Fletcher International Exports Pty Ltd v Lee - [2022] NSWPICPD 39

DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY A MEMBER
CITATION:	Fletcher International Exports Pty Ltd v Lee [2022] NSWPICPD 39
APPELLANT:	Fletcher International Exports Pty Ltd
RESPONDENT:	Eunsaem Lee
INSURER:	Self-insured
FILE NUMBER:	A1-W321/22
PRESIDENTIAL MEMBER:	Deputy President Michael Snell
DATE OF APPEAL DECISION:	21 October 2022
ORDERS MADE ON APPEAL:	1. In the opinion of the Commission the statement of opinion by the Member, in the Certificate of Determination dated 7 June 2022, that the Commission was “not exercising federal jurisdiction in determining this dispute”, was made without jurisdiction and is of no legal force. 2. To the extent that it is necessary, the Certificate of Determination dated 7 June 2022 is revoked. 3. The matter is remitted to the Division Head of the Workers Compensation Division of the Commission.
CATCHWORDS:	WORKERS COMPENSATION – Applications involving federal jurisdiction; Division 3.2 of the Personal Injury Commission Act 2020; application of Citta Hobart Pty Ltd v Cawthorn [2022] HCA 16; 96 ALJR 476; 400 ALR 1 and associated authorities
HEARING:	23 September 2022
REPRESENTATION:	Appellant:
Mr C Jackson, counsel
Leigh Virtue & Associates, solicitors
Respondent:
Mr J Beran, counsel
Walker Law Group, solicitors
DECISION UNDER APPEAL
MEMBER:	Mr G Whiffin
DATE OF Member’s DECISION:	7 June 2022

INTRODUCTION AND BACKGROUND

Eunsaem Lee (the worker/respondent) worked with Fletcher International Exports Pty Ltd (the employer/appellant) from November 2018 performing meat packing and slicing at the appellant’s premises at Dubbo. The worker resided in Dubbo at the time. On 27 October 2020, the worker was seeking to free a box that was stuck on a conveyor belt. As she freed the box, the conveyor belt recommenced moving and the worker’s jacket was sucked into a machine by the conveyor belt. She stated that her body was spun around, she was scared and thought she was going to die. She stated that it was 20 to 30 seconds until the conveyor belt was stopped. She stated she had to be removed by maintenance workers.[1]
[1] Respondent’s statement 20/7/21, [1]–[32], Application to Resolve a Dispute (ARD), pp 2–3.
The worker described injuring her back and right leg and also being psychologically impacted. She stated that she was off work for about one month and then resumed, performing light duties in the office. She stated that at one point she was given duties shredding documents, in the course of which she came upon documents which she had not received relating to her workers compensation claim. She stated that she was seen with this paperwork, which was taken from her. She said it was alleged she had stolen paperwork, she was sent home, and the employer terminated her employment on 1 June 2021. The worker stated that she was not paid weekly benefits beyond a payment made on 8 June 2021, but nor did she receive a notice disputing liability.[2]
[2] Respondent’s statement 20/7/21, [55]–[58], [60]–[64], [67]–[69], [80]–[89], [91], ARD, pp 5–7.
The employer’s solicitors denied liability in a dispute notice dated 27 October 2021. It denied that a claim in respect of physical injuries had been properly made and denied that a claim relating to psychiatric injury had been made at all. It asserted that the worker had recovered from the effects of her physical injuries. It asserted that she had not suffered any psychiatric injury. It disputed any entitlement to weekly payments or medical expenses.[3]
[3] ARD, pp 12–13.
The current proceedings were commenced by way of the Application to Resolve a Dispute (ARD) dated 19 January 2022, which claimed ongoing weekly payments from 9 June 2021 together with medical expenses. The pleaded injury was that which occurred on 27 October 2020. The alleged injuries were to the pelvis, the lower back and a “primary psychological condition PTSD”, all allegedly resulting from the same incident. The matter was listed for hearing on 5 April 2022. Mr Beran of counsel appeared for the worker and Mr Macken, solicitor, appeared for the employer.
The Member noted:
“A preliminary issue has arisen in relation to whether the Commission has jurisdiction in the matter, having regard to the fact that the [worker], prior to lodging the Application to Resolve a Dispute, moved to Queensland. She is a resident of Queensland. The [employer] has its registered office in New South Wales. In those circumstances the issue is whether the Commission has jurisdiction and whether the dispute is a federally impacted matter.”[4]
[4] Transcript 5/4/22 (T), T 1.42–2.8.
The Member said there would be submissions on the jurisdictional issue, following which he would express an opinion on that point. The matter then “may or may not be determined”.[5] Both legal representatives addressed orally on the jurisdictional issue. The Member reserved on this issue. The Member made orders for the parties to lodge written submissions dealing with the other issues raised in the matter. The parties were also given leave “to make any further submissions in relation to the federal jurisdiction point that you haven’t made today”.[6]
[5] T 2.10–13.
[6] T 34.23–26.
The worker lodged written submissions on 14 April 2022 dealing with the substantive issues.
The employer lodged written submissions dated 3 May 2022. These dealt briefly with the jurisdictional issue. The appellant referred to decisions of a Division Head of the Personal Injury Commission which it attached to its submissions. The employer submitted that the District Court of New South Wales was the “appropriate venue to determine issues of jurisdiction in matters such as these”.[7] It also made submissions on the substantive issues in the matter.
[7] Appellant’s written submissions before the Member, 3/5/22, [1]–[3].
The worker lodged written submissions in reply dated 4 May 2022.
The Commission issued a Certificate of Determination dated 7 June 2022 accompanied by the Member’s reasons.[8] The Member expressed an opinion that the Commission was “not exercising federal jurisdiction in determining this dispute”. The Certificate of Determination set out seven factual findings dealing with the substantive dispute. It made orders for the payment of weekly compensation at a rate of $834.55 from 9 June 2021 to date and continuing. It made orders for the payment of reasonably necessary treatment expenses pursuant to s 60 of the Workers Compensation Act 1987 (the 1987 Act).
[8] Lee v Fletcher International Exports Pty Ltd [2022] NSWPIC 271 (reasons).

THE HEARING OF THE APPEAL

Section 52(3) of the Personal Injury Commission Act 2020 (the 2020 Act) provides:
“(3) 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 and enabling legislation without holding any conference or formal hearing.”
The employer submits there should be an oral hearing. It gives two reasons for this. The first is that (at the time of the submissions) a transcript had not yet been provided. A transcript is now available, has been furnished to the parties, and they have had an opportunity to deal with matters arising from it.[9] The employer’s submissions in reply dated 6 September 2022 say that the transcript does not record its submissions dealing with the admission of late documents in the worker’s case and its application for an adjournment to meet that material. It submits “this of itself constitutes a denial of procedural fairness”.[10] The employer submits it is of the view that the grounds require an oral hearing. Having regard to the parties’ submissions and to the issue raised in Ground No. 1 (see [36] below) I formed the view that it was appropriate that an oral hearing be held. The matter was listed for hearing on 23 September 2022. Mr C Jackson appeared for the employer and Mr J Beran appeared for the worker.
[9] Appellant’s submissions, [3].
[10] Appellant’s submissions in reply, [5].

THRESHOLD MATTERS

There is no dispute between the parties that the threshold requirements as to quantum and time pursuant to ss 352(3) and 352(4) of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act) have been met.

THE MEMBER’S REASONS

The Member noted agreement on pre-injury average weekly earnings (PIAWE) at $1,043.19. He noted the worker’s concession that she had moved to reside in Queensland prior to lodgment of the ARD, and that the employer had sought an opinion from the Commission regarding whether it had jurisdiction to determine the dispute or whether the determination would involve the exercise of federal jurisdiction. The Member said he had indicated an opinion that the Commission had jurisdiction, but that he would publish his reasons in this regard when providing his reasons in the matter generally.[11]
[11] Reasons, [9]–[11].
The Member dealt with some procedural issues between the parties regarding the admission of documents.[12] He refused an application for an adjournment made by the employer on the basis that it had had insufficient time to “address” medical records.[13]
[12] Reasons, [14]–[19].
[13] Reasons, [20].
The Member summarised the evidence in the worker’s case. He referred to the background and factual matters surrounding the accident, and circumstances going to the termination of the worker’s employment, in a fashion generally consistent with the summary recorded above. He noted the worker was paid up to 8 June 2021.[14] The Member summarised the worker’s medical case. He noted a history recorded by Dr Lim that the worker was depressed and anxious after the accident, had flashbacks and nightmares of being pulled into the machine, and was scared and had panic attacks when she went into work, fearful of another accident.[15] The Member referred to a series of reports from Dr Low. This included reference to a report dated 17 March 2021, which referred to ongoing orthopaedic symptoms, pain and disturbed sleep, with the worker saying that her mental health was being affected, which the doctor did not find surprising. Dr Low, reporting on 23 August 2021, referred to “right sacroiliac joint incompetence and some likely nerve damage in the pelvis causing some increased urinary and faecal frequency”.[16]
[14] Reasons, [32].
[15] Reasons, [39].
[16] Reasons, [43]–[50].
The Member referred to a report from Dr Soo, an orthopaedic surgeon qualified by the worker’s solicitors, dated 29 October 2021. Dr Soo referred to a report from Dr Smith, a doctor qualified in the employer’s case, which described the worker as sustaining “fairly insignificant fractures”. Dr Soo was critical of the way in which Dr Smith relied on a bone scan in forming this view. Dr Soo described pelvic fractures as “one of the most painful and debilitating injuries you can suffer” and said that he would “definitely NOT call them ‘insignificant’” (capitalisation in original).[17]
[17] Reasons, [52]–[57].
The Member referred to a report from Dr Khan, a psychiatrist the worker was referred to for treatment, dated 12 December 2021. Dr Khan diagnosed Post Traumatic Stress Disorder and described the criteria that led him to that diagnosis. Dr Khan regarded the worker as totally incapacitated. He said that Dr Roberts (a psychiatrist qualified in the employer’s case) had failed to appreciate “the severity of the ‘traumatic ordeal’” experienced by the worker, leading to Dr Roberts’ failure to diagnose Post Traumatic Stress Disorder. Dr Khan also referred to an incident of sexual harassment experienced by the worker when back at work after the accident and said this was “not an enduring component of her thought content”. The doctor said the “main contributing factor to Ms Lee’s current psychological condition of Post traumatic stress disorder was the incident on 27 October 2020”.[18] The reasons referred also to reports from Dr Hong, a psychiatrist qualified in the worker’s case, whose views were generally consistent with those of Dr Khan.[19]
[18] Reasons, [58]–[63].
[19] Reasons, [64]–[67].
The Member summarised the employer’s medical case. Dr Smith considered the worker’s fractures should have healed within six months of the incident without disability. He could find no radiological cause for the worker’s right leg pain. The doctor regarded the worker as fully fit from an orthopaedic perspective.[20] The Member referred to Dr Roberts’ psychiatric report. The doctor said: “I do not consider that the stressor was of sufficient severity to produce PTSD”. He suggested that “A differential diagnosis however from PTSD would be an Adjustment Disorder with anxiety and depression as a response to the symptoms alleged to be present as a consequence of the physical injury.” He said that “neither psychiatric diagnosis suggested by him would result in the [worker] being unemployable”.[21]
[20] Reasons, [72]–[77].
[21] Reasons, [78]–[89].
The Member also referred to some lay material relied on by the employer that went to the circumstances surrounding the worker’s termination.[22]
[22] Reasons, [92].
The Member referred to the jurisdictional issue. He said that the worker’s move to reside in Queensland “would only affect the jurisdiction of the Commission if the [employer] was either considered to be a resident of New South Wales or the State of New South Wales”. He noted the worker’s position that “there was no statutory provision that made [the employer] a state or part of a state”. The Member noted a submission by the worker:
“… if the Commission was to posit an opinion that it could decide the dispute without exercising federal jurisdiction, it was able to continue to then decide the dispute. The dispute did not need referring to the District Court simply because the [appellant] had raised the issue, so long as the Commission had provided the appropriate opinion that it could decide the dispute.”[23]
[23] Reasons, [93]–[97].
The Member referred to the worker’s submissions in reply. The worker referred to a decision of the District Court of New South Wales in Stanton v Winning,[24] a motor accident case, in which it was held that NRMA (an insurer) was not part of the State of New South Wales. In that case Priestley SC, DCJ said:
“… it is well established that the words ‘residents’ and ‘resident’ appearing in s 75(iv) [of The Australian Constitution] refer only to natural persons and not corporations; see Crouch v Commissioner for Railways (Qld) (1985) 62 ALR 1.”[25]
[24] [2022] NSWDC 104 (Stanton).
[25] Stanton, [17].
The Member also referred to the employer’s oral submissions before him. It was submitted there was no distinction between the NSW Self Insurance Corporation and a licensed self-insurer. All licensed insurers were in the same position as the Corporation. Federal jurisdiction would be exercised if a dispute was determined between a self-insurer and a resident of another State. The appellant, it was submitted, was effectively a State for the purposes of s 74(iv) of the Constitution.[26] Alternatively, the employer said it was a resident of the State of New South Wales, it would not otherwise be entitled to a license as a self-insurer.[27]
[26] Reasons, [109]–[111].
[27] Reasons, [112].
The Member referred to the employer’s “final oral submission”. It had raised the issue of federal jurisdiction and that issue needed to be determined by the District Court. The Commission was entitled to posit an opinion, but it was not entitled to determine the dispute even if its opinion was that federal jurisdiction was not being exercised. The matter would need to first be referred to the District Court. It referred to two decisions of the Commission in support of this approach. Both of these matters were dismissed, it was submitted, on the basis that “determination of the dispute may potentially involve the exercise of federal jurisdiction”.[28]
[28] Commission matter nos. M10452902/21 and APP-10486197; reasons, [113], [115].
The employer submitted that by 19 May 2021 (when the worker was stood down) she had a demonstrated capacity to make earnings equal to her pre-injury average weekly earnings. It submitted that credit was in issue. It relied on the circumstances that led to the worker being stood down. It referred to an episode of sexual harassment when the worker was working on 9 March 2021. It submitted this was causally related to the worker’s psychological condition. It submitted the incident on 27 October 2020 was not life threatening.[29]
[29] Reasons, [122]–[123].
The employer submitted that the psychological condition was a ‘disease’ and the worker had not established that “the accident was the main contributing factor”. It submitted the worker had recovered from her physical injuries. It submitted that, in considering the worker’s “capacity”, regard should be taken of the worker’s university qualifications, her previous work experience and the fact that she had moved to Queensland.[30]
[30] Reasons, [128].
The Member noted a submission by the employer that, “after positing my opinion”, the Member remained “required to refer the dispute to the District Court”. The Member said the employer had referred to no authority in this regard. The Member said that if he accepted this submission, the positing of an opinion was “irrelevant”. If a party raised the possibility of the Commission exercising federal jurisdiction, “however spuriously”, it would need to be referred to the District Court. The Member described this as contrary to the ‘guiding principle’ in s 42 of the 2020 Act. He expressed a view that “once the Commission has opined that it has jurisdiction to determine a dispute, it should proceed to determine the dispute”. He said, “I posit an opinion that the Commission would not be exercising federal jurisdiction in determining the dispute, and I therefore intend to determine it.”[31]
[31] Reasons, [129]–[130].

The Member referred to Crouch v Commissioner for Railways (Queensland), from which he quoted the following passage:
“The plaintiff’s contention that the Commissioner is, for the purposes of s 75(iv), a resident of the State of Queensland is effectively answered by the decision of the Court in Australasian Temperance and General Mutual Life Assurance Society Ltd v Howe [1922] HCA 50; (1922) 31 CLR 290. As the dissenting judgments of Isaacs J and Starke J demonstrated, the reasoning of the majority in that case might well be thought to be less than compelling (see also Quick & Garran, The Annotated Constitution of the Australian Commonwealth (1901), p 777). The decision has however stood for over sixty years and the Court unanimously refused over fifty years ago to reopen it (see Cox v Journeaux [1934] HCA 72; (1934) 52 CLR 282). In the course of argument in the present case an application was made on the plaintiff's behalf that the decision be reconsidered, but the Court, again unanimously, refused to reopen it. The basis of the decision in Howe is correctly stated in the headnote to the report (at p 290): ‘the words ‘residents’ and ‘resident’ in sec.75(iv) refer to natural persons only and not to artificial persons or corporations’ (see per Knox CJ and Gavan Duffy J at pp 294ff and per Higgins J at pp 325ff).”[32]
[32] [1985] HCA 69; 159 CLR 22 (Crouch), the plurality at [2].
The Member rejected the employer’s submission that it must be a resident of New South Wales as it was a licensed self-insurer in the State. The Member said this was contrary to Crouch. He rejected the employer’s submission that it was part of the State of New South Wales, akin to the NSW Self Insurance Corporation, distinguishing the current facts from those in Ritson v State of New South Wales.[33] The Member accepted the comments of Principal Member Harris in Ritson at [53]. The Member referred to Stanton (see [22] above. The Member relied on the above as supporting his opinion, quoted at [27] above.[34]
[33] [2021] NSWPIC 409 (Ritson), [53]–[55], reasons, [136].
[34] Reasons, [135]–[143].

The Member noted the worker did not bring her claim for psychological injury on the basis of the ‘disease’ provisions, and that it was unnecessary for her to establish that employment was the ‘main contributing factor’. It was necessary that she satisfy s 9A of the 1987 Act. He accepted that the worker suffered psychological injury in the incident on 27 October 2020, accepting the evidence of the worker together with that of Drs Khan, Hong and Lim. He said that the worker’s statement evidence was consistent with the histories given to her doctors. The Member did not accept that the termination of the worker’s employment reflected on her credit. He said there was a lack of evidence from both parties relating to the application to the Fair Work Commission.[35]
[35] Reasons, [145]–[150].
The Member referred to the evidence dealing with the events that led to the worker’s termination. The two witnesses, Ms Gilholme and Ms Stanton, said they saw the worker putting paperwork, that she was meant to shred, into her bag. The witnesses were silent regarding the nature of the paperwork. The Member said he noted the employer had not sought to cross-examine the worker. He accepted the worker’s evidence regarding the nature of the paperwork.[36] The Member did not draw any adverse conclusions from the fact that the worker’s partner Brandon interpreted for her on various medical consultations and when she saw the pharmacist.[37]
[36] Reasons, [151]–[153].
[37] Reasons, [154]–[156].
The Member said he accepted the worker’s “statement evidence”. The accident on 27 October 2020 was “an exceptionally traumatic event”. She was trapped for 20 to 30 seconds and thought she was going to die. She had physical pain with pelvic fractures. The Member rejected the employer’s submission that the incident could not be considered “life threatening”. A diagnosis of post-traumatic stress disorder was made by Dr Lim (general practitioner), Dr Khan (the treating psychiatrist) and Dr Hong (a medicolegal psychiatrist). The Member said that Dr Roberts underestimated the significance of the stressor. The Member preferred the evidence of Dr Khan to that of Dr Roberts. The Member rejected a submission that the worker’s forensic medical reports were in breach of regulation 44 of the Workers Compensation Regulation 2016, as the relevant doctors, except for Dr Hong, were treaters.[38]
[38] Reasons, [157]–[163].
The Member said there was no medical evidence to support the employer’s submission that the termination of the worker’s employment was a significant factor in the development of her psychological condition. He referred to the evidence of sexual harassment on 9 March 2021, referred to the relevant medical evidence and described this as “a minor factor”.[39] He made a finding:
“I find that the [respondent] sustained psychological injury in the form of post-traumatic stress disorder arising out of or in the course of her employment with the [appellant] on 27 October 2020, and I also find that the [respondent’s] employment on that date was a substantial contributing factor to the psychological injury.”[40]
[39] Reasons, [164]–[165].
[40] Reasons, [166].
The Member rejected the employer’s submission that the psychological condition was a ‘disease’,[41] referring to NSW Police Force v Gurnhill.[42] The Member rejected any defence based on an alleged defect in making a claim in respect of the psychological injury.[43] The Member said that the correctness of the worker’s claim for weekly compensation was raised in the employer’s dispute notice, but it made no submissions on the issue. The Member referred to correspondence on the topic and concluded there was no impediment to the Commission determining this claim.[44]
[41] Reasons, [167]–[171].
[42] [2014] NSWWCCPD 12, [72], [74].
[43] Reasons, [172]–[179].
[44] Reasons, [180]–[181].
The Member dealt with the worker’s weekly entitlement. He engaged in a detailed review of the medical evidence. He accepted the evidence of Drs Lim, Khan and Hong on this topic. He referred also to the evidence from Drs Low, Di Ieva and Soo. He did not accept the evidence of Dr Smith, relied on by the employer. The Member concluded that due to a combination of the physical and psychological injuries the worker had ‘no current work capacity’.[45] The Member said that the worker’s earnings, during the period while she worked on restricted duties after the accident, were not in a “real job”. Her duties were “menial office-based work” which the employer was obliged to provide because of its obligations pursuant to Chapter 3 of the 1998 Act. They did not properly reflect her ability to earn in a “real job”. The Member said there was no recent evidence to counter the certificates of the treating practitioners, who certified the worker up to March 2022 as having ‘no current work capacity’.[46] He also discussed the claim for expenses pursuant to s 60 of the 1987 Act and made a ‘general order’ for the payment of medical expenses pursuant to s 60 of the 1987 Act.[47]
[45] Reasons, [182]–[197].
[46] Reasons, [200], [204]–[205].
[47] Reasons, [207]–[210].

GROUNDS OF APPEAL

The Appeal Application dated 29 June 2022 raises the following Grounds of Appeal:
(a)    error law in regard to the determination as to jurisdiction (Ground No. 1);
(b)    denial of procedural fairness (Ground No. 2);
(c)    error of fact regarding current work capacity (Ground No. 3), and
(d)    determining the matter on a basis not put by or to the parties (Ground No. 4).

LEGISLATION

Sections 25, 26, 27 and 28 of the 2020 Act relevantly provide:
“25    Definitions
In this Division—
compensation claim means—
…
(d)     a claim for compensation or work injury damages to which the Workplace Injury Management and Workers Compensation Act 1998 applies.
compensation matter application—see section 26.
federal jurisdiction means jurisdiction of a kind referred to in section 75 or 76 of the Commonwealth Constitution.
relevant courts legislation means—
(a)     the District Court Act 1973 and the rules of court under that Act, and
(b)     the Civil Procedure Act 2005 and the regulations and uniform rules under that Act in their application to the District Court.
substituted proceedings—see section 27.
usual decision-maker, in relation to determining a matter concerning a compensation claim, means the person or body (whether or not the President or Commission) on which the function is conferred or imposed by this Act or enabling legislation.”
“26    Applications involving federal jurisdiction may be made to District Court
(1)     A person with standing to apply to the President or the Commission for a matter concerning a compensation claim to be determined by the usual decision-maker (a compensation matter application) may, with the leave of the District Court, make the application to the Court instead of the President or Commission.
(2)     The regulations may make provision for or with respect to—
(a) who has standing to make an application for leave, and
(b) excluding or including applications as compensation matter applications.
(3)     The District Court may grant leave for a compensation matter application to be made to the Court only if it is satisfied that—
(a) an application was first made to the President or Commission, and
(b) the determination of the matter by the usual decision-maker would involve an exercise of federal jurisdiction, and
(c) the usual decision-maker would otherwise have had jurisdiction enabling the decision-maker to determine the application.
(4)     An application for leave must be—
(a)filed with the District Court along with—
(i) an application that has been completed in the form and manner required under this Act or enabling legislation for the kind of compensation matter application concerned, and
(ii) if the parties to the compensation matter application have reached a settlement before leave is sought using a resolution process provided under this Act or enabling legislation—a copy of the terms of settlement, and
(b) accompanied by the applicable fee (if any) payable for the compensation matter application unless it has already been paid.
(5)     The District Court may—
(a) remit a compensation matter application for determination by the usual decision-maker if the Court is satisfied that the usual decision-maker has jurisdiction to determine it, and
(b) do so instead of granting leave or after granting leave.
(6)     If the District Court remits a compensation matter application to be dealt with by the usual decision-maker, the Court may make such orders that it considers appropriate to facilitate the determination of the application by the decision-maker.
(7)     The usual decision-maker is to determine any compensation matter application that is remitted to the decision-maker in accordance with any orders made by the District Court.”
“27    Proceedings after leave granted
(1)     If the District Court grants leave for a compensation matter application to be made to it instead of the President or Commission—
(a) proceedings for the determination of the application (substituted proceedings) are taken to have been commenced in the Court on the day on which the application was first made, and
(b) the Court may make such orders (including in relation to the usual decision-maker) as it considers appropriate to facilitate its determination of the application.
(2)     Subsection (1) applies despite any limitation period under the Limitation Act 1969 or any enabling legislation that applies to the application concerned provided it was first lodged for exercise by the usual decision-maker before the expiry of the period.
(3)     The District Court has, and may exercise, all of the jurisdiction and functions in relation to the substituted proceedings that the usual decision-maker would have had if they could exercise federal jurisdiction, including jurisdiction and functions conferred or imposed by or under this Act, enabling legislation or any other legislation.
(4)     Without limiting subsection (3), the District Court may—
(a) order that a medical assessment or merit review required by or under enabling legislation (or a review or appeal against the assessment or merit review) be carried out for the Court by a medical assessor, merit reviewer or panel specified by the Court, and
(b) make any other orders it thinks fit to facilitate the carrying out of the medical assessment, merit review or the review or appeal before the panel (including with respect to the issuing of certificates), and
(c) adopt (whether with or without variation), or refuse to adopt, the decision of the medical assessor, merit reviewer or panel as the Court sees fit.
(5)     A decision adopted by the Court (whether with or without variation) has effect as a decision of the Court in respect of the matter concerned.
(6) This section has effect subject to the provisions specified by section 28.”
“28    Provisions relating to determining substituted proceedings
(1)     The following provisions apply in relation to substituted proceedings—
(a) the District Court is to be constituted as provided by its relevant courts legislation instead of as provided by this Act or enabling legislation,
(b) the legislation applicable to appeals against decisions of the District Court applies to decisions of the Court instead of appeal provisions specified by or under this Act, enabling legislation or any other legislation,
(c) the practice and procedure applicable in the District Court under its relevant courts legislation (and any laws applicable in relation to contempt of court) apply to the substituted proceedings instead of the practice and procedure specified by or under this Act, enabling legislation or any other legislation,
(d) the District Court may make orders giving effect to any settlement reached by the parties even if that settlement was reached before the substituted proceedings commenced,
(e) any other provisions (including by way of modifications to the provisions of this Act, enabling legislation or other legislation) as may be prescribed by the regulations in respect of the substituted proceedings of the kind concerned.
(2)     Without limiting subsection (1)(e), the provisions that may be prescribed by the regulations for the purposes of the paragraph include provisions for or with respect to the following—
(a) the parties to substituted proceedings,
(b) fees and costs payable in respect of substituted proceedings,
(c) enabling a person or body to determine a matter for the District Court,
(d) the updating of references in provisions of this Act, enabling legislation or other legislation conferring or imposing functions exercisable in substituted proceedings by the District Court instead of some other person or body.
(3) The Minister is not to recommend the making of a regulation for the purposes of subsection (1)(e) unless the Minister certifies that—
(a) if the proposed provisions affect the exercise of jurisdiction or functions by the Commission—the President has agreed to the provisions, and
(b) if the proposed provisions affect the exercise of jurisdiction or functions by the District Court—the Chief Judge of the District Court has agreed to the provisions.”
Sections 75, 76 and 77 of the Constitution provide:
“75    Original jurisdiction of High Court.
In all matters—
(i)      Arising under any treaty:
(ii)     Affecting consuls or other representatives of other countries:
(iii)    In which the Commonwealth, or a person suing or being sued on behalf of the Commonwealth, is a party:
(iv)    Between States, or between residents of different States, or between a State and a resident of another State:
(v)     In which a writ of Mandamus or prohibition or an injunction is sought against an officer of the Commonwealth:
the High Court shall have original jurisdiction.
76     Additional original jurisdiction.
The Parliament may make laws conferring original jurisdiction on the High court in any matter—
(i) Arising under this Constitution, or involving its interpretation:
(ii)     Arising under any laws made by the Parliament:
(iii)    Of Admiralty and maritime jurisdiction:
(iv)    Relating to the same subject-matter claimed under the laws of different States.
77     Power to define jurisdiction.
With respect to any of the matters mentioned in the last two sections the Parliament may make laws—
(i)      Defining the jurisdiction of any federal court other than the High Court:
(ii)     Defining the extent to which the jurisdiction of any federal court shall be exclusive of that which belongs to or is invested in the courts of the States:
(iii)    Investing any court of a State with federal jurisdiction.”
Sections 38 and 39 of the Judiciary Act 1903 (Cth) provide:
“38    Matters in which jurisdiction of High Court exclusive
Subject to sections 39B and 44, the jurisdiction of the High Court shall be exclusive of the jurisdiction of the several Courts of the States in the following matters:
(a)     matters arising directly under any treaty;
(b)     suits between States, or between persons suing or being sued on behalf of different States, or between a State and a person suing or being sued on behalf of another State;
(c)     suits by the Commonwealth, or any person suing on behalf of the Commonwealth, against a State, or any person being sued on behalf of a State;
(d)     suits by a State, or any person suing on behalf of a State, against the Commonwealth or any person being sued on behalf of the Commonwealth;
(e)     matters in which a writ of mandamus or prohibition is sought against an officer of the Commonwealth or a federal court.”
“39    Federal jurisdiction of State Courts in other matters
(1) The jurisdiction of the High Court, so far as it is not exclusive of the jurisdiction of any Court of a State by virtue of section 38, shall be exclusive of the jurisdiction of the several Courts of the States, except as provided in this section.
(2) The several Courts of the States shall within the limits of their several jurisdictions, whether such limits are as to locality, subject‑matter, or otherwise, be invested with federal jurisdiction, in all matters in which the High Court has original jurisdiction or in which original jurisdiction can be conferred upon it, except as provided in section 38, and subject to the following conditions and restrictions:
(a) A decision of a Court of a State, whether in original or in appellate jurisdiction, shall not be subject to appeal to Her Majesty in Council, whether by special leave or otherwise.
Special leave to appeal from decisions of State Courts though State law prohibits appeal
(c)The High Court may grant special leave to appeal to the High Court from any decision of any Court or Judge of a State notwithstanding that the law of the State may prohibit any appeal from such Court or Judge.”
Section 9 of the Interpretation Act1987 (NSW) provides:
“9      Meaning of may and shall
(1)     In any Act or instrument, the word “may”, if used to confer a power, indicates that the power may be exercised or not, at discretion.
(2)     In any Act or instrument, the word “shall”, if used to impose a duty, indicates that the duty must be performed.”

THE NATURE OF THE APPEAL PURSUANT TO SECTION 352 OF THE 1998 ACT

This appeal is brought pursuant to s 352 of the 1998 Act, subs (5) of which provides:
“An appeal under this section is limited to a determination of whether the decision appealed against was or was not affected by any error of fact, law or discretion, and to the correction of any such error. The appeal is not a review or new hearing.”
In Workers Compensation Nominal Insurer v Hill Basten JA said:
“With respect to errors of fact finding, the line between preferring a different result and identifying error is by no means easy to draw, but that is clearly what the Deputy President sought to do by adopting the language complained of. It was also what Barwick CJ sought to do in Whiteley Muir in using such language to identify the difference between an appeal based on a finding of error and a hearing de novo (and, one must now add, a rehearing). If, on an appeal by way of rehearing, the court asked whether the findings of fact were ‘open’ to the trial judge, that might demonstrate an unduly limited understanding of the court’s function; however, that language is not out of place in determining an appeal from factual findings under s 352(5).”[48]
[48] [2020] NSWCA 54, [20].
In Northern NSW Local Health Network v Heggie Sackville AJA said:
“A fortiori, if a statutory right of appeal requires a demonstration that the decision appealed against was affected by error, the appellate tribunal is not entitled to interfere with the decision on the ground that it thinks that a different outcome is preferable: see Norbis v Norbis [1986] HCA 17; 161 CLR 513, at 518-519.”[49]

GROUND NO. 1

[49] [2013] NSWCA 255, 12 DDCR 95, [72].

Appellant’s submissions

The employer submits the “question of the jurisdiction of the Commission is one for the District Court”. It again refers to the two decisions of the Commission referred to above. The employer repeats its submission that as a licensed self-insurer it is “in the position of being a resident of NSW either generally or at least for the purpose of the proceedings before the Commission”. It submits “the Commission does not have jurisdiction to determine the dispute between a resident of Queensland (the respondent worker) and a resident of another State (in this case NSW)”.[50]
[50] Appellant’s submissions, [9].

Respondent’s submissions

The respondent submits the Member’s decision dated 7 June 2022 disposed of all matters brought before the Commission. The respondent submits that the appellant has “failed to articulate any rational legal basis” as to why this matter would invoke federal jurisdiction. The respondent notes the appellant has not made any argument that Australasian Temperance and General Mutual Life Assurance Society Ltd v Howe[51] “is not good law and should not apply to it”. It submits that this ground of appeal is “baseless”.[52]
[51] [1922] HCA 50; 31 CLR 290 (Howe).
[52] Respondent’s submissions, [9]–[10].

The parties’ oral submissions

Counsels’ submissions at the oral hearing on 23 September 2022 were directed to Ground No. 1.

The appellant’s oral submissions

Mr Jackson referred to Citta Hobart Pty Ltd v Cawthorn,[53] which was mentioned by Mr Beran shortly after the commencement of the hearing. Mr Jackson described Cawthorn as containing “nothing controversial” and as being “helpful”. He described the distinction between the powers of a court and of a tribunal as being “pretty well put in a nutshell” in Cawthorn.[54] He submitted:
“… as a general principle the court has the power to determine its jurisdiction and will make a decision within its jurisdiction even when it makes a mistake about that, it still has the power to do so, whereas a tribunal, if it - it’s difficult, isn’t it, but a tribunal, if it correctly apprehends it has jurisdiction, can exercise it.
… The tribunal if it makes a mistake about that really hasn’t determined anything at all and hasn’t actually really made a decision and that’s the issue that they’re grappling with in Gatsby or that’s one of the issues they’re grappling with in Gatsby, whereas a court has the authority to be wrong about its jurisdiction …”.[55]
[53] [2022] HCA 16; 96 ALJR 476; 400 ALR 1, (Cawthorn).
[54] Transcript of hearing 23/9/22 (T2), T2 4.21–25.
[55] T2 4.25–5.5, referring to Attorney General for New South Wales v Gatsby [2018] NSWCA 254 (Gatsby).
Mr Jackson referred to “the regime that’s been set in place to determine the question of jurisdiction if its raised”. He submitted:
“… simply asserting that there’s an argument about jurisdiction wouldn’t be enough to require the matter to be determined by the District Court and this is an interpretation of the legislation essentially but if there’s some sort of argument and it’s not merely colourable, i.e., it really is arguable and there’s some prospect of success at some level of the judiciary on that argument then it must be determined by the District Court.”[56]
[56] T2 5.14–22.
Reference was made to s 26 of the 2020 Act. Mr Jackson submitted that “section 26 where it says the District Court may determine the matter in the circumstances there it really means must determine the matter”.[57] He submitted “it’s really for the District Court to determine whether there’s any merit in the application”. If the District Court formed the view that a case was “not a Federal matter” then “it will go back to the Commission”. This was described as “consistent with Gatsby”, in which there was a procedure to refer a matter to the Supreme Court which should have been followed, “a similar procedure is provided for here”.[58] Mr Jackson described his “fallback position”, in the alternative, in the following terms:
“… the Commission does have the power to determine the matter if it’s not - if it’s merely colourable I - there’s no real argument but provided there’s a real issue raised it’s the District Court.”[59]
[57] T2 5.27–30.
[58] T2 6.12–17, 21–26.
[59] T2 7.9–14.
The appellant then turned to the issue of whether it was making a “non-colourable argument”. Mr Jackson submitted there was “potentially an argument” that the appellant was, “for the purposes of this specific legislation”, a “resident of the state, as an employer resident of the state”. The appellant referred to the fact that it was subject to the jurisdiction of the Personal Injury Commission, under the workers compensation legislation, with a registered office in the State, employing workers in the State, dealing with claims, as an employer resident of the State. Mr Jackson submitted “I’m not saying that that is necessarily the case but I’m saying that’s an issue that could be determined by a court”.[60] When referred to the decision of the High Court in Howe Mr Jackson said, “Could be an argument for the High Court where it might need to be revisited.” He submitted the question was really whether “at any level of the judicial system [it] is arguable.”[61]
[60] T2 9.1–16.
[61] T2 9.18–10.2.
Mr Jackson described two limbs of the ‘non-colourable argument’. The first he put in the following terms:
“… the argument that I think could be litigated would be that Fletcher [the appellant] could, as a corporation as a whole, come within the Howe kind of definition or whatever the earlier of those two cases, but on the other hand, when it’s exercising a specific function which is as a licenced self-insurer under the Act it is, when it’s exercising that function, acting as an agent of the state and when it is sued under that legislation and when it’s exercising that function then that’s a very specific role in which it is acting as agent of the state just as a solicitor might act as an agent for a particular client or whatever. There are many situations when you act as an agent for someone which doesn’t represent your whole self or doesn’t define you. That’s the first - the absolute first limb was it’s all a matter for the District Court.”[62]
[62] T2 10.2–11.4.
The second limb was the argument that the appellant, a corporation, was a resident of the State of New South Wales. Mr Jackson submitted, apparently referring to Howe:
“I do recognise the difficulty with the second limb because when one goes back to the original authorities, the High Court authorities we probably need to end up back up there and, you know, that would be ambitious. I concede that would be ambitious but I have an ambitious solicitor, Deputy President, and - but leaving that to one side, I do accept the difficulty with that argument is that my understanding of the reasoning in that case by the majority is that they’re not a resident, full stop.”[63]
[63] T2 11.16–25.
In submissions in reply, Mr Jackson returned to his submission dealing with s 26 of the 2020 Act, that ‘may’ really means ‘must’. He referred to Smith v Wyong Shire Council,[64] particularly to the reasons of Spigelman CJ at [12] to [17]. He specifically referred to the reference in that case to s 9 of the Interpretation Act. The meanings referred to are subject to any contrary intention. Mr Jackson submitted:
“… in the end it’s a matter of statutory construction when you look at the objects and the purpose of the Act and the way that it operates and you determine whether may does mean may or it means shall. There’s many, many examples of may being interpreted as shall, not so many in the other direction.”[65]
[64] [2003] NSWCA 322 (Smith).
[65] T2 18.25–30.
Mr Jackson referred to how s 26 of the 2020 Act works. He submitted it is necessary that an application be made first to the Commission, “that’s a precondition to the District Court having the power to consider the matter”. The District Court can grant leave when the preconditions for the grant are satisfied; this includes a determination that the matter would involve an exercise of federal jurisdiction. It flows from the determination regarding federal jurisdiction that the Commission could not then determine the matter. If the District Court declined to exercise the discretion the worker would be left without a remedy. The appellant submitted that “it wouldn’t work if it were a discretion”. If “the precondition to the exercise of power is there, the District Court has to exercise it”.[66]
[66] T2 19.11–20.12.

The respondent’s oral submissions

Mr Beran referred to Cawthorn at [22] to [28]. He referred to “the power of tribunals to determine their own jurisdiction ascribed by the plurality”.[67] He submitted the respondent was not taking action against the appellant based on the exercise of the appellant’s functions as an insurer, but rather as an employer. The respondent was injured in the course of her employment with the appellant.[68]
[67] T2 3.19–4.11.
[68] T2 12.14–24.
The respondent referred to the proceedings at first instance, saying the appellant had there relied “on some analogy to the self-insurance corporation that is established under the Self-Insurance Corporations Act”. Mr Beran submitted this was “totally unanalogous to this situation”. Mr Beran referred to “an analogy” of an employer being a company with the words “New South Wales” in its name, and an assertion by the employer that the matter was federally impacted. Would this devoid the Commission of jurisdiction because the assertion was raised by the employer? Mr Beran submitted “Of course the answer is no”.[69]
[69] T2 12.29–13.11.
Mr Beran submitted “[T]his tribunal still needs to make the decision as to its own jurisdiction because otherwise any spurious argument has to go because it doesn’t even get into the tribunal.” The submission continued:
“… pure logic doesn’t mean that any respondent can say this is federally impacted and despite it being a spurious argument it has to go to the District Court because that’s essentially what the appellant’s saying in this case.”[70]
[70] T2 13.19–31.
The respondent submitted that the current proceedings were commenced and the issue relating to federal jurisdiction was raised; “[w]ho determines it?” The 2020 Act provides for the dismissal of proceedings pursuant to s 54, which refers to the Personal Injury Commission Rules 2021 (the Rules). Rule 77 provides that proceedings can only be dismissed due to “failure of due dispatch”. Mr Beran submitted that, in its Workers Compensation Division, the Commission must determine its own jurisdiction, there was no provision for dismissal for want of jurisdiction.[71]
[71] T2 14.2–22.
Mr Beran referred to the reasons of the plurality in Cawthorn as authority for the proposition that “a state tribunal has the jurisdiction to determine its own jurisdiction”.[72] He also quoted the following from the reasons of Edelman J in the same case:
“In summary, both courts and tribunals have the duty and the authority to decide, ‘in the sense of forming an opinion’ about, the existence of their jurisdiction. Hence, for the purposes of ascertaining whether federal jurisdiction exists, courts and tribunals can decide whether a person is a consul or an officer of the Commonwealth. They can decide whether a person is a resident of a different State. And they can decide whether the dispute before them is a ‘matter ... arising under this Constitution, or involving its interpretation’.”[73] (excluding references)
[72] T2 15.10–11.
[73] Cawthorn, [65].
Mr Beran submitted the Commission had the power to make a decision as to jurisdiction, although not the authority to make a judicial pronouncement. The appellant, if aggrieved, could appeal to the Court of Appeal on a question of law.[74]
[74] T2 15.26–34.

Consideration

It is appropriate to deal initially with Ground No. 1, which challenges (in a very general way) the correctness of the Member’s approach to the issue involving federal jurisdiction. The nature of the issue was described by the plurality in Cawthorn:
“Burns v Corbett[75] held that a State Parliament lacks legislative capacity to confer on 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 judicial power with respect to any matter of a description in s 75 or s 76 of the Constitution. To ensure validity, a State law conferring State jurisdiction on a State tribunal must therefore be construed in accordance with applicable State interpretation legislation to exclude jurisdiction with respect to all such matters.”[76]
[75] [2018] HCA 15; 265 CLR 304 (Burns).
[76] Cawthorn, [1].

The potential application of Division 3.2 of the 2020 Act

Division 3.2 of the 2020 Act can be understood in the above context. The following is intended to provide a brief overview of the operation of Div 3.2 in respect of a ‘compensation claim’ within the meaning of s 25 of the 2020 Act; it does not purport to be exhaustive. Division 3.2 provides for the determination of matters which could not otherwise be determined by the Commission because they involve the exercise of ‘federal jurisdiction’ as defined in s 25 of the 2020 Act. A ‘compensation claim’ is defined in s 25 as “a claim for compensation or work injury damages to which the Workplace Injury Management and Workers Compensation Act 1998 applies”. A ‘compensation application matter’ is described in s 26(1). Shortly put, a person with standing to apply to the President or the Commission for determination of the matter may seek leave to make the application to the District Court instead. The application for leave is to be filed with the District Court, in the form and manner required, accompanied by any applicable fee (s 26(4)). Section 26(3) provides that leave may only be granted by the District Court if it is satisfied that:
(a)    an application was first made to the President or the Commission, and
(b)    the determination of the matter by the usual decision-maker would involve an exercise of federal jurisdiction, and
(c)    the usual decision-maker would otherwise have had jurisdiction enabling the decision-maker to determine the application.
If satisfied that the usual decision-maker has jurisdiction to decide the matter, the District Court, instead of or after granting leave, may remit the matter to the usual decision-maker for determination consistent with any orders made by the District Court to facilitate the determination (subss (5), (6) and (7) of s 26).
If the District Court grants leave for the application to be made to it instead of the President or the Commission (‘substituted proceedings’) the District Court may exercise all the jurisdictions and functions that the original decision-maker would have had if the original decision-maker could exercise federal jurisdiction (s 27(3)). This extends to matters involving medical assessment, and reviews or appeals before the panel (s 27(4)). The substituted proceedings are taken to have been commenced in the District Court on the day when the application was first made (s 27(1)(a)). Section 27(2) deals with the position of a party where time limits on the bringing of a claim or action may have expired, in circumstances where the application was first lodged to be dealt with by the usual decision-maker before the expiry of the period.
Section 28 of the 2020 Act contains provisions relating to the determination of substituted proceedings.
Division 3.2 draws a distinction between a ‘compensation claim’, an application to the President or the Commission that a claim be determined by the usual decision-maker (the definition in s 25) and a ‘compensation matter application’ to the District Court for leave pursuant to s 26. Section 26(3)(a) requires that an application be first made to the President or the Commission, before leave may be granted by the District Court pursuant to s 26. There are specific procedural requirements pursuant to s 26(4), relating to the application to the District Court for leave, which must be satisfied. It is appropriate that the provisions of Div 3.2 be read together.[77]
[77] See generally, Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355, the plurality at [70].
In the current proceedings an application pursuant to s 26, for determination by the District Court, would have required a specific application to the District Court for leave, in addition to the application initially made to the Commission for decision by the usual decision-maker. It would involve compliance with the various requirements in s 26. Neither of the parties made such an application. The appellant submits the Commission lacks jurisdiction to determine the dispute (see [44] above). The appellant, in its written submissions on appeal, submits the issue of jurisdiction is one for the District Court.[78] In this regard the appellant relies on two decisions of the Commission which were attached to its written submissions before the Member[79] and are briefly discussed below.
[78] Appellant’s submissions, [8].
[79] Appellant’s written submissions before the Member, 3/5/22, [1]–[3].
The two decisions were dated 30 and 31 March 2022. Both involved claims for damages for personal injuries sustained in motor vehicle accidents. The decisions were de-identified but were attached to the appellant’s written submissions dated 3 May 2022. In one of these (No. M10452902/21) the claimant resided in Tasmania at the date when the application was filed in the Commission. The insurer was “a licensed NSW CTP insurer”. In the other (No. APP-10486197) the claimant resided in New South Wales at the date of filing and the insurer was “RACQ Insurance in the state of Queensland”. In each instance the matters were dismissed pursuant to s 54(c) of the 2020 Act and r 77(b)(iv) of the Rules. In each instance it was stated that the dismissal was “primarily” because of where the claimant resided. It was stated that “the District Court is the appropriate venue to determine the issue of jurisdiction in matters such as these”. It was stated in both matters that “determination of the dispute may potentially involve the exercise of federal jurisdiction” (emphasis in original).
The date on which residency is assessed is the date of filing of the relevant application.[80] I reject the appellant’s submission that I should follow the decisions referred to in the preceding paragraph. I am not bound by them. On the limited factual background set out, it could not be concluded the above matters were between States, between residents of different States, or between a State and a resident of another State (see the passage from Crouch quoted at [28] above). It could not be concluded that the circumstances described would potentially involve an exercise of federal jurisdiction. The orders dismissing the proceedings effectively relied on the premise that there was no jurisdiction to determine the relevant disputes (r 77(b)(iv) of the Rules). The relevant provision in r 77(b)(iv) applies to “motor accidents legislation” (the situation in the two decisions relied on), not to “an application made under the workers compensation legislation” (like the current one). I do not accept that the circumstances represent an appropriate basis for the dismissal of proceedings pursuant to s 54 of the 2020 Act, at the least in applications brought under the workers compensation legislation. These decisions can be readily distinguished from the current matter. They do not assist the appellant’s argument.
[80] See Foxe v Brown [1984] HCA 69; 59 ALJR 186; 58 ALR 542, [12]; Watson v Marshall & Cade [1971] HCA 33; 124 CLR 621, [2]; R v Oregan; Ex parte Oregan [1957] HCA 18; 97 CLR 323, [19], Momcilovic v The Queen [2011] HCA 34, [134].
The appellant submitted that “the absolute first limb [of its jurisdictional argument] was it’s all a matter for the District Court” (see [51] above). Division 3.2 of the 2020 Act gives the District Court power to grant leave subject to the requirements in s 26(3) (including being satisfied that determination by the usual decision-maker would involve an exercise of federal jurisdiction). If the District Court is satisfied the usual decision-maker has jurisdiction to determine the matter it may remit the matter to the usual decision-maker accompanied, if appropriate, by orders to facilitate the determination: subss (5) to (7) of s 26. The Member dealt with the current matter in the absence of any application by a party pursuant to s 26. In those circumstances the statutory scheme in Div 3.2 was not invoked. The Member dealt with the matter, consistent with the respondent’s submission, on the basis he could decide the matter, providing the Commission posited an opinion that this could be done without exercising federal jurisdiction (see [21] above). There was no application before the District Court.

The Member’s determination regarding jurisdiction

The Member’s consideration of the jurisdictional issue is summarised at [27] to [29] above. He concluded that his determination of the claim in the circumstances did not involve an exercise of federal jurisdiction.
In Gatsby Leeming JA said:
“Only a superior court can pronounce authoritatively on the limits of its own jurisdiction. At best, all that NCAT could do was to form and express an opinion …”.[81]
[81] Gatsby, [281].

His Honour quoted from what was said by Brennan J in Re Adams and the Tax Agents’ Board:
“An administrative body with limited authority is bound, of course, to observe those limits. Although it cannot judicially pronounce upon the limits, its duty not to exceed the authority conferred by law upon it implies a competence to consider the legal limits of that authority, in order that it may appropriately mould its conduct. In discharging its duty, the administrative body will, as part of its function, form an opinion as to the limits of its own authority. The function of forming such an opinion for the purpose of moulding its conduct is not denied to it merely because the opinion produces no legal effect.”[82]
[82] (1976) 12 ALR 239, 242.
The High Court in Cawthorn considered the power of a court or a non-court tribunal to consider the limits of its jurisdiction. The plurality said:
“22.   The power which a court or a non-court tribunal necessarily has to ensure that it remains within the limits of its jurisdiction is not of a nature that is inherently judicial. The reason is that the exercise of the power is incapable of quelling a controversy between parties about existing legal rights. Nor is it inherently non‑judicial. Rather, the power takes its nature from the nature of the power to which it is incidental: ‘[t]he nature of the final act determines the nature of the previous inquiry’.
23.    A court in which judicial power is invested therefore ‘has jurisdiction to determine – and to determine judicially – whether it has the jurisdiction to entertain a particular application or to make a particular order’. The court, in other words, has ‘jurisdiction to decide its own jurisdiction’ in the performance of which it exercises judicial power.
24.    A tribunal that is not a court and that is invested with non-judicial power correspondingly has authority – in the exercise of non-judicial power – to ‘make up its mind’ or ‘decide' in the sense of forming an opinion about the limits of its own jurisdiction ‘for the purpose of determining its own action’. The authority is not to ‘reach a conclusion having legal effect’ but to form an opinion for the purpose of ‘moulding its conduct to accord with the law’.
25. The 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 on which State judicial power is conferred by State legislation is to be understood in conformity with the same principles. The State tribunal must be taken to have incidental jurisdiction to determine whether the hearing and determination of a particular claim or complaint would be within the legislated limits of its State jurisdiction. The Federal Court and the Court of Appeal of the Supreme Court of New South Wales have correctly so held.
26. Taking its nature from the nature of the power to which it is incidental, that 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 itself a conferral of State judicial power. Accordingly, the State tribunal exercises judicial power when it decides that a claim or complaint in respect of which its jurisdiction is sought to be invoked is or is not a matter of a description referred to in s 75 or s 76 of the Constitution. The Federal Court has correctly so held. To the extent that the Court of Appeal of the Supreme Court of New South Wales might be understood to have held to the contrary in Sunol v Collier, that decision should not be followed.
27. The legal effect of the judicial exercise by 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 of its jurisdiction to decide its own jurisdiction is no different from the legal effect of the judicial exercise of jurisdiction to decide its own jurisdiction by an inferior court of the State that is a court within the meaning of s 77(ii) and s 77(iii) of the Constitution. The limits of jurisdiction are in each case the limits that are set by the legislated conferral of jurisdiction construed in light of the Constitution. The judicial determination of jurisdiction is in neither case conclusive. In either case, if jurisdiction is wrongly determined to exist, such order as is ultimately made in the purported exercise of jurisdiction is wholly lacking in legal force.” [83] (excluding footnotes)
[83] Cawthorn, [22]–[27].
The arguments made by the appellant at first instance, as identified by the Member, relevant to whether the matter was federally impacted, are briefly summarised at [23] to [24] above. The appellant, in its written submissions on this appeal, argued the matter was federally impacted, and therefore should be referred to the District Court if the issue of federal jurisdiction was raised. Mr Jackson, in his oral submissions, dealt with the need for an argument challenging jurisdiction to be “non-colourable”. In its oral submissions on this appeal, the appellant submitted the Commission would have jurisdiction if there was “no real argument”, but rather that the argument was “merely colourable”. Mr Jackson submitted that if there was a “real issue raised” it should be dealt with by the District Court (see [47] to [49] above).
The plurality in Cawthorn, dealt with whether it was necessary that an asserted constitutional defence meet “some threshold degree of arguability and, if so, what that threshold was”. Their Honours said:
“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.”[84]
[84] Cawthorn, [35]–[36].
The plurality said that “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”. Their Honours quoted from Burgundy Royale Investments Pty Ltd v Westpac Banking Corporation in which the Full Court of the Federal Court said that “[a]ny other approach would involve the extremely inconvenient result that the existence or absence of jurisdiction to deal with a particular claim would depend upon the substantive result of that claim”.[85] The plurality said:
“The respondent, with the support of the Attorney-General of the Commonwealth and some other intervenors, invites this Court to depart from that principled and longstanding approach. The invitation is to put in its place a requirement that, to operate to characterise a justiciable controversy as a matter described in s 76(i) or s 76(ii) of the Constitution,a claim or defence asserted in reliance on a Commonwealth law or in reliance on the Constitution must meet a threshold of arguability consistent with the raising of the claim or defence in a court not amounting to an abuse of the process of that court. The invitation is rejected.”[86]
[85] (1987) 18 FCR 212.
[86] Cawthorn, [41].
Their Honours continued:
“Applied by a State tribunal that is not a court of the State within the meaning of s 77(ii) and s 77(iii), it would inevitably involve that tribunal being drawn down the forbidden path of judicially determining the merits of a matter within a description in s 76(i) or s 76(ii) of the Constitution.”[87]
[87] Cawthorn, [42].
The plurality referred to decisions of the Full Court of the Federal Court in which claims or defences were “found on analysis and after argument to be ‘foredoomed to fail’ or ‘so clearly untenable that it cannot possibly succeed’” yet the Federal Court was held “to retain jurisdiction simply by reason of the claim or defence having been genuinely asserted”.[88]
[88] Cawthorn, [40].
In Cawthorn the plurality noted that there was an unchallenged finding that a constitutional defence had been found to be “not colourable”. Their Honours said there could be no suggestion that the constitutional defence was not genuinely raised or is so incoherent as to be insusceptible of judicial determination. The hearing and determination of the defence was “beyond the jurisdiction conferred on the Tribunal by the State Act”.[89]
[89] Cawthorn, [46].
The parties’ submissions on this topic were summarised by the Member, those of the respondent in the reasons at [93] to [98] and those of the appellant in the reasons at [108] to [113]. The Member dealt with the jurisdictional issue in his reasons at [129] to [143]. He did not deal with this issue by reference to whether the appellant’s jurisdictional argument was “unarguable”, “colourable” or “manifestly hopeless” (the latter being the term preferred by Edelman J in his reasons).[90] It does not appear that the jurisdictional issue was raised with the Member at first instance in those or related terms. The matter proceeded on the uncontroversial basis that the Commission was not a court.[91]
[90] Cawthorn, [77].
[91] Orellana-Fuentes v Standard Knitting Mills [2003] NSWCA 146; 57 NSWLR 282, [52].
The reasons on this issue commenced at [129], in which the Member said:
“I posit an opinion that the Commission would not be exercising federal jurisdiction in determining the dispute, and I therefore intend to determine it.”
The Member said that “[i]n positing my opinion, I have also opined that the [employer] is neither a state nor a resident of a state”. He agreed with the reasoning of Principal Member Harris in Ritson, that the Commission was not a court of a State, and therefore lacked “jurisdiction to determine a dispute between a resident of Queensland (the [worker]) and either a resident of another state or another state”.[92] The Member quoted from the decision of the High Court in Crouch as authority that “the words ‘residents’ and ‘resident’ in sec.75(iv) refer to natural persons only and not to artificial persons or corporations”. He considered himself bound by Crouch. He rejected the appellant’s argument that it must be a resident of New South Wales to be licensed as a self-insurer in New South Wales, saying it “carries no force when considering the High Court authority”.[93]
[92] Ritson [132]–[133].
[93] Reasons, [130]–[135].
The Member referred to the decision in Ritson, in which Principal Member Harris opined that the NSW Self Insurance Corporation was a State. The Member said that “by section 4(2) of the NSW Self Insurance Corporation Act 2004, the Corporation is specifically said to be constituted as a statutory body representing the Crown”. The Member distinguished this from the position of the employer in the current matter.[94] He concluded on this point:
“The fact that the [appellant] has been provided with a particular licence by the State Insurance Regulatory Authority pursuant to section 210 of the 1987 Act does not in my opinion make it a state for the purpose of section 75 (iv) of the Constitution.”[95]
[94] Reasons, [136]–[137].
[95] Reasons, [138].
The Member quoted from Ritson and Deputy Federal Commissioner of Taxation v State Bank of NSW.[96] He concluded:
“The controlling corporation in my opinion is a state for the purpose of section 75(iv) of the Constitution, but there is no logical reason why the insurers which it controls would also be a state for that purpose. Those insurers (including the [appellant]) in my opinion are not ‘agencies or instrumentalities of government’, but corporations with their own constitution determined by their individual articles of association and such.”[97]
[96] [1992] HCA 6; 174 CLR 219.
[97] Reasons, [140].
The Member also referred to two unreported decisions of the District Court as being supportive of the view he had reached.[98]
[98] Reasons, [141]–[143].
The appellant maintained the arguments previously advanced regarding jurisdiction. It argued that it relevantly constituted the State as a self-insurer under the New South Wales workers compensation legislation. It argued that it was a resident of the State of New South Wales. The appellant in tandem pursued a more nuanced argument, that in exercising its functions as a self-insurer, it acted as an agent of the State of New South Wales and should be considered to be the State in that regard. I accept Mr Jackson’s submission this was “an issue that could be determined by a court”.[99] It was not a question of whether the Member accepted the correctness of the substantive argument. It was necessary that the Member consider the factors referred to in Cawthorn (see [76] to [79] above). Was the defence genuinely in controversy; did it give rise to an issue capable of judicial determination?
[99] T2 9.2–16.
On a fair reading of the reasons, it is clear that the Member dealt with the defence based on federal jurisdiction on the basis that he was determining the substantive issue on its merits as opposed to considering its arguability. The reasons of the plurality in Cawthorn make it clear that this was “no part of the requisite assessment” (see [77] above). Such a course, like determining whether a claim or defence amounted to an abuse of process, would “inevitably involve that tribunal being drawn down the forbidden path of judicially determining the merits of a matter within a description in s 76(i) or s 76(ii) of the Constitution” (see [78] above).
It follows that the Member erred in how he approached the issue of whether the Commission had jurisdiction in the circumstances and in his finding regarding whether the matter was federally impacted. In Burns the plurality said:
“Chapter III of the Constitution provides for the authoritative adjudication of matters listed in ss 75 and 76 by federal courts and by State courts co-opted for that purpose as components of the federal Judicature. The provisions of Ch III exhaustively identify the possibilities for the authoritative adjudication of matters listed in ss 75 and 76. Adjudication by an organ of State government other than the courts of the States is not included within those possibilities and is therefore excluded from them.”[100]
[100] Burns, [3].
In my opinion the Member’s decision, made without jurisdiction, is wholly lacking in legal force.[101] To the extent that it is necessary the decision is revoked.
[101] Cawthorn, [27].
The proceedings remain on foot. The most efficacious way to bring them to a conclusion would be for a party with appropriate standing to make an application to the District Court pursuant to s 26 of the 2020 Act. I remit the matter to the Division Head of the Workers Compensation Division.
In the circumstances it is not necessary or appropriate that I deal with the appellant’s statutory construction argument regarding the interpretation of s 26 of the 2020 Act or with the remaining grounds of appeal.

DECISION

In the opinion of the Commission the statement of opinion by the Member, in the Certificate of Determination dated 7 June 2022, that the Commission was “not exercising federal jurisdiction in determining this dispute”, was made without jurisdiction and is of no legal force.
To the extent that it is necessary, the Certificate of Determination dated 7 June 2022 is revoked.
The matter is remitted to the Division Head of the Workers Compensation Division of the Commission.

Michael Snell
Deputy President

21 October 2022