Royal & Sun Alliance v Workcover & Visser No. DCCIV-99-400

Royal & Sun Alliance Workers Compensation (SA) Ltd v Workcover Corporation of South Australia & Colin Visser
[2000] SADC 22

Judge C R Lee
Appeals Tribunal

The document which is the subject of this appeal under the Freedom of Information Act 1991 (“FOI Act”) is a memorandum dated 26 May 1998 from the first respondent (“Workcover”) to the appellant (“Royal”). Royal was and remains an agent of Workcover for the purpose of managing claims under the Workers Rehabilitation and Compensation Act 1986 (“WR&C Act”). The memorandum imposed a limit upon the authority of Royal to agree a redemption sum under s42 of the WR&C Act with Patrick Daley, who was and remains a recipient of benefits under the WR&C Act for a work related injury.
Mr Daley does not appear in the notice of appeal as a second respondent. However, the person who was so named, Colin Visser, had Mr Daley’s authority to appear and represent him on the appeal. Mr Visser made submissions in opposition to the appeal through Ms P Dean. Workcover made submissions through counsel in support of the appeal.
Mr Visser applied to Workcover for access under the FOI Act to documents held by Workcover in relation to Mr Daley’s claim, and one of Workcover’s responses, which it maintained following an internal review, was to determine that the memorandum in question was an exempt document and should not be released. Following an external review pursuant to s39 of the FOI Act, the Ombudsman directed Workcover to make a fresh determination providing for the release of the memorandum.
Section 40 of the FOI Act entitles a person who is dissatisfied with the determination of an agency to appeal to this Court. The definition of “agency” in s4 extends to Workcover. Section 42(1) provides that the appeal will be by way of rehearing and that evidence may be taken on the appeal. Section 48 provides that, in any proceedings concerning a determination by an agency, the burden of establishing that the determination is justified lies on the agency.
As appears from the material placed before me by way of three affidavits and a book of agreed documents, the memorandum came into existence in the following circumstances. Trevor Hancock is employed by Workcover as a case resolution officer. One of his roles is to recommend to the Manager, Claims Operation, maximum amounts to be imposed upon the authority of claims agents to agree redemption sums with workers under s42 of the WR&C Act. Claims agents have general authority to redeem claims up to a certain amount where the claim is more than two years old. Specific authority is required for redemptions beyond that amount. In April and May 1998, Mr Hancock prepared a list of workers receiving loss of earning capacity payments under s42A with a view to offering redemption sums to those workers in an endeavour to reduce and eventually eliminate payments of that kind. Mr Daley was on Mr Hancock’s list. Hence the memorandum which Workcover sent to Royal with respect to Mr Daley’s claim. Royal entered into negotiations with Mr Daley, offers and counter-offers were exchanged, but no agreement was reached.
The FOI Act provides, by s12, that a person has a legally enforceable right to be given access to an agency’s documents in accordance with the Act and, by s20(1), that an agency may refuse access to a document if it is an exempt document. Clause 9 of Schedule 1 provides:-
“9 (1) A document is an exempt document if it contains matter —
(a) that relates to —
(i).... any opinion, advice or recommendation that has been obtained, prepared or recorded; or
(ii) any consultation or deliberation that has taken place,
in the course of, or for the purpose of, the decision-making functions of the Government, a Minister or an agency; and
(b)the disclosure of which would, on balance, be contrary to the public interest.
(2)... A document is not an exempt document by virtue of this clause if it merely consists of —
(a)matter that appears in an agency’s policy document; or
(b).... factual or statistical material.”
It is apparent from its face that the memorandum satisfies the requirement of (a) of clause 9(1). It is an “advice” prepared “for the purpose of the decision making functions of” Workcover. The real question is whether disclosure of the memorandum, in terms of (b), “would, on balance, be contrary to the public interest.”
It seems to me that the “public interest”, in the particular circumstances of this case, is an interest in seeing that Workcover properly discharges its functions and responsibilities in conformity with the provisions of s42 of the WR&C Act. Previous versions of s42 (Act No.124 of 1986 and amending Act No.49 of 1994) gave a worker the right to apply for commutation of the employer’s liability to make weekly payments. The present version of s42 was enacted in 1995 (by amending Acts Nos. 35 and 56 of 1995) to expand the liabilities which may be redeemed and to substitute for the worker’s right to apply a process for reaching an agreement. But an agreement cannot be reached unless the worker receives competent professional and financial advice and a recognised medical expert has certified that the extent of the worker’s incapacity can be determined with a reasonable degree of confidence (subsection (2)). If Workcover wishes to enter into negotiations, it must indemnify the worker for the reasonable costs of obtaining the advice required by the section up to a limit prescribed by regulation (subsection (4)). If agreement is not reached within three months after redemption is first proposed, either party may apply to the Workers Compensation Tribunal for reference of the matter to a conciliation conference (subsection (5)). At the conciliation conference, each party must disclose to the other information that may be relevant to the failure to reach agreement (subsection (7)). In the end, however, a party cannot be compelled to agree (subsection (9)). If an agreement is made, it is not reviewable (s89A).
Arriving at a redemption sum by whatever means is a question of assessment rather than the application of a mathematical formula: what lump sum should Workcover pay to a worker now to buy back, for this is what redemption means, its liability under the Act to make periodic payments of compensation to the worker in the future? Usually a number of contingencies have to be weighed in the scales, and often fair and reasonable minds will differ on what, in any given case, the redemption sum should be. A claims agent who offers less than the limit imposed by Workcover is not necessarily offering less than fair compensation. It is one thing for the claims agent to disclose, as it should, the factual (such as medical reports) and statistical (such as actuarial tables) material upon which the offer is based, but quite another to disclose the limit which Workcover has placed upon the authority of the claims agent to negotiate. Disclosure of the limit would inevitably result in the agent’s maximum becoming the worker’s minimum. Workcover would be reluctant to commit its final position to writing. Perhaps it would desist altogether from giving its claims agents any scope or discretion to negotiate within a range.
To require disclosure of a limit would, in my opinion, frustrate or at least undermine the process by which redemption sums under s42 are agreed. It must follow that in this case disclosure of the memorandum would be contrary to the public interest in terms of clause 9(1)(b) of Schedule 1 of the FOI Act, and I so hold.
Additional grounds of exemption in Schedule 1 of the FOI Act were advanced in the notice of appeal and supported by counsel for Workcover. Counsel argued that disclosure of the memorandum could reasonably be expected to have a substantial adverse effect on:
1. the ability of the Government to manage the economy: clause 14
2...... the financial and property interests of the State and Workcover: clause 15
3.the effective performance by an agency of the agency’s function: clause 16(1)(a)(iv).

and in each case would, on balance, be contrary to the public interest in terms of clauses 14(b), 15(b) and 16(1)(b).

Counsel relied upon what he described in written submissions as the “precedential implication occasioned by disclosure”. I am unsure what Workcover would do in future cases if required to disclose the memorandum in this case. I have already suggested that it would be reluctant to commit its final position to writing and might desist altogether from giving its claims agents any scope or discretion to negotiate within a range. Perhaps some other adjustment of procedures could be employed to reduce or eliminate the unwanted consequences described in clauses 14,15 and 16 of the Schedule. Since these are matters for evidence rather than speculation, I leave them for another day.
Before concluding, I make the following further comments.
I do not consider that the enquiry into the meaning of “public interest” is assisted, in the particular circumstances of this case, by reference to other cases in other jurisdictions. As I have endeavoured to show, what is called for here is an examination of the meaning and purpose of s42 of the WR&C Act.
Two of the objects set forth in s2(1) of the WR&C Act are to achieve “a reasonable balance between the interests of employers and the interests of workers” ((a)(i)) and to provide “fair compensation for employment-related disabilities”((a)(iii). In my opinion, it is unhelpful to refer to these objects in isolation as though in some abstract way they provide independent support for a conclusion that the memorandum should be withheld or disclosed. As subsection (2) of s2 makes clear, the objects are there to provide a background against which the provisions of the Act including s42 must be construed.
In the course of his external review, the Ombudsman expressed a concern about what he described as the possible inequality in the bargaining positions of workers and Workcover in relation to redemption agreements under s42. In letters dated 28 June 1999, he said that the then prescribed maximum of $100 allowable to a worker for obtaining legal advice “is indicative of the level of advice that it was intended that a worker receive”. It seems to me that any imbalance in the respective bargaining strengths of the parties should be remedied, not by distorting the process by which agreements are reached, but rather by increasing the costs allowable to a worker for advice. Indeed, this is what the Government has just done. Clause 12 of Regulations published in the Government Gazette of 25 November 1999 increases from $100 to $300 the maximum allowable to a worker for obtaining advice about the consequences of redemption. It should also be mentioned that letters included in the book of documents show that Mr Daley received considered advice from solicitors in relation to his entitlement to redemption and that he conducted his negotiations with Royal through those solicitors.
I have said that s40 of the FOI Act entitles a person who is dissatisfied with the determination of an agency to appeal to this Court. The meaning of the phrase “person who is dissatisfied” was considered by the Full Court in Bray v Workers Rehabilitation & Compensation Corporation (1994) 62 SASR 218. Bollen J, with whom the other members of the Court agreed, referred to cases on the meaning of “persons aggrieved” and concluded that a person with an interest which is peculiar to the person and above any interest of ordinary members of the public is a person who is dissatisfied within the meaning of s40. Clearly, as a claims agent of Workcover, Royal qualifies as a person who is entitled to appeal.
The order of the Court is that the appeal be allowed and that Workcover’s most recent determination be varied to exclude from disclosure to Mr Daley or any person on his behalf the memorandum dated 26 May 1998 from the first respondent to the appellant.

[2000] SADC 22

25 February 2000