not contemplated by the statutory provision that may given rise to a legitimate expectation. However, in general, it will be a matter of determining what the duty to act fairly requires in the way of procedural fairness in the circumstances of the case. A resolution of that question calls for an examination of the statutory provisions and the interests which I have already mentioned." (footnotes omitted)

1. Section 35B(1) provides that a worker's entitlement to weekly payments ceases at the end of the third entitlement period unless the worker is assessed by the Corporation as having no current work capacity and as being likely to continue indefinitely to have no current work capacity. Section 35B says nothing about how such an assessment is to be made. As to when, it says only that it may be made before or after the end of the third entitlement period: s 35B(5).
2. Such an assessment is not mandatory, but s 35B(4) provides that a worker in receipt of weekly payments under para (a) of s 35A(3) is entitled to continue to receive weekly payments at the rate prescribed by that paragraph unless or until the Corporation has made such an assessment. If that is done and the decision made to discontinue payments, s 35B(6) requires that the worker be given at least thirteen weeks notice in writing of the proposed discontinuance.
3. On 24 November 2008, ie on the second anniversary of the commencement of the incapacity, the compensating authority issued a determination under s 38(7) to the effect that the weekly payments then being made to the worker were to remain unchanged on the basis that the worker was "currently partially deemed totally incapacitated for work". The worker's weekly payment entitlement was calculated in the amount of $1714.34, being 80% of his notional weekly earnings.
4. It is agreed that the compensating authority did not conduct a s 38 review in the third year of incapacity, as it was obligated to do by s 38(2). The worker continued to receive weekly payments on the basis of his entitlement as determined by the second year s 38 review with economic adjustments in accordance with s 39 of the Act.
5. It is also agreed that prior to the work capacity assessment and decision dated 3 May 2010 the compensating authority did not give the worker notice that it proposed to conduct an assessment under s 35B of the Act or invite him to be heard in relation to either the assessment or its decision to stop weekly payments.
6. The notice of 3 May 2010 records that the worker "passed the end of your third entitlement period in the week ending 19/9/2009". The notice implies that it was this occurrence that prompted the assessment of the worker's current work capacity and entitlement to weekly payments, notwithstanding that s 35B(4) allows such an assessment before or after the end of the third entitlement period.
7. In Creek v WorkCover Corporation Employers Mutual Limited (GI Pty Ltd)[73] it was contended on behalf of the worker that where s 35B(1) speaks of "is assessed" there should be read in the words "following a s 38 review". In addressing this contention, Deputy President Judge Gilchrist referred to the incongruity of Parliament creating through s 38 a process requiring that the compensating authority, when reviewing weekly payments payable to workers who have been incapacitated for work for more than a year, give the worker an opportunity to be heard prior to any decision being made, take reasonable steps to obtain all relevant evidence and reach its conclusion in a fair and unbiased way, but not putting in place a similar process where issues of work capacity are being assessed that could lead to the discontinuance of payments for workers who have been in receipt of payments for over two years.
8. It was DPJ Gilchrist's view that the clear words of the legislation could not be ignored and that "Had Parliament intended a process similar to that provided by s 38 or that s 38 itself had to be invoked in connection with the assessment of a worker's work capacity under s 35A(1) it would have said so".
9. I respectfully concur with DPJ Gilchrist's view. I think it is clear that in enacting s 35B Parliament intended that there not be a specific consultative process with the worker akin to that provided by s 38. However, I also think it can be presumed that Parliament contemplated that the compensating authority would comply with its statutory obligations, including, relevantly, its obligation to conduct s 38 reviews within the stipulated timeframes.
10. Timely s 38 reviews not only ensure that the compensating authority is kept up to date with any changes in the extent of the worker's incapacity and other changes relevant to the calculation of the quantum of his weekly payments, but, perhaps more importantly, give the worker the opportunity to be heard on matters pertaining to these topics.
11. Whilst it is the case that a worker may request a s 38 review of weekly payments, he is unlikely to pursue this where, as here, he is receiving his full entitlement.
12. For the compensating authority here to default on its obligation to conduct a review of weekly payments and then determine to end weekly payments on the basis of a private assessment that the worker has a current work capacity without notice to or opportunity of input from the worker hardly reflects a fair and even-handed discharge of its statutory functions. I do not think this is what Parliament intended when enacting s 35B.
13. In the circumstances of this case, and to the extent indicated, I think that there is an inter-relationship between s 38 and an assessment made under s 35B, such that a failure to comply with s 38(1a) in the year prior to an assessment under s 35B may lead to the conclusion that the worker has been denied procedural fairness. On the facts here, it is difficult to see how one could not come to this conclusion.
14. The consequences of a failure to afford a worker procedural fairness are to be determined in accordance with the approach taken in Rundle v WorkCover Corporation/Vero Workers Compensation (SA) Ltd[74]. Not every procedural irregularity will result in the notice or determination being set aside.
15. For present purposes, no distinction should be drawn between a failure by the compensating authority to comply with a procedural obligation expressly set out in the Act and a failure by it to afford procedural fairness as is to be implied from the provisions of the Act.
16. The reservations expressed by the Full Tribunal in Rundle about using the words "void" and "voidable" should, in my view, be heeded. The real issue is to identify what Parliament intended the effect of a procedurally irregular notice or determination to be.
17. The Tribunal has jurisdiction to determine this. It is not a case, as suggested by Mr Stanley, of the Tribunal seeking to exercise a supervisory jurisdiction over the operations of the compensating authority.
18. Section 85, moreover, requires that the Tribunal "must act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms". That is to say, that it ignore technicalities and focus on the substantial merits of the case where to do otherwise would "be manifestly unfair" or would bring "the administration of justice into disrepute among right-thinking people".[75]
19. Section 85 empowers the Tribunal to ignore legal or other technicalities and instead adopt a broad approach of common sense and common fairness. [76]
20. Whether the compensating authority's determination dated 3 May 2010 should be set aside will likely depend on the Tribunal's consideration of s 85 and the principles of common sense and common fairness it invokes.
21. I would answer the agreed issues for determination thus:
    • (a) A compensating authority is required to afford a worker procedural fairness when undertaking an assessment and prior to making a decision under s 35B of the Act.
    • (b) A failure to afford a worker procedural fairness in the circumstances contemplated does not render a subsequent determination based on an assessment under s 35B void, but rather irregular and susceptible to an application for it to be set aside on the grounds of irregularity.
    • (c) In the circumstances of this case, there is an interrelationship between s 38 and an assessment done under s 35B, such that a failure to comply with s 38(1a) in the year prior to an assessment under s 35B may lead to the conclusion that the worker has been denied procedural fairness.

It is the practice of this Tribunal to publish its reasons for decision in full on the Internet. If any party or person contends that these reasons for decision should not be published in full the party or person must make an application within seven days of the delivery of these reasons. The application shall be by an Application for Directions with a supporting affidavit and should be addressed to the presiding member(s). If no such application is lodged within the time specified these reasons will be published in accordance with the Tribunal's usual practice.

[1] Defined in the interpretation provision - s 3 of the Act.

[2] Consent Order 14 March 2008 - Full Bench Referral Book (RB) p 7 (RB/7).

[3] The relevant provisions of s 38 are set out below at para 42. If a period of incapacity extends for more than one year, as in this case, the compensating authority must conduct a review of the amount of weekly payments in the second year of incapacity and in each subsequent year of the incapacity - s 38(1a) of the Act.

[5] Agreed Statement of Facts - para 4 RB/3.

[6] Determination of the compensating authority 3 May 2010 - RB /14-28.

[7] The "third entitlement period" is defined in s 35(8) of the Act.

[8] As opposed to 28 days notice that would otherwise have applied under s 36(3b)(b) of the Act.

[9] That is, he was not assessed as having "no current work capacity", and likely to continue indefinitely to have no current work capacity - s 35B(1)(a) and (b) of the Act.

[10] [1985] HCA 81; (1985) 159 CLR 550.

[11] [1990] HCA 57; (1990) 170 CLR 596.

[13] Mason CJ, Deane and McHugh JJ at 598 - citations omitted.

[14] Commissioner of Police v Tanos [1958] HCA 6; (1958) 98 CLR 383 at 395-396 per Dixon CJ and Webb J.

[20] Brennan J in Kioa at pp 616 - 619; Mason CJ: Deane and McHugh JJ in Annetts at p 599 - 600.

[24] Kioa per Brennan J at 614; Mason J at 584 - 585.

[25] [2010] HCA 23; (2010) 241 CLR 252 per French CJ, Gummow, Hayne, Crennan and Kiefel JJ at paras 11 - 15.

[26] [2010] HCA 41 unanimously at paras 74 and 75.

[27] [2010] SAWCT 22.

[28] These amendments were effected by s 15 of the Scheme Review Act and came into force on 1 July 2008.

[29] For the purposes of Sch 1 cl 4(2) the "relevant day" is 1 April 2009 - Workers Rehabilitation and Compensation (Scheme Review) (Relevant Day) Proclamation 2009 - Government Gazette 26 March 2009 at p 1156.

[31] For the sake of convenience, I refer only to discontinuance of weekly payments, although the provisions and my observations apply equally in the case of a proposed reduction.

[32] Reg 7(b) of the Workers Rehabilitation and Compensation (General) Regulations 1999 ("the Regulations").

[33] Specifically, through s 36(1)(h), as it then was, which permitted discontinuance under s 36 if the discontinuance of weekly payments was authorised or permitted by some other provision of the Act.

[34] Mitsubishi Motors Australia Ltd v Sosa [1995] SASC 5084.

[37] The only amendments made to this section by the Scheme Review Act were the addition of subs (1b) and alterations to subsecs (3) and (7) to change the phrase "in the form determined by the regulations" to "in a designated form".

[38] Section 94C(1) of the Act remains in the same terms as previously - see fn 35 above.

[40] Some of the implications arising from these provisions were considered in Yaghoubi v Employers Mutual Limited (BDS People Pty Ltd) [2010] SAWCT 26 - that decision was appealed and together with another matter that appeal was heard by the Full Supreme Court on 8 December 2010. The decision was reserved.

[41] [1995] SASC 5084 at para [15].

[42] [1976] HCA 58; (1976) 136 CLR 106.

[44] Sections 35B(6) and 36(3); reg 7 of the W_orkers Rehabilitation and Compensation (General) Regulations 1999_ ("the Regulations") - the latter provision has been repealed and replaced by reg 35 of the Workers Rehabilitation and compensation Regulations 2010 as from 1 November 2010.

[46] Mitsubishi Motors Australia Ltd v Kowalski [2004] SASC 302; South Australian Fire and Emergency Services Commission v Workers Compensation Tribunal & Anor [2009] SASC 213.

[47] See s 98E(h) which provides that a "medical question" means, among others, a question as to the extent or permanency of a worker 's incapacity for work and the question whether a worker has no current work capacity or a current work capacity.

[48] A matter which may be considered in the Yaghoubi appeal referred to at fn 40 above.

[51] McAvoy v BT and LR Churcher (NZI Workers Comp (SA) Ltd v Workcover) [1998] SAWCT 42.

[54] Per Kirby J in Miah at para 178.

[56] Salemi v MacKellar (No 2) [1977] HCA 26; (1977) 137 CLR 396; Reg v McKellar; ex parte Ratu [1977] HCA 26; (1977) 137 CLR 396.

[59] Part 4 Division 4 of the Act. - and in particular, ss 37 - 39 inclusive.

[60] [1994] SASC 4571; (1994) 62 SASR 229 at 236 per King CJ.

[64] For example, a breach of an obligation or engaging in conduct which allegedly results in a breach of mutuality, where the worker may have the opportunity to take steps to remedy the breach or otherwise restore mutuality and thus the entitlement to ongoing weekly payments.

[65] [2004] SAWCT 127 and in particular at paras 37 and 43.

[66] [2006] SAWCT 12.

[70] Kioa v West [1985] HCA 81; (1985) 159 CLR 550 per Brennan J at 609

[71] WorkCover Corporation/CGU Workers Compensation (SA) Pty Ltd (Duell's Furniture Removals Pty Ltd) v Davidson [2000] SAWCT 32 at para 30; Robins v Harbord and General Motors Holden [1994] SASC 4571; (1994) 62 SASR 229 per King CJ at 236

[73] [2010] SAWCT 22

[74] [2006] SAWCT 12

[76] Earl v Slater and Wheeler (Airlyne) Ltd (1973) 1 All ER 145 at 150_; Trittenheim v H & H Gill Nominees_ (1994) 63 SASR 434 at 442