WorkCover/Allianz Australia (Stephen Nelson Adelaide Electrical Services Pty Ltd) v Nelson [2002] SAWCT 47

1. He was referred to rehabilitation with the provider, Kathryn Hourigan Consultancy Services Pty Ltd, on 22 April 1997 and Ms Karen Osborne was his rehabilitation consultant. He was placed on the first of a series of rehabilitation programmes shortly thereafter.

1. In view of the respondent's disability, discussions ensued between the respondent and Ms Osborne as to alternative areas of vocational interest. Actions to be taken by the respondent as part of his second rehabilitation programme dated 18 August 1997 included the submission of applications to WEA for pre-STAT test preparation and to SATAC for entrance to University. The cost of this was met by the appellant (AB 96).

1. The respondent was successful in the SATAC mature age entry exams and commenced a Bachelor of Arts degree in first semester of 1998. He completed the first year of this degree and was offered and accepted a position in the LLB Degree course commencing in 1999.

1. During 1998 further rehabilitation programmes were designed for him (dated 8 May 1998, 26 August 1998 and 10 November 1998; AB 102 - 107) which specifically made reference to the continuation of his University studies. The rehabilitation programmes of 8 May 1998 and 26 August 1998 were both approved by the appellant's claims agent. Monthly reports from the rehabilitation provider to the claims agent indicate that the latter was kept informed of the worker's endeavours. Furthermore the claims agent paid the respondent's HECS fees and certain associated expenses for the 1998 academic year (AB 130, 131, 157, 158, 277, 278).

1. However the rehabilitation programme dated 10 November 1998, which also made reference to the continuation of University studies by the respondent, was not approved by the claims agent, and at that time the rehabilitation provider was required by the claims agent to cease rehabilitation services.

1. At about that time the worker was advised by letter from the claims agent that further tertiary studies would not be included in any rehabilitation programme, that his referral to his rehabilitation provider was cancelled and that he was required to attend rehabilitation with a different rehabilitation adviser. We interpolate here that this apparently sudden change of provider was understandably the subject of some comment by the learned Deputy President. It is as well to keep in mind that the success of rehabilitation depends upon the confidence which its participants have in its objectivity.

1. The respondent wrote to the claims agent on 10 January 1999 seeking an explanation and enquiring about the claims agent's position "regarding continued funding of my re-training ..." (AB 7).

1. The reply dated 15 January 1999 advised that it was the claims agent's intention to disallow payment for full time or part time University study, that it was the claims agent's intention to return him to suitable alternative full time or part time duties, and that the rehabilitation provider had been cancelled due to a failure to expedite his return to work (AB 8).

1. The worker then lodged a Notice of Dispute concerning that decision. The reconsideration which followed, dated 26 February 1999, described the determination of 15 January 1999 as a decision "rejecting the worker's claim for reimbursement of costs of University studies" and confirmed the decision on the basis that such costs had not been authorised by the appellant and had not been approved as part of the Rehabilitation and Return to Work Plan dated 8 January 1999.

1. That Plan, for the period 6 January 1999 to 6 April 1999, prepared by the newly substituted rehabilitation provider, made no reference to further tertiary studies on the part of the respondent and required him to job search.

1. The learned Deputy President recorded that the respondent, having been accepted into the Bachelor of Laws course for 1999, pressed on with a combined Arts Law Degree which he hoped to complete at the conclusion of 2002. In choosing to proceed with the combined Arts Law course in 1999 and thereafter, the respondent incurred certain costs set out in the schedule at AB 278.

1. The statement of issues (AB 15) identifies that the essence of the respondent's dispute was the review of the nature of rehabilitation services provided or to be provided to him (s 89A(b)). The primary issue ventilated by the respondent was the refusal of the appellant to include continued University studies in a rehabilitation programme (AB 176). The issue of associated costs incurred from 1999 also arose.

1. The learned Deputy President addressed these issues. He identified that the nature of the service which the respondent sought to be provided to him was a rehabilitation programme assisting him in training or retraining (s 26(3)(d)). He identified the rehabilitation programme in dispute. Of this he said "the context is of a person completing a tertiary qualification which is known to involve 3 or 4 years" (judgment par 18). He found that the respondent was midstream in the "programme" when he was interrupted by the appellant's decision. He concluded that he could review the appellant's decision to discontinue the programme in those circumstances. In this respect he relied upon Dunstan v State of South Australia (Department of Education Training and Employment) JD48/1998.

1. His Honour tested the appellant's actions of refusing to continue the programme by the standard of reasonableness. He was persuaded by the original circumstances that the gaining of a tertiary qualification by the respondent was supported by the appellant so long as the respondent cooperated and succeeded in that objective. Furthermore, he concluded that enrolment in the LLB course was within the scope of that proposal as it refined the learning to a more career specific qualification. He concluded that the issue of reasonableness on these facts was in the worker's favour.

1. Accordingly he decided that the appellant should be required to continue to include, as part of a rehabilitation programme, that the respondent continue his University studies and that the appellant pay the associated costs.

1. The learned Deputy President concluded that past costs incurred by the respondent associated with his University studies were, in the circumstances of this case, a class of costs authorised by the appellant and were therefore recoverable by the respondent pursuant to s 32 of the Act. In this respect reliance was placed upon Roberts v WorkCover Corporation/HIH Winterthur Workers Compensation (SA) Ltd (Rabbit Photos (No2) JD2/1999.

1. The operation of s 26 and s 32, which is central to this appeal, was dealt with in Dunstan (supra). Certain propositions can be made relying on that decision. By invoking s 26 a compensating authority can provide the worker with any service which achieves his or her best practicable level of physical and mental recovery and restoration to the workforce and the community. This is a very wide discretion to be exercised by the compensating authority.

1. If, as here, the compensating authority provides a particular service by way of a rehabilitation programme and then withdraws it, the worker may seek a review of that decision (s 89A). On such a review the issue will be whether the compensating authority exercised its discretion to withdraw the service appropriately given the objects of s 26. In other words, the review concerns the compensating authority's right to establish and determine the contents of a rehabilitation programme. That was clearly one of the issues before the learned Deputy President in the instant matter.

1. However, if following the compensating authority's withdrawal of the particular rehabilitation service, the worker unilaterally decides to proceed with the rehabilitation service in dispute and thereby incurs costs, the issue of reimbursement of those costs to the worker is not a matter within the scope of a review of a compensating authority's actions in withdrawing the rehabilitation service. Rather it involves an issue of compensation claimed by the worker and the worker must find a means by which he or she is entitled to claim that compensation.

1. It is in this context that the operation of s 32 arises as that is the only potential means by which the respondent in these proceedings could seek reimbursement for the cost of tuition incurred from 1999 onwards. There are only two heads of compensation contained in s 32 which provide some scope for the recovery of such expenses. The first is s 32(2)(c); "the cost of approved rehabilitation". However, s 32(8) would seem to create an insurmountable obstacle. That subsection provides that a reference to "approved rehabilitation" in s 32 is a reference to "rehabilitation programmes or services provided by a person who has an agreement with the Corporation for the provision of those programmes or services". In this instance there was no evidence that the University of Adelaide had an agreement with the Corporation for the provision of tuition to disabled workers.

1. The second potentially relevant subclause is s 32(2)(i); "any other costs (or classes of costs) authorised by the Corporation". The learned Deputy President placed reliance upon this subclause and Roberts v WorkCover Corp (No 2) (supra) which he said provided further understanding to Dunstan. Whereas Dunstan had confined the application of subcl (i) to classes of costs for medical and like expenses, Roberts No 2 was said to clarify that the Act does not prevent the compensating authority from authorising a class of costs which are other than medical or like expenses, and that if such authorisation has occurred then the costs become recoverable. The learned Deputy President then relied upon his finding that the appellant had authorised the payment of costs associated with the respondent's 1998 University tuition to find that such fees were a class of costs authorised by the appellant for the purposes of reimbursement pursuant to s 32.

1. We cannot agree with that analysis of the concept of authorisation as used in s 32(2)(i). The fact that at one time in the past, the appellant invoked its powers under s 26 to create a rehabilitation programme that included within its terms the provision of costs associated with the respondent's University course was not evidence of an authorisation at a later time for the purposes of s 32. We would conclude that there was no evidence of authorisation of a cost or class of costs for the purposes of s 32(2)(i) and to have concluded otherwise constitutes an error of law. The worker has no entitlement to reimbursement of the costs incurred in connection with his University course from 1999.

1. As to the respondent's review of the rehabilitation programme and in particular the refusal of the appellant to include the continuation of his University course, the approach required by the learned Deputy President was that referred to in West v WorkCover Corporation/Allianz Australia Workers Compensation (SA) Ltd (BCC Constructions Pty Ltd) ([2001] SAWCT 60) in which a single member of the Tribunal said:-

"In accordance with Dunstan (supra) the Tribunal is required to exercise the discretion afresh. The approach adopted in Dunstan was to test the proposed measure, the provision of home help and a firm mattress, against the commencing objects of s 26. It was decided that, on available evidence, the measure would assist the worker to cope with her disability in the home and in the workplace. It was therefore inferred that the provision of the items would facilitate her rehabilitation. It was therefore concluded that the request was reasonable and the employer's failure to establish such a progamme was unreasonable. Applying Dunstan the worker must establish that the request was reasonable and that the refusal was unreasonable."

1. In considering whether tertiary tuition was a reasonable rehabilitation initiative the learned Deputy President said that the circumstances in this matter were similar to those of Miller v WorkCover/Royal and Sun Alliance Workers Compensation (SA) Ltd (P and J Hurley t/as Hotel Royal)(No. 2) [2001] SAWCT 57, but the respondent's circumstances are far removed from those of the worker in Miller's case where the worker had not resumed work at all and the Corporation had given up on the search for alternative employment opportunities but not made any other moves towards rehabilitating him. In the absence of any initiatives from the Corporation, the single Member of the Tribunal held that retraining the worker to gain accounting qualifications for employment in the hospitality and liquor industry in which the worker had spent most of his working life was reasonable; a decision not disturbed on appeal.

1. The learned Deputy President took a longitudinal view of the nature of tertiary training and regarded the reasonableness of the inclusion of continued University studies to be supported by that alone. However although that context was important, applying the test of reasonableness to the proposed rehabilitative initiative also required an evaluation of matters such as the nature and purpose of the tuition, the costs associated therewith, and the rehabilitative benefit from the perspective of both the respondent and the appellant, including whether there were any alternative measures which would facilitate the respondent's rehabilitation. This is not intended to be an exhaustive list of relevant matters, but merely a guide to the kinds of considerations which bear on an objective analysis of the reasonableness of a rehabilitative measure (Norbis v Norbis [1986] HCA 17; (1986) 161 CLR 513 pp 519, 520). In restricting his consideration in the manner that he did, the learned Deputy President erred in law and therefore his decision cannot stand. In those circumstances we will hear the parties as to the appropriate orders to be made.