Redman v Return to Work Corporation of South Australia

[2019] SASC 167

Supreme Court of South Australia
(Appeals to a Single Judge: Civil)

REDMAN v RETURN TO WORK CORPORATION OF SOUTH AUSTRALIA

[2019] SASC 167

Judgment of The Honourable Chief Justice Kourakis

24 September 2019

WORKERS' COMPENSATION - ENTITLEMENT TO COMPENSATION - EMPLOYMENT RELATED INJURY, DISABILITY OR DISEASE - GENERALLY

Application brought by Mr Redman for permission to appeal against a decision of the Full Bench of the South Australian Employment Tribunal (the Full Bench).

That decision concerns the Full Bench’s consideration of a question of law as to whether on the proper construction of s 40 of the Return to Work Act 2014 (SA) (the RTW Act), Mr Redman is entitled to income maintenance for a period of incapacity for work following surgery for a compensable injury. The Full Bench answered in the negative.

Mr Redman injured his knees in the course of employment in September 2014. In relation to his right knee injury, he obtained weekly payments and medical expenses under the then operative Workers Rehabilitation and Compensation Act 1986 (SA). As provided for in the transitional provisions in the RTW Act, his entitlement to weekly payments ceased on 27 June 2017.

Section 33(20) of the RTW Act gives an entitlement to medical expenses in the 12-month period immediately following cessation of income maintenance. All within this 12-month period, Mr Redman applied and received approval for surgery to his left knee and underwent that surgery.

He applied for income maintenance pursuant to s 40(1) of the RTW Act. The claim was not approved by the respondent because the surgery was not one that had been approved under s 33(21)(b), which operates as an exception to s 33(20) where the respondent accepts or determines that it is reasonable and appropriate to postpone surgery beyond the 12-month period, since it was approved within the 12-month period. The Full Bench upheld the respondent’s decision.

Held, granting permission to appeal in part:

1. The construction of s 40(1) of the RTW Act is a question of general importance to workers incapacitated by surgical intervention after two years from the date of injury. Permission to appeal on ground 1 is granted.

2. Decision reserved on the application for permission on grounds 2 and 3 until Schroeder v Return to Work SA is determined by this Court.

Return to Work Act 2014 (SA) ss 33, 40, sch 9 cl 37; Workers Rehabilitation and Compensation Act 1986 (SA), referred to.
Redman v Return to Work SA [2019] SAET 127; Return to Work Corporation of South Australia v Karpathakis [2018] SASCFC 45, discussed.

REDMAN v RETURN TO WORK CORPORATION OF SOUTH AUSTRALIA
[2019] SASC 167

1. 1      KOURAKIS CJ: This is an application brought by Mr Peter Redman for permission to appeal against a decision of the Full Bench of the South Australian Employment Tribunal (the Full Bench). That decision concerns the Full Bench’s consideration of a question of law ‘as to whether on the proper construction of s 40 of the [Return to Work Act 2014 (SA) (the RTW Act)], Mr Peter Redman is entitled to supplementary income support payments for a period of incapacity for work following surgery for a compensable injury’.

2. 2      Mr Redman suffered injuries to both his knees in the course of employment on 22 September 2014.  He obtained compensation, in the form of weekly payments and medical expenses, for the injury to his right knee under the repealed Workers Rehabilitation and Compensation Act 1986 (SA) (the WRCA). In relation to his left knee injury, Mr Redman obtained compensation under the WRCA in the form of medical expenses only.

3. 3 Mr Redman’s entitlement to weekly payments continued after the RTW Act commenced on 1 July 2015. He continued to receive weekly payments in relation to his right knee injury until 27 June 2017. This was the 104-week period provided for in the transitional provisions in sch 9 cl 37 of the RTW Act.

4. 4 On 15 July 2016, Mr Redman’s request for a surgical procedure to his left knee was approved. This surgery took place in January 2017. There was another request for further surgery on his left knee, which was approved on 20 November 2017. In relation to medical expenses, s 33(20) of the RTW Act provides that:

   Subject to subsection (21), an entitlement to compensation under this section (including an entitlement to make an application under subsection (17)) comes to an end if the worker has not had an entitlement to receive weekly payments in relation to the work injury under Division 4 for a continuous period of 12 months (or has not had an entitlement to receive weekly payments under Division 4 and a period of 12 months has expired) (insofar as costs are incurred after the end of that period).

5. 5      I will refer to the 12-month period immediately following the cessation of income maintenance in which medical expenses are paid as the 12-month medical test.  The second surgery took place on 7 December 2017.  It is to be observed that both the approval for it, and the surgery, took place before the 12-month medical test period expired on 27 June 2018. 

6. 6 Due to Mr Redman’s incapacity to work as a result of the second surgery, a claim for supplementary income support payments pursuant to s 40 of the RTW Act was made on Mr Redman’s behalf. Section 40(1) of the RTW Act is as follows:

   Subject to this section, an injured worker who has an incapacity for work as a result of surgery approved by the Corporation under section 33(21)(b) is entitled to weekly payments (supplementary income support payments) as provided by this section if the incapacity occurs after the end of the second designated period that applies under section 39(1)(b). 

7. 7 Section 33(21)(b)(ii) enacts an exception to the general rule made by s 33(20) of the RTW Act if the respondent accepts or determines that it is reasonable and appropriate to postpone surgery beyond the 12-month period:

   … in relation to surgery, any associated medical, nursing or medical rehabilitation services (including the cost of hospitalisation), where the Corporation has determined or accepted, on application made before the end of the period referred to in subsection (20), that it is reasonable and appropriate for such surgery to be undertaken at a later time due to the impact (or likely impact) of the work injury on the worker's health and capacity (or future health and capacity) …

8. 8 Accordingly, the respondent refused the supplementary income support payments because the surgery was not one that had been approved under s 33(21)(b).

9. 9      This Court held in Return to Work Corporation of South Australia v Karpathakis that a determination made pursuant to s 33(21)(b) of the RTW Act, on the ground that it is reasonable to postpone surgery, is not an approval given pursuant to s 33(17) of the RTW Act. Nor can it be an acceptance of a claim for medical expenses pursuant to s 33(1), because no expenses have yet been incurred. It follows that s 40 of the RTW Act, on one literal reading, has no work to do, because no surgery, even after the expiry of the 12-month medical test, is ‘approved’ pursuant to s 33(21)(b) of the RTW Act. It can only be approved pursuant to sub-ss 33(1) or 33(17) of the RTW Act. Alternatively, another literal reading confers an entitlement to income maintenance whenever surgery which it was reasonable to postpone is performed, even if it was ultimately unreasonably performed.

10. 10     An application to review the decision was filed on 18 January 2018 and when it was heard before Gilchrist DPJ, his Honour referred the question of law to the Full Bench.

11. 11     The Full Bench answered in the negative to the question of law and held that:

    … the compensating authority was right to have rejected Mr Redman’s claim for supplementary income support payments for his period of incapacity, following his surgery on 7 December 2017.

12. 12 As to counsel for Mr Redman’s argument regarding the construction of s 40 of the RTW Act, the Full Bench held that:

    … we cannot be certain that the wording of s 40(1) of the RTW Act reflects a drafting error. We agree that its wording is consistent with Parliament making a considered decision that the supplementary income support payments are only available to workers who have had approved surgery that has been the subject of a s 33(21)(b) application, which necessarily means that s 40 only applies in respect of surgery that takes place after the medical entitlement period has expired. This might seem arbitrary, but even on the construction urged upon us by Mr Possingham [counsel for Mr Redman], there would be arbitrary outcomes. Why should the supplementary income support payments only apply in the case of pre-approved surgery? Why should it not also apply to a period of incapacity following reasonably required surgery that was not the subject of pre-approval? Why should the supplementary income support payments be limited to incapacity for work following surgery? Why would they not be payable in connection other forms of treatment that result in an incapacity for work? And why only 13 weeks? We intend no criticism in saying this. We merely make the point that legislation such as this involves all sorts of policy decisions and compromises that could be regarded as resulting in arbitrary outcomes. It is a long step to say that any one of them was unintended.

13. 13 Counsel for Mr Redman’s alternative argument was that although the second surgery was said to have been approved under s 33(17) of the RTW Act, the letter requesting approval did not mention that provision. It was submitted that the application could be characterised as one requesting pre-approval under s 33(21)(b)(ii) of the RTW Act, thereby bringing it within s 40(1). The Full Bench found that:

    Mr Possingham’s second argument ignores the fact that Mr Redman had no need to make an application under s 33(21)(b) when he sought pre-approval as his medical entitlement period had not expired. His application for pre-approval was an application under s 33(17) and that is all it was.

14. 14 The further alternative argument advanced by counsel for Mr Redman was that the second surgery could be considered a ‘new injury’ under the RTW Act and he relied on Return to Work Corporation of South Australia v Watkins [2017] SASCFC 149. The Full Bench held that:

    … although the Full Court in Watkins treated the worker’s surgery as a new injury, importantly it reckoned the period of the entitlement to weekly payments by reference to the the [sic] date when incapacity first occurred as a result of the original work injury. In this case that was 22 September 2014. Watkins provides no basis to support an award of weekly payments in December 2017. 

15. 15 The construction given to s 40 of the RTW Act by the Full Bench means that a worker undergoing surgery in the period of 12 months after the end of the second designated period (104 weeks) following injury, but before the end of the immediately following 12 months referred to by s 33(20) of the RTW Act, is not entitled to income maintenance even if the surgery has been approved pursuant to s 33(17) of the RTW Act whilst recovering from incapacity, because s 33(21) of the RTW Act only applies to extend the time for medical expenses incurred after the 12-month medical test. On the other hand, a worker undergoing an operation much later is so entitled if the respondent has accepted or determined that it is reasonable to postpone surgery.

16. 16 I would grant permission to appeal on ground (1). The question is one of general importance to workers incapacitated by surgical intervention after two years from the date of injury, a not infrequent occurrence in the case of joint injuries. The construction given to s 40 of the RTW Act by the Full Bench creates an anomaly which on its face is arbitrary, and which is inexplicable by rational policy considerations of the kind which might explain the other express exclusions to which the Full Bench referred.

17. 17 The construction contended for by the applicant is arguable. In particular, given the false premise, that approval for surgical treatment is granted under s 33(21)(b), when it can only be granted under s 33(1) or s 33(17), it is arguable that Parliament intended to give an entitlement to income maintenance only when approval for the surgery has been given in accordance with the provisions of s 33 of the RTW Act.

18. 18     I would reserve my decision on the application for permission on grounds (2) and (3) until after the hearing and determination of the decision of this Court in Schroeder v Return to Work SA.