Chetty v Queanbeyan-Palerang Regional Council - [2023] NSWPIC 528

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	Chetty v Queanbeyan-Palerang Regional Council [2023] NSWPIC 528
APPLICANT:	Surayakanthi Chetty
RESPONDENT:	Queanbeyan-Palerang Regional Council
PRINCIPAL MEMBER:	John Harris
DATE OF DECISION:	6 October 2023
CATCHWORDS:	WORKERS COMPENSATION - Workers Compensation Act 1987; federal jurisdiction; allegation of injury pursuant to section 4(b); accepted that the applicant interstate resident and respondent an entity of the State of New South Wales; respondent contended that it was arguable that Commission exercising judicial power; Citta Hobart Pty Ltd v Cawthorn referred; Kanajenahalli v State of New South Wales discussed; Finding in Kanajenahalli not of general application; causation of injury relevant to section 4(b); Australian Padding Co Pty Ltd v Zarb and AV v AW discussed; rights of workers arises at time of injury; Hochbaum v RSM Building Services Pty Ltd applied; federal workers compensation scheme may not be analogous with state scheme; discussion of other factors suggesting exercise of power may be administrative or judicial; defence of federal jurisdiction clearly arguable; application to remit matter to President on a question of law refused as question framed could not be determined; Held – opinion that it was arguable Commission exercising judicial power; proceedings dismissed.
DETERMINATIONS MADE:	The Commission opines and orders: Opinion 1. The respondent’s defence that the determination of the application is federally impacted is arguable. Order 2. The proceedings are dismissed pursuant to s 54 of the Personal Injury Commission Act 2020.

STATEMENT OF REASONS

BACKGROUND

Ms Surayakanthi Chetty (the applicant) was employed by Queanbeyan-Palerang Regional Council (the respondent). The applicant alleged that she suffered injury deemed to have occurred on 8 April 2022 which is pleaded in the following terms:
“At the time of injury, the Applicant was employed by the Respondent as an engagement officer.
Throughout the course of her employment, for a period of approximately 5 months, the Applicant was exposed to physical and racial abuse, perpetrated by her colleagues.
As a result of the nature and conditions of her employment, the Applicant developed a psychological injury, diagnosed as major depressive disorder with anxious distress.”
The applicant sought various statutory entitlements pursuant to the provisions of the Workers Compensation Act 1987 (the 1987 Act).
The respondent raised various defences including a denial of injury.[1] Given the pleaded date of injury, it is necessary that the applicant establish that the disease was either “contracted … in the course of employment” (s 4(b)(i)) or that the employment “was the main contributing factor to the aggravation, acceleration, exacerbation or deterioration of the disease” (s 4(b)(ii)).
[1] Reply, p 2.
The respondent has raised a defence that the matter is potentially federally impacted and that the proceedings should be dismissed and commenced in the District Court.

LEGISLATION

Section 75(iv) of the Commonwealth of Australia Constitution Act (the Constitution) provides:
“In all matters—
…
(iv.) Between States, or between residents of different States, or between a State and a resident of another State:

…
the High Court shall have original jurisdiction.”

Section 77(iii) of the Constitution provides that Parliament may invest any court of a State with federal jurisdiction.
Matters between residents of different States or between a State and a resident of another State can be heard by a court of a State due to the combined operation of ss 38 and 39 of the Judiciary Act 1903 (Cth).

Federally impacted matters

Division 3.2 of the Personal Injury Commission Act 2020 (the 2020 Act) provides for matters to be heard in the District Court if the determination of the matter by the Personal Injury Commission (the Commission) “would involve an exercise of federal jurisdiction”. The application must first be made to the President or the Commission.[2]
[2] Section 26(3)(a) of the 2020 Act.
There are three requirements in determining whether a claim is potentially federally impacted. They are:
(a)    jurisdiction can only be exercised by a court of a State;
(b)    the resolution of the dispute requires the exercise of judicial power (“judicial” as understood in the constitutional sense), and
(c)    the matter is between residents of different States, or between a State and a resident of another State.
A Tribunal cannot decide whether the determination involves an exercise of federal jurisdiction and should express a view consistent with the test set out in Citta Hobart Pty Ltd v Cawthorn.[3] If the matter is potentially federally impacted then it is for a court of a State to decide whether the determination does in fact involve such an exercise.
[3] [2022] HCA 16; 96 ALJR 476; 400 ALR 1 (Citta Hobart), [35]–[37] per Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ.
The plurality in Citta Hobart stated:
“35. The resolution in principle is that for a claim or defence in reliance on a Commonwealth law or in reliance on the Constitution to give rise to a matter of a description in s 76(i) or s 76(ii) of the Constitution, it is enough that the claim or defence be genuinely in controversy and that it give rise to an issue capable of judicial determination. That is to say, it is enough that the claim or defence be genuinely raised and not incapable on its face of legal argument.
36. That is what should be taken to have been meant by repeated acknowledgements that the assertion of a claim or defence will not give rise to a matter within the description in s 76(i) or s 76(ii) of the Constitution if the claim or defence is ‘unarguable’ or if the claim or defence is ‘colourable’ in that it is made for the purpose of ‘fabricating’ jurisdiction.
37. Thus, the State jurisdiction of a State tribunal that is not a court of the State within the meaning of s 77(ii) and s 77(iii) of the Constitution is not denied, just as the federal jurisdiction of this Court under s 76(i) or s 76 (ii) or of another court under s 77(i) or s 77(iii) of the Constitution is not engaged, by the assertion of a claim or defence that amounts to ‘constitutional nonsense’ or any other form of legal nonsense. But examination of what the prospects of success of a legally coherent claim or defence might be, were that claim or defence to be judicially determined on its merits, forms no part of the requisite assessment.” (footnotes omitted)
Accordingly, it is for a Member to decide whether the defence that federal jurisdiction exists is arguable, colourable or the argument amounts to judicial nonsense.
The matter was listed for telephone conference on 29 September 2023 following receipt of the applicant’s initial submissions. The applicant was then advised that her submissions did not address the relevant test set out in Citta Hobart and the applicant was granted leave to file supplementary submissions. The respondent maintained that, consistent with the correct test, it was arguable that the Commission was exercising judicial power when determining a dispute pursuant to s 4(b) of the 1987 Act.
The applicant was also advised that, consistent with the Citta Hobart test, I held the preliminary view that the issue of federal jurisdiction was arguable, and I would not necessarily ask for submissions from the respondent.
In her initial submissions the applicant sought a referral of a question of law to the President for a “determination of whether employment is the main contributing factor to an injury an exercise of administrative or judicial power”, that the Commission “can determine that it has jurisdiction”. That latter concept was described as an entitlement that it can determine that “we have jurisdiction” and any aggrieved party can bring judicial review proceedings.
Those submissions were far removed from what a Tribunal can decide in light of the observations in Citta Hobart. Further, the applicant’s suggestion that the President can determine the issue is obviously inconsistent with binding High Court authority. The fact that the President is a Judge of the District Court does not mean that he exercises those powers as a Court: see Mahal v State of New South Wales (No 5).[4]
[4] [2019] NSWWCCPD 42, [257]–[262].
The applicant was given leave to file any further submissions considering the applicant had not addressed the correct test.
In her supplementary submissions, the applicant conceded that the test of whether the defence of federal jurisdiction was available was in accordance with the test in Citta Hobart and noted that the respondent had not filed submissions.
Despite the applicant’s submissions that the respondent had not been called upon, I am clearly of the opinion that the defence of federal jurisdiction is arguable. The matter requires determination by a court of a State particularly in circumstances where I do not accept the applicant’s characterisation of recent Court of Appeal authority.

FINDINGS

It is common ground that, at the date of the filing of the application, Ms Chetty was a resident of the State of South Australia and that the respondent was relevantly the State of New South Wales.[5]
[5] See for example Stanley v Lachlan Shire Council [2023] NSWDC 262.
It is otherwise arguable (and highly likely) that the Commission is not a court of a State: Orellana-Fuentes v Standard Knitting Mill Pty Ltd;[6] Attorney-General for New South Wales v Gatsby.[7]
[6] [2003] NSWCA 146; 57 NSWLR 282 (Orellana-Fuentes).
[7] [2018] NSWCA 254 (Gatsby).
Accordingly, the only issue is whether the resolution of the dispute involves the exercise of judicial power and is arguably federally impacted.

Kanajenahalli v State of New South Wales

Given what the applicant submitted was the effect of the reasons of the Court of Appeal in Kanajenahalli v State of New South Wales (Western New South Wales Local Health District),[8] it is necessary to set out the relevant passages of that decision. The Court then stated:
“9.     That is to say, the only issue was whether a statutory prohibition, framed on whether reasonable action taken by the employer was the whole or predominant cause of the injury prevented Mr Kanajenahalli’s entitlement to statutory benefits. There is no close analogy to any issue arising at general law. The closest analogy would be a claim for negligence. But in order to obtain the statutory benefits he seeks, Mr Kanajenahalli does not have to prove duty, or breach, or causation, and not only does he not have to prove loss, but the statutory benefits he claims do not necessarily have a close relationship with any loss he has suffered. This is considerably removed from traditional aspects of judicial power; cf Attorney General for New South Wales v Gatsby (2018) 99 NSWLR 1; [2018] NSWCA 254 at [125]-[126].
….
12.    What is determinative of this appeal is the nature of the particular dispute between the parties. More general considerations do not all point in the same direction. Thus (and without being exhaustive), although its decisions are final and binding, the Commission is empowered to ‘reconsider any matter that has been dealt with by the Commission in the Workers Compensation Division’ and ‘rescind, alter or amend any decision previously made or given by the Commission in that Division’: Personal Injury Commission Act 2020 (NSW), ss 56 and 57. It is also true that the certificate of the Commission may be filed in a court and will thereafter operate as a judgment: Personal Injury Commission Act, s 59.
13.    There is no occasion in determining the present appeal (which lacks any contradictor) to resolve any more general question as to the nature of the powers exercised by the Commission, or to seek to reconcile the statements in Orellana Fuentes and Searle mentioned above (although it may be noted that the statement in Orellana-Fuentes was expressed in general terms, without regard to the particular powers being exercised in any particular case). It is sufficient to observe that in the case of the particular dispute involving these parties, where the only issue was that arising under s 11A, the Commission was exercising administrative power. The limitation in Burns v Corbett was not infringed.”
[8] [2023] NSWCA 202 (Kanajenahalli).
The applicant submitted that a dispute pursuant to s 4(b) of the 1987 Act was “analogous and administrative” for the following reasons:
-the principles in Kanajenahalli were “of general application”;
-the s 4(b) dispute was a statutory clause preventing the applicant from “recovering statutory benefits” which is “considerably removed from the traditional aspects of judicial power”, and
-the determination of that issue does not require “consideration of breach, duty or causation”.
The applicant’s submission that Kanajenahalli is of general application lacks merit given the Court expressly stated that:
“There is no occasion in determining the present appeal (which lacks any contradictor) to resolve any more general question as to the nature of the powers exercised by the Commission …”.
The applicant’s submission that there are no causation issues under s 4(b) is inconsistent with various authorities and is otherwise self-evident from the terms of the legislation. In Australian Padding Co Pty Ltd v Zarb[9] the Court of Appeal analysed various authorities on the issue of s 4(b)(ii) and upheld the finding of “causation of disability … in terms of the definition of injury in section 4, this was that the employment of the respondent during the relevant period as a contributing factor ‘to the aggravation, acceleration, exacerbation or deterioration’ of his disease.”[10]
[9] (1996) 13 NSWCCR 365 (Zarb).
[10] Zarb, [376F].
The 2012 amendment to s 4(b)(ii) by the addition of the words “main contributing factor” created a “more stringent test” of causation. As Snell DP stated in AV v AW:[11]
“On the other hand, the requirement in s 4(b) inserted by the 2012 amendments, that employment be ‘the main contributing factor’ (emphasis added) permits the existence of only one such factor. The requirement of ‘the main contributing factor’ involves a more stringent connection with the employment than the requirement of a ‘a substantial contributing factor’ that applied to ‘disease’ injuries prior to the 2012 amendments.”
[11] [2020] NSWWCCPD 9, [66].
Section 4(b)(i) requires that the worker contracted a disease to which that employment was the main contributing factor. Causation is a necessary element of making that finding.[12]
[12] See the discussion of Meagher JA in CSR Timber Products Pty Ltd v Weathertex Pty Ltd [2013] NSWCA 49, albeit in the context when the causation test did not include “the main contributing factor”.
I am not required to make positive findings. However, it is difficult to accept the applicant’s submission that s 4 is analogous to s 11A due to the absence of considerations of breach, duty or causation. Issues of causation of injury, albeit in a statutory text, require determination in a s 4 dispute. To the extent that I am required to form an opinion, it is at least arguable that there are significant differences between findings under s 4(b) and s 11A.
As Beech-Jones CJ at CL observed extra-curially in a recent paper, the concept of “matter is very much bound up with the exercise of judicial power”.[13]
[13] The Constitution and State Tribunals, p 4.
Classifying an exercise of power as administrative or judicial is difficult. In Citta-Hobart the plurality described the test as:[14]
“A ‘matter’ referred to in s 75 or s 76 of the Constitution encompasses a justiciable controversy about a legal right or legal duty having an existence that is not dependent on the commencement of a proceeding in the forum in which that controversy might come to be adjudicated.”[15]
[14] At [31].
[15] The quote cited in a footnote “Fencott v Muller (1983) 152 CLR 570 at 603 (citing In re Judiciary and Navigation Acts [1921] HCA 20; (1921) 29 CLR 257 at 265), 608.”
In Searle v McGregor[16] Kirk JA expressed obiter comments whether the determination of a claim for statutory benefits in the Workers Compensation Division of the Commission is an exercise of judicial power and noted that this was “open to substantial doubt”.[17] His Honour left that question open whilst making clearer observations about the exercise of various powers in the Motor Accidents Division.
[16] [2022] NSWCA 213 (Searle).
[17] Searle, [21].
In Orellana-Fuentes, Ipp JA opined that the Workers Compensation Commission was “undoubtedly” exercising judicial powers.[18] Sackville AJA expressed similar observations in Sabanayagam v St George Bank Ltd.[19] The comments of Ipp JA were queried (to use a neutral expression) by the Court of Appeal in Kanajenahalli.
[18] At [39], Spigelman CJ and Handley JA agreeing.
[19] [2016] NSWCA 145, [123].
A worker’s cause of action and the employer’s liability vests at the time of injury even though the entitlements are not immediately ascertainable.[20] Settlements can otherwise be made outside the forum such as s 66A complying agreements or by way of deed. This indicates, adapting the test in Citta-Hobart referenced above, that the controversy between the parties concerning workers’ entitlements exists independently of the forum.
[20] Hochbaum v RSM Building Services Pty Ltd; Whitton v Technical and Further Education Commission t/as TAFE NSW [2020] NSWCA 113.
In Searle Kirk JA described the federal scheme for statutory workers compensation benefits as administrative.[21] For the above reasons it is arguable that the exercise of administrative powers at the federal level may not be analogous to the determination of disputes in the Commission due to the existence of a worker’s independent cause of action under the State legislation.
[21] Searle, [21].
Workers compensation decisions are “final and binding”[22] subject to rights of reconsideration and an appeal to a Presidential Member. The nature of the reconsideration power was mentioned by the Court of Appeal in Kanajenahalli and referred by the applicant as detracting from the principle of finality.
[22] Section 56 of the 2020 Act.
Whilst there is an undoubted broad reconsideration power, it is not one which results in decisions being readily overturned. This is because a relevant factor in the exercise of the discretionary power is the finality of litigation.[23]
[23] See Samuel v Sebel Furniture Ltd [2006] NSWWCCPD 117, [44]–[45] applying Hilliger v Hilliger (1952) 52 SR (NSW) 105 and Hardaker v Wright & Bruce Pty Ltd [1962] SR (NSW) 244.
The applicant correctly noted that Members need not be legally qualified although in practise they are. There is an appeal from a Member to a Presidential Member where the decision is affected by errors of fact, law or discretion.[24] The decisions are subject to publication.[25]
[24] Workplace Injury Management and Workers Compensation Act 1998, s 352(5).
[25] 2020 Act, s 58.
The applicant references various decisions of the District Court where it has been held that decisions in the Motor Accidents Division and medical assessments are administrative decisions. Save as Kanajenahalli, there is no decision determining whether the Commission exercises judicial power when deciding workers compensation disputes. The distinction between damages assessments in the Motor Accidents Division, which are not final and binding (an “advisory opinion”)[26] and those undertaken in the Workers Compensation Division are significant and mean that the decisions between the respective Divisions are not comparable.
[26] Searle, [36].
In Searle it was held that the suggestion that medical assessments, including reviews and appeals, involve an exercise of judicial power is “counter-intuitive”.[27] This observation is consistent with authority that the nature of the function may be judicial or administrative depending by whom it is exercised (the chameleon doctrine[28]). Indeed, the process in which medical assessments occur involving an examination without the presence of the parties’ legal practitioners is far removed from the notion that it involves the exercise of judicial power.
[27] Searle, [80].
[28] See Thomas v Mowbray [2007] HCA 33; 233 CLR 307; 81 ALJR 1414; 237 ALR 194.

In Campbelltown City Council v Vegan, Basten JA observed that appeal panels constituted under the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) “might not constitute an exercise of judicial power for the purposes of the federal Constitution, but they are functions properly characterised as judicial in nature, for the purposes of determining their incidents.”[29] In Rafiqul Islam v Transport Accident Commission of Victoria and Heather Worldon v Transport Accident Commission of Victoria,[30] the District Court also held that a Medical Assessor under the motor accidents legislation does not exercise judicial power.
[29] [2006] NSWCA 284; 67 NSWLR 372, [117].
[30] [2022] NSWDC 582.
The observations by Basten JA are consistent with the distinction between a determination which is final and binding in adversarial proceedings, without that determination being considered an exercise of judicial power: Tomlinson v Ramsey Food Processing Pty Ltd.[31]
[31] [2015] HCA 28 (Tomlinson), [21].
In her supplementary submissions the applicant noted that the Commission “is not bound by the rules of evidence and its procedures are informal”. The former is correct with the qualification set out below. I otherwise do not understand what is meant by the applicant’s reference to “informal” and, in my experience, the practice is to the contrary. The parties are generally legally represented with a focus on legal principles. For example, issue estoppel[32] and Anshun estoppel[33] applies to decisions in the Workers Compensation Division of the Commission.
[32] Trustees for the Roman Catholic Church for the Diocese of Bathurst v Hine [2016] NSWCA 213, [27].
[33] Miller v Secretary, Department of Communities and Justice [2022] NSWCA 190. The Court then referred to the Commission’s power in the Workers Compensation Division to make final and binding decisions and left open whether that involved an exercise of judicial power (at [124]).
The qualification that the Commission is not bound by the rules of evidence does not mean that there are no relevant procedures. In Tudor Capital Australia Pty Limited v Christensen[34] McColl JA stated:
“In South Western Sydney Area Health Service v Edmonds I observed that r 70 of the Workers Compensation Commission Rules 2003 (NSW), the precursor of r 15.2, ‘broadly reflects fundamental principles of the common law concerning admissibility of evidence.’ However, it does not reintroduce the rules of evidence as, if it did, it would be inconsistent with the WIM Act, s 354. As French CJ observed in Kostas ‘the rules of evidence, excluded by statute, [should not be allowed] to ‘creep back through a domestic procedural rule’.
Nevertheless, ‘[a]lthough not bound by the rules of evidence, there can be no doubt that the [Workers Compensation Commission] is required to be satisfied that expert evidence provides a satisfactory basis upon which the Commission can make its findings’ and ‘the question of the acceptability of expert evidence will not be one of admissibility but of weight.’” (footnotes omitted)
[34] [2017] NSWCA 260, [362]–[363].
No doubt consideration of this issue with respect to the Workers Compensation Division will include the exclusive jurisdiction of the Commission to hear and determine all matters under the 1987 Act and the 1998 Act[35] and the finality of the decision subject to appeal based on errors of fact, law or discretion.[36]
[35] See s 105 of the 1998 Act.
[36] See s 352 of the 1998 Act.
Finally, I note that orders of the Commission are enforceable in a Court having jurisdiction to give judgment for a debt in accordance with the procedures set out in s 59 of the 2020 Act. That factor does not assist the applicant.[37]
[37] See Brandy v Human Rights & Equal Opportunity Commission [1995] HCA 10 at [11]-[12] per Deane, Dawson, Gaudron and McHugh JJ.
There are various factors which suggest that a determination under s 4 may be judicial or an exercise of administrative power. The applicant may be correct that the Commission is not exercising judicial power when considering a dispute under s 4(b) of the 1987 Act. However, that is not the relevant test for my consideration. The respondent’s defence that the matter is federally impacted is arguable, and the determination of the issue must be made by a court of a State.
I otherwise decline to refer the matter to the President on a question of law for the following reasons.
First, the applicant’s submission that the issue is “novel and complex” undercuts its general submission that the respondent’s defence of federal jurisdiction is unarguable. Secondly, the question is incorrectly framed as it assumes the President can determine the issue when he can only determine whether the issue as arguable. Thirdly, I am of the view that the preferable course is that there is a binding decision which can only be provided by a court of a State on this important issue. The suggestion that the matter be remitted to the President not only delays the matter but does not provide a binding decision.

CONCLUSION

My opinion is that there is an arguable basis that the Commission exercises judicial power in these proceedings.
The opinion and order are set out in the Certificate of Determination.

OTHER COMMENTS

The applicant otherwise submitted:[38]
“The PIC does not need to send each and every clause of the Workers Compensation Act to the Court of Appeal to determine whether it involves judicial or administrative exercise of power. The PIC is entitled to determine that an exercise of power is administrative and falls within the scope of binding or persuasive authority.”
[38] Applicant’s submissions, [37].
This submission shows a confusion that has arisen from the way the appellant framed the ground of appeal in Kanajenahalli.
The Commission does not “send” matters to the Court of Appeal. The Commission expresses an opinion consistent with the test in Citta Hobart. If there is an arguable basis that the matter is federally impacted, then the matter is determined by the District Court.
The reasoning of Wood DP in State of New South Wales vKanajenahalli[39] shows that the Commission was only expressing an opinion on whether it was exercising judicial power.
[39] [2023] NSWPICPD 1.
The distinction between the nature of the appeal from a determination on the merits and an opinion was raised in Citta Hobart[40] and more recently noted by the Court of Appeal in Attorney-General for New South Wales v FJG.[41] In FJG, Beech-Jones JA (as his Honour then was) stated:[42]
“They could not require a final determination of any genuinely raised question arising under a law of the Commonwealth Parliament or under the Constitution. Citta confirms that the exercise of ‘incidental jurisdiction’ does not extend that far. Such questions of law do not arise in the proceedings before NCAT because the answers to them will not resolve any issue before NCAT.”
[40] Citta Hobart [45]–[46].
[41] [2023] NSWCA 34 (FJG), [89]–[91].
[42] FJG, [91], Bell CJ and Ward P agreeing.
Despite these observations, the Court of Appeal in Kanajenahalli treated the opinion expressed by Wood DP as a final determination.
To avoid any misunderstanding, I am not deciding whether the Commission is exercising judicial power in a dispute involving s 4(b) of the 1987 Act. I am expressing an opinion that the respondent’s defence that the Commission is exercising judicial power is arguable. The applicant’s submission that these issues are removed (or sent) to the Court of Appeal misconstrues the scope of the Commission’s incidental power to only express an opinion.