Sabanayagam v St George Bank Limited

Statutory Framework

1. Each of the WC Act and the WIM Act is to be construed with and as if it forms part of the other. [12] In order to consider the arguments advanced on the appeal it is necessary to consider provisions in both Acts, often introduced into the legislation at different times.
2. The most significant provisions for present purposes, however, are those contained in Div 2 of Pt 3 of the WC Act, which is headed "Weekly compensation by way of income support". Division 2 of Pt 3 was very substantially amended by the Workers Compensation Legislation Amendment Act 2012 (NSW) (2012 Act). The 2012 Act also amended other provisions in the WC Act and the WIM Act. It is common ground that the amendments effected by the 2012 Act applied to the Worker as from 1 January 2013. [13]
3. Before setting out the provisions relevant to the appeal to this Court, it is convenient to refer to the Explanatory Memorandum to the Workers Compensation Legislation Amendment Bill 2012. It stated that the amendments were intended to implement the following changes: "(i) the calculation of weekly payments will be based on the worker's pre-injury average weekly earnings rather than on the worker's current weekly wage rate at the time of injury, (ii) the amount of weekly compensation will be calculated as a percentage of pre-injury average weekly earnings (with a maximum compensation amount of $1,838.70) minus any current earnings or an amount the worker is able to earn in suitable employment, (iii) the rate of compensation will vary during 3 entitlement periods (weeks 1-13, weeks 14-130, and after week 130), with weekly payments after week 130 only available to totally incapacitated workers or partially incapacitated workers who have returned to work for at least 15 hours per week, (iv) no weekly compensation will be payable to a worker after 5 years of weekly payments (with an exception for injured workers with more than 20% whole person impairment), (v) a new dispute resolution process for disputes about work capacity decisions will feature internal review by an insurer of its decision with a merit review by WorkCover Authority and a procedural review by the proposed WorkCover Independent Review Officer, … (vii) insurers will conduct a work capacity assessment of injured workers to assess capacity for work at various stages throughout the life of the claim".
4. Prior to the enactment of 2012 Act, Div 2 of Pt 3 of the WC Act comprised ss 35-58 and had no subdivisions. The 2012 Act repealed ss 34-44, 52A, 54, 55A and 56 and inserted the following subdivisions in Div 2: Subdiv 1 (Interpretation): s 32A Subdiv 2 (Entitlement to weekly compensation): ss 34-42 Subdiv 3 (Work capacity): ss 43-44B Subdiv 4 (Interpretation): ss 44C-44I, 54
5. Further amendments to Div 2 of Pt 3 of the WC Act were made by the Workers Compensation Amendment Act 2015 (NSW) (2015 Act). Relevantly, the 2015 Act amended s 44 of the WC Act (as inserted by the 2012 Act), which set out the review procedures available to a worker challenging a work capacity decision. The 2015 Act also transferred the amended s 44, renumbered as s 44BB, to a new Subdiv 3A of Div 2 of Pt 3 of the WC Act (ss 44BA-44BF). The 2015 Act commenced on 4 December 2015. However, the transitional provisions state that an amendment made by the 2015 Act to s 44 (now renumbered as s 44BB) extends to a work capacity decision made before the commencement of the amendment. Thus in the present case, s 44BB as amended by the 2015 Act applied to the decision made by the Insurer, assuming that it was a "work capacity decision".

WC Act

1. Part 2 of the WC Act deals with liability of employers to pay compensation. Section 9(1) provides that a worker who has received an injury shall receive compensation from the worker's employer in accordance with the WC Act. An "injury" is defined to include a personal injury arising out of or in the course of employment (s 4). "Worker" is defined to mean, subject to express exclusions, a person who has entered into or works under a contract of service (s 4).
2. Part 3 of the WC Act deals with the compensation payable to workers. The compensation includes death benefits (Div 1), weekly compensation by way of income support (Div 2), compensation for medical, hospital and rehabilitation expenses (Div 3) and compensation for non-economic loss (Div 4).
3. Section 33 (in Subdiv 2 of Div 2 of Pt 3) provides that: "If total or partial incapacity for work results from an injury, the compensation payable by the employer under this Act to the injured worker shall include a weekly payment during the incapacity."
4. The maximum amount of weekly compensation is $1,838.70, but this amount is adjusted in accordance with the indexation provisions of Div 6 of Pt 3 of the WC Act (s 34(1), (2)).
5. Sections 36 and 37 of the WC Act specify the rates of weekly compensation to which an injured worker is entitled during the "first entitlement period" (13 weeks) and "the second entitlement period" (weeks 14-130). The relevant formula for each period incorporates the worker's pre-injury average weekly earnings and the worker's earnings after the injury. The latter is calculated as the greater of the amount the worker is able to earn in "suitable employment" [14] and the worker's current weekly earnings (s 35).
6. Section 38(1) of the WC Act states that a worker's entitlement to weekly payments ceases on the expiry of the second entitlement period (that is, after compensation has been paid for 130 weeks) unless the worker is entitled to compensation under other provisions in s 38. The relevant provisions are as follows: "(2) A worker who is assessed by the insurer as having no current work capacity and likely to continue indefinitely to have no current work capacity is entitled to compensation after the second entitlement period. (3) A worker … who is assessed by the insurer as having current work capacity is entitled to compensation after the second entitlement period only if: (a) the worker has applied to the insurer in writing … no earlier than 52 weeks before the end of the second entitlement period for continuation of weekly payments after the second entitlement period, and (b) the worker has returned to work … for a period of not less than 15 hours per week and is in receipt of current weekly earnings … of at least $155 per week, and (c) the worker is assessed by the insurer as being, and as likely to continue indefinitely to be, incapable of undertaking further additional employment or work that would increase the worker's current weekly earnings. … (4) An insurer must, for the purpose of assessing an injured worker's entitlement to weekly payments of compensation after the expiry of the second entitlement period, ensure that a work capacity assessment of the worker is conducted: (a) during the last 52 weeks of the second entitlement period, and (b) thereafter at least once every 2 years. … (8) A worker's entitlement to compensation under this section may be reassessed at any time." [Emphasis added.]
7. Section 38(6) and (7), which are not reproduced, set out the formulae for determining the rates of compensation, respectively, for an injured worker who has "no current work capacity" and an injured worker who has "current work capacity". The formula applicable to an injured worker who has "current work capacity" incorporates a reference to "suitable employment".
8. The key terms incorporated in s 38(2) and (3) are "no current work capacity" and "current work capacity". These terms are defined, rather awkwardly, in s 32A of the WC Act: "'no current work capacity, in relation to a worker, means a present inability arising from an injury such that the worker is not able to return to work, either in the worker's pre-injury employment or in suitable employment.' 'current work capacity, in relation to a worker, means a present inability arising from an injury such that the worker is not able to return to his or her pre-injury employment but is able to return to work in suitable employment.'" The term "suitable employment", which is used in the statutory formulae for calculating rates of weekly compensation, is defined in s 32A as follows: "'suitable employment', in relation to a worker, means employment in work for which the worker is currently suited: (a) having regard to: (i) the nature of the worker's incapacity and the details provided in medical information … (ii) the worker's age, education, skills and work experience, and … (v) such other matters as the Workers Compensation Guidelines may specify, and (b) regardless of: (i) whether the work or the employment is available, and (ii) whether the work or the employment is of a type or nature that is generally available in the employment market, and (iii) the nature of the worker's pre-injury employment, and (iv) the worker's place of residence."
9. Section 43 of the WC Act is central to the present appeal. It contains a privative clause and a provision qualifying the grant by the WIM Act of exclusive jurisdiction to the Commission to determine matters arising under the legislation. [15] It also defines "work capacity decisions". Section 43 provides as follows: "(1) The following decisions of an insurer (referred to in this Division as work capacity decisions) are final and binding on the parties and not subject to appeal or review except review under section 44BB or judicial review by the Supreme Court: (a) a decision about a worker's current work capacity, (b) a decision about what constitutes suitable employment for a worker, (c) a decision about the amount an injured worker is able to earn in suitable employment, (d) a decision about the amount of an injured worker's pre-injury average weekly earnings or current weekly earnings, (e) a decision about whether a worker is, as a result of injury, unable without substantial risk of further injury to engage in employment of a certain kind because of the nature of that employment, (f) any other decision of an insurer that affects a worker's entitlement to weekly payments of compensation, including a decision to suspend, discontinue or reduce the amount of the weekly payments of compensation payable to a worker on the basis of any decision referred to in paragraphs (a)-(e). (2) The following decisions are not work capacity decisions: (a) a decision to dispute liability for weekly payments of compensation, (b) a decision that can be the subject of a medical dispute under Part 7 of Chapter 7 of the 1998 Act. (3) The Commission does not have jurisdiction to determine any dispute about a work capacity decision of an insurer and is not to make a decision in respect of a dispute before the Commission that is inconsistent with a work capacity decision of an insurer."
10. Section 44A deals with "Work capacity assessment" and relevantly provides as follows: "(1) An insurer is to conduct a work capacity assessment of an injured worker when required to do so by this Act or the Workers Compensation Guidelines and may conduct a work capacity assessment at any other time. (2) A 'work capacity assessment' is an assessment of an injured worker's current work capacity, conducted in accordance with the Workers Compensation Guidelines. (3) A work capacity assessment is not necessary for the making of a work capacity decision by an insurer." The WIM Act provides for the issuing of Workers Compensation Guidelines. [16]
11. As I have noted, s 44BB was introduced into the WC Act by the 2012 Act as s 44, but has since been renumbered as s 44BB and placed in subdiv 3A of Pt 3 of the WC Act. Section 44BB provides for review of work capacity decisions as follows: "(1) An injured worker may refer a work capacity decision of an insurer for review: (a) by the insurer in accordance with the Workers Compensation Guidelines within 30 days after an application for internal review is made by the worker, or (b) by the [WorkCover Authority of New South Wales] Authority (as a merit review of the decision), but not until the dispute has been the subject of internal review by the insurer, or (c) to the Independent Review Officer (as a review only of the insurer's procedures in making the work capacity decision and not of any judgment or discretion exercised by the insurer in making the decision), but not until the dispute has been the subject of internal review by the insurer and merit review by the Authority. … (3) The following provisions apply to the review of a work capacity decision when the reviewer is the Authority or the Independent Review Officer: … (g) recommendations made by the Authority are binding on the insurer and must be given effect to by the insurer, (h) recommendations made by the Independent Review Officer are binding on the insurer and the Authority. … (5) The Commission is not to make a decision in proceedings concerning a dispute about weekly payments of compensation payable to a worker while a work capacity decision by an insurer about those weekly payments is stayed."

WIM Act

1. The Notice issued by the Insurer was purportedly given pursuant to s 74 of the WIM Act, which was introduced by the 2012 Act. [17] Section 74 provides as follows: "(1) If an insurer disputes liability in respect of a claim or any aspect of a claim, the insurer must give notice of the dispute to the claimant. (2) The notice must contain the following: (a) a concise and readily understandable statement of the reason the insurer disputes liability and of the issues relevant to the decision (indicating, in the case of a claim for compensation, any provision of the workers compensation legislation on which the insurer relies to dispute liability), (b) such other information as the regulations may prescribe. … (5) Notice is not required to be given under this section with respect to a dispute if notice has been given under section 54 of the [WC] Act with respect to the dispute and that notice contained the statements and information that a notice under this section is required to contain. (6) This section does not apply to a dispute based on a work capacity decision of an insurer under Division 2 of Part 3 of the [WC] Act." Section 74A(1) provides that an insurer who admits liability to pay compensation must pay the compensation promptly.
2. Section 105 of the WIM Act provides that, subject to the WIM Act, the Commission has exclusive jurisdiction to hear and determine all matters arising under the WIM Act and the WC Act. The Note to s 105 states that the Commission does not have jurisdiction to determine any dispute about a work capacity decision by reason of s 43 of the WC Act. Sections 105(2) and (3) of the WIM Act provide for other exceptions to the Commission's exclusive jurisdiction, but these provisions are not presently relevant.
3. Part 4 of Ch 7 of the WIM Act deals with "Compensation Dispute Determination". Part 4 applies, relevantly, to a dispute in connection with a claim for compensation between the person who makes the claim and a person on whom the claim is made (s 287(1)). "Claim" is defined in s 4 of the WIM Act to mean "a claim for compensation … that a person has made or is entitled to make".
4. A worker may request an insurer to review a claim after the insurer has disputed the claim (s 287A(1)). The insurer is then required to review the claim (s 287A(2)). The claimant may refer the dispute to the Registrar of the Commission (Registrar) for determination by the Commission (s 288(1)). However, a dispute about a claim for weekly compensation cannot be referred to the Commission unless the person on whom the claim is made disputes liability for a claim (in whole or in part) or fails to determine the claim as required by the legislation (s 289(1)).
5. Section 289A provides as follows: "(1) A dispute cannot be referred for determination by the Commission unless it concerns only matters previously notified as disputed. (2) A matter is taken to have been previously notified as disputed if: (a) it was notified in a notice of dispute under this Act or the [WC] Act after a claim was made or a claim was reviewed, … (4) … a dispute relating to previously unnotified matters may be heard or otherwise dealt with by the Commission if the Commission is of the opinion that it is in the interests of justice to do so."
6. Part 7 of Ch 7 of the WIM Act deals with "Medical Assessment". Section 321(1) provides that a "medical dispute" may be referred for assessment under Part 7 by a court, the Commission or the Registrar, either of their own motion or at the request of a party. The term "medical dispute" is defined in s 319 to mean a dispute about any of the following matters in connection with a claim: "(a) the worker's condition … (b) the worker's fitness for employment, (c) the degree of permanent impairment of the worker as a result of an injury, … (f) whether impairment is permanent, …"
7. The approved medical specialist to whom a medical dispute is referred is to give a medical assessment certificate setting out details of the matters referred for assessment and certifying as to the specialist's assessment of those matters (s 325(1), (2)). Section 326(1) states that an assessment certified or a medical assessment certificate is conclusively presumed to be correct as to the matters identified in s 319(c), (d) and (f).
8. A party to a medical dispute may appeal against a medical assessment but only in respect of a "matter that is appealable" (s 327(1)). That term is defined by s 327(2) to mean: "a matter as to which the assessment of an approved medical specialist certified in a medical assessment certificate … is conclusively presumed to be correct in proceedings before a court or the Commission". The available grounds of appeal are specified in s 327(3). An appeal may be brought on the grounds, among others, that additional relevant information has become available or that the assessment was made on the basis of incorrect criteria. An appeal against a medical assessment is to be heard by an Appeal Panel constituted by two approved specialists and an Arbitrator of the Commission (s 328(1)).
9. Section 376(1) of the WIM Act in its current form empowers the State Insurance Regulatory Authority and the Minister to issue, amend, revoke or replace Workers Compensation Guidelines. Prior to the enactment of the State Insurance and Care Governance Act 2015 (NSW), which came into force on 1 September 2015, Workers Compensation Guidelines could be issued by the WorkCover Authority of New South Wales.
10. Under the legislation, the Workers Compensation Guidelines may deal with a number of matters including "such other matters as a provision of the Workers Compensation Act provides may be the subject of Workers Compensation Guidelines" (s 376(1)(c)). Workers Compensation Guidelines are to be published in the Government Gazette (s 376(5)). The regulation making power conferred by s 248 of the WIM Act extends to "any matter for which the Workers Compensation Guidelines can provide" (s 376(6)).

The Work Capacity Guidelines

1. The WorkCover Authority of New South Wales issued the WorkCover Work Capacity Guidelines (Work Capacity Guidelines) in October 2013. The Work Capacity Guidelines state that they were issued under s 376(1) of the WIM Act and s 44A of the WC Act.
2. The Introduction to the Work Capacity Guidelines refers to the 2012 Act and identifies the purpose of the Guidelines as follows: "This document provides instructions and guidance to insurers regarding the appropriate and consistent application of work capacity assessments and decisions in the NSW workers compensation system. It also explains the process for the review of work capacity decisions when this is requested by a worker …"
3. Section 5 of the Work Capacity Guidelines deals with work capacity decisions. The introduction to Section 5 states that a work capacity decision is a discrete decision which may be made at any time. It is said to be different to a work capacity assessment: "which is a review process that may or may not lead to the making of a work capacity decision or another type of decision regarding a claim".
4. Section 5.1 of the Work Capacity Guidelines explains when and how a work capacity decision is to be made. It includes the following: "The insurer may make a work capacity decision on receipt of new information that relates to the worker's capacity for employment which may affect the calculation of weekly payments. … Any work capacity decision should be logical, rational and reasonable. It should be a decision that is more likely than not to be correct. In many cases the insurer will already have all the information they need to make a work capacity decision without the need to refer the worker for additional evaluations by third party service providers. … Example: The worker has returned to suitable employment, working reduced hours. Information has been received from the worker's physiotherapist and nominated treating doctor indicating that the worker has capacity for full pre-injury hours. The insurer can make a work capacity decision about the amount the worker is able to earn in this suitable employment, working full hours, probably without the need for any further evidence."
5. Section 5.2 of the Work Capacity Guidelines states that before making a work capacity decision that may result in a reduction or discontinuation of the worker's weekly payments the insurer must, at least two weeks prior to the work capacity decision, inform the worker (among other things) that a review is taking place and provide an opportunity to supply further information bearing on the review.
6. Section 5.3 of the Work Capacity Guidelines requires the insurer to notify the worker in writing of a work capacity decision. Section 5.3 also states that the decision, where possible, should be communicated by telephone or in person so that the outcome and available review processes can be explained. The worker should also be informed that the decision will be confirmed in writing. Section 5.3.1 of the Work Capacity Guidelines requires the insurer to provide the worker and other relevant parties with plain language communications regarding the work capacity decision.
7. Section 5.3.2 sets out the requirements for the written notification of a work capacity decision, as follows: "The written work capacity decision advice must comply with any requirement of the [WC Act] and Review Guidelines [18] and: • reference the relevant legislation • explain the relevant entitlement periods • state the decision and give brief reasons for making the decision • outline the evidence considered in making the decision, noting the author, the date and any key information. All evidence considered should be referred to, regardless of whether or not it supports the decision • clearly explain the line of reasoning for the decision • state the impact of the decision on the worker in terms of their entitlement to weekly payments, entitlement to medical and related treatment expenses and return to work obligations • advise of the relevant legislative notice requirements applicable to the decision • advise the date of the work capacity assessment • advise the date when the decision will take effect • detail any support, such as job seeking support, which will continue to be provided during the notice period • advise that any documents or information that have not already been provided to the worker can be provided to the worker on request to the insurer • advise of the process available for requesting review of the decision and how to access the required form, Work capacity - application for internal review by insurer (catalogue no. WC03304) The outcome of an internal review of a work capacity decision must be communicated by the insurer to the worker in the same way as any work capacity decision."
8. Section 7 of the Work Capacity Guidelines sets out the principles applying to reviews of work capacity decisions conducted pursuant to s 44BB of the WC Act. Clause 7.1.2 provides for an approved form that must be used by a worker seeking internal review of a work capacity by an insurer. Clause 7.1.4 states that the insurer: "must acknowledge the referral in writing to the worker within 7 days of receiving the application and: • explain the review process • advise that a review of a work capacity decision does not operate to stay the decision or otherwise prevent the taking of action based on the decision • clarify with the worker any new information supplied or any other information that the worker is in the process of obtaining • indicate when and how the decision will be conveyed to the worker."
9. Section 7.1.6 provides that the internal reviewer is to undertake the review of the work capacity decision in accordance with the insurer's dispute handling model. This is to include at a minimum: "• the review of the work capacity decision is to be undertaken by a party independent to the original work capacity decision • the review of the work capacity decision is to be conducted by someone with a comprehensive knowledge of the legislation as it applies to the work capacity decision referred and the issues arising from it, and has the appropriate expertise and authority for the decision they are making • the reviewer is to undertake a full consideration of the subject of the work capacity decision considering all available information and making a fresh work capacity decision • the reviewer has an obligation to make a decision they think is more likely than not to be correct."
10. Section 7.2 of the Work Capacity Guidelines sets out the procedures applicable to merit review by the Authority in accordance with s 44BB(1)(b) of the WC Act. Section 7.3 addresses the requirements for procedural review by the Independent Review Officer in accordance with s 44BB (1)(c).

Course of Events

1. The Deputy President summarised the Insurer's management of the Worker's claim in the form of a chronology. Not all the primary documents are reproduced in the appeal papers. Accordingly, the following account to some extent reflects the Deputy President's summary.
2. On 25 November 2013, the Insurer gave written notice to the Worker that a work capacity decision had been made pursuant to s 43(1) of the WC Act. The Insurer also gave the Worker a written notice pursuant to s 54(1) and (2) of the WC Act informing her that weekly compensation payments would cease on 4 March 2014.
3. It appears that the Worker sought an internal review of the unfavourable work capacity decision. On 31 December 2013, the Insurer notified the Worker that the internal review had determined that she had no current capacity to work in suitable employment. Accordingly she had an entitlement to weekly compensation payments with an effective date of 1 April 2014. Why that date was selected does not appear from the appeal papers.
4. On 22 August 2014, the Insurer made a further decision, characterised by the Deputy President as a work capacity decision. The effect of this decision was to terminate the Worker's entitlement to weekly compensation.
5. The Worker sought an internal review by the Insurer of the decision. As has been noted, on 24 September 2014, the internal review concluded that the Worker had "no current work capacity" as defined in s 32A of the WC Act. The reviewer determined in accordance with s 38(6) of the WC Act (which specifies the formula for ascertaining the rate of weekly payments), that the Worker had an entitlement to weekly compensation payments of $788.40 gross.
6. The appeal papers include the Statement of Reasons (Statement) provided to the Worker for the review decision of 24 September 2014. The Statement recorded, among other things, the background to the Worker's application, the legislation governing work capacity decisions, the medical and vocational reports taken into account and the Worker's submissions in support of the review. The Statement also briefly recorded the reviewer's reasons for her conclusions.
7. On 16 March 2015, the Insurer sent a letter to the Worker advising her that she was fit for pre-injury duties and that liability to pay weekly compensation was denied. This letter was in substantially identical terms to the Notice sent four days later, except for changes to dates and some additional material included in the Notice. The Bank does not appear to have relied on the letter of 16 March 2015 in the proceedings.
8. On 20 March 2015 the Insurer issued the Notice. The document is headed "Section 74 Notice", presumably to indicate that it was issued in compliance with the requirement in s 74 of the WIM Act. [19] The opening paragraph is as follows: "We refer to your claim for compensation. As an agent for WorkCover NSW, [the Insurer] is obliged to initially assess and regularly review liability for your Workers Compensation claim. On receipt of evidence which indicates that QBE [the Insurer] does not have or no longer has a liability, we are obliged to act on that evidence, and decline liability if so indicated."
9. The Notice continues as follows: "Following an assessment of all available evidence on your claim and in accordance with Section 74 of the Workplace Injury Management and Workers Compensation Act 1998, we wish to advise that liability has been denied as of 20th March 2015. STATEMENT OF MATTER IN DISPUTE The evidence indicates that: • You are fit for pre injury duties with St George Bank. This decision was made by Maggie Boyd on the 20th March 2015. This decision was reviewed and confirmed by Belinda Maughan, Service Manager on the 20th March 2015. REASONS FOR DENYING LIABILITY • Our evidence indicates that your alleged injury of 06 October 2006, which occurred whilst you were in the employ of St George Bank Limited has now resolved and you do not continue to suffer from any injury within the meaning of section 4 of the Workers Compensation Act 1987. This section defines an injury for the purposes of Workers Compensation as "a personal injury arising out of or in the course of employment". • In our opinion the work injury that you allege to have received on 06 October 2006, which occurred whilst you were in the employ of St George Bank Limited, is no longer causing you any incapacity for work as required by Section 33 of the Workers Compensation Act 1987. This section requires that you either be partially or totally incapacitated as a result of the injury in order to obtain weekly benefits compensation."
10. Under the heading "ISSUES RELEVANT TO THIS DISPUTE" the Notice briefly summarises reports by three medical practitioners, all of whom had reviewed the Worker and concluded that she was fit to perform her pre-injury duties. The Notice also refers to surveillance conducted on the Worker and records that the author of the Notice had spoken with the Worker both about the surveillance video and the medical reports. The Notice states that "[w]e therefore consider that you are fit for pre injury duties".
11. The Notice lists all the reports (including the surveillance DVD) upon which the Insurer had relied and encloses copies of the reports. This is said to be in accordance with s 74 of the WIM Act and cl 37(3) of the Workers Compensation Amendment (Miscellaneous Provisions) Regulation 2006. The Notice also informs the Worker that in accordance with s 54 of the WC Act, the Insurer is required to continue paying her wages until 1 May 2015.
12. Under the heading "YOUR RIGHTS", the Notice advises the Worker that she is entitled to request internal review by the Insurer of "our decision to dispute liability". After providing additional information, the Notice continues as follows: "Alternatively, you may dispute our decision by referring your claim to the Registrar of the Workers Compensation Commission … We advise that the Workers Compensation Commission will only be able to consider issues raised as 'disputed', which are either contained in this notice, or in a notice which may be issued to you following our further review of the claim (if you request a review) - this is in accordance with section 289A of the [WIM Act]."
13. On 23 March 2015, the Worker requested the Insurer to review the decision to deny liability. In the review determination of 26 March 2015, the Insurer treated the request as having been made pursuant to s 287A of the WIM Act. After considering additional material submitted by the Worker, the reviewer maintained the original determination.
14. The review determination advised the Worker that she was entitled to seek further review of the decision to dispute liability to be conducted by a senior officer of the Insurer. The determination repeated the advice in the Notice that the Worker's alternative course was to refer the dispute to the Commission.
15. On 30 March 2015, the Worker requested a further review. On 9 April 2015, the Insurer's New South Wales Service Manager decided to maintain the original determination. Yet again the Worker was advised that she could dispute the Insurer's decision by referring the matter to the Commission.
16. The Worker followed the advice she had been consistently given and filed the Application in the Commission on 14 May 2015. The Application was in the form required for a party to a dispute wishing to refer the dispute to the Registrar for determination by the Commission pursuant to s 288(1) of the WIM Act. The claim to which the dispute related was said to be "Weekly benefits" and the weekly amount in dispute was stated to be $758.80.

The Arbitrator's Determination

1. The Arbitrator held that there was a dispute about a work capacity decision and that accordingly the Commission had no jurisdiction to determine the dispute. [20] The Arbitrator did not think it necessary to decide whether the decision recorded in the Notice or the decisions made in the subsequent reviews were themselves work capacity decisions. However, the Arbitrator expressed the opinion that they were work capacity decisions.

The Appeal Determination

1. The Deputy President recorded the grounds of appeal relied on by the Worker, as follows: "Ground 1: The Arbitrator erred when she found that the Commission did not have jurisdiction after the second entitlement period in circumstances where the requirements of [s 38 of the WC Act] had been met in that the [Insurer] had assessed the [W]orker as having no work capacity. Ground 2: The Arbitrator erred when she considered that the Commission has no jurisdiction to determine a dispute whether a work capacity decision is binding. Ground 3: The Arbitrator erred when she found that the section 74 notices of 20 March 2015, 26 March 2015 and 9 April 2015 were work capacity decisions." [21] His Honour dealt first with Ground 3 and then addressed Grounds 1 and 2.

Ground 3: Work Capacity Decisions

1. In the Deputy President's opinion, despite the Arbitrator's approach: "the question as to whether there had been a work capacity decision made by the [I]nsurer in 2015 was the fundamental question. That is so having regard to the existence of the September 2014 work capacity decision … and [the Worker's] argument that it remains extant". [22]
2. The Deputy President recorded a concession by the Bank that the Notice constituted a decision to dispute liability and thus "may not be found to be a work capacity decision: s 43(2)(a) [of the WC Act]". The Deputy President considered that the concession had been properly made. [23] The Deputy President also accepted the Worker's submission that the Notice and review determinations addressed her fitness for employment, a matter which "can be the subject of a medical dispute" for the purposes of s 43(2)(b) of the WC Act. His Honour considered that this conclusion was supported by the definition of "medical dispute" in s 319 of the WIM Act. [24] The Deputy President said it followed that the Notice and review determinations could not themselves be taken to be relevant work capacity decisions and that the Arbitrator, to the extent she found to the contrary, was in error. [25]
3. His Honour said that the remaining question was: "whether, having regard to all the circumstances, it could be inferred that a work capacity decision had been made before service of the [Notice]". [26] His Honour dealt with this question as follows: "[59] It is clear that the material referred to in the [N]otice had been considered by the [Insurer] and that a decision had been made to discontinue weekly payments to [the Worker]. Such a decision is contemplated by the terms of s 43(1)(f). If it be that such decision was made 'on the basis of any decision referred to in paragraphs (a)-(e)', the decision is one which falls within s 43 and is a work capacity decision. [60] It is [the Worker's] case that a decision to discontinue payments cannot, as is argued on behalf of [the Bank], be a decision described in s 43(1)(a). That is so, it is put, given that the term 'current work capacity' is defined in s 32A and such definition does not include a decision to discontinue weekly payments. [61] Whilst [the Worker's] argument had, at first, considerable appeal, I have reached the view that it should be rejected. I reach this conclusion given that a decision 'about a worker's current work capacity' should be taken to include a decision as to the existence, or otherwise, of such current work capacity as defined. This is plainly so given that the statute, in s 43(1)(f) addresses decisions 'to suspend, discontinue or reduce the amount of weekly compensation'. Reading subclauses (a) and (f) of s 43(1) together has the consequence, on the present facts, that the decision to discontinue payments, as earlier found, is a work capacity decision within the meaning of the Act. The Commission may not make a decision that is inconsistent with that work capacity decision."
4. Since a work capacity decision had been made by the Insurer in March 2015, the force and effect of the Insurer's decision of August 2014 had come to an end. Accordingly, the Commission could not make an award inconsistent with the Insurer's later work capacity decision. [27]

Ground 1: Jurisdiction

1. The Deputy President rejected the Worker's contention that once the Insurer had assessed her as having no work capacity (as had occurred in August 2014), the Commission had jurisdiction to determine any other matter that was relevant to her entitlement. In his Honour's view, this submission reduced the role of the Insurer under s 38 of the WC Act to "a simple question of quantification of monetary entitlement": "The Act provides that the [I]nsurer determines entitlement. The question for the [I]nsurer is to determine whether [the Worker] has a right or claim to weekly benefits. In the case of disagreement between the [I]nsurer and [the Worker] on that question, the Act makes provision for review as prescribed in s 44BB or by judicial review of the Supreme Court (s 43(1)). The Commission has no power to rule on, or determine, any such dispute." [28]

Ground 2: The September 2014 Decision

1. The Deputy President accepted the Worker's argument that the Arbitrator had wrongly found that the dispute was "about" the work capacity decision made by the Insurer in September 2014. There was in fact no dispute about that decision. But the Arbitrator's error on this point did not relevantly affect her decision. [29]

Concessions

1. It is important to appreciate that Mr Parker SC, who appeared with Mr Flett for the Bank, acknowledged that the Notice purportedly given by the Insurer pursuant to s 74 of the WIM Act was deficient. He accepted that the Notice and each of the review determinations informed the Worker that she could seek review of the Insurer's decision in the Commission, pursuant to s 288 of the WIM Act. This information was misleading since on the Bank's case the Commission lacked jurisdiction to review the Worker's claim and she was entitled only to seek review of the Insurer's decision in the manner provided by s 44BB of the WC Act.
2. Mr Parker said that the Worker could have sought review by the Commission had the Insurer denied her claim on the ground that she had never suffered any injury arising out of or in the course of her employment. While the first bullet point in the Notice [30] seemed to suggest that the Insurer had concluded that the Worker had not suffered an injury arising out of or in the course of her employment, the Notice in substance informed the Worker that she was no longer entitled to receive weekly compensation payments. Despite the misleading terms of the Notice, such a decision could be reviewed only under the procedures specified in s 44BB of the WC Act.
3. Mr Parker also accepted that there was no evidence that the Insurer notified the Worker of its decision in the manner required of work capacity decisions by section 5.3 of the Work Capacity Guidelines. [31] Nor was there any evidence that if the Insurer had made a work capacity decision prior to issuing the Notice (as the Bank submitted), the Worker had been given "fair notice" of the decision in advance as required by section 5.2 of the Work Capacity Guidelines. [32]
4. In addition to these irregularities, Mr Parker frankly conceded in oral argument that the officers carrying out the two internal reviews of the Insurer's decision to deny liability to the Worker were not conscious that they were reviewing a work capacity decision. In view of this concession, it is not surprising that there is no evidence that the internal reviews of 26 March 2015 and 9 April 2015 were conducted in conformity with the requirements of section 7 of the Work Capacity Guidelines. [33]

Worker's Submissions

1. The Worker contended that the Deputy President erred in inferring from the terms of the Notice that the Insurer had made a work capacity decision at some time prior to issuing the Notice. The Worker also submitted that insofar as the Bank relied on the decision made by Ms Boyd on 20 March 2015 (as it did in its Notice of Contention), [34] Ms Boyd had not made a "work capacity decision".
2. Mr Gross QC, who appeared with Mr McManamey for the Worker, pointed out that although the Notice purported to have been issued in compliance with s 74 of the WIM Act, that section is concerned with notification of a dispute, not with notification of a work capacity decision. It is not permissible, so Mr Gross contended, to read the Notice, which makes no reference to a work capacity decision, as implying that such a decision had been made. A work capacity decision must be notified expressly to the affected worker so that he or she understands the options available. He submitted that the Insurer's conceded failure to comply with the Work Capacity Guidelines demonstrated that it is impermissible to infer that the Insurer had made a work capacity decision.
3. Mr Gross said that s 74(6) of the WIM Act, which provides that s 74 does not apply to a dispute based on a work capacity decision, demonstrates that there is a clear distinction between notification of a dispute and the making of a work capacity decision. The legislation contemplates that workers should receive clear advice as to the nature of a decision made by an insurer and of the means available to them to challenge an unfavourable decision.
4. Mr Gross further submitted that there was no evidence that the Insurer's decision was made on the basis of a finding that any of the matters identified in s 43(1)-(3) had been considered or had been the subject of a decision by the Insurer. In the absence of any such finding, it was not open to the Deputy President to rely on s 43(1)(f) to conclude that the Insurer had made a "work capacity decision". Mr Gross contended that the words "any other decision … affecting a worker's entitlements to compensation" in s 43(1)(f) should be read as ejusdem genesis with the preceding paragraphs of s 43(1). On this basis, s 43(1)(f) had to be understood as limited to decisions consequential on a decision described in one or more of s 43(a)-(e). If it were otherwise, so Mr Gross argued, s 43(1)(f) would deprive the Commission of jurisdiction to hear and determine all disputes relating to a worker's entitlement to weekly compensation payments. This would mean, for example, that the Commission would be unable to decide whether an injured claimant was a "worker" or whether a claimant had suffered a work-related injury.
5. Mr Gross' answer to the Bank's Notice of Contention was that the terms of the Notice are inconsistent with Ms Boyd having made a work capacity decision. The Notice asserts that the injury sustained by the Worker in 2006 had "now resolved" and that any injury she had suffered was no longer causative of any incapacity for work. This is not language indicating that the Insurer had made a work capacity decision. The Notice is conveying propositions about the Worker's medical recovery and the absence of any ongoing "causative effects of the injury". According to Mr Gross, there is a substantial difference between a medical recovery from an injury and the existence of "work capacity".
6. In his oral submissions, Mr Gross contended that the definitions of "current work capacity" and "no current work capacity" in s 32A of the WC Act should be construed as incorporating an assumption that the worker has an existing capacity. On this approach, the Insurer's role is to assess the level of compensation payments to be made, not to decide whether the worker is no longer incapacitated in consequence of a work-related injury. Thus, if the Insurer purported to determine that the Worker was no longer incapacitated, that determination could not have been a "work capacity decision" within s 43(3) of the WC Act. Moreover, having found that the Notice and the reviews which followed it could not of themselves constitute work capacity decisions, the Deputy President should have given effect to that finding by concluding that there had not been any antecedent work capacity decision made by the Insurer.
7. Mr Gross submitted that if, contrary to his argument, the Insurer's decision satisfied the definition of "work capacity decision" in s 43(1), nonetheless the decision was taken outside the definition by s 43(2)(a) of the WC Act. Mr Gross contended that the Insurer's decision to terminate weekly compensation payments constituted "a decision to dispute liability for weekly payments of compensation". He said that by expressly referring to "our decision to dispute liability", the Notice clearly indicates that the Insurer's decision fell within s 43(2)(a) and thus was not a "work capacity decision".
8. In the alternative, Mr Gross contended that the Insurer's decision was one that could "be the subject of a medical dispute under Pt 7 of Chapter 7 of the [WIM] Act". Accordingly, s 43(2)(b) of the WC Act took the decision outside the definition of "work capacity decision" in s 43(1). In addition to his other arguments, Mr Gross relied on the definition of "medical dispute" in s 319 of the WIM Act which includes a dispute about "the worker's fitness for employment". If the Insurer denied liability to pay weekly compensation because the Worker was assessed to be fit for employment, its decision could be the subject of a medical dispute and thus was within s 43(2)(b) and not a work capacity decision.

The Bank's Submissions

1. Although the Bank's written submissions identified the central question as whether the Deputy President was correct to infer from the Notice that the Insurer had made a work capacity decision, Mr Parker's oral submissions concentrated on the Bank's Notice of Contention. He sought to uphold the Deputy President's decision on the ground that the Notice expressly states that the decision to terminate the Worker's weekly compensation payments was made by Ms Boyd on 20 March 2015. There was therefore no need for the Deputy President to "infer" from the Notice that a decision had been in March 2015, before service of the Notice. The terms of the Notice made it quite clear when and by whom the decision had been made.
2. Mr Parker submitted that the decision made by Ms Boyd was the relevant "work capacity decision" within s 43(1) of the WC Act. The Insurer's decision was that the Worker was fit to resume her pre-injury employment and thus was no longer entitled to receive weekly compensation payments. This constituted a work capacity decision because it was both a decision about the Worker's current work capacity (s 43(1)(a) of the WC Act) and a decision to discontinue the Worker's weekly compensation payments (s 43(1)(f)). The status of the decision was not affected by the Insurer's failure to comply with the Work Capacity Guidelines, so Mr Parker argued, because the Insurer was not obliged to follow those Guidelines. Nor was it affected by any of the other irregularities affecting the Notice.
3. Mr Parker submitted that, contrary to the Worker's argument, s 43(1)(f) is not confined to decisions consequential on a decision within s 43(1)(a)-(e), but extends to any decision affecting a worker's entitlement to weekly compensation payments. The word "including" in para (f) shows that the provision is not limited in the manner implied by the Worker's submissions.
4. Mr Parker submitted that s 43(2)(a) of the WC Act does not take the Insurer's decision to terminate the Worker's weekly compensation payments out of the definition of "work capacity decisions" in s 43(1). He contended that s 43(2)(a) encompasses only a decision by an insurer to dispute what he described as "primary liability". That is, s 43(2)(a) excludes from the definition only decisions relating to a worker's entitlement to benefits under the legislation at large, such as a decision as to whether the worker suffered an injury arising out of or in the course of employment. On this basis, s 43(2)(a) does not apply to a decision that a worker's current entitlement to weekly compensation payments should be terminated.
5. Mr Parker argued that this construction of s 43(2)(a) is consistent with the object of the legislation, which is to remove from the Commission's jurisdiction all matters relating to weekly compensation once the employer's underlying liability has been established. He submitted that this object can be discerned from s 43(1) of the WC Act, all paragraphs of which are concerned with the amount (if any) of weekly compensation payments to which a worker is entitled.
6. Mr Parker further submitted that s 43(2)(b) of the WC Act is of no assistance to the Worker, as the decision to terminate weekly compensation payments could not be the subject of a medical dispute under Pt 7 of Ch 7 of the WIM Act. The fact that fitness for work may be the subject of a medical dispute does not mean that a decision to terminate weekly compensation payments is also the subject of a medical dispute.

The Jurisdictional Issue

1. The central issue argued on the appeal is whether the Commission correctly decided that it had no jurisdiction to hear and determine the Worker's application for review of the Insurer's decision to terminate her weekly compensation payments. The substance of the dispute between the parties, however, is whether the Insurer's decision conveyed by the Notice was effective to terminate the Worker's entitlement to weekly compensation payments.
2. As has been seen, the Bank made a number of concessions about deficiencies in the Notice and the Insurer's decision-making procedures. The concessions suggest that not only did the Insurer fail to follow the Work Capacity Guidelines, but it misapprehended its statutory functions and responsibilities. If this is a correct understanding of the concessions, it is not easy to see how the Insurer's decision to terminate weekly compensation payments could have withstood a challenge brought by the Worker in an appropriate forum. Such a challenge might have been brought in the Supreme Court pursuant to s 69 of the Supreme Court Act 1970 (NSW), [35] given that the privative clause contained in s 43(1) of the WC Act expressly preserves "judicial review by the Supreme Court".
3. Since the Worker has chosen to raise the jurisdictional question for determination, it is not open to this Court to deal with the matter as if it was an application for judicial review, although many of the arguments raised on the appeal would be relevant to such an application.

The Insurer's Decision

1. The Deputy President, having concluded that the Notice itself was not a work capacity decision, identified the critical issue as whether an inference could be drawn from the Notice that a work capacity decision had been made before service of the Notice. [36] His Honour found that the material referred to in the Notice had been considered by the Insurer "and that a decision had been made to discontinue weekly payments to [the Worker]". [37]
2. It is not clear from the Appeal Determination whether the Deputy President intended to conclude that the Insurer's decision had been made by Ms Boyd on 20 March 2015 (as the Notice said) or whether his Honour inferred that the Insurer made the decision at some earlier time. Mr Parker appeared to interpret the Deputy President's reasons as inferring that the Insurer's decision had been made at some unspecified time prior to 20 March 2015. If this is a correct interpretation of his Honour's reasoning, Mr Parker did not seriously attempt to support it. He essentially relied on the Notice of Contention to uphold the Deputy President's orders on the basis the Insurer made a work capacity decision on 20 March 2015 and communicated that decision to the Worker by means of the Notice given on the same day.
3. Under s 353(1) of the WIM Act, the Court has jurisdiction to hear an appeal from a decision of a Presidential member of the Commission "in point of law". If the Deputy President intended to find that the Insurer made a work capacity decision prior to 20 March 2015, that finding was in error. There was simply no evidence to support a finding that the Insurer made a decision to terminate the Worker's continued entitlement to weekly compensation payments other than the decision made by Ms Boyd on the Insurer's behalf.
4. The making of findings and the drawing of inferences in the absence of any evidence to support them is an error of law. [38] Thus to the extent that the Deputy President found that the Insurer had made a work capacity decision prior to 20 March 2015 (other than those made in 2013 and 2014), his Honour erred in point of law.
5. The crucial question on the appeal is therefore whether the decision made by the Insurer on 20 March 2015, as communicated in the Notice, was a work capacity decision. If not, the Notice of Contention cannot succeed.

Reasoning

1. The jurisdictional question which arises on the appeal requires consideration of interconnected provisions of the WC Act and the WIM Act. As the competing submissions suggest, it is no easy task to construe the amendments effected by the 2012 Act and the 2015 Act in a manner that is consistent with the language and purpose of all of the provisions of the relevant legislation. This, however, is the task that must be undertaken. [39]

Jurisdiction of the Commission under the WIM Act

1. When the WIM Act was enacted in 1998, s 105 conferred exclusive jurisdiction on the Compensation Court, subject to certain exceptions, "to examine, hear and determine all matters arising under this Act". [40] The Compensation Court was abolished as from 1 January 2004. [41] From that date, s 105(1) of the WIM Act provides that, subject to transitional arrangements and the exceptions stated in the WIM Act, the Commission has exclusive jurisdiction to determine "all matters arising under this Act and the [WC] Act". It is common ground on the present appeal that, as indicated in the Note to s 105(1) of the WIM Act, [42] the conferral of exclusive jurisdiction on the Commission to determine matters arising under the WC Act and the WIM Act is subject to the privative clause in s 43(1) of the WC Act and the exclusion from the Commission's jurisdiction effected by s 43(3).
2. The jurisdiction and powers of the Commission are governed by statute. Although the Commission exercises judicial power, it has been held not to be a court for the purposes of Chapter III of the Constitution. [43] As a body created by statute, the Commission does not possess an inherent jurisdiction. It therefore has only those powers that are incidental and necessary to the exercise of its statutory jurisdiction. [44]
3. The language used by s 105(1) of the WC Act to confer exclusive jurisdiction on the Commission is of "wide scope". [45] The work "matter" has a well-settled interpretation in constitutional law. In the context of Chapter III of the Constitution it means the subject matter for determination in a legal proceeding - that is, the determination of rights, duties, liabilities and obligations in a legal proceeding. [46] When used in State legislation, the word does not necessarily have a meaning co-extensive with the constitutional conception. Nonetheless, the constitutional understanding of a "matter" has generally been regarded as a guide to the construction of similar language in State legislation conferring jurisdiction on courts. [47] While s 105(1) confers jurisdiction on a body that is not a court for the purposes of Chapter III of the Constitution, there is no obvious reason why the conferral of jurisdiction should not be read in the manner suggested by the authorities. Neither party to the appeal submitted otherwise.
4. Pursuant to s 105(1) of the WIM Act, in order for the Commission to have jurisdiction over "matters", they must "arise under" the WC Act or the WIM Act. The general principle is that a matter arises under a law of Parliament if the right or duty in question owes its existence to the law or depends on the law for its enforcement. [48]
5. The Worker's claim to weekly compensation payments arose under ss 9(1) and 33 of the WC Act. Section 9 provides that a "worker" who has received an "injury" is entitled to compensation in accordance with the WC Act. [49] Section 33, which has antecedents in New South Wales going back to at least 1910, [50] provides that if "total or partial incapacity results from an injury", the compensation payable to the injured worker includes a weekly payment during the period of incapacity. Section 33 assumes that a worker has received an injury and therefore satisfies s 9(1) of the WC Act. However, it imposes additional conditions that must be satisfied before the worker becomes entitled to weekly compensation payments. In this case, the Insurer determined long before March 2015 that the Worker had received an injury in the course of her employment and that she had been totally incapacitated for work as a result of the injury.
6. The Worker's Application to the Commission in the present case was made pursuant to s 288 of the WIM Act. The controversy the Worker sought to have determined by the Commission in May 2015 was her claim to be entitled to weekly compensation payments after the second entitlement period expired. She was entitled to compensation after the expiry of that period if she satisfied the requirements of s 38(2) or s 38(3) of the WIM Act. The Insurer asserted that the Worker was not entitled to a continuation of weekly compensation payments, while the Worker claimed that the Insurer should have assessed her as satisfying the statutory requirements for a continuation of the payments. The controversy between the parties arose under the WC Act and, subject to the operation of s 43(1) and (3) of the WC Act, was within the jurisdiction of the Commission to determine.
7. It follows that if s 43(1) and (3) are put to one side, the Commission would have jurisdiction to settle the controversy between the Worker and the Insurer (representing the Bank). For example, the Commission would have jurisdiction to evaluate the medical evidence relied on by the Insurer in order to determine whether the Worker was capable of returning to her pre-injury employment. Similarly, the Commission would have jurisdiction to determine whether the Insurer had misconstrued the legislation, thereby causing it to make an erroneous decision. [51]

Exclusions from the Commission's Jurisdiction

1. The grant of exclusive jurisdiction to the Commission by s 105(1) of the WIM Act is qualified by the privative clause in s 43(1) and the express exclusion from the Commission's jurisdiction effected by s 43(3) of the WC Act. To understand the operation of these provisions, reference must be made to other provisions of Div 2 of Pt 3 of the WC Act.
2. Part 3 of the WC Act deals with the various forms of compensation payable to a worker who has suffered an injury. Division 2 of Pt 3 deals specifically with a worker's entitlement to weekly compensation payments. In order to receive weekly compensation payments, s 33 of the WC Act requires the worker to establish that he or she has a total or partial incapacity that results from an injury.
3. The WC Act does not define "total or partial incapacity". This, however, is a longstanding expression found in workers compensation legislation. In Arnotts Snack Products Pty Ltd v Yacob, [52] a case under the Workers' Compensation Act 1926 (NSW), the majority stated that: [53] "incapacity for work denotes physical incapacity for doing work in the labour market in which the employee was working or might reasonably be expected to work". Their Honours explained that: [54] "the concept of partial incapacity for work is that of reduced physical capacity, by reason of physical disability, for actually doing work in the labour market in which the employee was working or might reasonably be expected to work".
4. Even if a worker has a partial or total incapacity resulting from an injury, under s 38(1) of the WC Act the worker's entitlement to weekly compensation payments ceases after 130 weeks unless he or she can satisfy the "special requirements for continuation of weekly payments after [the] second entitlement period". [55] It is at this point that the expressions "no current work capacity" and "current work capacity", each of which is defined in s 32A, become significant for the statutory scheme.
5. For present purposes, there are two principal categories of totally or partially incapacitated workers who are entitled to receive weekly compensation payments after 130 weeks:

• a worker assessed by the insurer as having no current work capacity (that is, having a present inability arising from an "injury" such that the worker is not able to return to work, either in his or her pre-injury employment or in "suitable employment") and as being likely to continue indefinitely to have no current work incapacity; [56] and
• a worker assessed by the insurer as having current work capacity (that is, a present inability arising from an injury such that the worker cannot return to his or her pre-injury employment but can return to work in "suitable employment"), provided the worker satisfies the other statutory requirements including working at least 15 hours per week and being assessed by the insurer as likely to continue to be incapable of undertaking further additional employment. [57]

1. Section 43(1) of the WC Act is a qualified privative clause which provides that "work capacity decisions" are final and binding on the parties and not subject to appeal or review except under s 44BB or "judicial review by the Supreme Court". The review process under s 44BB provides for an internal review, a "merit review" by the Authority and a further review by the Independent Review Authority limited to a review of the insurer's procedures. A worker wishing to challenge a work capacity decision therefore has no recourse to the Commission or a court, other than by way of an application for judicial review in the Supreme Court pursuant to s 69 of the Supreme Court Act 1970 (NSW).
2. It is not entirely clear why s 43(3) of the WC Act was thought necessary having regard to the privative clause in s 43(1), since the privative clause itself seems to preclude the Commission from reviewing or going behind "work capacity decisions". Be that as it may, s 43(3) expressly states that the Commission:

• does not have jurisdiction to determine any dispute about a work capacity decision of an insurer; and
• is not to make any decision in respect of a dispute before the Commission that is inconsistent with a work capacity decision.

1. In Inghams Enterprises Pty Ltd v Sok, [58] this Court rejected a submission that the expression "any dispute about a work capacity decision" in s 43(3) means "any dispute about a matter of a kind which may be the subject of a work capacity decision". The Court also pointed out that both limbs of s 43(3) assume that a work capacity decision has been made. [59]

Section 43(1)(a) of the WC Act

1. Both the privative clause in s 43(1) and the exclusion from the Commission's jurisdiction in s 43(3) refer to "work capacity decisions". This term is defined in s 43(1) to include six categories of decision. Five are particular kinds of decisions that are material to an assessment of a worker's entitlement (if any) to weekly compensation payments. The sixth is framed in more general terms.
2. The Bank says that the Insurer's decision on 20 March 2015 to terminate the Worker's weekly compensation payments was a work capacity decision because it satisfied both s 43(1)(a) ("a decision about a worker's current work capacity") and s 43(1)(f) ("any other decision of an insurer that affects a worker's entitlement to weekly compensation payments"). This contention is the foundation for the Bank's argument that the Worker's Application to the Commission involves a "dispute about a work capacity decision of an insurer" and that by reason of s 43(3) the Commission lacks jurisdiction to determine the dispute.
3. The drafting of s 43(1)(a) is rather curious. It refers to a decision about a worker's current work capacity" (a term defined in s 32A), but makes no mention of a decision about a worker's "no current work capacity" (also a defined term). Mr Gross took no point about the apparent omission and was therefore prepared to accept that a decision by an insurer that a worker has neither "current work capacity" nor "no current work capacity" can be a decision "about a worker's current work capacity". I am content to proceed on that basis.
4. A decision about a worker's current work capacity may be relevant to a number of matters arising for determination by an insurer under Div 2 of Pt 3 of the WC Act. They include the following:

• an assessment of weekly compensation payable during the first entitlement period of 13 weeks (since s 36 assumes that an injured worker must have either "no current work capacity" or "current work capacity" and distinguishes between the rate payable to an injured worker who has no "current work capacity" and to a worker who has a "current work capacity");
• an assessment of weekly compensation payable during the second entitlement period of 117 weeks (since s 37 incorporates the same assumption and distinction as s 36); and
• a determination under s 38 as to whether a worker is entitled to a continuation of weekly compensation payments after the second entitlement period has expired (since the worker's entitlement depends on an assessment by the insurer that the worker has either "no current capacity" or "current work capacity"). It is the third of these assessments that is in issue in the present case.

1. It is important to appreciate that Div 2 of Pt 3 of the WC Act vests only limited functions and powers in insurers. It is implicit in s 38(2) of the WC Act (read with s 44A(1)) that the insurer must assess whether a worker seeking a continuation of weekly compensation after 130 weeks has "no current work capacity" and is likely indefinitely to have no such capacity. Similarly, it is implicit in s 38(3) that the insurer must assess whether a worker seeking a continuation of weekly compensation has "current work capacity" and is incapable of undertaking further employment that would increase his or her earnings. [60] An insurer also has power under s 44A(1) to conduct a work capacity assessment at any time and is required to do so in certain circumstances.
2. Division 2 of Pt 3 of the WC Act does not, however, confer a general or comprehensive power on insurers to decide whether workers are entitled to weekly compensation or to a continuation of weekly compensation after the expiry of the second entitlement period. They are not given power, for example, to decide that a worker no longer has a "total or partial incapacity" and thus no longer satisfies the requirements of s 33 of the WC Act. Nor are insurers given power to decide that a worker is no longer suffering from an injury arising out of or in the course of his or her employment and thus no longer satisfies s 4 of the WC Act
3. Furthermore, in exercising their statutory functions and powers, insurers must apply the criteria laid down by the legislation. Thus an assessment of whether a worker has "no current work capacity" requires the insurer to determine whether the worker has: "a present inability arising from an injury such that the worker is not able to return to work, either in the worker's pre-injury employment or in suitable employment." [61] An assessment of whether a worker has "current work capacity" requires the insurer to determine whether the worker has: "a present inability arising from an injury such that the worker is not able to return to his or her pre-injury employment but is able to return to work in suitable employment". [62]
4. The difficulty confronting the Bank in the present case is that the only evidence of any relevant assessment made by the Insurer is the Notice. There is nothing in the Notice to indicate that the Insurer was exercising or even purporting to exercise the powers conferred on it by Div 2 of Pt 3 of the WC Act. The Notice does not record or refer to any assessment by the Insurer as to whether the Worker had "no current work capacity" or "current work capacity". Indeed there is nothing to indicate that the Insurer's decision-maker directed her attention to the terms of s 38 of the WC Act or to the relevant definitions in s 32A that delineate the inquiry the Insurer is required to undertake.
5. There are other indications that the Insurer was not purporting to make a decision about the Worker's current work capacity. The Insurer did not comply with the fair notice provisions of the Work Capacity Guidelines applicable to work capacity decisions. Nor did the Insurer give notice of its decision in the manner required by the Work Capacity Guidelines for a work capacity decision. Instead it gave a notice that was said to comply with s 74 of the WIM Act. But that provision, as s 74(6) suggests, [63] is not concerned with notification of a dispute based on a work capacity decision made by an insurer pursuant to Div 2 of Pt 3.

• the Worker no longer suffered an injury arising out of or in the course of her employment with the Bank within the meaning of s 4 of the WC Act; and
• the Worker was no longer a person who was totally or partially incapacitated within the meaning of s 33 of the WC Act. Division 2 of Pt 3 of the WC Act does not confer authority or power on an insurer to decide either of those two matters. In my opinion, in purporting to make decisions about those matters the Insurer was not making decisions "about a worker's current work capacity".

1. It is quite possible that if the Insurer had carried out the tasks entrusted to it by the legislation in accordance with the statutory criteria, it would have concluded that the Worker did not have "no current work capacity" or "work capacity". But that is beside the point. The decision purportedly made by the Insurer was not within s 43(1)(a) of the WC Act.

Section 43(1)(f) of the WC Act

1. In my opinion, the Bank's reliance on s 43(1)(f) of the WC Act as an alternative basis for concluding that the Insurer's decision was a "work capacity decision" is misplaced. Section 43(1)(f) which is within Div 2 of Pt 3 of the WC Act, must be construed in context. Division 2 of Pt 3 addresses an injured worker's entitlement to weekly compensation. That entitlement is to be determined in accordance with and subject to the constraints stated in Div 2 of Pt 3.
2. Section 43(1)(f) identifies one of the six categories of decisions by insurers that is subject to the privative clause and thus can be challenged only under s 44BB or by way of judicial review in the Supreme Court. No doubt s 43(1)(f) can be read with other provisions in Div 2 of Pt 3 to inform the construction of those provisions. For example, s 43(1)(f) may support a construction of ss 36 and 37 of the WC Act that gives an insurer the statutory power to calculate the weekly compensation payable to an injured worker during the first and second entitlement periods. But s 43(1)(f) is not a discrete grant of decision-making power to an insurer. Its purpose is to describe a category of decision that are to be regarded as "work capacity decisions" and are therefore subject to the private clause in s 43(1) and to the operation of s 43(3).
3. It follows that the expression "any other decision of an insurer that affects a worker's entitlement to weekly compensation" in s 43(1)(f) is a reference to any other decision affecting such an entitlement that Div 2 empowers an insurer to make. Section 43(1)(f) cannot convert a purported decision by an insurer that it has plainly no authority to make under Div 2 of Pt 3 into a decision that is subject to the privative clause or to s 43(3).
4. In expressing the conclusion this way I am not implying that s 43(1)(f) cannot apply to decisions that insurers may be empowered to make by provisions outside Div 2 of Pt 3 of the WC Act. The argument on the appeal did not address whether insurers have any such power and, if so, whether their exercise would produce decisions that affect a worker's entitlement to weekly compensation payments. It is not necessary for present purposes to take this question further.
5. As I have explained, the Insurer in the present case purported to perform decision-making functions that the legislation does not entrust to it. The deficiencies in the process went further than the Insurer committing a jurisdictional error, such as a denial of procedural fairness, in the course of exercising a power undoubtedly conferred on it by the legislation. [65] The Insurer purported to exercise a power to make decisions that the legislation confers on other decision-making bodies. A purported decision of this character is not protected by the privative clause in s 43(1)(f) of the WC Act.
6. This conclusion does not necessarily mean that s 43(1)(f) is confined to decisions that are consequential on decisions of the kind identified in s 43(1)(a)-(e). Nor does the conclusion depend, as Mr Gross' submissions perhaps suggested, on reading s 43(1)(f) as ejusdem generis with the preceding paragraphs of s 43(1). The scope of s 43(1)(f) is determined by the nature of the powers conferred on insurers by other provisions in Div 2 of Pt 3. Given that the Insurer did not have power to do what it purported to do, it is not necessary in this case to attempt a definitive pronouncement on the precise scope of the powers that are conferred on insurers by Div 2 of Pt 3.
7. For these reasons, the decision purportedly made by the Insurer on 20 March 2015 was not a work capacity decision within s 43(1) of the WC Act. The Bank therefore cannot rely on the privative clause in s 43(1) or s 43(3) to support its contention that the Commission did not have jurisdiction to hear and determine the Worker's Application. Accordingly, the Worker's appeal to this Court must be allowed.

Section 43(2) of the WC Act

1. In view of the conclusion I have reached, it is not necessary to consider the Worker's contention that the Insurer's decision, if otherwise within s 43(1) of the WC Act, was not a "work capacity decision" by reason of s 43(2). It will be recalled that the Worker submitted that the Insurer's decision was not a work capacity decision because it was either "a decision to dispute liability for weekly payments of compensation" within s 43(2)(a) or, alternatively, a "decision that [could] be the subject of a medical dispute under Part 7 of Chapter 7 of the [WIM] Act" within s 43(2)(b). However, I shall state briefly my opinion on each of these contentions.

Section 43(2)(a)

1. Section 43(2)(a) of the WC Act is a qualification or exception to the definition of "work capacity decision" in s 43(1). As such, although it does not say so expressly, it must be referring to decisions "of an insurer", since decisions of that kind are the subject of the definition in s 43(1). Section 43(2)(a) must also be read with s 74 and Pt 4 of Ch 7 of the WIM Act, both of which refer to decisions by an insurer to "dispute liability".
2. Section 74 requires an insurer, if it disputes liability "in respect of a claim", to give notice of the dispute to the claimant. A "claim" is defined to include both a claim made by a person and a claim a person is entitled to make (s 4). Section 74(6) states that the section does not apply to a "dispute based on a work capacity decision of an insurer under Division 2 of Part 3 of the [WC] Act". An insurer who admits liability to pay compensation must pay the compensation promptly (s 74A(1)).
3. Part 4 of the WIM Act applies to disputes "in connection with a claim for compensation" (s 287(1)). Section 287 provides that Pt 4 of Ch 7 of the WIM Act extends to a dispute that concerns failure to commence provisional weekly payments of compensation as required by Div 1 of Pt 3 of Ch 7, even though no claim has been made. Accordingly, a dispute can arise between a person who makes a claim or is entitled to make a claim and the person on whom the claim is made independently of any work capacity decision by an insurer. The general principle is that any party to a dispute within Pt 4 of Ch 7 of the WIM Act may refer it to the Registrar for determination by the Commission (s 288(1)).
4. If s 43(2)(a) of the WC Act is construed so as to encompass any decision by an insurer that adversely affects a worker's claim to weekly compensation payments or the Worker's entitlement to continuing weekly payments, there would be little room for s 43(1) or s 43(3) to operate. The latter provisions are intended to preclude a worker adversely affected by a "work capacity decision" from challenging that decision otherwise than by the procedures specified in s 43(1) (that is, review under s 44BB or judicial review). A broad interpretation of s 43(2)(a) that equates a decision to dispute liability with a decision to refuse a claim or to terminate an entitlement to weekly compensation would effectively negate s 43(1), at least in relation to claims by workers to weekly compensation payments. The broad interpretation is also inconsistent with this Court's decision in Inghams Enterprises Pty Ltd v Sok. [66]
5. Whatever the true scope of s 43(2)(a), I do not think that it excludes from the definition of "work capacity decisions" a decision by an insurer in the exercise of its powers under Div 2 of Pt 3 of the WC Act that results in the termination or reduction of a worker's existing entitlement to weekly compensation payments. The reference in s 43(2)(a) to a "decision to dispute liability for weekly payments of compensation" is in my view a reference to a decision of a different character. A decision may be made, for example, to dispute liability to make weekly compensation payments on the ground that the claimant was never a "worker" or had never sustained an injury in the course of his or her employment.
6. A decision to dispute liability on grounds such as these are to be dealt with under Pt 4 of Ch 7 of the WIM Act. The insurer may be required to review the decision to dispute liability (s 287A(1)) but the ultimate decision-maker, subject to judicial review, is the Commission (s 288(1)). In the absence of s 43(2)(a), a decision by an insurer to dispute liability on grounds such as I have identified might be said "to affect a worker's entitlement to weekly payments of compensation" within the meaning of s 43(1)(f). Section 43(2)(a) is intended to make it clear that a decision of this kind is not to be regarded as a work capacity decision.
7. This construction receives support from the terms of s 74(6) of the WIM Act (which says that an insurer is not required to give an s 74 notice of "a dispute based on a worker capacity decision"). Section 74(6) contemplates that such a dispute, unlike other disputes, will be dealt with in accordance with the procedures laid down in Div 2 of Pt 3 of the WC Act, rather than those laid down in Pt 4 of Ch 7 of the WIM Act.
8. For these reasons, had I held that the Insurer made a "work capacity decision" within s 43(1) of the WC Act, I would have rejected the Worker's submission that the decision was taken out of the definition by s 43(2)(a).

Section 43(2)(b)

1. Section 43(2)(b) of the WC Act excludes from the definition of "work capacity decisions" a "decision that can be the subject of a medical dispute under Part 7 of Chapter 7 of the [WIM] Act". Mr Gross relied on the definition of "medical dispute" in s 319 of the WIM Act (which includes a dispute in connection with a claim about a worker's fitness for employment) to support his submission that the Insurer's decision in the present case came within s 43(2)(b) and therefore could not be a work capacity decision.
2. In my opinion, the reason s 43(2)(b) excludes a decision that can be the subject of a medical dispute is that the WIM Act sets out the decision-making procedures and appeal processes for the resolution of medical disputes. Approved medical specialists do not make and are not authorised to make "work capacity" decisions within s 43(1) of the WC Act. An assessment incorporated in a medical assessment certificate issued under Pt 7 of Ch 7 of the WIM Act is conclusively presumed to be correct as to certain matters "in any proceedings before a court or the Commission" (s 326(1)). The conclusive presumption does not apply to work capacity assessments or work capacity decisions made by insurers under Div 2 of Pt 3 of the WC Act.
3. Had I concluded that the Insurer's decision in the present case was a "work capacity decision" within s 43(1) of the WC Act, I would not have accepted the Worker's submission that the decision was excluded from the definition by s 43(2)(b). A decision about a worker's current work capacity may involve a work capacity assessment and an evaluation of medical opinions as to the worker's ability to undertake work. But the decision is not one that can be the subject of a medical dispute under Pt 7 of Ch 7 of the WIM Act. The resolution of a medical dispute, such as a worker's fitness for employment, serves a different purpose than a decision made by an insurer under Div 2 of Pt 3 of the WC Act and is subject to a different regime.

Orders

1. The Deputy President erred in point of law in holding that the Commission lacked jurisdiction to hear and determine the Worker's Application. I propose the following orders:
2. Appeal allowed.
3. Set aside the orders made on 21 January 2016 by the Commission constituted by a Presidential Member and the determination made by the Arbitrator on 17 August 2015.
4. Remit the matter to the Commission constituted by an Arbitrator for determination consistently with these reasons for judgment.
5. The respondent (Bank) pay the appellant's (Worker's) costs of the appeal.

Endnotes

1. Sabanayagam v St George Bank Limited [2016] NSWWCCPD 3 (Deputy President Kevin O'Grady).
2. Decision of Senior Arbitrator dated 17 August 2015 at par 2.
3. Internal review, 24 September 2014, par 14.
4. Internal review, pars 23 and 24.
5. Sabanayagam v St George Bank Ltd [2016] NSWWCCPD 3 (Appeal Determination).
6. Workers Compensation Act 1987 (NSW) (WC Act), s 154G. See [78] below.
7. WC Act, s 154C. The role of WorkCover NSW in acting for the Nominal Insurer has since been replaced by the State Insurance Regulatory Authority pursuant to the State Insurance and Care Governance Act 2015 (NSW), sch 4 cl 3.
8. Workplace Injury Management and Workers Compensation Act 1998 (NSW) (WIM Act), s 353(1).
9. WIM Act, s 353(2).
10. See at [47] below.
11. As to the nature of the appeal see WIM Act, s 352(5); Inghams Enterprises Pty Ltd v Sok [2014] NSWCA 217; 87 NSWLR 198 at [14]-[18] (Basten JA, Barrett JA and Sackville AJA agreeing).
12. WC Act, s 2A(2); WIM Act, s 60(2).
13. Workers Compensation Regulation 2010 (NSW) sch 8 cl 3(1).
14. This is a defined term: see at [47] below.
15. WIM Act, s 105(1). See at [52] below.
16. See at [59] below.
17. 2012 Act, sch 11[1].
18. "Review Guidelines" is a reference to "Guidelines for work capacity decision internal reviews by insurers and merit reviews by the Authority": see Work Capacity Guidelines section 1.2. The Review Guidelines are contained in section 7 of the Work Capacity Guidelines.
19. See [51] above.
20. See at [33] above.
21. Appeal Determination at [18].
22. Appeal Determination at [41].
23. Appeal Determination at [55].
24. Appeal Determination at [56].
25. Appeal Determination at [57].
26. Appeal Determination at [58].
27. Appeal Determination at [63].
28. Appeal Determination at [77].
29. Appeal Determination at [83].
30. See at [79] above.
31. See at [66]-[67] above.
32. See at [65] above.
33. See at [68]-[69] above.
34. The sole ground of the Notice of Contention is that the Deputy President's decision should be upheld on the ground that the Insurer made an express decision to cease making weekly compensation payments to the Worker and that the decision was a "work capacity decision" within s 43 of the WC Act.
35. Section 69 of the Supreme Court Act 1970 (NSW) confers jurisdiction, inter alia, on the Supreme Court to quash decisions affected by errors of law appearing from the decision-maker's reasons. The Supreme Court also has jurisdiction to quash decisions affected by jurisdictional errors, such as a denial of procedural fairness.
36. Appeal Determination at [58].
37. Appeal Determination at [59].
38. Australian Broadcasting Tribunal v Bond [1990] HCA 33; 170 CLR 321 at 355-356 (Mason CJ, Brennan and Deane JJ agreeing); Bruce v Cole (1998) 45 NSWLR 163 at 187-188 (Spigelman CJ, Mason P, Sheller and Powell JJA agreeing).
39. Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [69] (McHugh, Gummow, Kirby and Hayne JJ); Certain Lloyds Underwriters v Cross [2012] HCA 56; 248 CLR 378 at [24] (French CJ and Hayne J).
40. The history is outlined briefly in Speirs v Industrial Relations Commission of New South Wales [2011] NSWCA 206; 81 NSWLR 348 at [37]-[40] (Giles JA, Allsop P and Hodgson JA agreeing).
41. By the Compensation Court Repeal Act 2002 (NSW), s 4(2).
42. The only change to s 105(1) effected by the 2012 Act was to insert the Note referring to s 43(3) of the WC Act.
43. Orellana-Fuentes v Standard Knitting Mills Pty Ltd [2003] NSWCA 146; 57 NSWLR 282 15 at [37]-[52] (Ipp JA, Spigelman CJ and Handley JA agreeing).
44. Raniere Nominees Pty Ltd t/as Horizon Motor Lodge v Daley [2006] NSWCA 235; 67 NSWLR 417 at [66] (Santow JA, Spigelman CJ agreeing).
45. Speirs v Industrial Relations Commission of New South Wales [2011] NSWCA 206; 81 NSWLR 348 at [57] (Giles JA, Allsop P and Hodgson JA agreeing).
46. Ruhani v Director of Police [2005] HCA 42; 222 CLR 489 at [56] (McHugh J), citing Abebe v Commonwealth [1999] HCA 14; 197 CLR 510 at [24] (Gleeson CJ and McHugh J).
47. See Acton Engineering Pty Ltd v Campbell (1991) 31 FCR 1 at 13 (Lockhart J, Black CJ and Davies J agreeing); Avamure Pty Ltd (in liq) v Fletcher Jones & Staff Pty Ltd [1997] 2 VR 56 at 58 (Tadgell JA, Callaway JA agreeing); Lunn v Cardiff Coal Company (No 3) [2003] NSWSC 789; 177 FLR 411 at [44]-[47] (Barrett J).
48. LNC Industries Ltd v BMW (Australia) Ltd [1983] HCA 31; 151 CLR 575 at 581 per curiam; Enterprise Sheet Metal Pty Ltd (in liq) v Queensland Steel and Sheet Pty Ltd [1995] 1 Qd R 511 at 514 (McPherson JA and Derrington J).
49. Both "worker" and "injury" are defined terms: see at [40] above.
50. Workmen's Compensation Act 1910 (NSW) s 5, second schedule cl 1(2).
51. The WIM Act provides for an Arbitrator, with the leave of the President, to refer a question of law for the opinion of the Commission constituted by the President: s 351(1). A party to a dispute in connection with a claim for compensation may appeal to the Commission constituted by a Presidential member: s 352(1). An appeal is limited to a determination of whether the decision appealed against was or was not affected by any error of fact, law or discretion: s 352(5).
52. [1985] HCA 2; 155 CLR 171.
53. (1985) 155 CLR 171 at 177 (Mason, Wilson, Deane and Dawson JJ), referring to Williams v Metropolitan Coal Co Ltd [1948] HCA 8; 76 CLR 431 at 444 (Starke J), 449 (Dixon J).
54. (1985) 155 CLR 171 at 178.
55. These words appear in the heading to s 38.
56. WC Act s 38(2).
57. WC Act s 38(3).
58. [2014] NSWCA 217; 87 NSWLR 198 at [54] (Basten JA, Barrett JA and Sackville AJA agreeing).
59. Ingham Enterprises Pty Ltd v Sok [2014] NSWCA 217; 87 NSWLR 198 at [55].
60. See s 38(3)(c).
61. See the definition of "no current work capacity" in WC Act, s 32A at [47] above.
62. See the definition of "current work capacity" in WC Act, s 32A at [47] above.
63. See at [51] above.
64. See at [79] above.
65. See Plaintiff S157/2002 v Commonwealth [2003] HCA 2; 211 CLR 476; Re Refugee Review Tribunal; Ex Parte Aala [2000] HCA 57; 204 CLR 82.
66. See at [136].

Amendments 01 August 2016 - [131] - quoting the High Court, change "employer" to "employee". [151] - quoting s 43(1)(f) of WC Act, change "decisions" to "decision". DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 01 August 2016