Chris Waller Racing Pty Ltdv Muscutt - [2016] NSWWCCPD 57

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:	Chris Waller Racing Pty Ltdv Muscutt [2016] NSWWCCPD 57
APPELLANT:	Chris Waller Racing Pty Ltd
RESPONDENT:	Peter Muscutt
INSURER:	Racing NSW
FILE NUMBER:	A1-788/16
ARBITRATOR:	Mr T Wardell
DATE OF ARBITRATOR’S DECISION:	12 May 2016
DATE OF APPEAL DECISION:	21 November 2016
SUBJECT MATTER OF DECISION:	Operation of s 60(2A) of the Workers Compensation Act 1987, entitlement of worker to recover the cost of medical treatment, namely surgery, when surgery performed without prior notice to insurer and liability to pay compensation benefits generally including s 60 expenses is later accepted by the insurer in respect of the injury giving rise to the need for surgery; meaning and effect of s 60(1) and sub-s (2A) of the Workers Compensation Act 1987 and cl 3.2.1.2 of the WorkCover Guidelines for Claiming Compensation Benefits
PRESIDENTIAL MEMBER:	Acting Deputy President Larry King SC
HEARING:	On the papers
REPRESENTATION:	Appellant:	Turks Legal
Respondent:	Law Partners
ORDERS MADE ON APPEAL:	1. Order 2 of the Arbitrator’s Determination of 12 May 2016 is confirmed.

INTRODUCTION

This appeal concerns the meaning and effect of s 60(2A) of the Workers Compensation Act 1987 (the 1987 Act) and of the relevant exemptions set out in the WorkCover Guides for Claiming Compensation Benefits (the Guidelines) in a straight forward factual situation which was not in dispute.

BACKGROUND

That factual situation can be stated, to a large extent chronologically, as follows.
Peter Muscutt, the respondent to this appeal, was a senior employee of the appellant, Chris Waller Racing Pty Ltd. On 13 January 2015, Mr Muscutt suffered a back injury in the course of his employment and experienced worsening symptoms thereafter.
On 19 January 2015, Mr Muscutt presented at the Norwest Private Hospital (having been driven there by his partner), and was referred to a neurosurgeon, Dr Owler, who advised him to undergo spinal surgery.
That same day, upon getting home from the hospital Mr Muscutt reported what had happened to his employer who encouraged him to have the operation provided he could be back at work on the following Monday.
Also apparently that same day, as set out in para 16 of his evidentiary statement, Mr Muscutt:
“… also telephoned Racing NSW to report the injury and requirement for surgery. They were not happy and demanded that I go to a GP and get a referral to see Dr Owler so they can consider approving the referral. I agreed to fill in some forms for them and I scanned them to them.”
On 20 January 2015, Mr Muscutt was contacted by Dr Owler’s rooms and informed that the spinal surgery could take place the next day, upon the basis that Dr Owler wanted that to happen. The closing three sentences of para 17 of his evidentiary statement are “… I advised her that I had reported it to Racing NSW but did not have approval. She said well the doctor wants to do the operation. I then advised her about my private health insurance with MediBank Private.”
On 21 January 2015, Dr Owler performed spinal surgery on Mr Muscutt at Norwest Private Hospital. Mr Muscutt resumed work on Australia Day 2015 working reduced hours doing very light work, mostly watching the staff train horses. However his condition worsened and he had a second spinal operation on 3 February 2015.
On 17 March 2015, Mr Muscutt returned to work full-time, having done some light duties for reduced hours, gradually increasing, at least for a period, commencing on 23 February 2015.
Mr Muscutt at some subsequent time consulted solicitors who, by letter dated 17 November 2015, submitted a claim for a range of workers compensation benefits on his behalf viz statutory lump sum compensation pursuant to s 66 of the 1987 Act, weekly payments of compensation in respect of the closed period between 19 January and 16 March 2015 and medical expenses (s 60 expenses) including the expense of the surgery.
On 1 June 2015, the appellant’s insurer issued a Notice pursuant to s 74 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) denying liability for Mr Muscutt’s claim for compensation benefits. The Notice could fairly be described as advancing an “all grounds” denial of liability. Relevantly, under the heading “2. REASON(S) FOR THE DECISION” the first matter raised is the text of s 60 of the 1987 Act or a close paraphrase thereof, and later in that part of the Notice in cl 3.3.b it said that “… medical treatment (surgery) is not considered reasonable and necessary for the alleged incident on 13/1/2015.”
On 17 February 2016, by Application to Resolve a Dispute, Mr Muscutt pressed his claim. The matter then came before Arbitrator Wardell, on 28 April 2016, for conciliation/arbitration proceedings.
It was necessary for an arbitral hearing to take place, and it is apparent that before those proceedings were recorded there had been some preliminary discussion involving concessions on the part of the appellant made through its counsel, Mr Morgan. The relevant passage on the first page of the transcript can be usefully reproduced, especially since the concluding sentence of it seems accurately and briefly to state the issue which was left for the Arbitrator’s determination. The Arbitrator said (at T1.18):
“… Although a number of matters were disputed by a section 74 notice, I am advised by Mr Morgan that there is now no issue in relation to injury or, presumably, late report and the claim for permanent impairment compensation is to be referred to an Approved Medical Specialist for assessment. I will make orders accordingly, referring the lumbar spine for assessment.
I am further informed by Mr Morgan that the respondent accepts that the surgery undergone by Mr Muscutt was reasonably necessary as a result of injury. The only outstanding issue, therefore, is whether the respondent is not liable to pay for those section 60 expenses in respect of the surgery by operation of section 60(2A) of the 1987 Act.”
At the conclusion of the hearing the Arbitrator reserved his decision. On 12 May 2016, the Arbitrator issued a Certificate of Determination and a Statement of Reasons. The Certificate of Determination is in the following terms:
“The Commission determines:
1.       Amend the name of the Respondent wherever appearing to ‘Chris Waller Racing Pty Ltd’.
2.       The Respondent is to pay the Applicant’s section 60 expenses.
3.       Remit the matter to the Registrar for referral to an Approved Medical Specialist to assess the degree of impairment of the lumbar spine resulting from injury on 13 January 2015.
4.       The material to be sent to the Approved Medical Specialist is:
(a)The Application to Resolve a Dispute and attached documents;
(b)The Application to Admit Late Documents lodged by the Respondent dated 15 March 2016 (consisting of the Reply).
A brief statement is attached to this determination setting out the Commission’s reasons for the determination.”
The order that the appellant “… is to pay the [Mr Muscutt’s] s 60 expenses” was based upon the conclusion that Mr Muscutt was not precluded from recovering from the appellant the relevant expenses, namely those associated with the two spinal operations, upon the proper construction of s 60(2A) and the associated Guidelines.
The appellant appeals order 2 of that decision, contending that the true meaning of the section and associated Guidelines is that where, as here, there was no refusal of liability for the medical treatment in question before it took place, there can be no liability in the appellant to pay for it. On the appellant’s interpretation of the section and Guidelines, it is irrelevant that the claim formally advanced for Mr Muscutt squarely included a claim for the medical expense now in question, irrelevant that that claim was met with a denial which relevantly extended to the contention that that medical expense was not reasonably necessary as a result of injury, and irrelevant that ultimately it was conceded that the medical expense was in fact reasonably necessary as a result of the injury.

LEGISLATION AND GUIDELINES

The material parts of the statutory provisions and Guidelines are extracted below.
Section 60 of the 1987 Act provides:
“60 Compensation for cost of medical or hospital treatment and rehabilitation etc.
(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
…
the worker’s employer is liable to pay, in addition to any other compensation under this Act, the cost of that treatment or service …
…
(2A)The worker’s employer is not liable under this section to pay the cost of any treatment or service … 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
…”

The Guidelines relevantly provide:
“3.Exemptions from Prior Approval for Medical and Hospital Treatment
3.1...
3.2Exemptions
The following treatments and services (and related travel expenses) are exempt from the requirement for prior insurer approval.
3.2.1Workers Compensation Commission Determination
3.2.1.1Any treatment or service provided to an injured worker where liability has been initially declined but where the Workers Compensation Commission or [sic] subsequently finds for the worker on liability and it is agreed or determined that the treatment or service provided was reasonably necessary.
3.2.1.2Any treatment or service provided to an injured worker where there is a dispute about reasonably necessary treatment or service and the Workers Compensation Commission has found that the treatment or service provided was reasonably necessary
…”

THE ARBITRAL PROCEEDINGS AND THE ARBITRATOR’S DECISION

The arbitral proceedings have been briefly but sufficiently adverted to above. In his decision the learned Arbitrator both summarised the arguments of each party and provided reasons for his determination. In the circumstances I shall simply shortly refer to the essentials of his reasoning as I see them, and make some passing comment thereon. I shall then go on to deal with the arguments on appeal and the appeal itself in a later part of these reasons.
So far as Mr Muscutt’s argument before the Arbitrator was concerned, in para [39] of his reasons the Arbitrator summarised it as a contention that cl 3.2.1.2 of the Guidelines operated to entitle him to recover the medical expense in question because it could be said to operate retrospectively if need be. It contained only two requirements which were not limited by reference to any particular point in time, namely that “there is a dispute about reasonably necessary treatment or service” and a finding by the Commission “that the treatment or service provided was reasonably necessary”.
Mr Muscutt pointed to the s 74 Notice as creating a relevant dispute and said that, in effect, it became the subject of proceedings in the Commission which because of the state of the evidence or the concession made by the appellant or both, could be seen to be a dispute that would have been determined by the Commission in Mr Muscutt’s favour (as to treatment being reasonably necessary) had the concession not been made. A reading of the transcript of the argument before the Arbitrator shows that the thread of Mr Muscutt’s argument was at times difficult to follow but I think this fairly encapsulates what was put. Moreover it is fair to say that the appellant did not contend that the fact that the Commission, through the Arbitrator, did not actually determine the dispute about the surgery either after a contest or by consent, went against Mr Muscutt or was material in the circumstances: see [39]. The Arbitrator recorded that state of affairs in the opening sentence of the following paragraph of his reasons ([40]).
In the same paragraph the Arbitrator referred to the decision of the Commission in Patrick Stevedores Holdings Pty Limited v Fogarty [2014] NSWWCCPD 76, holding that it was open to the Commission to determine an issue before it notwithstanding that the employer through its insurer purported to accept liability and withdraw a s 74 Notice. There was no challenge to the correctness of that decision and it would seem a rational extension of it to say that where after an initial denial of liability, an employer informally communicates an admission of liability, a worker could, if it is necessary or desirable to do so, call upon the Commission to make a determination after a hearing or by consent.
Finally, also in the same paragraph, the Arbitrator referred to the relevant implications of ss 355 and 367 of the 1998 Act. It seems to me that the short point here is that there was no argument before the Arbitrator that he should regard cl 3.2.1.2, if otherwise applicable, as inapplicable in the instant case for want of a decision on his own part which he could readily have supplied presumably by consent. The parties, including in particular the appellant, allowed the case to go to decision upon that basis and there has been no attempt to disturb that position upon this appeal.
The Arbitrator’s reasons (at [40]) record the essence of the appellant’s argument before him, namely that both exemptions in the Guidelines, particularly cl 3.2.1.2, have no retrospective effect but apply only to “any treatment or service provided to an injured worker” after approval has been refused or liability otherwise declined or disputed. To hold otherwise would in effect emasculate s 60(2A). Any claim for medical expenses could in the end be allowed against the employer by reference to s 60(1) of the 1987 Act, regardless of whether prior approval had been sought from the insurer.
In reaching his decision the Arbitrator made several findings.
The Arbitrator said (at [46]) that it was implicit in the appellant’s argument that the phrase in cl 3.2.1.2 “any treatment or service provided to an injured worker where there is a dispute about reasonably necessary treatment or service” had to be read as meaning any such treatment provided “after liability for that treatment or service has been disputed on the basis that the treatment or service is not reasonably necessary”. He noted that that was not the wording of the exemption, and that it would have been readily possible for it to be so expressed if that were its intent.
He noted (at [47]) that in the exemption the existence of the dispute is referred to using the present tense but that it must be referring to past treatment (presumably by reference to the concluding words of the exemption “… was reasonably necessary”). He further said (at [48]) that the s 74 Notice “was retrospective”. This was on the basis that it denied liability in respect of past times and events, as well as generally, the claim being concerned with a past period of incapacity, past medical expenses, and a claim for lump sum compensation upon the basis of assessable physical disability which must have come into existence before the claim was advanced, all of which were denied by the Notice. In particular he concluded (at [48]) that:
“… The relevant ‘dispute’ therefore arose prior to the treatment being undertaken by the applicant, notwithstanding that the decision in that regard had not been conveyed to him at that time.”
Proceeding from what he had said in at least [47] and [48], the Arbitrator said (in [49]) that there was an ambiguity in the exemptions, particularly cl 3.2.1.2 “… in that there is no express statement, or even indication, that they apply only to the cost of treatment provided after there has been a denial of liability generally or in relation to a particular treatment”. I take this to mean that he regarded it as unclear whether cl 3.2.1.2 operated only after a refusal to approve particular treatment or after a denial of liability to pay compensation generally which extends to medical treatment undergone before a s 74 Notice issues denying liability for medical treatment, as well as medical treatment occurring thereafter prior to hearing, or both.
Thereafter the learned Arbitrator discussed some well known canons of statutory construction, specifically in the workers compensation context, and referred to the decision of the Court of Appeal in Tan v National Australia Bank Limited [2008] NSWCA 198; 6 DDCR 363. He concluded that the proper construction of s 60(2A) was to regard it as modified by the exemptions where they applied, and that the proper construction of cl 3.2.1.2, reading it beneficially to injured workers, was that, in effect, all that was necessary to bring the exemption into play was that there be a dispute at some time about whether the medical treatment was reasonable necessary, and that the Commission so find.
The Arbitrator then made two comments about the construction he applied to cl 3.2.1.2. First, the Arbitrator said (at [58]) that it still left a field of operation for s 60(2A) namely that it gave the insurer what could be said to be the chance of exercising some influence in the course of a worker’s medical treatment, and to set, in the case of a dispute, as it were the framework of the dispute. Then (at [61]) he remarked that there remained (notwithstanding his view), “… an anomaly arising from the Exemptions …”. That anomaly was that where a worker underwent reasonably necessary medical treatment as a result of injury without prior approval of the insurer, the insurer could nonetheless rely on s 60(2A) by accepting liability for the treatment but saying that the section relieved it of liability. He said (at [62]) that that had not happened in this case, because the insurer had retrospectively disputed liability. He should be taken as adverting to a situation in which an insurer does not give advance approval and remains silent thereafter on the question of liability for the treatment as being reasonably necessary as a result of injury. He apparently did not consider that the idea of any such anomaly could well be regarded as remote upon the basis that if the insurer, on behalf of the employer, simply did not pay for the treatment for long enough and obliged the worker to bring proceedings in the Commission, a constructive denial of liability would probably arise. This is curious, because the Arbitrator and the parties both were alert to the possibility of a constructive disapproval of the surgical treatment on the part of the insurer when Mr Muscutt contacted it to inform it of Dr Owler’s recommendation for surgery. It was not suggested by anybody that there was a constructive disapproval, and I think properly so since the insurer was given limited information and the timeframe was very tight. It is sufficient to conclude in relation to the suggested anomaly by recording that the learned Arbitrator thought it was real and that those responsible for the creation and monitoring of the Guidelines should give the matter some thought.
The learned Arbitrator encapsulated his decision at [63] and [64]. He confined himself to the construction and effect of cl 3.2.1.2, and held that it operated “… so that s 60(2A)(a) does not apply where an insurer disputes liability for medical treatment on the grounds that such medical treatment is not reasonably necessary as a result of injury within the meaning of s 60(1) and the Commission determines otherwise, regardless of whether approval had been sought and/or refused prior to the medical treatment being provided”: (see[64]).

This must be read subject to what I have recorded above as to the treatment of the concession by the appellant before the Arbitrator, both by him and the parties, as tantamount to a determination of the Commission (see [24] above).

THRESHOLD MATTERS

There is no issue about whether or not the threshold requirement as to time in s 352(4) of the 1998 Act has been met and the amount of the claim in s 352(3) in respect of the surgery, although not clearly dissected from the medical expenses generally, appears to well exceed $5,000 upon the basis that Dr Owler’s fees alone exceed $7,000. It has not been suggested that the monetary threshold creates any difficulty and in the circumstances I shall proceed on the basis that this threshold has also been satisfied.

ON THE PAPERS

Section 354(6) of the 1998 Act provides:
“(6) If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
Having regard to Practice Directions Nos 1 and 6; the material that is before me; and the submissions by the parties that the appeal can proceed to be determined on the basis of that material including the submissions, I am satisfied that I can proceed ‘on the papers’ without holding any conference or formal hearing and that this is the appropriate course in the circumstances.
In so holding I should say that having read the papers when referred to me and seen passages in the Arbitrator’s reasons which on one view raised the possibility of approaching the case upon the basis that in construing the legislation and Guidelines any difficulties which might upon proper analysis be thought to arise from them could be resolved by applying a construction involving the reading in of words. Accordingly, I arranged for a Direction to be given to the parties that they put in additional submissions on two topics. Those topics were:
(a) whether the legislation and/or Guidelines may legitimately be read by construing them as though they contained additional words covering a factual situation like the present involving an informal admission of relevant liability by the employer. Such submission should deal with the line of authority discussed in Pearce and Geddes: Statutory Interpretation in Australia (7^th edition) at [2.33] pp 55-56, and
(b) the status of the Guidelines and whether their status is relevant to the application of the authorities referred to in the abovementioned discussion in Pearce and Geddes. Regard should be had to the decision of the Court of Appeal in Ali v AAI Limited [2016] NSWCA 110 (Ali).
Further submissions were received and it is appropriate to add the following matters in light of the Direction and submissions in order to show that there is nothing arising from them which displaces the conclusion that this appeal be dealt with on the papers. First, in referring to the 7^th edition of Pearce and Geddes I overlooked the existence of the 8^th, 2014, edition but even if counsel for the parties did not go to it I am satisfied that the discussion of the point in topic (a) above in the 8^th edition does not alter the thrust of the discussion of the same topic in the 7^th edition. Secondly, it is apparent from these submissions that it was not made clear enough to them in the Direction that the reference to an “informal admission of relevant liability” was a reference to the concession made by the insurer in this matter immediately before the arbitration proceedings began and not to a hypothetical admission of liability by an employer prior to medical treatment being undergone. However the confusion, in light of my consideration of the matter, does not displace the view that the appeal can be decided “on the papers”. Finally, in argument and in written submissions there was some reference to the decision of Arbitrator Harris in Gittoes v Qantas Airlines Limited [2016] NSWWCC 168 (Gittoes), in which the decision of the Court of Appeal in Ali (supra) was briefly adverted to in a way which, as will later appear, does not in my view require any exegesis which is important in the disposition of this appeal so as to necessitate an oral hearing.

FRESH EVIDENCE

Neither party applied to rely on fresh evidence in this appeal.

THE QUESTION IN DISPUTE

Upon appeal the question was the same as before Mr Wardell, specifically whether by application of s 60(2A) and cl 3.2.1.2 Mr Muscutt was entitled to recover from the appellant the expense associated with the surgery to his low back and whether the construction of cl 3.2.1.2 is of more moment than the construction of the statutory provisions.

For the appeal to succeed the appellant must show that the construction placed upon the relevant statutory provisions and Guidelines by the learned Arbitrator was incorrect. Success in that argument necessarily entails the successful demonstration of one type of error which enables an Arbitrator’s decision to be overturned, namely error of law. Whilst it is not strictly essential to success in that endeavour to show what the true construction is, an argument which both identifies the Arbitrator’s error and corrects it by revealing the true construction is obviously more complete and convincing than one which exposes error but does not reinforce the exposure by revealing the correct answer to the question.

SUBMISSIONS, CONSIDERATION AND DISPOSITION OF THE APPEAL

Submissions

The submissions of the parties were a condensation and fine tuning of the oral arguments advanced before the Arbitrator, given, of course, the existence of his written reasons upon which to focus.
The appellant’s submissions upon the appeal were that before the medical expense for the surgery became recoverable either the insurer needed to give prior approval or prior disapproval (the treatment not having been rendered within 48 hours of the injury). This submission was advanced specifically in the context of cl 3.2.1.2 of the Guidelines by reference to the use of the present tense “is” in the opening words “Any treatment or service provided to an injured worker where there is a dispute about reasonably necessary treatment …”. The present tense is relied upon as showing that, by reference to the earlier word “provided”, there must be a sequence of events whereby there is first a dispute as to whether the treatment was reasonably necessary. The appellant’s submission went on to answer the reliance by the Arbitrator upon the decision of the Court of Appeal in Tan (supra) by reference to the decision of the High Court in ADCO Constructions Pty Limited v Goudappel [2014] HCA 18; 13 DDCR 90. What was taken, and in my opinion correctly taken, by the appellant from the High Court in that case was that although in general workers compensation legislation is beneficial in character and in the case of ambiguity should be construed so as to resolve the ambiguity if need be by giving a beneficial interpretation to the relevant statutory words, nonetheless certain parts of workers compensation legislation can be plainly of a non-beneficial kind, because they are clearly restrictive or limiting. I accept that that must be true of s 60(2A), but I do not think it is true of the Guidelines, which undoubtedly are intended to give some relief against the literal effect of s 60(2A). If the Guidelines, and in particular cl 3.2.1.2, disclosed an ambiguity I think it would be legitimate to resolve it, if need be, perhaps as a last resort, by a beneficial reading.

This last remark of mine of course involves the proposition that the Guidelines may, if need be, be construed as one would construe legislation. For reasons that I will shortly give later herein, I think that is how they should be read and construed.

As regards Mr Muscutt’s submissions, I think it is fair to say that they very succinctly restated the argument put to the Arbitrator and championed his decision as a correct one according to its terms.

Preliminary matters for consideration

Before expressing my conclusion as to how this appeal should be determined and giving my reasons for that conclusion, I think there are some preliminary matters to be dealt with, as it were to clear the decks.
First, the Guidelines were issued on 4 October 2013 and came into effect on 11 October 2013. The front cover page of the Guidelines states that the Guidelines were issued under ss 376(1) and 260 of the 1998 Act and s 60(2A) of the 1987 Act. Those Guidelines apply to this claim.
Second further consideration by me of the point I raised as to whether a different approach to the question of construction from that taken by the Arbitrator was available, namely the “reading in” of words, has led me to the view that such an approach is not appropriate and that the idea is best to be regarded as a regrettable canard of my making. The position is well discussed in the passage in the 8^th edition of Pearce and Geddes to which I referred above, with the relevant authorities, chiefly Wentworth Securities Limited v Jones (1980) AC 74 at 105-6, discussed in Bermingham v Corrective Services Commission of NSW (1988) 15 NSWLR 292 and other New South Wales Court of Appeal decisions, and then the most recent High Court discussion in Taylor v The Owners – Strata Plan No. 11564 [2014] HCA 9, being dealt with.
Both parties in their supplementary submission dealt with this question, but it seems to me that as the law stands at the moment the scope for reading words into a statute or instrument is indeed limited and that where what amounts to a purposive approach seems to be called for, it is preferable if necessary to give the actual words a stained interpretation in order to effectuate the proper purpose. This flows from the emphasis on the part of the majority in Taylor (supra) that the task of construction remains the interpretation of the words the legislature enacted and that any modified meaning must be consistent with it: [39]. The minority espoused a similar sentiment: [65]. In the circumstances I would not essay any “reading in”, but will confine myself to an interpretation of the existing wording of the Guideline, the meaning of which was treated as decisive by the learned Arbitrator and is focussed upon by both parties, namely cl 3.2.1.2.
Third, in approaching the matter in that way in my further consideration of the matter I have come to the view that it is not necessary to pronounce upon their status and in particular not necessary to say whether they are delegated legislation. This means it is not necessary to make any comment by way of acceptance or rejection of the “arguable” proposition suggested by Arbitrator Harris in Gittoes (supra) at [102]. On this aspect of the present case, to the extent that it has any importance, which I think is doubtful, Pearce and Geddes provides support at [1.1], p 2, for what I, with respect, think is a sensible and commonsense proposition, namely that even if the Guidelines are not delegated legislation or not even akin to it, they should still be interpreted in accordance with the usual principles of statutory interpretation.
Fourth, it is appropriate to repeat what is mentioned earlier, namely that I believe that the Arbitrator and the parties were correct to say that no question of a constructive disapproval of the treatment by way of surgery arises for consideration. That is not to say, however, that such a disapproval could not arise on different facts. Undoubtedly it could, and the attitude of the Arbitrator and the parties in saying that it did not in this instance virtually involves acceptance of the other side of the coin, namely that it might if the facts were different.
Fifth, neither party referred to the Explanatory note to the Workers Compensation Legislation Amendment Bill 2012, which Bill contained s 60(2A) in the terms in which it was enacted and made it clear that Guidelines would be introduced in relation to it, nor to the second reading speeches in respect of the Bill in the Legislative Assembly on 19 June 2012 and Legislative Council on 20 June 2012. From them the following may be noted:
(a)     clause (c) of the Explanatory note says that “an employer’s liability for medical and hospital treatment and rehabilitation services provided to an injured worker will be made subject to various conditions to ensure that any treatment or service is appropriate, properly provided and approved by the insurer, and the WorkCover Guidelines will be able to limit an employer’s liability for medical and hospital treatment and rehabilitation services”.
(b)     the second reading speech in the Legislative Assembly says “… An employer’s liability for medical and related treatment and rehabilitation services will be made subject to preconditions to ensure that the treatment is appropriate and properly provided and approved. WorkCover Guidelines will be able to limit an employer’s liability for medical and hospital treatment and rehabilitation services …”.
(c)     the second reading speech in the Legislative Council is in the same terms.
The legal representatives of the parties are not to be criticised for failing to refer to these materials. Each may have taken the view that there was no ambiguity and no occasion to do so, more likely each looked at them and took the view that there was no definitive assistance to be gained. Such a view is understandable, but as I shall shortly mention later herein I think there is some limited assistance in the inclusion of reference to “rehabilitation services” alongside services by way of “treatment” in each of the three materials.
In my opinion it is appropriate to have regard to them, because whatever view the parties may have taken, I agree with the Arbitrator that there is a degree of ambiguity or if not ambiguity, doubt about the meaning of cl 3.2.1.1 read in conjunction with the statutory provision.

Discussion

Having followed the above all too lengthy path to the point of decision in this appeal, it seems to me that it is not too terse a statement to say that the competing positions of the parties can be reduced to fairly short and stark terms.
Mr Muscutt’s support of the Arbitrator’s decision comes down to, and finds its greatest force in, the proposition that it is indeed a very curious result, difficult to justify and even approaching absurdity, to say that if a worker undergoes medical treatment which is subsequently found or agreed to result from an employment injury and to be reasonably necessary as a response to that injury, the worker can be left to fund the treatment as best he or she can because approval was not given for it to take place. This impression is only made starker or thrown into higher relief when there is a denial for a relevant period of time of the connection between the injury and the treatment and whether the treatment was reasonably necessary. It is difficult to see in principle any difference between a refusal on the part of an insurer to approve treatment, having been afforded a fair opportunity to know about it and evaluate it, before it happened, and a denial of liability in respect of it after it has happened. What rational grounds for refusal of approval could there be other than either or both a lack of connection between the injury and the proposed treatment or that it was not reasonably necessary by reference to the injury, and what other grounds could there be for a denial of liability to pay for it once it has happened?
The facts of this case are a good example of the likely accuracy of that comment. After the event, the insurer made a denial by way of the s 74 Notice on both grounds and did not advance any other ground which it might have felt it could say would have been available to it had it been given proper information in advance. Moreover this case is an example of how urgency in respect of treatment can develop beyond the 48 hour period nominated in s 60(2A), either for medical reasons or reasons of practical convenience. Both seem to have been operative here: Mr Muscutt’s condition was rapidly deteriorating and his medical advice was that he needed surgery quickly – a medical reason – and it seems that a window of opportunity opened in that Dr Owler was able to find a place for him in his operating list on 21 January 2015 – a practical reason.
If no more appeared as a factor or as factors going to the true meaning and effect of cl 3.2.1.2 when read with s 60(1) and (2A), I would have had no hesitation in saying that the decision arrived at by Arbitrator Wardell made no error. But it seems to me that the reading of them which the genuine force of Mr Muscutt’s argument strongly suggests immediately supplies force to the appellant’s argument. If one accepts the conventional approach to construction, as one must, namely that the words of a statute – and by extension words of an instrument like the Guidelines – are to be taken to have some rational meaning, then it follows that it is necessary to identify some purpose for the statutory provisions and Guidelines under consideration here. (See for example in the workers compensation context, the statement of Mason P in Mercer v ANZ Banking Group [2000] NSWCA 138; 48 NSWLR 740 at [32] and 747. His Honour pointed out that work must be found for the words used by the legislature unless this proves an impossible task. Such impossibility is, I think, a rarity). To put it another way, the proper construction of the texts should leave them with some work to do, not read them out of operation or existence. This is what the appellant says the Arbitrator’s decision and Mr Muscutt’s argument do.
This is an argument which to my mind does not require for its vitality reliance upon the present tense (“is”) in the opening words of cl 3.2.1.2. Moreover I think that the present tense is quite neutral, neither standing in the way of Mr Muscutt’s argument nor giving any measurable assistance to the appellant’s.
Whilst I acknowledge the substance of the appellant’s argument, in my opinion there is genuine work for s 60(2A) as affected by the Guidelines to do if the texts are read as the Arbitrator read them and as Mr Muscutt contends for. In those circumstances the force of the argument based upon the strange consequences of the appellant’s approach, which I think it is fair to say border on irrational, clearly in my judgment predominates over the substance of the appellant’s approach.
In this connection not only do I think the learned Arbitrator did not err in pointing to room for the operation of s 60(2A) (at [58]), I think there is more to it than just that. I leave aside in this regard the passing comment made by the Arbitrator during the argument before him about the accruing of substantial physiotherapy bills (T11.9-.12). With all respect to the Arbitrator I think this example of possible mischief to which the subsection is directed is somewhat fanciful. But it seems to me that by extension of the sentiments expressed at [58] of the Arbitrator’s reasons, at all stages where an insurer is given reasonable information as to proposed treatment it has the opportunity to try to exercise some influence, and that one possible situation which could realistically be engaged with by an insurer acting in an even handed fashion (that is with due regard to the best interests of the injured worker) could be the discouragement of treatment which is so non-mainstream as to indicate “quackery” or is otherwise not endorsed by a reputable body of medical practitioners practising in the relevant sphere of treatment. Once the information is provided, consultation between the insurer, if appropriate its doctors, and the worker and his or her doctors could well in any given case result in a change of proposed treatment to the benefit of the worker’s health and physical integrity and perhaps to the financial interests of the insurer. No doubt from time to time in the event of a refusal of approval the worker will have no treatment, which might directly serve the financial interest of the insurer. In addition, the fact that medical expenses can include the cost of rehabilitation services as earlier mentioned seems to me to be of some moment in ascertaining the meaning of the legislation and Guidelines. It cannot be denied that employers have an interest in getting employees who have been injured back to work as soon as possible and that rehabilitation is a useful means to that end. The opportunity for the employer to suggest rehabilitation and/or endeavour to influence the most beneficial type of rehabilitation should be seen as a genuine advantage to it arising from the approval process.

But whether or not that process takes place, it seems to me that where an insurer chooses, either by way of advance disapproval or outright denial of liability at any relevant stage of what amounts to a claim for medical treatment, to challenge the worker’s entitlement to recover the expense of it, if that challenge fails because of change of stance on the part of the insurer or decision of the Commission, the only sensible outcome is that the expense should be borne by the party to whom s 60(1) points.
Whilst I do not think it is correct to say that a s 74 Notice issued after treatment has taken place which denies liability for that treatment should be necessarily seen as operating to create a retrospective dispute existing in advance of the treatment, a dispute at that point in time is not essential. All there need be is a dispute as to whether the need for treatment is a result of injury or whether the treatment is reasonably necessary to deal with the consequences of the injury or both at a relevant time. That being so the decision arrived at by the Arbitrator involves no error.
In my judgment the correct view of the legislation and Guidelines is that cl 3.2.1.2 means, as the Arbitrator held, that if at any relevant time the employer, through the insurer or directly, denies liability for medical treatment the exemption operates. Lack of prior refusal of approval is not a bar to the recovery of the medical expense. Because a refusal by an insurer in advance of treatment has the same practical effect as a denial of liability at any material time, the real practical utility of s 60(2A) should be seen to be to give the insurer a voice in the decision a worker must ultimately make about whether to have medical treatment and if so what treatment to have.
Accordingly order 2 of the Arbitrator’s determination of 12 May 2016 is confirmed.

Larry King SC
Acting Deputy President

21 November 2016