35 I respectfully take a different view to Adams J as I am of the opinion that the terms of the letter of 28 March 2003 are such that it is not possible to see the reference to claims experience as merely incidental, or as something which could not reasonably or logically be considered to give support to the classification which was made. WorkCover's letter stated the basis for the view, which is obviously central to the decision, that the predominant activity of Staging Connections is hiring equipment to business for the purpose of staging events, and that basis was set out in three points one of which refers to claims experience. The reference to claims experience is basal, not merely incidental to the decision which was reached.
36 However I must go on also to say that I do not agree with Adams J's view that the reference to and treatment of the consideration relating to claims experience in WorkCover's determination constitute an error of law. It would be an error of law to identify the appropriate classification in Table A by considering whether the claims experience of Staging Connections justifies the imposition of the premium rate referred to in the classification. WorkCover was aware that it should not use claims experience in this way, and I regard it as clear that WorkCover did not do so, although some submissions put forward by Staging Connections had, in effect, invited WorkCover to do so. In its determination WorkCover stated the basis for WorkCover's view about what the predominant activity of Staging Connections was, and one of the three points of that basis was the part of the business activities from which a substantial majority of claims arose. This and the other two points, the most significant source of turnover and the activities of the majority of staff, are, in my opinion, relevant to identification of the predominant activity; a reasonable person in WorkCover's position could so regard them.
37 Staging Connections also presented arguments to the effect that in reaching its determination WorkCover had not applied subcl.2(4) of Schedule 1 of the Insurance Premium Order according to its true meaning, and had applied tests which should not have been applied according to the true meaning and effect of subcl.2(4). The first form of this argument was to the effect that WorkCover had applied a "predominant activity" test in determining to apply Classification 774310 Plant and Machinery Hiring and Leasing without Operators, and that to adopt this test was not to identify the classification applicable to the business as "that which most accurately describes the entire business of the employer," taken with the definition of inclusion of "the entire business" in the second sentence of subcl.2(4). The contention was to the effect that identifying the predominant activity is a different process to searching for and identifying the classification which most accurately describes the entire business, including operations and activities directly involved in the conduct of the business and also those incidental to the conduct of the business. Obviously enough, identifying the predominant activity of a business is a different process to identifying the most accurate description of the entire business, including both the activities directly involved and the incidental activities.
38 This contention was made before Adams J, who disposed of it in the following terms: (Red 16)
In this case the reasoning of WorkCover, as disclosed in the correspondence, is that it determined that the entire business is most accurately described in class 323774 because of the extent to which its activities predominantly fall within that description. It does not seem to me that the plaintiff has made good the complaint that WorkCover equated the predominant activity with "entire business" but, in determining whether the business fell within the specified classification, it considered that, because its predominant activity did so in terms, that is connected one way or another with the leasing of equipment, that classification best described its entire business. I repeat that many businesses will not fit precisely into any classification. The mere reference by Workcover to the predominant activities of an employer did not mean that all the activities of the employer were not considered. It simply means that the predominance of those activities, as it were, clinched the matter.
39 In my respectful view Adams J disposed of this question correctly. I do not see the terms of the correspondence, and in particular of the letter of 28 March 2003, as indicating that WorkCover did not advert to or was not fully aware of the terms of subcl.2(4). When searching for the most accurate description of the entire business, including the activities directly involved and the incidental activities, the identification of the predominant activity is in my view a relevant matter; indeed it would be very hard to address the application of subcl.2(4) without identifying the predominant activity among the operations and activities directly involved in the conduct of the business, as well as identifying any incidental activities so involved. It would be an error to treat identification of the predominant activity as excluding or substituting for the whole exercise, but identifying the predominant activity could never be anything less than a very important part of the exercise. I do not think that it has been shown, from the terms of the determination or from the other material in evidence, that WorkCover substituted the predominant activity test for the application of the test in subcl.2(4).
40 In saying this I have regard to observations of Brennan CJ, Toohey, McHugh and Gummow JJ on the proper role of judicial review in Minister for Immigration and Ethnic Affairs v. Wu Shan Liang (1996) 185 CLR 259 at 271-272, which show that it is well settled that the reasons for an administrative decision should be given a beneficial construction, that a Court should not be concerned with looseness in language or unhappy phrasing and "The reasons for the decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error." I do not see the prominent attention given by WorkCover to the predominant activity, a relevant and important consideration, as an indication that WorkCover did not give attention to other relevant considerations or to the test in subcl.2(4).
41 In approaching the meaning of subcl.2(4) it should be understood that the subclause proceeds on the basis that there is no classification which accurately describes the entire business of Staging Connections. If there had been such a classification (as there often would be), the process of assessment in subcl.2(4) would not have been necessary. When subcl.2(4) is taken with the terms of the classifications themselves, which are quite broad, many businesses can be readily and unmistakably classified. Staging Connections certainly leases out equipment without operators; if it did nothing else its business could readily be allocated to Classification 774310 Plant and Machinery Hiring Leasing Without Operator. The terms of the classifications themselves reflect the insusceptibility of many businesses to precise classification. Even when some classification seems from its own words to be completely clear or very close, it cannot be taken in isolation from the other classifications: there may be one or several others which, once identified, disturb the clarity which seems to emerge from isolated consideration.
42 After opening with the word "Plant and Machinery Hiring and Leasing without Operator" the terms of Classification 774310 in effect acknowledge the indefinite nature of the exercise by going on to state certain employers included in the class and certain employers excluded from the class, references to other parts of Table A, and illustrations of activity under the heading of "Primary Activities". (The word "Primary" appears to be present for the historical reason that it also appears in the ANZSIC Standard Industrial Classification 1993 from which Table A is derived. The word "Primary" has significance for the purpose of the ANZSIC classification but appears to have no real meaning in Table A where the heading "Primary Activities" indicates some included business activities.) The generally indefinite edge of the expressions used reflects the nature of the whole exercise, as it is beyond what language can do to define classifications of businesses with complete rigour so as to have a classification for all possible businesses and to have no overlaps. Table A could not work and achieve its purposes without subcl.2(4) and its process of assessment.
43 In an argument which was not presented before Adams J, Staging Connections contended to this effect. The criticism was offered of WorkCover's determination that it made a quantitative approach to Staging Connections' business activities, and did not make a qualitative approach which would have enabled recognition of the provision of services as the central or qualitative character of the business activities, and would have enabled recognition of the hire of equipment as no more than ancillary and incidental to the effectual provision of the services. I see this argument as another form of the contention that it was wrong to identify the predominant activity. In my understanding subcl.2(4) does not require adoption of either qualitative approach or quantitative approach, and does not make either a qualitative or a quantitative approach determinative. In recognising the classification which most accurately describes the entire business of Staging Connections it is open to WorkCover and it would be reasonable for WorkCover to appraise both the quality of the services provided by the business and the quantity of the various activities in which the business engages; neither is exclusive or predominant, and there is a range of outcomes which it would be reasonable for a decision maker to reach while allocating weight and importance to quality, quantity and other aspects; the exercise is not completely susceptible of logical resolution, and it is difficult to suppose that some allocation by a decision maker of weight to quality or quantity could be identified as an error of law.
44 Staging Connections contended that WorkCover was wrong to have taken a sequential approach to the various classifications brought forward for consideration. In illustration of this counsel pointed to the terms of the letter of 21 June 2002 and its elimination of a number of classifications under consideration, for reasons there stated; counsel contended that WorkCover was wrong to take the sequential approach of eliminating a number of classifications from consideration and then directing attention, as was done in the letter of 28 March 2003, to the respects in which the classifications remaining under consideration seemed appropriate. Counsel said of this method "It fails to take a holistic approach to the identification of the classification which most accurately describes the entire business." Counsel also said "The sequential approach in Table A fails to give due significance to the NEC classifications unless a precise fit can be made between primary activities there listed and the predominant activity of an employer."
45 In my opinion this submission is correct. The terms of subcl.2(4) mean that it is incorrect to address classifications sequentially, rejecting some and then bringing relatively intense examination to bear on how accurately the remaining classification or classifications describes the entire business. This sequential method does not appropriately recognise the underlying difficulty which subcl.2(4) exists to resolve: the difficulty that there is and can be no classification which completely and accurately describes the entire business of an employer, and there are a number of classifications , all of which are imperfect descriptions, which have to come under consideration when identifying which of these most accurately describes the entire business. Even if there is one classification which seems to fit the business under consideration entirely accurately, the impression of entire accuracy may well be unreliable because of the nature of the process of description, and because each description is set in the context of many other descriptions also describing a subject matter which cannot be defined in an entirely precise way.
46 Business classifications which do not give rise to doubt, the overwhelming majority, can be left on one side. For those where there is doubt subcl.2(4) is to be applied so as to make a choice among them, and it is necessary to identify the classifications which call for consideration, all of which describe the business more or less accurately but not with complete accuracy, and then to identify the one which describes the business most accurately. Once the classifications which call for consideration are identified, sequential elimination will prevent the exercise from being conducted properly; what is required is global assessment of all those which call for consideration.
47 To carry out the exercise in subcl.2(4) it is necessary to have an understanding of what is the entire business of the employer, with the inclusions required by subcl.2(4), it is necessary to identify all the classifications which call for consideration, and it is necessary to make a global assessment about which classification most accurately describes that entire business. In both parts of this exercise there is plainly a wide range for judgment, admitting of little possibility of judicial review; but the exercise has not been performed and in my opinion it should have been.
48 For these reasons I am of opinion that the appeal should be allowed, and the application under s.170 of the Workers Compensation Act 1987 should be returned to WorkCover for determination in accordance with these reasons. The orders should be: