Workcover/Royal & Sun Alliance (Ams Engineering Pty Ltd) v Toohey [2001] SAWCT 53

3 In 1996 things started to go awry. The worker started to feel the pressure of his work and began to experience symptoms of anxiety and stress. His enthusiasm for work started to wane. Mark Toohey spoke of his brother beginning to make mistakes at work, being less easy to get on with, experiencing difficulties with other members of staff, and becoming more introverted. At around this time the employer encountered some financial difficulties that the worker attributed to the incompetence of some of the staff. Whatever the case, the worker became quite ill, developing a major depressive illness which the psychiatrist Dr Blakemore concluded rendered him totally unfit for any work at the time of his consultation on 13 October 1998.

4 The worker sought compensation pursuant to the Act and his claim was eventually accepted.

5 Arrangements were made for the worker to return to the workplace in mid-February 1999, working two hours per day on modified duties. The worker undertook these duties for a little while but found that he was not achieving anything by working two hours a day and it was resolved that he would work one full day per week and two hours on the other four days. The worker said that this did not prove successful either and that he was completely lacking in confidence in undertaking this work. He thought that his best chance of making any sort of recovery from the debilitating effects of his depressive illness was to leave Adelaide. He decided to move to Bundaberg in Queensland.

6 By letter dated 4 May 1999 the worker's solicitors advised the claims agent of the worker's circumstances and formally requested permission for the worker to leave the State. That letter noted, inter alia, that:-

"We understand that Mr Toohey has attempted to return to work in accordance with a return to work program discussed with Elinor Bolt but that this attempted return to work, which occurred at Mr Toohey's instigation, has been unsuccessful. Mr Toohey lacks confidence at work, his contact with employees at AMS Engineering causes friction and anxiety and tends to lead to outbursts. Mr Toohey made an honest and genuine attempt to return to work but has found that he faces the same people and problems at the workplace which gave rise to his disability. This return to work has therefore caused a deterioration of his condition.

Due to the nature of the work carried out by AMS Engineering (signage, advertising displays etc.) there are visible reminders throughout Adelaide of the work previously undertaken by Mr Toohey. These reminders cause Mr Toohey to dwell on his previous problems and therefore result in ongoing frustration and annoyance. Mr Toohey often comes into contact with people in Adelaide with whom he previously worked. These encounters also exacerbate his health problems.

The ongoing problems suffered by Mr Toohey have had a severe effect on his marriage. Mr Toohey and his wife have undertaken counselling which has established that his marriage breakdown is work related.

In light of the above, Mr Toohey has decided to leave Adelaide in order to improve his mental health. He intends to return to Adelaide after there has been significant improvement in his condition. He also intends to continue to undergo medical treatment and rehabilitation at his own cost if necessary. However, it appears that proper rehabilitation will not occur until Mr Toohey has departed from the familiar environment which is causing him ongoing problems.

The objects of the Workers Rehabilitation and Compensation Act include the provision of `effective rehabilitation of disabled workers and their early return to work'. To date attempts to rehabilitate Mr Toohey and return him to work have been limited and unsuccessful.

In light of the above, Mr Toohey is seeking the permission of the WorkCover Corporation to leave the State ..."

7 By letter to the worker's solicitors dated 7 May 1999 the claims agent advised that it considered the worker's request for approval to leave the State to be unreasonable, citing as the basis for this decision the fact that the worker had "not exhausted all avenues of the rehabilitation process" and the need for there to be in place a rehabilitation and return to work plan. The letter warned that if the worker chose to reside outside the State his income maintenance payments would be discontinued in accordance with the provisions of the Act.

8 On 10 May 1999 the worker sold his house at North Haven and then moved to Queensland. Having arrived there he had himself referred to a psychologist, Ms Karen Howe, and began to see her on a regular basis.

9 The learned Deputy President found that since moving to Queensland the worker had noticed an increase in his participation and enjoyment of everyday activities. It was the worker's evidence that his level of concentration improved and that he was now better organised. The worker said that he was no longer as irritable or depressed as he used to be. He spoke of being less anxious than before. He had recently obtained a position as a welder and this had made him feel positive.

10 The learned Deputy President accepted the worker as a witness of truth and found, on the basis of the worker's evidence, that since moving to Bundaberg his medical condition had improved.

11 By determination dated 28 May 1999 the Corporation invoked s 36(1)(g) of the Act to discontinue the worker's payments of income maintenance on the ground that he had ceased to be a resident of the State without the consent of the Corporation. The worker disputed this determination.

12 The Corporation subsequently agreed to continue payments of income maintenance to the worker for a period of six months. The dispute itself was referred into the Suspense List. The learned Deputy President described this agreement in the following terms:-

"... As events have unfolded the Corporation agreed to pay weekly payments up to December 1999 as I understand it on the basis that it ultimately gave its consent to the worker to live outside of the State until that time.

I therefore proceed on the understanding that the real issue is whether as at the end of 1999 the Corporation should have consented to the worker ceasing to reside outside (sic) of the State."

13 The matter proceeded to hearing before the learned Deputy President with oral evidence being led from the worker and from his brother Mark Toohey. At the outset there was some discussion between the learned Deputy President and counsel to establish the parameters of the hearing:-

"GILCHRIST DP: So this is going to proceed solely on the factual basis as to whether in all the circumstances the Corporation's decision to refuse to consent to your client residing interstate was reasonable?

MR DURKIN: Yes. We say that they had a discretion to make that decision and the analysis is whether that discretion was exercised reasonably in all the circumstances.

GILCHRIST DP: Well, on Davidson's Case I think it was held that they do have a discretion, but their discretion was reviewable by the Tribunal.

MR CRAWLEY: Yes. I won't be disputing that. That's clearly the authority of Davidson.

GILCHRIST DP: Alright. While I think of it I will make an order pursuant to section 88DA of the Act to enlarge the issues in dispute between the parties to reflect the determination of that issue."

14 The learned Deputy President described his approach to the determination of this issue as follows:-

"In resolving the dispute between the parties I do not think that my task is simply to decide whether it was open on the material presented to the Corporation for it to have declined to grant consent. In my view, I have to arrive at my own decision based on the material presented to me and decide whether at the material time consent should or should not have been given and I must do so by reference to what was expected at the time when the consent was being sought, not by reference to that which has since been established."

15 Applying this approach to the facts, and reminding himself that the focus of his inquiries concerned the situation as it was at December 1999, the learned Deputy President then weighed "all the relevant considerations" before concluding that the Corporation should have granted the worker consent to reside outside the State. It is apparent that significant amongst those considerations was the fact that the evidence did not support a finding that the worker's absence from the State could have been expected, as at December 1999, to entail any significant adverse financial consequences to the Corporation or to the employer, nor support a finding that the Corporation's capacity to monitor the worker's medical and rehabilitative progress had been compromised. Also patently significant to the learned Deputy President was the fact that the Corporation had previously had very limited success in achieving a return to work.

16 Before us, Mr Crawley submitted that the learned Deputy President had erred in law in his approach to the issue in holding that it was for himself to arrive at his own decision based on the evidence presented whether consent should or should not have been given. Instead, Mr Crawley submitted, the learned Deputy President should have confined himself to a consideration of whether the Corporation's exercise of its discretion had been reasonably open to it following the principles used by an appellate court on reviewing an exercise of discretion, as espoused in House v The King [1936] HCA 40; (1936) 55 CLR 499.

17 It was not sufficient, Mr Crawley submitted, for the learned Deputy President simply to find that he came to a different conclusion to that of the Corporation. He needed to find that the Corporation had erred in principle, eg by taking into account irrelevant considerations or by failing to take into account a material consideration, when exercising its discretion.

18 Mr Crawley further submitted that the learned Deputy President had erred in law in misdirecting himself on the onus of proof. It was, he contended, for the worker to prove that in all the circumstances consent to reside out of the State should have been given.

19 In the course of the appeal hearing Mr Crawley sought and was granted leave to amend the Corporation's Notice of Appeal by adding the further ground of appeal, "that the learned Deputy President erred in directing himself to the question of consent as at December 1999 when the operative date was 7 May 1999." Mr Crawley submitted that the learned Deputy President's focus on the facts as they were in December 1999 was misconceived and his conclusion based thereon of no relevance to the issue in dispute.

20 Mr Durkin submitted that whether the task undertaken by the learned Deputy President was characterised as a review by him of the Corporation's exercise of its discretion or as a rehearing by him on the evidence, it was clear that he had performed the task properly. It did not matter what words he had used, or omitted to use, to describe the process, the learned Deputy President had looked at all relevant criteria and had excluded any irrelevant criteria. He had not ignored the Corporation's decision, Mr Durkin submitted, it was just that on the facts as determined by him the Corporation's decision was unreasonable.

21 With respect to Mr Durkin's submission, we do not agree that the process undertaken by the learned Deputy President can be vindicated by the outcome. If the learned Deputy President's task was confined to reviewing the Corporation's exercise of its discretion, his preference for a different result was, by itself, an insufficient basis to set aside the Corporation's decision. Before that could be done, it must have appeared to the learned Deputy President that the Corporation had erred in its exercise of its discretion, eg by not taking into account some relevant consideration.

22 It is, we think, clear enough from the learned Deputy President's judgment that he did not see his task as confined to reviewing the process of the Corporation's exercise of its discretion, but rather as being a task of exercising his own discretion afresh as to whether or not consent should have been given. There is a difference, fine as it might be in some instances, between a finding that the compensating authority has erred in the process of exercising its discretion and a finding that it has erred in its ultimate decision.

23 Mr Crawley's first submission attributes to the Corporation's decision not to give consent to the worker residing outside the State a status before the learned Deputy President that it did not have, a status akin to a decision on appeal. The hearing before the learned Deputy President was not a hearing in the nature of an appeal. He was not reviewing the Corporation's exercise of its discretion, but rather reviewing the Corporation's decision to withhold its consent to the worker ceasing to reside in the State.

24 The true status of decisions of a compensating authority, whilst disputed and pending resolution by judicial determination or otherwise, is as described by Deputy President Judge Gilchrist in Hornhardt v WorkCover Corporation/HIH Workers Compensation (SA) Ltd (NTP Pty Ltd) [2000] SAWCT 157:-

"I think that it follows from this that the effect of the lodging of a notice of dispute within time is to render the disputed decision unenforceable and that remains so until the Tribunal makes an order either by consent or after an adjudication on the merits. In the latter case, the order only becomes enforceable after the time limit for which to seek judicial determination after arbitration or appeal after judicial determination, as the case may be, has expired. Thus the disputed determination carries no status in hearings before the Tribunal other than to provide a framework from which to ascertain the nature of the issues of dispute. The effect of this is that the party disputing the compensating authority's position need not demonstrate that the determination, or in the case of a disputed variation subsequent to a reconsideration, the reconsideration, was made in error. The status quo is the position as it was before the disputed determination was made. Thus, when the parties come before the Tribunal, the party seeking to disturb that status quo, absent any contrary provision in the Act, bears the onus of proof.

As to the nature of the hearing itself, given the status of the disputed determination, it must be a hearing de novo at which the Tribunal must arrive at its own decision based upon the evidence presented to it and the law as it is at the time of the hearing. ...

Thus the role of the Tribunal in adjudicating upon a disputed determination is essentially the same as that of a Review Officer (with the important qualification that does not arise here, namely that it is obliged to act upon a lawful agreement reached between the parties)."

25 There is, in our view, no justification for inferring that Parliament intended the Tribunal to have the power to conduct only a limited form of review in respect of s 36(1)(g) matters, this being a review akin to the hearing of an appeal against the Corporation's exercise of its discretion. Had that been Parliament's intention, we would have expected Parliament to have explicitly said so. It was the Corporation's decision to refuse consent to the worker living outside the State that was the subject of the judicial determination, not the exercise of the Corporation's discretion.

26 The approach adopted by the learned Deputy President was the correct one. No error of law is disclosed.

27 The status quo before the Corporation's decision, or amended decision, saw the worker residing in Queensland and in receipt of income maintenance. It was the Corporation that sought to disturb that status quo. There being no contrary provision in the Act, the Corporation bears the onus of proof. The Corporation's second ground of appeal must accordingly fail.

28 As to Mr Crawley's third point, it is evident that it was not in issue before the learned Deputy President that the Corporation had, notwithstanding its decision in May 1999, consented to the worker living outside the State until December 1999 and remaining in receipt of maintenance payments.

29 It is not apparent as to precisely why or on what legal footing income maintenance was paid to the worker for this period. The claims agent's determination of 28 May 1999 declared that payments had been discontinued effective from the date of the determination. The determination did not comply with s 36(3a) of the Act which requires that at least 21 days notice be given to the worker.

"At the conciliation it was agreed to allow the worker a period of six months to see if that sorted matters out, at the expiration of which, if he returned to South Australia, that would be the end of the matter. If the compensating authority allowed further time then the matter would remain in the suspense list for that further time.

It was on the basis that it was without prejudice to the position of the compensating authority and that if the matter then proceeded to a hearing it would be in relation to that determination and not on the basis of requiring a fresh consent and a fresh dispute about the further consent, so it's an unusually structured agreement in that sense and perhaps it is best in terms of its legal effect, described as being `a suspension of the 36(1)(g) notice.'"

31 Mr Durkin submitted that it is only upon reconsideration that a dispute is fully described for the purposes of proceeding through the Tribunal and so it was inappropriate, in any event, to focus on the date of the original decision. Moreover, he submitted:-

" ... the Deputy President rightly had regard to the actuality of the Corporation's cessation of consent. It was only the Corporation's cessation of consent in December 1999 which brought the matter before the Tribunal for resolution."

32 The only information about this agreement before the learned Deputy President, however, was what Mr Durkin had conveyed in his final submission:-

"It ought to be borne in mind - and I don't say that this emerges from the fact pattern insofar as the documents are before Your Honour - that at the process of conciliation of this dispute the determinations you have before you were de facto varied, I suppose, in that the Corporation's agent did in fact extend their consent to this man residing in Bundaberg until the end of last year. So I think the period in question is through this year."

33 Mr Crawley, who appeared for the Corporation at the judicial determination, did not demur to this.

34 Whether there is now any conflict between Mr Durkin's description of the agreement and Mr Crawley's description of the agreement is not a matter that need concern us. What is clear is that December 1999 was the operative date for the Corporation's withdrawal of consent.

35 In these circumstances, we do not think it can be said, as Mr Crawley has contended, that the operative date of the Corporation's refusal of consent was 7 May 1999. We think that the learned Deputy President was fully justified in regarding December 1999 as the operative date of the Corporation's decision not to consent to the worker residing outside the State. No error of law has been demonstrated.