Sabanayagam v St George Bank Ltd
[2016] NSWWCCPD 3
•21 January 2016
| WORKERS COMPENSATION COMMISSION | ||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | ||
| CITATION: | Sabanayagam v St George Bank Ltd [2016] NSWWCCPD 3 | |
| APPELLANT: | Christina Sabanayagam | |
| RESPONDENT: | St George Bank Ltd | |
| INSURER: | QBE Workers Compensation (NSW) Ltd | |
| FILE NUMBER: | A1-2744/15 | |
| ARBITRATOR: | Ms C McDonald | |
| DATE OF ARBITRATOR’S DECISION: | 17 August 2015 | |
| DATE OF APPEAL HEARING: | 15 December 2015 | |
| DATE OF APPEAL DECISION: | 21 January 2016 | |
| SUBJECT MATTER OF DECISION: | Section 38 of the Workers Compensation Act 1987; entitlement to weekly payments upon expiration of first two entitlement periods; s 43(1) and (2) of the Workers Compensation Act 1987; whether work capacity decision made by insurer; s 43(3) of the Workers Compensation Act 1987; jurisdiction of Workers Compensation Commission to determine dispute about a work capacity decision | |
| PRESIDENTIAL MEMBER: | Deputy President Kevin O'Grady | |
| HEARING: | Oral | |
| REPRESENTATION: | Appellant: | Mr B McManamey, instructed by Law Partners |
| Respondent: | Mr C Tanner, instructed by Curwoods Lawyers | |
| ORDERS MADE ON APPEAL: | 1. The finding made by the Senior Arbitrator as found in [1] of the Certificate of Determination dated 17 August 2015 is amended to read: “The Commission has no jurisdiction to determine the dispute as to weekly payments.” 2. The Senior Arbitrator’s refusal to make an order as recorded at [2] of the Certificate of Determination dated 17 August 2015 is confirmed. | |
INTRODUCTION
The appellant, Ms Christina Sabanayagam, was injured in the course of her employment with St George Bank Ltd (the respondent) in 2006, following which payments of compensation benefits were made by the respondent’s insurer. Those payments ceased in May 2015 following notice, given in March 2015, that the insurer declined further liability.
These proceedings were commenced by Ms Sabanayagam, in which she sought orders concerning resumption of weekly payments. The matter came before Senior Arbitrator Catherine McDonald, who determined the matter on the papers following consideration of written submissions put on behalf of each party. The Senior Arbitrator’s decision was published on 17 August 2015. The Certificate of Determination issued on that date recorded the following matters:
“The Commission determines:
1. The Commission has no jurisdiction to determine a dispute as to weekly payments after the end of the second entitlement period as defined by section 32A of the Workers Compensation Act 1987.
2. I decline to make an order.
A brief statement is attached to this determination setting out the Commission’s reasons for the determination.”
Argument in support of the allegations of error on the part of the Senior Arbitrator give rise to a primary question as to whether the insurer had made a work capacity decision, which term is addressed in s 43 of the Workers Compensation Act 1987 (the 1987 Act), as evidenced by its correspondence dated 20 March 2015, forwarded to Ms Sabanayagam. Once that question is resolved it will become necessary to determine the correctness or otherwise of the Senior Arbitrator’s determination as to the absence of jurisdiction in the Commission to adjudicate the dispute which has arisen between the parties. The factual detail, and argument raised, are addressed below.
Before attempting to summarise relevant factual matters, and to permit some understanding of the dealings between the parties, it is convenient to note at this point the statutory provisions relevant to resolution of the dispute concerning entitlement to weekly payments.
Division 2 of Part 3 of the 1987 Act makes provision with respect to an injured worker’s entitlement to weekly compensation. Section 33 provides:
“33 Weekly compensation during total or partial incapacity for work
If total or partial incapacity for work results from an injury, the compensation payable by the employer under this Act to the injured worker shall include a weekly payment during the incapacity.”
The manner of calculation of the quantum of such entitlement is to be determined having regard to which of three entitlement periods might, on given facts, be relevant: ss 32A, 36, 37 and 38 of the 1987 Act.
The first and second entitlement periods are defined in s 32A (an aggregate of 13 weeks and of 117 weeks respectively). Such entitlement during those periods is to be calculated in accordance with formulae which appear in ss 36 and 37. Regard is to be had to whether the worker has, either, no current work capacity, or has current work capacity. The terms “no current work capacity” and “current work capacity” are defined in s 32A as follows:
“no current work capacity, in relation to a worker, means a present inability arising from an injury such that the worker is not able to return to work, either in the worker’s pre-injury employment or in suitable employment.”
“current work capacity, in relation to a worker, means a present inability arising from an injury such that the worker is not able to return to his or her pre-injury employment but is able to return to work in suitable employment.”
The question of a worker’s entitlement, or otherwise, to weekly compensation following the expiration of the first and second entitlement periods (130 weeks), which is presently relevant, is governed by the provisions of s 38 which provides:
“38 Special requirements for continuation of weekly payments after second entitlement period (after week 130)
(1) A worker’s entitlement to compensation in the form of weekly payments under this Part ceases on the expiry of the second entitlement period unless the worker is entitled to compensation after the second entitlement period under this section.
(2) A worker who is assessed by the insurer as having no current work capacity and likely to continue indefinitely to have no current work capacity is entitled to compensation after the second entitlement period.
(3) A worker (other than a worker with high needs) who is assessed by the insurer as having current work capacity is entitled to compensation after the second entitlement period only if:
(a) the worker has applied to the insurer in writing (in the form approved by the Authority) no earlier than 52 weeks before the end of the second entitlement period for continuation of weekly payments after the second entitlement period, and
(b) the worker has returned to work (whether in self-employment or other employment) for a period of not less than 15 hours per week and is in receipt of current weekly earnings (or current weekly earnings together with a deductible amount) of at least $155 per week, and
(c) the worker is assessed by the insurer as being, and as likely to continue indefinitely to be, incapable of undertaking further additional employment or work that would increase the worker’s current weekly earnings.
(3A) A worker with high needs who is assessed by the insurer as having current work capacity is entitled to compensation after the second entitlement period only if the worker has applied to the insurer in writing (in the form approved by the Authority) no earlier than 52 weeks before the end of the second entitlement period for continuation of weekly payments after the second entitlement period.
(4) An insurer must, for the purpose of assessing an injured worker’s entitlement to weekly payments of compensation after the expiry of the second entitlement period, ensure that a work capacity assessment of the worker is conducted:
(a) during the last 52 weeks of the second entitlement period, and
(b) thereafter at least once every 2 years.
Note. An insurer can conduct a work capacity assessment of a worker at any time. The Workers Compensation Guidelines can also require a work capacity assessment to be conducted.
(5) An insurer is not to conduct a work capacity assessment of a worker with highest needs unless the insurer thinks it appropriate to do so and the worker requests it. An insurer can make a work capacity decision about a worker with highest needs without conducting a work capacity assessment.
(6) The weekly payment of compensation to which an injured worker who has no current work capacity is entitled under this section after the second entitlement period is to be at the rate of:
(a) (AWE × 80%) − D, or
(b) MAX − D,
whichever is the lesser.
(7) The weekly payment of compensation to which an injured worker who has current work capacity is entitled under this section after the second entitlement period is to be at the rate of:
(a) (AWE × 80%) − (E + D), or
(b) MAX − (E + D),
whichever is the lesser.
(8) A worker’s entitlement to compensation under this section may be reassessed at any time.”
Work capacity decisions are addressed in s 43 of the 1987 Act as follows:
“43 Work capacity decisions by insurers
(1) The following decisions of an insurer (referred to in this Division as work capacity decisions) are final and binding on the parties and not subject to appeal or review except review under section 44BB or judicial review by the Supreme Court:
(a) a decision about a worker’s current work capacity,
(b) a decision about what constitutes suitable employment for a worker,
(c) a decision about the amount an injured worker is able to earn in suitable employment,
(d) a decision about the amount of an injured worker’s pre-injury average weekly earnings or current weekly earnings,
(e) a decision about whether a worker is, as a result of injury, unable without substantial risk of further injury to engage in employment of a certain kind because of the nature of that employment,
(f) any other decision of an insurer that affects a worker’s entitlement to weekly payments of compensation, including a decision to suspend, discontinue or reduce the amount of the weekly payments of compensation payable to a worker on the basis of any decision referred to in paragraphs (a)–(e).
(2) The following decisions are not work capacity decisions:
(a) a decision to dispute liability for weekly payments of compensation,
(b) a decision that can be the subject of a medical dispute under Part 7 of Chapter 7 of the 1998 Act.
(3) The Commission does not have jurisdiction to determine any dispute about a work capacity decision of an insurer and is not to make a decision in respect of a dispute before the Commission that is inconsistent with a work capacity decision of an insurer.”
Review of work capacity decisions is addressed by s 44BB (formerly s 44) of the 1987 Act as follows:
“44BB Review of work capacity decisions
(1) An injured worker may refer a work capacity decision of an insurer for review:
(a) by the insurer in accordance with the Workers Compensation Guidelines within 30 days after an application for internal review is made by the worker, or
(b) by the Authority (as a merit review of the decision), but not until the dispute has been the subject of internal review by the insurer, or
(c) to the Independent Review Officer (as a review only of the insurer’s procedures in making the work capacity decision and not of any judgment or discretion exercised by the insurer in making the decision), but not until the dispute has been the subject of internal review by the insurer and merit review by the Authority.
(2) An application for review of a work capacity decision must be made in the form approved by the Authority and specify the grounds on which the review is sought. The worker must notify the insurer in a form approved by the Authority of an application made by the worker for review by the Authority or the Independent Review Officer.
(2A) The insurer is to notify the worker of the decision on an internal review as soon as practicable after the review is conducted.
(3) The following provisions apply to the review of a work capacity decision when the reviewer is the Authority or the Independent Review Officer:
(a) an application for review must be made within 30 days after the worker receives notice in the form approved by the Authority of the insurer’s decision on internal review of the decision (when the application is for review by the Authority) or the Authority’s decision on a review (when the application is for review by the Independent Review Officer),
(b) an application for review by the Authority may be made without an internal review by the insurer if the insurer has failed to conduct an internal review and notify the worker of the decision on the internal review within 30 days after the application for internal review is made,
(c) the reviewer may decline to review a decision because the application for review is frivolous or vexatious or because the worker has failed to provide information requested by the reviewer,
(d) the worker and the insurer must provide such information as the reviewer may reasonably require and request for the purposes of the review,
(e) the reviewer is to notify the insurer and the worker of the findings of the review and may make recommendations to the insurer based on those findings (giving reasons for any such recommendation),
(f) the Independent Review Officer must also notify the Authority of the findings of a review and the Authority may make recommendations (giving reasons for any such recommendations) to the insurer based on those findings,
(g) recommendations made by the Authority are binding on the insurer and must be given effect to by the insurer,
(h) recommendations made by the Independent Review Officer are binding on the insurer and the Authority.
(4) (Repealed)
(5) The Commission is not to make a decision in proceedings concerning a dispute about weekly payments of compensation payable to a worker while a work capacity decision by an insurer about those weekly payments is stayed.
(6) (Repealed)”
A work capacity assessment is addressed by the provisions found in s 44A as follows:
“44A Work capacity assessment
(1) An insurer is to conduct a work capacity assessment of an injured worker when required to do so by this Act or the Workers Compensation Guidelines and may conduct a work capacity assessment at any other time.
(2) A work capacity assessment is an assessment of an injured worker’s current work capacity, conducted in accordance with the Workers Compensation Guidelines.
(3) A work capacity assessment is not necessary for the making of a work capacity decision by an insurer.
(4) An insurer is not to conduct a work capacity assessment of a worker with highest needs unless the insurer thinks it appropriate to do so and the worker requests it.
(5) An insurer may in accordance with the Workers Compensation Guidelines require a worker to attend for and participate in any assessment that is reasonably necessary for the purposes of the conduct of a work capacity assessment. Such an assessment can include an examination by a medical practitioner or other health care professional.
(6) If a worker refuses to attend an assessment under this section or the assessment does not take place because of the worker’s failure to properly participate in it, the worker’s right to weekly payments is suspended until the assessment has taken place.”
FACTUAL BACKGROUND
Ms Sabanayagam injured her left leg in the course of her employment with the respondent on 6 October 2006. Whilst there is no evidence from Ms Sabanayagam before the Commission, it seems that since that date she has undergone extensive medical treatment and has had absences from work by reason of incapacity. It also seems that Ms Sabanayagam’s employment came to an end following her retrenchment in late 2008. A history recorded in 2012 by Dr William Bye, orthopaedic surgeon and Approved Medical Specialist, indicates that Ms Sabanayagam had, since her retrenchment, resumed restricted employment with three subsequent employers.
Following the injury, Ms Sabanayagam had received voluntary payments of weekly compensation from the respondent. The precise detail of such payments is not revealed on the evidence, however, it is clear that payments ultimately ceased in May 2015. At that time the insurer served upon Ms Sabanayagam a notice, given in accordance with s 74 of the Workplace Injury Management and Workers Compensation Act 1998 (the 1998 Act), that the respondent declined liability upon the basis that Ms Sabanayagam was “fit for pre-injury duties with St George Bank”. The terms of that notice are more fully discussed in the course of discussion below.
Notwithstanding the paucity of evidence, it seems that before service of this notice in May 2015, Ms Sabanayagam’s claim had been managed by the insurer as demonstrated by the following chronology:
25 November 2013 As recorded in a decision for expedited assessment subsequently made by a Delegate of the Registrar, the insurer: “…gave written notice to [Ms Sabanayagam] on 25 November 2013 of the insurer’s work capacity decision under s 43(1) of the 1987 Act and notice to [sic] reduction or cessation of wages [sic] under section 54 of the Act. The effect of the work capacity decision made on the 25th November is [Ms Sabanayagam’s] pre-transitional entitlement to weekly benefits would reduce to nil and take effect on 4 March 2014” (at [13] of the Delegate’s decision dated 28 February 2014).
31 December 2013 As recorded in the same decision of the Delegate of the Registrar (at [16]): “On 31 December 2013 the insurer gave notice in writing to [Ms Sabanayagam] on [sic] the outcome of the internal review. The decision as a result of the internal review is [Ms Sabanayagam] has no current capacity to work in suitable employment giving an entitlement to weekly payments under s 37 [sic] of the 1987 Act of $758.80 with an effective date on 1 April 2014.”
22 August 2014 The insurer made a work capacity decision, as recorded in the insurer’s “Internal review” made 24 September 2014 (noted below), “to reduce Ms Sabanayagam’s entitlement to weekly payments of compensation to Nil under s 38 of the Workers Compensation Act 1987.”
24 September 2014 The insurer made a decision, following an internal review of the work capacity decision made 22 August 2014. The following matters were recorded in a statement of reasons of the Internal Review Team (at [23] and [24]):
“Whilst I [sic] find Ms Sabanayagam does have capacity for some type of employment based on her work experience since the injury and her medical certification as per paragraph 14. Considering the above, I am not satisfied there is sufficient evidence to support suitable employment as defined under s 32A of the 1987 Act for Ms Sabanayagam.
Accordingly, I must find that Ms Sabanayagam has no current work capacity as defined under s 32A of the 1987 Act at this time.”
20 March 2015 The insurer issued a notice as is required by s 74 of the 1998 Act that “liability [for weekly payments] has been denied as of 20 March 2015”. It was stated in that notice that Ms Sabanayagam “[is] fit for pre-injury duties with St George Bank”. The notice (which was in terms similar to an earlier notice dated 16 March 2015) stated, as other reasons for denying liability, that:
“Our evidence indicates that your alleged injury of 06 October 2006, which occurred whilst you were in the employ of St George Bank Limited has now resolved and you do not continue to suffer from any injury within the meaning of section 4 of the Workers Compensation Act 1987. This section defines an injury for the purposes of Workers Compensation as ‘a personal injury arising out of or in the course of employment’.
In our opinion the work injury that you allege to have received on 06 October 2006, which occurred whilst you were in the employ of St George Bank Limited, is no longer causing you any incapacity for work as required by Section 33 of the Workers Compensation Act 1987. This section requires that you either be partially or totally incapacitated as a result of the injury in order to obtain weekly benefits compensation.”
26 March 2015 A review made pursuant to s 287A of the 1998 Act, which had been requested by Ms Sabanayagam, confirmed the matters found in the s 74 notice dated 20 March 2015.
9 April 2015 The insurer again reviewed the decision made on 20 March 2015 and written notice was given that “the decision is maintained”.
THRESHOLD MATTERS
There is no dispute between the parties that the threshold requirements as to quantum and time as found in the provisions of ss 352(3) and 352(4) of the 1998 Act have been met.
HEARING
Whilst the respondent submitted that this appeal may be heard on the papers, as is permitted by the terms of s 354(6) of the 1998 Act, Ms Sabanayagam submitted that a hearing was, in all the circumstances, appropriate.
Having regard to the questions raised on appeal, I reached the view that it was appropriate that a hearing be conducted. The matter was heard on 15 December 2015, at which time Ms Sabanayagam was represented by Mr McManamey of counsel and the respondent was represented by Mr Tanner of counsel. The proceedings were recorded and a transcript has been produced.
ISSUES IN DISPUTE
The grounds of appeal relied upon by Ms Sabanayagam are as follows:
“Ground 1: The Arbitrator erred when she found that the Commission did not have jurisdiction after the second entitlement period in circumstances where the requirements of section 38 had been met in that the insurer had assessed the worker as having no work capacity.
Ground 2: The Arbitrator erred when she considered that the Commission has no jurisdiction to determine a dispute whether a work capacity decision is binding.
Ground 3: The Arbitrator erred when she found that the section 74 notices of 20 March 2015, 26 March 2015 and 9 April 2015 were work capacity decisions.”
A question was raised at the hearing of the appeal (at T7–8) as to whether it was appropriate to address ground three, which concerns the question as to whether a relevant work capacity decision had been made by the insurer in 2015, before the first and second grounds were addressed. Following that discussion, counsel addressed ground three and concluded argument with submissions concerning the dispute as to the existence of jurisdiction. In these reasons I adopt that approach, that is, I will initially deal with ground three.
THE ARBITRAL PROCEEDINGS
The Senior Arbitrator conducted a telephone conference on 18 June 2015 at which time the parties were advised, and the parties agreed, that the matter was to be determined on the papers. The issues in dispute were summarised by the Senior Arbitrator at [5] of her Reasons as follows:
“The issues in dispute are whether the Commission retains jurisdiction to make an award of weekly payments after the expiration of the second entitlement period as defined in s 32A of the Workers Compensation Act 1987 (the 1987 Act) and the nature of any jurisdiction it has.” (emphasis in original)
The Arbitrator’s approach to the dispute, to which the parties tacitly consented, was to address the “legal” (at [7] of Reasons) issue of jurisdiction, which also raised some question as to the making of a work capacity decision, as a preliminary question. In the circumstances, arguments advanced in written submissions were principally restricted to that discrete issue. The Arbitrator’s conclusion as to jurisdiction defeated Ms Sabanayagam’s application seeking a resumption of weekly payments.
The evidence before the Senior Arbitrator
Both Ms Sabanayagam and the respondent tendered copies of documents which related to the matters summarised in the chronology recorded at [14] above. Those documents, where relevant, are addressed in the course of discussion below. The balance of the documentary evidence, which comprised expert medical reports, correspondence between the insurer and Ms Sabanayagam’s general practitioner Dr Darshanee Mahaliyana and a surveillance report, need not be summarised given that those documents had no relevance to the Arbitrator’s determination of the dispute nor are they relevant, given my findings stated hereunder, on this appeal.
Submissions before the Senior Arbitrator
Ms Sabanayagam’s submissions
Written submissions presented on behalf of Ms Sabanayagam by Mr McManamey included a summary of medical evidence and it was put that “the proper conclusion to be drawn from the medical evidence is that the effects of the injury are continuing”. That argument was not considered by the Senior Arbitrator given the limited ambit of those issues actually ruled upon by her.
Of relevance to the issues as described by the Senior Arbitrator (at [20] above) were the following matters, as put in those written submissions (in summary form):
(a) section 105 of the 1998 Act confers upon the Commission exclusive jurisdiction to examine, hear and determine all matters arising under the 1998 Act and the 1987 Act;
(b) that jurisdiction is limited by the provisions of s 43(3) of the 1987 Act (noted at [9] above);
(c) section 43(3) “does not purport to deprive the Commission of jurisdiction to make awards for weekly payments”. The provision prevents the Commission going “behind a work capacity decision or review it on its merits”. The Commission is bound to accept “the accuracy of the work capacity decision and can only make orders consistent with that decision”;
(d) the work capacity decision made on 24 September 2014 has not been revoked or varied. The Commission is required to accept that work capacity decision (no current work capacity) and an award in favour of Ms Sabanayagam should be made;
(e) reliance was placed upon the decision of Roche AP in Rawson v Coastal Management Group Pty Ltd [2015] NSWWCCPD 3 (Rawson) in support of an argument that “once the medical issue is resolved in [Ms Sabanayagam’s] favour, the Commission is required to make a decision which is not inconsistent with the work capacity decision [made on 24 September 2014]”: s 43(3);
(f) the decision of the President of the Commission, Keating DCJ in Lee v Bunnings Group Limited [2013] NSWWCCPD 54 (Lee), in which it was determined that an entitlement to weekly compensation after the expiration of the first two entitlement periods must be assessed by the insurer, not the Commission, was distinguished in argument upon the basis that, in Lee, the insurer had not made an assessment in terms of s 38(2) or (3) of the 1987 Act. In the present case, Ms Sabanayagam’s “entitlement has been determined. The role for the Commission is to give effect to that determination by making an award for weekly compensation”, and
(g) reliance was also placed upon the decision of Arbitrator Wynyard in Urquhart v Rainbow Home and Respite Service Pty Limited [2015] NSWWCC 212 (Urquhart).
The respondent’s submissions
Argument as advanced on behalf of the respondent may be summarised as follows:
(a) Ms Sabanayagam’s entitlement to weekly payments ceases upon the expiry of the second entitlement period unless she is entitled to such compensation under s 38;
(b) the Commission’s jurisdiction “with respect to section 38 weekly payments is affected by section 43” (noted at [9] above);
(c) the history of the insurer’s management of the claim was summarised and it was noted that liability was denied in March 2015 for the reason set out in that s 74 notice (noted at [14] above);
(d) the claim for weekly compensation is sought “under s 38” and the Commission “does not have jurisdiction to make any determination in relation to a claim for weekly payments after the expiration of the second entitlement period” (emphasis in original);
(e) reliance was placed upon the decision in Lee and upon the content of the second reading speech before Parliament concerning the relevant amendments to the legislation made in 2012;
(f) reliance was also placed upon the decision in Rawson as being authority for the proposition “that the Commission does not have jurisdiction to determine a dispute in relation to weekly payments after the second entitlement period has expired”;
(g) in Rawson the Commission (both the Arbitrator and the Deputy President) drew an inference that a work capacity decision had been made given the insurer’s “decision not to pay weekly compensation in respect of a particular period”. A similar inference should be drawn in the present matter having regard to the issue of the March 2015 s 74 notice;
(h) it was further argued that the s 74 notice served in March 2015 was “fundamentally related to [Ms Sabanayagam’s] capacity and consequently was a decision falling within the meaning of s 43(1)(f) of the 1987 Act”. That provision is noted at [9] above;
(i) the legislative scheme, it was argued, makes provision that a “worker’s capacity, or otherwise, would be constantly subject to review by the [insurer]”. The Commission has no jurisdiction to rule on entitlement, or otherwise, to weekly compensation, and
(j) reliance was again placed upon the decision of Rawson where (at [67]) it was said:
“As Mr Rawson seeks to challenge the insurer’s decision not to pay weekly compensation [during the closed period in question], that is, he seeks to challenge a work capacity decision that he has no entitlement to weekly compensation in that period, the Commission does not have jurisdiction to determine the dispute or make a decision that is inconsistent with the insurer’s work capacity decision (s 43(3)).”
Ms Sabanayagam, in reply, argued that no work capacity decision had been made, as had been argued on behalf of the respondent. This argument suggests that the respondent relied upon the s 74 notice as being a work capacity decision. Reference was made to the terms of s 43(2) noted at [9] above and it was put that “the section 74 notice is not a work capacity decision because it falls within at least one if not both of the matters that are expressly defined [in s 43(2)] as not being work capacity decisions”.
It was further argued in reply that the denial of liability made in the s 74 notice was “not expressed as being based upon a decision about any of the matters set out in (a)–(e) of s 43” and thus the decision did not fall within the terms of s 43(1)(f).
The final argument advanced was that the s 74 notice was founded upon a decision concerning the worker’s medical condition, that is, that it had resolved. That decision is not, given the terms of s 43(2)(b), a work capacity decision.
The Senior Arbitrator’s Decision
It was noted by the Senior Arbitrator that it was common ground that Ms Sabanayagam had received weekly compensation for more than 130 weeks and that her claim was to be determined in accordance with s 38. It was stated (at [47]) of Reasons:
“The words of the section are clear and prescriptive. The entitlement ‘ceases… unless’ the further requirements of the section fulfilled [sic, are fulfilled].”
It was recorded (at [52]) of Reasons that Ms Sabanayagam’s case was “that the decision dated 24 September 2014… is the operative work capacity decision”.
Following a consideration of the decision in Lee, the Senior Arbitrator rejected Ms Sabanayagam’s argument that the present matter may be distinguished “because [in Lee] a work capacity decision had not been made”. That argument, it was determined by the Senior Arbitrator, did not “take account of the clear words of s 38 or of all of the words used in s 43(3)”. The Senior Arbitrator reached the following conclusion (at [58] of Reasons):
“In this case there is a dispute about a work capacity decision in that Ms Sabanayagam argues that the insurer’s decision [made on 24 September 2014] is binding and the Respondent says that it is not. Section 43(3) makes clear that the Commission does not have jurisdiction in that dispute.” (emphasis in original)
The argument advanced by Ms Sabanayagam founded upon the decision in Rawson had, it was found by the Senior Arbitrator, relied upon words found at [67] of that decision that had been taken out of context. That argument was rejected.
The Senior Arbitrator seems to have adopted (at [65] of Reasons) a conclusion reached by the President in Lee that “… it is clear from the unambiguous terms of s 38 that an entitlement to compensation under that section must be assessed by the insurer, not by the Commission”.
An observation was made by the Senior Arbitrator (at [66] of Reasons) that it would be “… inappropriate that the legislation could require the Commission to give effect to the decision of an insurer without bringing independent consideration to bear on the evidence and questions before it”.
The Senior Arbitrator declined to follow the decision in Urquhart. Her reasons for so concluding appear between [69] and [72] of her Reasons.
The Senior Arbitrator’s ultimate conclusion and decision appears at [73] of her Reasons:
“As the Commission has no jurisdiction after the end of the second entitlement period defined in s 32A of the 1987 Act, I decline to make any order.”
SUBMISSIONS, DISCUSSION AND FINDINGS
Ground three
As earlier indicated, it is intended to address the third ground which concerns the question as to whether the Senior Arbitrator erred in finding that the s 74 notice of 20 March 2015 (and the decisions made on 26 March 2015 and 9 April 2015) were work capacity decisions. That question was addressed by the Arbitrator following her finding that the Commission had “no jurisdiction after the second entitlement period” (at [67]) and she expressed the view that it was unnecessary to determine whether the s 74 notice and/or reviews were work capacity decisions. Notwithstanding that circumstance, the Senior Arbitrator stated that she believed that they were work capacity decisions.
Written submissions presented on behalf of Ms Sabanayagam challenge the Senior Arbitrator’s finding that the s 74 notice and subsequent reviews were work capacity decisions “because the effect of the notices was to reduce the weekly payments to nil”. It is argued that her conclusion was reached without regard to the “words of the legislation”.
Attention is drawn to the terms of s 43(1) and it is argued that “a work capacity decision is only a decision about the matters described in [paragraphs (a) to (e) of that subsection] or a decision on the basis of one of those decisions”. In the course of argument at the hearing of the appeal, Mr McManamey argued that the s 74 notice constituted a decision to dispute liability for weekly payments and, also, was one that could be the subject of a dispute under Pt 7 of Ch 7 of the 1998 Act. It follows, it was argued, that having regard to the provisions of s 43(2)(a) and (b) (noted at [9] above) the decisions embodied within the s 74 notice and reviews were not work capacity decisions.
It is important to note that the respondent, in written submissions presented by Mr Morgan of counsel who appeared for the respondent before the Senior Arbitrator, argues that it is clear that the Senior Arbitrator’s expression of belief that the s 74 notice and reviews were work capacity decisions was made after “her earlier and decisive finding that the Commission has no jurisdiction after the second entitlement period”. In such circumstances, it is argued, the finding as to the nature of the notice and reviews was non-determinative, and had not relevantly affected the Senior Arbitrator’s decision in terms of s 352(5), and thus did not require correction.
The respondent’s submission assumes the correctness of the finding as to jurisdiction. I had, at the hearing (at T7), indicated my view that the question as to whether there had been a work capacity decision made by the insurer in 2015 was the fundamental question. That is so having regard to the existence of the September 2014 work capacity decision which gave rise to Ms Sabanayagam’s entitlement to weekly compensation, and her argument that it remains extant and, subject to resolution of the medical dispute in her favour, would entitle her to an award of weekly compensation.
In the circumstances, I have concluded that the correctness or otherwise of the Arbitrator’s finding which is the subject of this ground, should be determined on this appeal.
The respondent relies upon the “substance of the notices to determine what the decision truly was…”. It is acknowledged that “not all decisions relating to the payment of weekly compensation are necessarily work capacity decisions”.
The respondent points to s 43(1)(a) and (f) and argues that “…the combined effect of paragraphs (a) and (f) is such that the insurer’s decisions of 20 March 2015, 26 March 2015 and 9 April 2015, suspended weekly payments on the basis of the fitness (i.e. capacity) of [Ms Sabanayagam] and constituted a work capacity decision which revoked the former work capacity decision of 24 September 2014”.
In submissions at the hearing of the appeal, Mr Tanner, who then appeared for the respondent, sought to extend the argument put by Mr Morgan’s written submissions as follows (at T27):
“In my submission, there is an argument that there is the traditional dimension of a section 74 notice in purporting to dispute liability, but a preceding decision which may well engage the provisions of section 43 …”.
Counsel proceeded to address the content of the s 74 notice issued in March 2015 and argued that the respondent’s acknowledgement of its obligation to act on evidence to hand necessarily “involves making a decision with regard to the evidence” (at T28). It was put that “beyond that [decision as to capacity was] the legal decision on the consequences which is ‘decline liability’”.
Following an examination by Mr Tanner of the content of the notice, it was submitted that:
“… on a reading [of the notice] … it is arguable that although its ultimate effect is to decline liability, the declining of liability comes pursuant to a decision which is explained on the evidence and refers explicitly to [Ms Sabanayagam’s] capacity and to her ability to return to her pre-injury duties” (at T32).
The respondent’s argument was developed by reference to s 43(1)(a) and (f). Counsel acknowledged that the term “current work capacity” which appears in s 43(1)(a) is a term defined in s 32A (noted at [7] above). Counsel proceeded to argue that:
“The decision is not that the worker has current work capacity, but that the worker has capacity to return to duties. It necessarily is about a worker’s current work capacity because that has to be considered as a function of the decision to make the determination [sic] which the insurer did that the worker is fit for pre-injury duties.”
As later put by counsel, if s 43(1)(a) was construed as argued on behalf of Ms Sabanayagam, “an insurer would never be able to make a work capacity decision to terminate benefits” (T33).
Counsel fairly conceded that, having regard to s 43(2), the decision to dispute liability for weekly payments of compensation “is not a work capacity decision” (at T35).
A concluding submission was put that, should the respondent’s arguments be accepted and a finding on appeal is made that the Arbitrator had not erred in finding that a relevant work capacity decision had been made, “… there is no jurisdiction [in the Commission] to consider any entitlement to continuing weekly compensation. [Ms Sabanayagam] would have to go elsewhere for that purpose” (at T37).
In reply, Mr McManamey submitted that the substance of the s 74 notice demonstrates that the “… statement of the matter in dispute is ‘you are fit for pre-injury duties with [the respondent]’” (at T40–41). Section 319 of the 1998 Act provides that a medical dispute includes a dispute about a worker’s fitness for employment. Section 43(2)(b) excludes a decision that can be the subject of a medical dispute under Pt 7 Ch 7 of the 1998 Act from being a work capacity decision. The substance of the decision is concerned with “fitness, the medical condition which is expressly excluded from being a work capacity decision” (at T41).
Counsel proceeded to address the manner in which the scheme for determination of entitlement should, on a proper construction of the legislation, operate. The thrust of the argument was that disputes requiring careful examination of evidence should continue to be determined by the Commission where representation is available and the benefit of referral to a medical specialist may occur. The “nuts and bolts” of determining quantum of a worker’s entitlement for weekly benefits is to be determined by the insurer. The legislation should be construed so as not to deprive the worker of a remedy.
Both counsel briefly made submissions concerning the relevance to the present matter of the decision of the Court of Appeal in Inghams Enterprises Pty Ltd v Sok [2014] NSWCA 217; 87 NSWLR 198; 13 DDCR 139 (Sok). Where relevant those matters are addressed below.
Consideration
The respondent accepts that the s 74 notice and reviews, which constitute decisions to dispute liability, may not be found to be a work capacity decision: s 43(2)(a). In my opinion that concession was properly made.
I accept Mr McManamey’s submission that that notice and the reviews address Ms Sabanayagam’s fitness for employment, a matter which “can be the subject of a medical dispute”: s 319, in which “medical dispute” is defined (at s 319(b)).
It follows that the notice and reviews may themselves not be taken to be relevant work capacity decisions. Should the Senior Arbitrator’s expression of belief, expressed at [67] of her Reasons, be taken as a finding on the evidence, such finding was made in error.
Given the argument put by Mr Tanner (and by Mr Morgan, as noted at [25(g)] above) which I have attempted to summarise (between [43] and [51] above), it remains to be determined whether, having regard to all the circumstances, it may be inferred that a work capacity decision had been made before service of the s 74 notice.
It is clear that the material referred to in the notice had been considered by the insurer and that a decision had been made to discontinue weekly payments to Ms Sabanayagam. Such a decision is contemplated by the terms of s 43(1)(f). If it be that such decision was made “on the basis of any decision referred to in paragraphs (a)–(e)”, the decision is one which falls within s 43 and is a work capacity decision.
It is Ms Sabanayagam’s case that a decision to discontinue payments cannot, as is argued on behalf of the respondent, be a decision described in s 43(1)(a). That is so, it is put, given that the term “current work capacity” is defined in s 32A and such definition does not include a decision to discontinue weekly payments.
Whilst Ms Sabanayagam’s argument had, at first, considerable appeal, I have reached the view that it should be rejected. I reach this conclusion given that a decision “about a worker’s current work capacity” should be taken to include a decision as to the existence, or otherwise, of such current work capacity as defined. This is plainly so given that the statute, in s 43(1)(f) addresses decisions “to suspend, discontinue or reduce the amount of weekly compensation”. Reading subclauses (a) and (f) of s 43(1) together has the consequence, on the present facts, that the decision to discontinue payments, as earlier found, is a work capacity decision within the meaning of the Act. The Commission may not make a decision that is inconsistent with that work capacity decision.
The circumstances of the present matter may be distinguished from those relevant to the decision in Urquhart where the only work capacity decision made by the insurer was one which determined the worker had no current work capacity. The relief granted in Urquhart was not inconsistent with the relevant work capacity decision.
Given my finding that a work capacity decision had been made by the insurer in March 2015, it follows that the force and effect of the earlier 2014 decision had come to an end. In those circumstances the fundamental basis of Ms Sabanayagam’s argument that an award consistent with that earlier work capacity decision may be made by the Commission once the medical dispute had been determined by the Commission is negated and her argument must fail. It is unnecessary to determine, on this appeal, the question as to what, if any, jurisdiction the Commission may have to grant such relief, if the facts were otherwise. This ground fails.
Ground one
In Mr McManamey’s written submissions (at [21]) it is correctly noted that “the Arbitrator found that there was no jurisdiction to make an order because the entitlement fell to be determined by the application of s 38 of the 1987 Act”. Reference is then made in submissions to the decision of Lee, in which the President concluded (at [57]):
“It is clear from the unambiguous terms of s 38 that an entitlement to compensation under that section must be assessed by the insurer, not by the Commission.”
It was that passage, and others, that were relied upon by the Senior Arbitrator in reaching her conclusion as to an absence of jurisdiction.
It is argued that, in Lee, the President “did not say or find [that] the Commission did not have jurisdiction”. It was further put that in Lee there had been a finding “that there had not been an assessment by an insurer and such an assessment was necessary before there is an entitlement under s 38”.
That last submission was followed by an assertion that the decision in Lee may be distinguished from the present matter upon the facts (at [24] of submissions).
It is further bluntly asserted that “if the conclusion in Lee is to the effect that the Commission never has jurisdiction to determine a s 38 entitlement then that conclusion is wrong” (at [25] of submissions). It is further argued that “the only specific exclusion of jurisdiction is for [sic] a work capacity decision”. It is clear that the reference there is to the exclusions found in ss 43(3) and 44BB(5).
It is convenient to deal with those arguments summarised thus far. Ms Sabanayagam is incorrect in asserting that in Lee there was no finding that the Commission “did not have jurisdiction” as to s 38 entitlement. As was made clear in Lee, the provisions of s 38 had the effect that, at the expiry of the second entitlement period, a worker’s entitlement to weekly compensation ceases unless entitlement is determined by the insurer in accordance with that section. The Arbitrator in Lee had been found to have erred “by concluding that Mrs Lee had no ongoing entitlement to weekly compensation in the absence of a [work capacity assessment]” (at [59]). It was found that the Arbitrator should have declined to make an order in respect of the subject period. At [61] of the decision in Lee, it was expressly stated that there was an “absence of jurisdiction to determine the worker’s entitlement under s 38…”.
I respectfully agree with the reasoning and conclusion reached on the facts in Lee and I reject the submission that, in its conclusion as to absence of jurisdiction, the Commission was in error. I further find that there is no relevant distinction to be drawn between this matter and the facts in Lee.
Ms Sabanayagam’s written submissions proceed to examine those provisions of the 1987 Act that had relevance to jurisdiction of the Commission (ss 43(3) and 44BB(5), which concern work capacity decisions, as are addressed by the terms of s 38). Attention is drawn to s 38(2) and the following is put (at [29]–[31] of submissions):
“Subsection (2) expressly provides that a decision about liability is not a work capacity decision. Similarly by reference to Part 7 of Chapter 7 it is not a decision about a workers [sic] condition or fitness for employment.
It follows that any decision by an insurer about the matters excluded by subsection (2) is not a work capacity decision and is subject to the jurisdiction of the Commission.
Accordingly if an insurer made an assessment as required by section 38 but refused compensation because it formed the view that although the worker has no work capacity the condition is unrelated to injury that matter is subject to the jurisdiction of the Commission. To find otherwise would be to conclude that although the worker has an entitlement to compensation there is no means by which that entitlement can be enforced. As the decision is not a work capacity decision the review mechanism in section 44 is not available.”
Reliance is placed upon the decision of the Court of Appeal in Sok, in which matter no work capacity decision had been made, where the Court of Appeal (Basten JA, Barrett JA and Sackville AJA agreeing) determined that there was no jurisdictional impediment to the Commission determining any matter which may be the subject of a work capacity decision (see [52]–[58] of Sok) (emphasis added).
The fundamental proposition appearing in this section of Ms Sabanayagam’s submissions is found at [33] and [34] where it is put:
“Once the assessment had been made the Commission has jurisdiction to determine any other matter that is relevant to the determination of an entitlement.
In this instance the dispute is about whether the appellant has recovered from her injury. Once the Commission has determined that the appellant has not recovered from her injury it applies the assessment made on 29 September 2014 to make an award of compensation.”
Ms Sabanayagam’s submissions proceed to make reference to the decision in Rawson with particular attention given to paragraphs [67] and [68] therein. It was there made clear by the Deputy President that s 105 of the 1998 Act “does not overcome the clear restriction on the Commission’s jurisdiction in s 43(3)”.
Ms Sabanayagam seeks to distinguish Rawson upon the basis that the favourable work capacity decision of 2014, on her case, remains extant and that the Commission was “bound to apply [that decision]”.
Dealing with the arguments summarised above, it must be remembered that Ms Sabanayagam’s argument that there had been no relevant work capacity decision made in March 2015 has been rejected on this appeal. In the circumstances, as earlier noted, the 2014 work capacity decision ceased to have effect once the 2015 decision was made. In that circumstance Ms Sabanayagam can seek no comfort from that which may be found in the Court’s decision in Sok, in which case there had been no relevant work capacity decision made to which s 43(3) had application.
It is correct, as submitted by Ms Sabanayagam, that she disputes the insurer’s assertion found in the s 74 notice concerning her “recovery” from the effects of injury. Ms Sabanayagam’s entitlement ceased at the expiration of the second entitlement period. As was decided in Rawson (at [71]):
“Thus, the clear terms of s 38 are that the entitlement to compensation after the second entitlement period is dependent upon the insurer’s work capacity decision. If the insurer has incorrectly determined that entitlement, by either wrongly calculating the amount of the compensation payable or, as in the present case, by determining that no weekly compensation is payable in a particular period, the worker has the right to seek a review in the circumstances outlined in s 44, or a judicial review in the Supreme Court.”
There is nothing in the Acts which would tend to support Ms Sabanayagam’s argument that, in some way, the role of the insurer as prescribed by s 38 is somehow limited to a simple question of quantification of monetary entitlement. The Act provides that the insurer determines entitlement. The question for the insurer is to determine whether Ms Sabanayagam has a right or claim to weekly benefits. In the case of disagreement between the insurer and Ms Sabanayagam on that question, the Act makes provision for review as prescribed in s 44BB or by judicial review by the Supreme Court (s 43(1)). The Commission has no power to rule on, or determine, any such dispute.
For the reasons stated, Ms Sabanayagam has failed to establish error on the part of the Senior Arbitrator in concluding as she did concerning an absence of jurisdiction. Ground one fails.
Ground two
This ground challenges the Arbitrator’s conclusion expressed at [58] of Reasons:
“In this case there is a dispute about a work capacity decision in that Ms Sabanayagam argues that the insurer’s decision is binding and the Respondent says that it is not. Section 43(3) makes clear that the Commission does not have jurisdiction in that dispute.” (emphasis in original)
The work capacity decision referred to by the Senior Arbitrator in [58] of Reasons was that made in September 2014. Ms Sabanayagam correctly submits that there was no dispute between the parties concerning the making of that decision. It is asserted in argument that the “role” of the Senior Arbitrator was to “apply the work capacity decision”.
I am of the opinion that in any dispute before the Commission, such as the present, concerning entitlement of a worker to weekly payments following the expiration of the first two entitlement periods, it is necessary that a threshold question be answered as to the existence or otherwise of a work capacity decision. Such question, that is whether such work capacity decision has been made, is, in my opinion, not one which is “about” a work capacity decision within the meaning of s 43(3). That the Commission is bound by such a decision, once made, is not in doubt: s 43(3).
If a work capacity decision has been made, the Commission may not make a decision that is inconsistent with that decision: s 43(3). But for the making by the insurer of the work capacity decision in March 2015, as found on this appeal, it may have been arguable, as put by Ms Sabanayagam, that the Commission had jurisdiction to determine the medical dispute and, if such was favourable to Ms Sabanayagam, proceed to award weekly compensation in accordance with the September 2014 work capacity decision. As earlier noted, it is unnecessary on this appeal to determine that last question.
The Arbitrator (at [58] of Reasons) spoke of a dispute concerning whether the September 2014 work capacity decision “is binding” and she considered that such dispute was “about” a work capacity decision and was thus outside the Commission’s jurisdiction. Adoption of that approach involved, having regard to the facts and argument raised by the parties, asking a wrong question and was made in error. Such error has, however, not relevantly affected the Arbitrator’s decision. Whilst the Senior Arbitrator’s finding requires amendment as noted below, argument raised under ground two does not successfully challenge the Arbitrator’s findings and orders. Ground two is not made out.
CONCLUSION
Each of the grounds relied upon by Ms Sabanayagam have been rejected and the appeal must fail.
Whilst a finding has been made on this appeal that a relevant work capacity decision was, by implication from the facts, made by the insurer in 2015, it is clear that the procedure laid down by the terms of the 1987 Act and as required by the content of the relevant WorkCover Guidelines (those concerning work capacity decisions, internal reviews by insurers and merit reviews by the Authority) have not been followed by the insurer. That failure is consistent with the apparently haphazard process of management of this claim which is revealed on the evidence.
Such failure by the insurer may be of relevance to the question of what remedy might be available to Ms Sabanayagam, such being a matter upon which she may elect to seek advice.
DECISION
The finding made by the Senior Arbitrator as found in [1] of the Certificate of Determination dated 17 August 2015 requires amendment by deleting the word “a” before the word “dispute” and substituting the word “the”, and by deleting the words appearing after the word “payments”. Such amended finding is as follows: “The Commission has no jurisdiction to determine the dispute as to weekly payments.”
The Senior Arbitrator’s refusal to make an order as recorded at [2] of the Certificate of Determination dated 17 August 2015 is confirmed.
Kevin O'Grady
Deputy President
21 January 2016
I, STEVEN HAMPSON, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF KEVIN O'GRADY, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
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