Bishop v Qantas Airways Ltd

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	Bishop v Qantas Airways Ltd [2024] NSWPIC 703
APPLICANT:	Bradley Bishop
RESPONDENT:	Qantas Airways Limited
SENIOR MEMBER:	Kerry Haddock
DATE OF DECISION:	16 December 2024
CATCHWORDS:	WORKERS COMPENSATION - Workers Compensation Act 1987 (1987 Act); claim pursuant to section 60 for the costs of left shoulder pyrocarbon hemi-arthrosplasty; respondent disputed liability as the prosthetic device proposed to be used in the surgery was not listed on the Department of Health Prostheses List, and therefore it was unable to determine that the proposed surgery was reasonably necessary; applicant maintained that clause 8 of the Workers Compensation (Private Hospital Maximum Rates) Order 2024 is ultra vires the 1987 Act; consideration of McEldowney v Forde, Watson v Marshall, Day v Harness Racing New South Wales, Alcan (NT) Alumina Pty Limited v Commissioner of Territory Revenue, Project Blue Sky Inc v ABA, and Pelama v Blake; Held – clause 8 of the Workers Compensation (Private Hospital Maximum Rates) Order 2024 is not ultra vires the 1987 Act; sections 62(6) and 62(6A) of the 1987 Act apply to allow direction that additional amount payable; award for the applicant for the costs of surgery as claimed.
DETERMINATIONS MADE:	The Commission determines: 1. There is an award for the applicant pursuant to s 60 of the Workers Compensation Act 1987 for the cost of left shoulder pyrocarbon hemi-arthroplasty, as recommended by Dr Wade Harper, and costs incidental to the surgery.

STATEMENT OF REASONS

BACKGROUND

The applicant, Bradley Bishop (Mr Bishop) was employed by the respondent, Qantas Airways Ltd (Qantas), as a baggage handler.
Mr Bishop sustained injury to his left shoulder and neck while connecting a tow bar to the back of a utility vehicle on 15 October 2020.
On 6 June 2024, the applicant’s treating orthopaedic surgeon, Dr Wade Harper, requested that Qantas approve proposed surgery to the applicant’s left shoulder, that is, hemi-arthroplasty.
On 17 June 2024, Qantas, which is self-insured, issued the applicant with a notice pursuant to s 78 of the Workplace Injury and Workers Compensation Act 1998 (the 1998 Act).
Qantas disputed liability for the proposed surgery because Dr Wade had provided a quote for the use of a prosthesis, being an Aequalis pyrocarbon humeral head, which was not TGA (Therapeutic Goods Association) approved, and was not listed on the Department of Health Prostheses List (the Prostheses List).
Qantas referred to the gazetted Workers Compensation (Private Hospital Maximum Rates) Order 2024 (the Order); and s 62(1A) of the Workers Compensation Act 1987 (the 1987 Act). As the requested prosthesis was not on the Prostheses List, Qantas was unable to determine that the proposed surgery was reasonably necessary.
The applicant lodged an Application to Resolve a Dispute (the Application) on 26 July 2024.
The applicant claimed that on 15 August 2020, he sustained left shoulder and neck injuries while connecting a tow bar to the back of a ute. In the alternative, the incident had resulted in aggravation, acceleration, exacerbation, or deterioration of a disease, deemed to have happened on 15 October 2020.
The applicant claimed the sum of $9,380 for future medical treatment, being the cost of left shoulder pyrocarbon hemi-arthroplasty, as recommended by Dr Harper, plus all costs incidental to the surgery.
The respondent lodged its Reply on 16 August 2024.

ISSUES FOR DETERMINATION

The parties agree that the following issue remains in dispute:
(a) whether the proposed surgery is reasonably necessary medical treatment.

PROCEDURE BEFORE THE PERSONAL INJURY COMMISSION

The matter was listed for conciliation/arbitration hearing in person on 17 September 2024. Mr Robison of counsel, instructed by Mr Santone, appeared for the applicant, who was present. Mr Doak of counsel, instructed by Ms Metawa and Mr Gillespie, appeared for the respondent. Ms Harrison of Qantas also attended.
Mr Robison advised that the applicant intended to advance an argument that the Order is ultra vires the 1987 Act.
As the respondent was not in a position to meet such an argument, it was agreed that Mr Robison would make brief oral submissions outlining the applicant’s case, and a timetable would be set for written submissions from each party. The matter would then be determined “on the papers”.
The parties provided written submissions in accordance with my direction.
On 21 October 2024 I caused an email to be sent to the parties, requesting that they advise whether they wished to make submissions on the application of s 62(6) and s 62(6A) of the 1987 Act, and, if so, to agree on a timetable.
The applicant’s solicitors advised on 1 November 2024 that the applicant wished to make further submissions, requested that he be given until 5.00pm on 8 November 2024 to do so, and suggested that the respondent be given until 5.00pm on 15 November 2024 to provide its further submissions.
The applicant provided his further submissions on 7 November 2024.
The respondent provided its further submissions on 15 November 2024.
I am satisfied that the parties to the dispute understand the nature of the application and the legal implications of any assertion made in the information supplied. I have used my best endeavours in attempting to bring the parties to the dispute to a settlement acceptable to all of them. I am satisfied that the parties have had sufficient opportunity to explore settlement and that they have been unable to reach an agreed resolution of the dispute.

EVIDENCE

Documentary evidence

The following documents were before the Personal Injury Commission (Commission) and considered in making this determination:
(a)    Application and attached documents;
(b)    Reply and attached documents;
(c)    Application to Admit Late Documents dated 19 September 2024 and attached document (applicant’s submissions);
(d)    Respondent’s submissions dated 8 October 2024;
(e)    Applicant’s submissions in reply dated 16 October 2024;
(f)    Applicant’s submissions dated 7 November 2024, and
(g)    Respondent’s submissions dated 15 November 2024.

Oral evidence

There was no application to call oral evidence or cross-examine any witness.

FINDINGS AND REASONS

Much of the evidence is not relevant to the issue in dispute, and it is not necessary that I refer to it.

Evidence of the applicant, Bradley Bishop

Mr Bishop’s statement is dated 22 July 2024.
On 15 October 2020, the applicant injured his left shoulder and neck while attaching a tow bar to the back of a ute at work. He kept working on normal duties and hours, but his shoulder and neck pain continued to worsen.
On 14 November 2023, the applicant underwent left shoulder synovectomy and left bicep tenodesis, performed by Dr Harper. The surgery improved the movement in his shoulder, but he was in more pain.
Dr Harper had recommended a left shoulder stemmed pyrocarbon hemi-arthroplasty to treat the applicant’s left shoulder pain. The applicant wanted the surgery because he hoped it would reduce his pain and allow him to move his left shoulder without the bones grinding on each other.
It was important to the applicant to get the surgery with a pyrocarbon prosthetic, despite it not being TGA approved. The alternative cobalt prosthetic would cause more damage to the shoulder joint, and not last as long. The pyrocarbon prosthetic was more long-lasting. This is important to him, as he is only 56.
The surgery would improve the applicant’s mental health because it would hopefully reduce the constant pain. The applicant understood the surgery may not be successful and would not completely repair his injury. However, he had to take any opportunity for improvement and was willing to take this risk.

Medical evidence

Dr Wade Harper – orthopaedic shoulder and elbow surgeon

Dr Harper reported to Qantas on 15 June 2024.
Dr Harper noted that the pyrocarbon humeral head had not achieved TGA approval, largely as an economic decision by the companies that owned the device. Dr Harper had inserted over 70 pyrocarbon implants in the last 10 years, with excellent results.
Dr Harper opined that the pyrocarbon hemi-arthroplasty was one of the best performing implants on the Australian joint registry. It had FDA (Food and Drug Administration) approval in the United States and had been used in Europe for over 10 years.
There was no other implant that Dr Harper would use. A conventional total shoulder replacement with polyethylene bearing (anatomical or reverse) would be susceptible to early failure, given the applicant’s age and glenoid wear pattern. A hemi-arthroplasty with chrome cobalt would cause excessive wear of the applicant’s already abnormal glenoid socket, requiring early revision, made more complex by further bone wear.
The applicant was in extreme pain, requiring regular opiates. Dr Harper “hope[d] you can understand” that the pyrocarbon hemi-arthroplasty was the applicant’s best chance of pain relief and restoring long-term function.
Dr Harper reported to Dr King Chen on 24 June 2024.
Dr Harper noted that the applicant had had his surgery declined because the pyrocarbon humeral head was not on the TGA.
Dr Harper had been using the device under special access approval for over 10 years. Multiple WorkCover patients had received the device. However, Qantas would not support non-TGA devices.
The applicant could not afford the surgery. He had bilateral shoulder arthritis requiring opiate analgesia, and Dr Harper opined that his best solution remained bilateral pyrocarbon hemi-arthroplasties.

SUBMISSIONS

The applicant’s oral submissions have been recorded and counsels’ written submissions remain with the Commission’s file. I will therefore summarise the submissions.

Applicant

The applicant submitted there is no issue that the State Insurance Regulatory Authority (SIRA) can say that treatment is compensable at a maximum rate. There is nothing in s 62 of the 1987 Act that says SIRA can restrict the range of treatment a worker can undergo.
The applicant referred to the decision in Shire of Swan Hill v Bradbury.[1]
[1] [1937] HCA 15; (1937) 56 CLR 746 (Bradbury).
The applicant submitted that it was inferred that liability for his shoulder injury was not, per se, disputed, and nor was the need, generally, for treatment. The applicant therefore proceeded on the basis that the merits of his claim were not in issue. (Emphasis in original). The usual considerations for a s 60 claim per Diab v NRMA Ltd[2] therefore did not arise.
[2] [2014] NSWWCCPD 72.
The single issue, the applicant submitted, was the correctness of the respondent’s interpretation of the effect of the Order, being a statutory instrument (purportedly) made under the 1987 Act.
The Order was said to be made pursuant to s 62(1A) of the 1987 Act, which allows SIRA to proclaim “the maximum amount…for any particular hospital treatment.” The applicant submitted it does not say SIRA can proclaim what hospital treatment is or is not compensable.
The applicant submitted that the head of power (s 62 of the 1987 Act) is entitled “Rates Applicable for Hospital Treatment.” It has nothing to do with the type of treatment which may be compensable.
The applicant submitted that s 62(1) of the 1987 Act is clearly aimed at the amount payable for treatment; and the limiting provision, s 62(1A), is clearly aimed at creating a mechanism by which SIRA may cap the costs of treatment.
The applicant submitted that the Order, at cl 8(1), goes to the type of prostheses that would be considered compensable, and not the capping of the costs of such treatment, which is the scope and purpose of the delegation given by s 62(1A) of the 1987 Act. (Emphasis in original).
The applicant submitted that the question is whether the Order is valid, or whether it is ultra vires the enabling legislation, as it goes to the wrong issue. The type of treatment that is available is a matter for s 60 of the 1987 Act, the merits of such claims being a matter for the Commission, not SIRA.
The applicant submitted that Bradbury requires a comparison of the language of the enabling Act with the content of the purported regulation.
The applicant submitted that the comparative exercise has three steps. He referred to Lord Diplock’s speech in McEldowney v Forde.[3]
(a)    Step 1: determine the meaning and scope of the words used in the primary legislation.
(b)    Step 2: determine the meaning and scope of the delegated legislation.
(c)    Step 3: compare the analysis in step 1 with step 2.
[3] (1971) AC 632 (McEldowney).
Step 1 was to determine that the 1987 Act permits SIRA to limit the cost of hospital treatment.
Step 2 was to determine that SIRA has purported to dictate the type of treatment which is compensable. (Emphasis in original).
Step 3 was to say that the analyses in step 1 and step 2 do not match, and the enactment is ultra vires. Because the Commission is not a superior court, this is a matter of merely opining as to this issue, to the extent necessary, to give relief under s 60 of the 1987 Act, which is, itself, within the exclusive jurisdiction of the Commission (s 105 of the 1998 Act). (Emphasis in original).
The applicant submitted the only way for the respondent to succeed would be to persuade the Commission that to cap an expense is the same thing as to say which types of treatment are available. This “would necessitate an excursion into the absurd.”
The applicant submitted that to interpret the instrument as SIRA would contend would be contrary to the presumption of personal freedom with which the question must be approached, per Watson v Marshall.[4] The freedom to choose medical treatment based on medical advice would not be regarded as being infringed upon without clear words of statutory intendment (the 1987 Act, not in anything published by SIRA). (Emphasis in original).
[4] [1971] HCA 33; (1971) 124 CLR 621 (Watson).
The applicant submitted that from Bradbury and McEldowney, the essential ratio is that one must compare the instrument with the statute under which it was purportedly made. The scope of the latter either covers the former, or it does not.
Because all legislation is different, there is somewhat limited utility in seeking guidance from the authorities, other than to divine the comparative approach that is required. However, some are clearly relevant, such as Melbourne v Barry.[5]
[5] [1922] HCA 56; (1922) 31 CLR 174 (Barry).
In Barry, the High Court held that a power to “regulate” did not include a power to prohibit. The applicant submitted that SIRA has the power to regulate, by setting upper limits, the quantification of a s 60 award. By having an exclusive list of treatments available, SIRA has purported to prohibit an award in respect of treatment not on its list. It has thus impermissibly sought to prohibit, when it can only regulate. Even then, its power to regulate is not at large. Its power to regulate, for present purposes, is to limit quantum.
The applicant submitted that an alternative analysis is to read the Order as a whole. This includes cl 3, which says the order “sets the maximum fees” for treatment. If cl 8 is read with the broader principles in cl 3, on one view, cl 8 is not to be read literally. That is, a proper construction may be to read down cl 8 by reference to the overarching concept in cl 3.
This would be a construction that would render the Order intra vires, but not prohibitive of an award in respect of the treatment in question. This approach would be consistent with the “avoidance” approach to the validity of an enactment – see, by analogy, in the Constitutional, rather than administrative, context, Attorney-General (NSW) ex rel Tooth & Co Ltd v Brewery Employees’ Union of NSW.[6]
[6] [1908] HCA 94; (1908) 6 CLR 469.
The applicant finally submitted that, as the merits of the treatment are not in issue, and as the only ground for “declinature” is an ultra vires instrument, there must be an award in his favour.
In reply to the respondent, the applicant submitted that, properly construed, the Order only regulates quantum, and not the availability of treatment. If that construction is correct, the applicant must be entitled to an award, simply regulated by the sum in the Order. The obvious problem is that no such sum exists.
The applicant submitted that, whatever the stated purpose of the Private Health Insurance (Prostheses) Rules by reference to the Private Health Insurance Act 2007 (Cth), under which it was enacted, it cannot inform the ultra vires question, because it is different legislation.
The applicant submitted that SIRA could either have created its own list or adopted another list of types of approved treatment. The authorship of the list is immaterial. What is material is that the list, as adopted by SIRA, purports to be an exhaustive account of the type of, as opposed to merely the cost of, that treatment. (Emphasis in original).
Given the stated purpose of the Commonwealth instrument, the applicant submitted that it too may be ultra vires the enabling Act, but that question does not need to be answered. Rather, by adopting this instrument, SIRA has acted ultra vires its enabling legislation.
Referring to the respondent’s submission that he had mischaracterised the Order, the applicant submitted that, if the respondent’s criticism was correct, the applicant must succeed, but the question which would remain unanswered, and to which the respondent had no answer, is what is the amount to be awarded in making the award? (Emphasis in original).
The applicant did not submit that SIRA was literally prohibiting him from receiving his chosen treatment. A more precise submission would be that SIRA is seeking to prohibit compensation for that treatment being awarded. (Emphasis in original). That is consistent with the observation that the 1987 Act, as a scheme, is only concerned with the award of compensation to injured workers.
The applicant submitted that, to concede that the ex facie effect of the Order is to limit a worker to compensation for treatment from a list of appropriate treatments is to concede that the effect of the regulation is to dictate the types of treatment a worker may seek compensation for, and that is the precise vice in the Order and why it is ultra vires.
The applicant submitted that, contrary to the respondent’s submission, Dr Harper did not undermine anything in the Application. Whilst SIRA may be permitted to set an upper limit of the cost of the pyrocarbon humeral head device, it cannot restrict workers to seeking compensation for polythene humeral head merely because it is cheaper. It can, however, if it wishes, regulate the upper limit of the cost of each alternative.
The applicant again submitted that ultra vires cases are always case specific. That is why the applicant points to no cases saying that Watson applies to this case, because none is known to exist. The principle in Watson is only relevant in the instance of parliamentary ambiguity because of the presumption that parliament does not intend to interfere with personal freedoms. If the Commission decides, as the applicant submitted it should, that the Order is patently ultra vires, then those aspects of legislative interpretation do not arise.
In response to my request for further submissions, the applicant submitted that his primary case was that the Order is ultra vires the 1987 Act and of no effect.
The applicant submitted that s 62(6) and s 62(6A) of the 1987 Act also have some relevance. In the alternative, the Order may be regarded as intra vires. The subsections create a discretion to grant the relief the applicant seeks, even if the Order is valid.
The applicant submitted that s 62(6) of the 1987 Act allows for a direction that the applicant is entitled to an award in an amount additional to the amount fixed under s 62(5), that is, per the Order.
The applicant submitted that, in that case, such a direction should clearly be given where there is no controversy surrounding the medical merits of what is proposed to be done in relation to his treatment, and where the respondent does not suggest that a cheaper form of treatment is preferred or more expedient. Section 62(6) would be regarded as aimed at directions to the respondent. (Emphasis in original).

The applicant submitted that s 62(6A) expressly contemplates circumstances in which a matter is pending before the Commission. It allows directions to be given to SIRA by the Commission, where the worker seeks such a direction, that the treatment be paid. The Commission may regard the applicant’s submissions as a request for such a direction.
The applicant finally submitted that, even if his primary submissions were wrong on the ultra vires point, the Commission has, and should exercise, the power to direct both the respondent and SIRA that the claim is compensable.

Respondent

The respondent submitted that the issue for determination is whether it is able to reject the applicant’s claim for the cost of the prosthetic device proposed by Dr Harper on the basis that it is not permitted under cl 8 of the Order.
The respondent submitted that the Order was made pursuant to s 62 of the 1987 Act. It referred to cl 3 and cl 8 of the Order.
The respondent submitted that it was important to note that the Private Health Insurance (Prostheses) Rules (Cth) are an instrument made under the Private Health Insurance Act 2007 (Cth) for the purposes of regulating the cost of benefits payable for the provision of prosthetic devices. (Emphasis in original).
The respondent referred to the applicant’s argument that the purpose of s 62(1A) of the 1987 Act is to permit SIRA to cap the cost of treatment involving use of a prosthesis; and cl 8(1) of the Order seeks to regulate the type of prosthesis that would be considered compensable, not to cap the cost of the treatment, which is the purpose of the delegation given under s 62(1A) of the Act. (Emphasis in original).
The applicant contended that the provision of the type of prosthesis is a matter for the application of s 60 of the 1987 Act, not SIRA, pursuant to the Order. The respondent submitted that whether that argument had merit depended on whether the characterisation of the primary legislation (s 62(1A) of the 1987 Act), and the delegated instrument (cl 8 of the Order), as having a different purpose is correct.
The respondent submitted that the applicant’s argument relied on an erroneous characterisation of cl 8(1) of the Order as an instrument the purpose of which is to regulate the type of treatment provided, rather than to regulate the cost of treatment by reference to specific types of prostheses.
The respondent referred to the discussion by Leeming JA of the question of whether a delegated instrument is ultra vires enabling legislation in Day v Harness Racing New South Wales.[7]
[7] [2014] NSWCA 423; 88 NSWLR 594 (Day).
The respondent submitted that the purpose of the power conferred by s 61(1A) [sic] of the 1987 Act is to limit the cost of hospital treatment for an injury by specifying that particular hospital treatment is not to exceed such sum as may be fixed by SIRA.
The respondent submitted that, contrary to the applicant’s submission, cl 8(1) of the Order does not prohibit the type of treatment to be provided. Nowhere does it seek to prohibit access to treatment. Rather, it seeks to limit the cost of the treatment by specifying the types of prosthetic devices that are to be used in the treatment. That characterisation of the clause is supported by the purpose of the Private Health Insurance (Prostheses) Rules, which is to set the monetary benefit to be paid for types of prostheses used in treatment.
The respondent submitted that this analysis of the purpose of the clause as being consistent with the legislative power is confirmed by the wording of the clause itself. Plainly the purpose of the clause is not to prevent the provision of treatment, but to limit the cost of that treatment by providing for a list of authorised prostheses.
This was made clear by Dr Harper’s evidence that the pyrocarbon humeral head had not achieved TGA approval in Australia largely as an economic decision by the companies who owned the device. The respondent submitted that “presumably” Dr Harper was referring to the price of the prosthesis being at a level that had not been approved and was therefore not included on the Prostheses List. (I took Dr Harper to mean that the companies had chosen not to incur the expense of obtaining TGA approval).
The respondent submitted that Dr Harper’s evidence also undermined the applicant’s argument that the purpose of cl 8 of the Order is to prohibit treatment. Dr Harper stated that he recommended the use of the pyrocarbon humeral head because a polythene humeral head would be susceptible to early fatigue. He did not state that the proposed operation cannot be performed only using the pyrocarbon humeral head, only that he did not recommend doing so. The treatment was still available to the applicant. It was the cost when using the pyrocarbon humeral head that was restricted by cl 8 of the Order. (Emphasis in original).
The respondent submitted that, on a proper interpretation, cl 8 is not ultra vires the power conferred by s 61 [sic] of the 1987 Act.
The respondent submitted that the applicant’s submission that the interpretation of cl 8 in the manner for which it contended would be contrary to the presumption of personal freedom, and hence the freedom to choose medical treatment, had no force.
The respondent submitted that Watson had nothing to do with the provision of medical treatment, other than the fact that the doctor was detained for the purpose of involuntarily rendering treatment to him. The applicant cited no authority for the submission that the principles stated in Watson have any relevance to the issue to be determined.
The respondent submitted that an entitlement to compensation for the cost of medical treatment under the workers compensation legislation is a statutory right governed by the legislative provisions, including, where applicable, delegated legislation.
The principle considered in Watson was a common law right. There was no authority cited to support the applicant’s submission that the freedom to choose medical treatment would not be infringed upon without clear statutory intent. That submission also overlooked the point that cl 8 does not prohibit treatment, merely aspects of the cost of treatment.
The respondent submitted that cl 8 is not inconsistent with the stated purpose of the Order set out in cl 3. That is reinforced by the words, “This Order sets the maximum fees for which an employer is liable…” As cl 8 is not ultra vires s 62 of the 1987 Act, there is no need to seek to read down the clause as the applicant suggested
The respondent finally submitted that cl 8 of the Order applies to limit its liability for the cost of the surgery proposed by Dr Harper; and the Commission should enter an award for the respondent.
In response to my request for further submissions, the respondent submitted that s 62(6) and s 62(6A) of the 1987 Act are not relevant to the maximum prescribed “for any particular hospital treatment” per s 62(1A) of the Act. (Emphasis in original). It submits that those subsections relate only to the maximum liability for all hospital treatment as a result of an injury, per s 62(5) of the 1987 Act.
The respondent submitted that the reference to “such a direction” in s 62(6A) of the 1987 Act must, on the ordinary rules of statutory construction, relate to the “direction” in s 62(6) of the 1987 Act. (Emphasis in original). There is in any event no other direction mentioned in the section.
The respondent submitted that the “direction” in s 62(6) of the 1987 Act relates only to an amount additional to the amount fixed by s 62(5). (Emphasis in original).
The respondent submitted that, had it been the legislature’s intention to permit the maximum in s 62(1A) of the 1987 Act to be the subject of an increase by direction, then s 62(6) would have made specific reference to s 62(1A), and not just s 62(5).
Further, the respondent submitted the direction allows for “an amount additional” to the amount fixed in s 62(5) of the 1987 Act. This language is inconsistent with the language of s 62(1A), which, in reference to particular treatment, provides that the liability is not to “exceed such sum.” (Emphasis in original).
The respondent “observ[ed]” that s 62(1A) of the 1987 Act, under the ordinary rules of statutory interpretation, takes precedence over s 62(5) of the Act, being placed before it in the section. It could not, therefore, be argued that the maximum provided for “any particular hospital treatment” could be held to fall within the maximum for all hospital treatment as a result of an injury, should such an argument be advanced in reply. (Emphasis in original).
The respondent submitted that s 62(6) and s 62(6A) are irrelevant to the dispute.

SUMMARY

Section 59 of the 1987 Act defines “hospital treatment” as follows:
“‘hospital treatment’ means treatment (including treatment by way of rehabilitation) at any hospital or at any rehabilitation centre conducted by a hospital and includes:
(a)the maintenance of the worker as a patient at the hospital or rehabilitation centre,
(b)the provision or supply by the hospital, at the hospital or rehabilitation centre, of nursing attendance, medicines, medical or surgical supplies, or other curative apparatus, and
(c)any other ancillary service,
but does not include ambulance service.”
Section 60 of the 1987 Act provides:

“ Compensation for cost of medical or hospital treatment and rehabilitation etc60

(1) If, as a result of an injury received by a worker, it is reasonably necessary that-
(a) any medical or related treatment (other than domestic assistance) be given, or
(b) any hospital treatment be given, or
(c) any ambulance service be provided, or
(d) any workplace rehabilitation service be provided,

the worker’s employer is liable to pay, in addition to any other compensation under this Act, the cost of that treatment or service and the related travel expenses specified in subsection (2).
Note: Compensation for domestic assistance is provided for by section 60AA.
(2) If it is necessary for a worker to travel in order to receive any such treatment or service (except any treatment or service excluded from this subsection by the regulations), the related travel expenses the employer is liable to pay are-
(a) the cost to the worker of any fares, travelling expenses and maintenance necessarily and reasonably incurred by the worker in obtaining the treatment or being provided with the service, and
(b) if the worker is not reasonably able to travel unescorted-the amount of the fares, travelling expenses and maintenance necessarily and reasonably incurred by an escort provided to enable the worker to be given the treatment or provided with the service.

(2A) The worker’s employer is not liable under this section to pay the cost of any treatment or service (or related travel expenses) if-
(a) the treatment or service is given or provided without the prior approval of the insurer (not including treatment provided within 48 hours of the injury happening and not including treatment or service that is exempt under the Workers Compensation Guidelines from the requirement for prior insurer approval), or
(b) the treatment or service is given or provided by a person who is not appropriately qualified to give or provide the treatment or service, or
(c) the treatment or service is not given or provided in accordance with any conditions imposed by the Workers Compensation Guidelines on the giving or providing of the treatment or service, or
(d) the treatment is given or provided by a health practitioner whose registration as a health practitioner under any relevant law is limited or subject to any condition imposed as a result of a disciplinary process, or who is suspended or disqualified from practice.

(2B) The worker’s employer is not liable under this section to pay travel expenses related to any treatment or service if the treatment or service is given or provided at a location that necessitates more travel than is reasonably necessary to obtain the treatment or service.
(2C) The Workers Compensation Guidelines may make provision for or with respect to the following-
(a) establishing rules to be applied in determining whether it is reasonably necessary for a treatment or service to be given or provided,
(b) limiting the kinds of treatment and service (and related travel expenses) that an employer is liable to pay the cost of under this section,
(c) limiting the amount for which an employer is liable to pay under this section for any particular treatment or service,
(d) establishing standard treatment plans for the treatment of particular injuries or classes of injury,
(e) specifying the qualifications or experience that a person requires to be
‘appropriately qualified’ for the purposes of this section to give or provide a treatment or service to an injured worker (including by providing that a person is not appropriately qualified unless approved or accredited by the Authority).

(3)     Payments under this section are to be made as the costs are incurred, but only if properly verified.
(4)     The fact that a worker is a contributor to a medical, hospital or other benefit fund, and is therefore entitled to any treatment or service either at some special rate or free or entitled to a refund, does not affect the liability of an employer under this section.
(5)     The jurisdiction of the Commission with respect to a dispute about compensation payable under this section extends to a dispute concerning any proposed treatment or service and the compensation that will be payable under this section in respect of any such proposed treatment or service. Any such dispute may be referred by the President for assessment by a medical assessor under Part 7 (Medical assessment) of Chapter 7 of the 1998 Act.”

Section 62 of the 1987 Act provides:

“ Rates applicable for hospital treatment62

(cf former s 10 (2A), (3))
(1) The amount for which an employer is liable in respect of hospital treatment of a worker at a hospital is the cost to the hospital of the hospital treatment.
(1A) The maximum amount for which an employer is liable for any particular hospital treatment is not to exceed such sum (if any) as may be fixed by the Authority in respect of that treatment by order published in the Gazette.
(2)-(4) (Repealed)
(5) The maximum amount for which an employer is liable for hospital treatment given to a worker in respect of the same injury (whether the treatment is afforded at different stages of the injury or not) is-
(a) $50,000, or
(b) where some greater amount has been fixed by the Authority by order published in the Gazette-that greater amount.

(6)     Subject to the regulations, a direction may be given that the employer of a worker is liable for an amount additional to that fixed by subsection (5).
(6A) If proceedings relating to the worker’s claim for compensation are before the Commission and those proceedings relate to, or include matters relating to, the provision of hospital treatment for the worker, such a direction may be given by the Commission. If no such proceedings are before the Commission, such a direction may be given by the Authority on application made in respect of the worker from time to time.
(7)     A hospital, or a duly authorised officer of the hospital, may recover from the employer any amount for which the employer is liable under this Division in respect of hospital treatment given by that hospital.
(9)     If the maximum amount referred to in subsection (5) is, on or after the commencement of this subsection, amended either by an Act or an order of the Authority, the amount for which an employer is liable in respect of the hospital treatment of a worker under this section is to be calculated by reference to the maximum amount applicable to the worker at the time when the worker became injured.”

The current Order is dated 9 January 2024.
The Order provides, in cl 3:
“3. Application of Order
This Order applies to the hospital treatment of a worker at a private hospital, being treatment of a type referred to in clause 5 and provided on or after the date of commencement of this Order, whether the treatment relates to an injury that is received before, on, or after that date. This Order sets the maximum fees for which an employer is liable under the Workers Compensation Act 1987 for any treatment provided by a Private Hospital with respect to an injured worker.
For clarity, this Order applies to treatment provided to exempt workers and to injured workers receiving treatment under the Act outside of NSW.”
The Order provides, in cl 8:
“8.     Fees for Surgically Implanted Prostheses and Handling
(1)     Surgical prostheses are to be selected from the Department of Health Prostheses List (in accordance with the Private Health Insurance (Prostheses) Rules (Cth) rate current at the time of service) at the minimum benefit rate.
(2)     A 5% handling fee may be applied to each item up to a maximum of $189.00 per item.”
It is common ground that the prosthesis that Dr Harper has opined is appropriate for the applicant’s surgery is not listed on the Prostheses List.
I do not accept the applicant’s submission that the Order is ultra vires the enabling provision, that is, s 62(1A) of the 1987 Act.
As the respondent submitted, the Order does not prohibit the type of treatment to be provided to a worker. It seeks to give effect to the power, which is conferred by s 62(1A) of the 1987 Act, to limit the costs of treatment. It does so by reference to the types of prosthetic devices that are to be used in the treatment.
Leeming JA said in Day (at [62]):
“Moreover, the starting point in any such challenge must be ‘the true nature and purpose of the power’: Williams at 155…”
I accept the respondent’s submission that the purpose of the power conferred by s 62(1A) of the 1987 Act is to limit the costs of treatment for an injury by specifying that the cost of particular hospital treatment is not to exceed such sum as may be fixed by SIRA. The manner in which SIRA has fixed the amounts referable to the provision of prostheses is by reference to the Prostheses List.
Applying the test in McEldowney to which the applicant referred:
(a)    the meaning and scope of the words used in the primary legislation – the 1987 Act limits the cost of hospital treatment for which an employer is liable, and provides that SIRA may fix the maximum amount for which the employer is liable;
(b)    the meaning and scope of the delegated legislation – the delegated legislation (the Order) sets the maximum costs of hospital treatment. In the case of the fees for prostheses, it does so by reference to the Prostheses List, and
(c)    compare the analysis in (a) with (b) – there is no mismatch between the meaning and scope of the words used in the primary legislation and the words used in the delegated legislation.
I do not accept the applicant’s submission that to interpret the Order as SIRA would contend would be to limit the applicant’s freedom to choose medical treatment based on medical advice. The Order seeks only to limit the amount that the employer will pay for the costs of treatment, not the applicant’s choice of treatment.
As the respondent submitted, cl 8(1) of the Order does not prohibit the type of treatment to be provided but seeks to limit the cost of the treatment. This analysis of the purpose of the clause as being consistent with the legislative power is confirmed by the wording of the clause itself.
As noted above, “hospital treatment” includes the provision or supply by the hospital, at the hospital, of “medical or surgical supplies, or other curative apparatus.” The proposed prosthesis is a medical or surgical supply, or a curative apparatus.
SIRA was constituted by the State Insurance and Care Governance Act 2015 (the SIRA Act).
Section 23 of the SIRA Act provides that the principal objectives of SIRA are:
“(a)    to promote the efficiency and viability of the insurance and compensation schemes established under the workers compensation and motor accidents legislation and the other Acts under which SIRA exercises functions,
(b)     to minimise the cost to the community of workplace injuries and injuries arising from motor accidents and to minimise the risks associated with such injuries,
(c)     to promote workplace injury prevention, effective injury management and return to work measures and programs,
(d)     to ensure that persons injured in the workplace or in motor accidents have access to treatment that will assist with their recovery,
(e)     to provide for the effective supervision of claims handling and disputes under the workers compensation and motor accidents legislation,
(f)      to promote compliance with the workers compensation and motor accidents legislation.”

The SIRA Act amended s 62 of the 1987 Act, which previously provided:
“The amount for which an employer is liable in respect of hospital treatment of a worker at a hospital is the cost to the hospital of the hospital treatment, calculated as determined by the Authority by order published in the Gazette”, by omitting the words “calculated as determined by the Authority by order published in the Gazette”.
Section 62(1A) of the 1987 Act was also inserted by the SIRA Act.
Section 62(5) of the 1987 Act fixes the maximum amount for which an employer is liable for hospital treatment. I have referred above to the definition of “hospital treatment”.
Subject to the regulations, s 62(6) of the 1987 Act provides that a direction may be given that an employer is liable for an amount additional to that fixed by s 62(5) of the Act.
In order to resolve the dispute, it is necessary that I consider the provisions of ss 62(1A), 62(6) and 62(6A) of the 1987 Act, and their interaction with s 60 of the Act.
The High Court has made it clear that statutory interpretation requires reference to the text, context and purpose of a provision. In Alcan (NT) Alumina Pty Limited v Commissioner of Territory Revenue,[8] the plurality stated (at [47]):
“This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy.”
[8] [2009] HCA 41 (Alcan).
French CJ stated in Alcan (at [4]):
“The starting point in consideration of the first question is the ordinary and grammatical sense of the statutory words to be interpreted having regard to their context and the legislative purpose. That proposition accords with the approach to construction characterised by Gaudron J in Corporate Affairs Commission (NSW) v Yuill as:
‘dictated by elementary considerations of fairness, for, after all, those who are subject to the law’s commands are entitled to conduct themselves on the basis that those commands have meaning and effect according to ordinary grammar and usage.’
In so saying, it must be accepted that context and legislative purpose will cast light upon the sense in which the words of the statute are to be read. Context is here used in a wide sense referable, inter alia, to the existing state of the law and the mischief which the statute was intended to remedy.” (Citation omitted).
In Project Blue Sky Inc v ABA[9], the plurality of the High Court held (at [69]-[70]):
“The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined ‘by reference to the language of the instrument viewed as a whole’. In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that ‘the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed.’ Thus, the process of construction must always begin by examining the context of the provision that is being construed.
A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions...” (Citation omitted).
And (at [78]):
“However, the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning...”
[9] [1998] HCA 28; 194 CLR 355; 153 ALR 490; 72 ALJR 841 (Blue Sky).
I do not accept the respondent’s submission that ss 62(6) and 62(6A) of the 1987 Act relate only to the maximum liability for all hospital treatment but are not relevant to the maximum prescribed “for any particular hospital treatment”. (My emphasis).
The “conflict”, if such there is, between s 62(1A) and ss 62(6) and 62(6A) of the 1987 Act is to be alleviated by adjusting the meaning of the competing provisions “to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions”, and “the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed.”
In my view, the purpose and language of the provisions is to allow in appropriate cases for an employer to be liable for an amount or amounts in excess of the amounts in respect of hospital treatment for which s 62 of the 1987 Act provides. The “mischief it is seeking to remedy” is that which may occur if an injured worker is unable to access reasonably necessary hospital treatment because the cost of such treatment to an employer is capped at an amount that does not allow for it.
It would not best give effect to the purpose and language of the provisions if the respondent could be liable for hospital treatment that exceeded the amounts for which s 62 of the 1987 Act provides, but not for the cost of a prosthetic device that formed an integral part of that treatment.
Whilst it was decided before the amendments provided for by the SIRA Act, in the matter of Pelama Pty Ltd v Blake,[10] Burke J said:
“Again, while the Act imposes PRIMA FACIE limits on the total cost of medical or hospital treatment, there is a discretion to extend those limits which has been repeatedly exercised over a long period of time. I do not believe that such PRIMA FACIE limits suggest that very expensive forms of treatment cannot or should not be found to be reasonably necessary.” (Capitalisation in original; my emphasis).
[10] [1988] NSWCC 6; (1988) 4 NSWCCR 264.
In my view, it cannot be the intention of the legislation, and in particular s 62(1A) of the 1987 Act, to prevent the exercise of a discretion to extend the limits of the cost of hospital treatment, which, as Burke J pointed out, has been repeatedly exercised. In this case, of course, the proposed treatment is not “very expensive”, but its cost is reasonably modest.
The respondent did not submit that the prosthesis Dr Harper proposed to use was not an appropriate form of treatment.
The respondent submitted that the issue for determination was whether it could reject the claim for the cost of the proposed prosthetic device because it was not permitted under cl 8 of the Order. Put another way, cl 8 of the Order applied to limit its liability for the cost of the surgery.
The evidence of Dr Harper is persuasive that the prosthetic device he proposes to use in performing the surgery is appropriate and reasonably necessary medical treatment.
Due to the operation of ss 62(6) and 62(6A) of the 1987 Act, the Commission has the power to make a direction that the respondent is liable for an amount additional to that fixed by the Order made under the Act; and in my view it is appropriate to do so in this matter.
The order is set out in the Certificate of Determination.

[2024] NSWPIC 703

16 December 2024