The Trustees of the Sisters of Nazareth v Simpson

[2015] NSWSC 1730

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:	The Trustees of the Sisters of Nazareth v Simpson [2015] NSWSC 1730
Hearing dates:	4 November 2015
Date of orders:	23 November 2015
Decision date:	23 November 2015
Jurisdiction:	Common Law
Before:	Davies J
Decision:	(1) An order in the nature of certiorari quashing the decision of the WorkCover Independent Review Officer made on 8 May 2015;  (2) An order in the nature of mandamus remitting the application to the Worker Compensation Independent Review Officer for determination in accordance with this judgment.
Catchwords:	ADMINISTRATIVE LAW – workers compensation – weekly payments – after second entitlement period - work capacity decision by insurer – procedural review by Independent Reviewer – judicial review of procedural review – whether reasons of insurer capable of procedural review – whether insurer had failed to follow Workers Compensation Guidelines – whether breaches of Guidelines result in the setting aside of work capacity decision – errors of law by reviewer – legally unreasonable conclusion – reviewer’s decision quashed
Legislation Cited:	Workers Compensation Act 1987 (NSW)
Cases Cited:	Minister for Immigration and Multicultural Affairs v SGLB [2004] HCA 32 Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 Re Minister for Immigration and Multicultural Affairs; Exp applicant S20/2002 [2003] HCA 30; (2003) 77 ALJR 1165
Texts Cited:	Aronson & Groves, Judicial Review of Administrative Action (5th ed., (2013) Thomson Reuters)
Category:	Procedural and other rulings
Parties:	The Trustees of the Sisters of Nazareth (Plaintiff) Lucy Simpson (First Defendant) WorkCover Independent Review Officer (Second Defendant) WorkCover Authority of NSW (Third Defendant)
Representation:	Counsel: C Jackson (Plaintiff) Submitting appearances (Defendants)   Solicitors: Astridge & Murray (Plaintiff) RJ O’Halloran & Co Solicitors (First Defendant) WorkCover Independent Review Office (Second Defendant) Safety, Return to Work and Support – Legal Services (Third Defendant)
File Number(s):	2015/228957

Judgment

1. The Plaintiff seeks to quash a procedural review by a WorkCover Independent Review Officer conducted under s 44(1)(c) of the Workers Compensation Act 1987 (NSW).

Factual background

2. The injured worker (the First Defendant) was a Carer and Assistant in Nursing at Nazareth House, a nursing home. She sustained injuries to her right shoulder in the course of her employment on 14 May 2007 when she attempted to stop a patient from falling. Catholic Church Insurance, the insurer of the Plaintiff, was notified of the claim on 21 July 2007.

3. It is not necessary to set out the course of treatment and the worker’s incapacity during the following years. It is sufficient to note that the injured worker ceased work in February 2010. Subsequently she was assessed as suitable for certain duties but she was again assessed as unfit for work at the end of August 2011.

4. On 15 December 2014 the insurer made a work capacity decision pursuant to s 38 of the Act. The insurer advised the worker that following a review it had been determined that she was currently capable of working 20 hours per week in suitable employment and earning up to $459.20 per week. It noted that she was currently in receipt of weekly payments of compensation at the rate of $780.40 and that as a result of the work capacity decision the worker would have no further entitlement to weekly compensation. It notified her that the reduction to the worker’s weekly payments would take effect from 22 March 2015.

5. In the reasons for its decision the insurer noted that the worker had been paid more than 130 weeks of weekly benefits throughout the life of her claim, she had the capacity to work up to 20 hours per week in light employment, she was not currently employed for 15 or more hours earning more than $173 per week, her treating doctor had issued certificates of capacity indicating that she was capable of working for four hours per day five days per week with particular restrictions and that surveillance material indicated that she was freely able to use her right arm to conduct day to day activities.

6. The worker applied for a merits review of the decision by WorkCover pursuant to s 44(1)(b) of the Act. The delegate of WorkCover found that the worker had a present inability arising from the injury such that she was not able to return to her pre-injury employment but she was able to return to work in suitable employment as a receptionist. In order to be entitled to weekly payments of compensation the worker had to meet all three of the requirements contained in s 38(3) of the Act. The worker was not currently working and did not satisfy the requirement in s 38(3)(b) to have returned to work for a period of not less than 15 hours per week and in receipt of a current weekly earnings of at least $173 per week. Accordingly, the delegate of WorkCover found that the worker was not entitled to weekly payments of compensation after the second entitlement period.

7. The worker then applied for a procedural review of the work capacity decision under s 44(1)(c) of the Act. In her grounds for seeking a review the worker said this:

From the time I have been on worker comp. I have been treat like a third class person. I have been unpaid (which is sorted out) most cases no payslips either, wagers not on time, having to ring them and ask is my wagers going into my account, letters not sent to me emails and phone calls not returned to me and I could go on and on but. And not to mention all the case managers I have 8 or 9 I think. Being told I have to find a job which I have been looking for constantly. They do not take in consideration of my injury and the chronic pain, depression, anxiety and stress and where I live (there was one job that 600 people applied for) which I sent a copy to WorkCover. Being told I am not to have copies of letters and other items. (spelling and punctuation as recorded)

The Independent Review Officer’s review

8. The delegate of the Independent Review Officer noted in paragraph 7 of her report that the worker’s submissions were reviewed and were limited to the way in which the insurer had managed the claim and the worker’s inability to obtain employment. The delegate said that the submissions were not relevant to procedural review. The delegate noted that the insurer did not make submissions in response to the application.

9. The critical parts of the review are these:

13.   The insurer then deemed the applicant capable of earning $459.20 for 20 hours work per week. The insurer has failed to explain to the worker how that figure was calculated. The applicant is entitled to know the hourly rate upon which the figure is calculated and which of the employment options has been used to base the decision upon. The insurer has failed to comply with the Guideline.

14.   Guideline 5.3.2 requires the insurer to state the impact of the decision on the worker in terms of her entitlement to weekly payments, entitlement to medical and related treatment expenses and return to work obligations.

15. In this decision the insurer has reproduced Section 59A of the 1987 Act. The insurer has informed the applicant that "your entitlement to compensation in respect of medical or related expenses will continue in accordance with our previous liability notice for a further 12 months to 22/03/16 as per Section 59A of the Act, given that you have no further entitlement to weekly benefits from 22/03/15. For more information please refer to Section 59 and 60 of the Act." Interestingly, and perhaps ironically a hyperlink is then imbedded in the written document.

16. Given the present uncertainty that surrounds this Section 59A of the 1987 Act as evidenced by conflicting views from the Workers Compensation Commission it is unlikely the insurer could do any more in explaining Section 59A(2) the present case.

17. However, the insurer has merely reproduced Section 59A(3) without making an attempt to explain to the applicant that she may again become entitled to payment of medical and treatment expenses should she again become entitled to weekly payments. The insurer has failed to properly explain the legislation and has failed to comply with the Guidelines.

18.   This non-compliance with the legislation and Guidelines referred to in

the preceding paragraphs is sufficient to set aside the work capacity decision dated 15 December 2014.

10. The Guidelines are made pursuant to ss 44(1)(a) and 376(1)(c) of the Act and thereby have the status of delegated legislation.

11. Thereafter the delegate made these recommendations:

20.   The work capacity decision of the Insurer dated 15 December 2014 is

set aside.

21.   The applicant is to be reinstated to her weekly payments at the rate applicable prior to 22 March 2015.

22.   The payments are to be back-dated to 22 March 2015.

23.   Such payments are to continue until such time as a further work capacity decision is made and comes into effect.

12. The effect of those recommendations was to set aside the merit review made by WorkCover.

The appeal

13. The Plaintiff sought review in this Court of that determination of the Independent Reviewer on three grounds. However, ground 2 in the Summons was abandoned. The remaining grounds are these:

Ground 1

1. The second and/or third defendant asked the wrong question, exceeded their powers, and misunderstood the statutory function they had to perform when they embarked upon a review of the reasons given for the "work capacity" decision made by the insurer pursuant to section 44A of the Workers Compensation Act 1987 (NSW) ("the Act"), and found that the decision was ineffective because of purported faults in the reasons.

Particulars

1.1 Section 44(1)(c) of the Act is directed at review of the procedure followed in carrying out the work capacity assessment, and does not permit review of the reasons themselves.

…

Ground three

3. In the alternative, the second and/or third defendant asked the wrong question, misunderstood the nature of the statutory task, or reached a conclusion which was legally unreasonable when they held that the work capacity decision had failed to follow clause 5.3.2 of the Workcover Work Capacity Guidelines (4 October 2013), and should thus be inoperable because;

(i) the second and/or third defendant considered that the insurer had not adequately explained how the figure which the worker could earn in suitable employment had been calculated, where the amount the worker could earn in suitable employment could not affect the result of the work capacity assessment, AND

(ii) the insurer had "merely reproduced section 59(A)(3) without making an attempt to explain to the applicant that she may again become entitled to payment of medical and treatment expenses should she again become entitled to weekly payments".

Particulars

3.1 The Guidelines did not require the insurer to elaborate on peripheral observations which were not material to the result nor did they require the insurer to attempt to spell out the implications of every aspect of the Act with respect to weekly payments, or give legal advice about every possible right which the worker might have in the future with respect to such payments.

3.2   In the alternative, if the insurer's reasons did depart from the Guidelines in the ways found by the second and/or third defendant, the departures were not of a type to effect the correctness of the insurer's decision, or to permit review by the second and/or third defendant.

The legislation

14. The payment of weekly compensation representing loss of income is dealt with in Division 2 of Part 3 of the Act. Section 33 provides that if total or partial incapacity for work results from an injury the compensation payable by the employer under the Act to the injured worker will include a weekly payment during the incapacity. Sections 34 and 35 deal with the amount of the payment. There are then stipulated to be two periods during which payment may be made, called the first entitlement period and the second entitlement period. These terms are defined in s 32A. The first entitlement period means an aggregate period not exceeding 13 weeks, whether or not consecutive, in respect of which a weekly payment has been paid or is payable to the worker. The second entitlement period is defined in the same way but refers to an aggregate period of 117 weeks after the expiry of the first entitlement period.

15. Section 36 sets out the formulae for the calculation of the weekly payment of compensation in the first entitlement period for workers who have no current work capacity and those who have a current work capacity. Section 37 provides the formulae in respect of the second entitlement period. The expression “current work capacity” (defined in s 32A) 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.

16. Section 38 then relevantly 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 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.

…

It should be noted that the figure of $155 in (b) is indexed and at the relevant time the figure was $173.

17. Section 43 provides for the making of what are called work capacity decisions by insurers. Those decisions are enumerated in s 43(1) and are said to be final and binding on the parties and not subject to appeal or review except review under s 44 or judicial review by the Supreme Court.

18. Section 44 relevantly provides:

44 Review of work capacity decisions

(1) An injured worker may refer a work capacity decision of an insurer for review:

(a) by the insurer (an internal review) 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.

(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.

…

19. It can be seen that under s 44(1) three reviews are available to the injured worker. There is first an internal review conducted by the insurer. There is then a merit review by the Authority which at the relevant time was the WorkCover Authority of New South Wales. That merit review could not take place until there had been an internal review by the insurer except where under s 44(3)(b) the insurer has failed to conduct such a review and notify the worker within 30 days after the application for such review is made. That was in fact the position in the present case.

20. Finally there is a review by the Independent Review Officer. There are two restrictions to this review. The first is that such a review cannot take place until there has been both an internal review by the insurer and a merit review by the Authority. There is no equivalent to subs(3)(b) in respect of a review under s 44(3)(c) (ie, a provision removing the need for an internal review) but all involved in this present matter acted on the basis that, although there was no internal review, a procedural review by the Independent Review Officer was permitted, despite the restriction in s 44(1)(c). Secondly, it is:

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.

21. Sub-section (3) enabled the making of recommendations by either the Authority or the Independent Review Officer. The recommendations made by the Authority are binding on the insurer and recommendations made by the Independent Review Officer are binding on the insurer and the Authority.

22. It should first be remarked that the Scheme for review provided for in s 44 is unusual. After a work capacity decision referred to in s 43 is made the worker, if dissatisfied, may only refer the decision for an internal review by the insurer under s 44(1)(a). If still dissatisfied the worker may seek a merit review by the Authority.

23. It is only after a merit review by the Authority that the worker may refer a work capacity decision for review to the Independent Review Officer under s 44(1)(c) and that is “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”.

21. This has the odd result that although there has been a merit review by the Authority, the Independent Review Officer, who finds some defect in the insurer’s procedures, can make a recommendation which has the effect of overturning the merit review by the Authority although there was no error in that review.

22. Further, one might reasonably expect that a review of the insurer’s procedures would take place before there was a merit review by the Authority of the insurer’s decision, and not afterwards, so that the insurer could correct its procedures and make a valid work capacity decision before there was a need for a merit review. An alternative possibility is that the legislation never intended that the procedural review could result in the setting aside of the insurer’s decision, particularly because it would either have been set aside or approved in the merit review. Rather, the Independent Reviewer was simply to make recommendations that must be followed in the future by both the insurer and, if relevant, the Authority. It is instructive in that regard to note that the reviewer is to make recommendations. There is nothing to suggest that the reviewer is to set aside or overturn or modify the insurer’s decision.

23. The precise reason for the scheme of review in s 44(1) is not apparent. No assistance is provided in the explanatory memorandum to the 2012 Bill nor in the Second Reading Speeches which do not refer to the review provisions in any event.

24. What the present proceedings raise for decision is the precise scope of the review under s 44(1)(c) and, in particular, whether the “insurer’s procedures” include the reasons given by the insurer for the work capacity decision.

Submissions

Ground 1

28. The Plaintiff submitted that the words of s 44(1)(c) of the Act suggest that the review is confined to procedures followed which are preparatory to the making of the decision and not the reasons expressed for the decision, because the words of the section expressly preclude review of any judgment made or discretion exercised. That is reinforced by the fact that the procedural review occurs after the merit review. The procedural review is not concerned with the decision at all or the reasons expressed for the decision because any deficiency of that kind has already been the subject of the merit review.

Ground 3

29. The Plaintiff submitted that either no deficiencies were identified or the deficiencies were not sufficiently material to justify setting the decision aside. The Plaintiff submitted that there was no breach of the Guidelines.

30. The Plaintiff submitted that s 59A of the Act was set out and that the impact of the decision itself was explained succinctly within the decision. It was not necessary to explain the impact of a decision which could be made in the future as that was outside the scope of the requirement.

31. The Plaintiff submitted that the manner in which the requirement is expressed indicates that it is those steps which are material or essential to the making of the decision which must be clearly explained. Section 38 suggests that the necessary and essential steps are the matters identified in s 38(3) and these were set out in the decision.

32. The Plaintiff submitted that the amount the worker could have earned in suitable employment was not material to the decision, it need not have been calculated, and did not require any further elaboration in order for the worker to understand why the worker was not entitled to ongoing weekly payments.

33. Unfortunately, all of the Defendants including the injured worker filed Submitting Appearances. Accordingly, there was no contradictor in respect of the submissions made by the Plaintiff. This was especially unfortunate because this appears to be the first time that the provisions governing a review such as that made by the Independent Reviewer have been reviewed in this Court.

Consideration

Ground 1

34. Some guidance as to what are regarded as the insurer’s procedures appear in the Work Capacity Guidelines that relevantly came into effect on 11 October 2013. The following guidelines might be thought to deal with the procedures in making work capacity decisions:

2.3.   Soundly based decisions

All decisions made in relation to the worker's recovery and work capacity should be timely, informed and evidence based. Decisions should be made and communicated in a transparent and robust manner free from preference and prejudice ensuring that effective outcomes are achieved and due process is followed.

The insurer must use a sound decision-making model that includes appropriate controls and review processes aligned with the General Insurance Code of Practice incorporating a quality assurance and continuous improvement framework.

When making internal review decisions and notifying workers of those decisions, any requirements established by the 1987 Act and the Review Guidelines must also be satisfied.

…

A work capacity assessment considers all available information which may include, but is not limited to:

•   reports from the treating doctor, treating specialist or other allied health professionals

•   WorkCover NSW Certificate of Capacity

•   independent medical reports

•   injury management consultant reports

•   the worker's self report of their abilities and any other information from the worker

•   the injury management plan

•   reports from a workplace rehabilitation provider such as workplace assessment reports, return to work plans, functional capacity evaluation reports, vocational assessment report, work trial documents, job seeking logs, activities of daily living assessments, etc

•   information from the employer such as documents relating to return to work planning

•   information obtained and documented on the insurer's claim file.

…

5.1   Making a work capacity decision

…

When making a work capacity decision the insurer's approach should:

•   ensure that all reasonable opportunities to establish capacity for work have been provided to the worker

•   ensure that the insurer meets their responsibility of establishing and supporting an injury management plan tailored to the worker's injury as set out in Chapter 3 of the 1998 Act

•   evaluate all available and relevant material and relevant considerations

•   have regard to the particular facts and circumstances of the worker

•   follow a robust and transparent decision-making process with clear, concise and understandable information provided to the worker giving reasons for decisions

•   seek any additional information that is required to ensure the worker's current capacity for work is fully understood

•   provide opportunity for the worker to contribute additional information, especially if the decision may result in reduction or discontinuation of the worker's weekly payments

•   ensure decision makers have the appropriate expertise, ability, and support to make the decision they are making.

…

5.2. Fair notice provisions

Before making a work capacity decision that may result in a reduction or discontinuation of the worker's weekly payments the insurer must, at least two weeks prior to the work capacity decision, communicate this to the worker in a way that is appropriate in the circumstances of the case, and preferably by telephone or in person. This must be done to:

•   inform the worker that a review of their current work capacity is being undertaken and that a work capacity decision is going to be made

•   explain that this review may include further discussions with other parties such as their employer, nominated treating doctor or other treatment providers

•   advise the potential outcome of this review and detail the information that has led the insurer to their current position

•   provide an opportunity for the worker to supply any further information to the insurer for further consideration and the date that this information is to be provided by

•   tell the worker when this decision is expected to be made.

This information should also then be confirmed in writing to the worker. The written confirmation should be sent by post or served personally. If the worker has provided information to facilitate electronic communication, the information may also be sent to the worker by electronic means in addition to sending the information by post.

…

5.3. Notifying a worker of the outcome of a work capacity decision

The insurer must notify the worker in writing of a work capacity decision.

Upon making a work capacity decision that will result in a reduction or discontinuation of the worker's weekly payments the insurer will, where possible, communicate this to the worker by telephone or in person, to:

•   inform the worker that a work capacity decision has been made

•   explain the outcome and consequences of this decision and the information that has led the insurer to their current position

•   explain the internal review process and that a review application will be sent with a formal notice

•   confirm that the decision will be conveyed in writing.

The insurer must then give notice in writing of the reduction or discontinuation of weekly payments in accordance with section 54 of the 1987 Act and any requirement of the Review Guidelines.

…

5.3.2. Requirements of written advice of a work capacity decision and its outcome

The written work capacity decision advice must comply with any requirements of the 1987 Act and Review Guidelines and:

•   reference the relevant legislation

•   explain the relevant entitlement periods

•   state the decision and give brief reasons for making the decision

•   outline the evidence considered in making the decision, noting the author, the date and any key information. All evidence considered should be referred to, regardless of whether or not it supports the decision.

•   clearly explain the line of reasoning for the decision

•   state the impact of the decision on the worker in terms of their entitlement to weekly payments, entitlement to medical and related treatment expenses and return to work obligations

•   advise of the relevant legislative notice requirements applicable to the decision

•   advise the date of the work capacity assessment

•   advise the date when the decision will take effect

•   detail any support, such as job seeking support, which will continue to be provided during the notice period

•   advise that any documents or information that have not already been provided to the worker can be provided to the worker on request to the insurer

•   advise of the process available for requesting review of the decision and how to access the required form, Work capacity - application for internal review by insurer (catalogue no. WC03304)

35. The position is perhaps summed up in a flow chart that is set out in the Guidelines as follows:

5.4 Flow chart - making a soundly based work capacity decision

1. Identify the need for a work capacity decision (see section 5.1).

2. Identify the type of work capacity decision that needs to be made.

3. In light of the particular circumstances of the claim, consider the relevant and available information. Is there enough information to make a logical, rational and reasonable work capacity decision? [If no, go to (4). If yes, go to (5)]

4. Obtain additional information via consultation or third party assessments.

5. Assess all available and relevant information as a whole.

6. Make a preliminary decision and determine the likely impact of this decision on the worker. Is the preliminary decision an adverse decision? That is, will the outcome of this decision result in a reduction or discontinuation of the worker’s weekly payments? [If yes, go to (7). If no, go to (8)]

7. Advise the worker of the preliminary decision and the likely impact of this decision. Provide opportunity for the worker to submit additional information for consideration.

Allow a minimum of 2 weeks after preliminary decision before making final work capacity decision

8. Make the work capacity decision based on all the information available, including any additional information that has been submitted by the worker.

9. Advise the worker of the decision and the impact of this decision. If this is an adverse decision, provide written advice of a work capacity decision and comply with the legislative notice requirements before reducing or discontinuing the worker’s weekly payments.

36. A narrow reading of the “insurer’s procedures” would result in the enquiry being only concerned with procedural fairness. I do not think that is what the legislation means. If that was the focus of the enquiry I should have expected that s 44(1)(c) would refer to procedural fairness. However, the procedures certainly include procedural fairness.

37. Other aspects of the procedures which ought to be followed are identified in the Guidelines reproduced above. Contrary to the Plaintiff’s submission, I do not think that the procedures are confined to matters which are preparatory to the making of the decision. The Guidelines suggest otherwise. For example, clause 5.3 requires notification to the worker of the outcome of a work capacity decision. A failure to notify would be a procedural failure which would necessarily post-date the decision.

38. Nor do I think that, simply because something is contained within the reasons that are given or ought to be given, it can be considered to be outside the insurer’s procedures. Under the Guidelines the insurer is obliged to provide reasons for its decision. Clause 5.3.2. of the Guidelines sets out the approach the insurer should take to its reasons. A failure to do so seems to me to be a failure in the procedures adopted.

39. Analogously, judicial review (which s 44 seems designed to minimise or eliminate as far as possible) enables the supervising court to quash a decision where no reasons or inadequate reasons are given. I accept that that analogy can only be carried so far because s 44(1)(c) expressly excludes from the review “any judgment or discretion exercised by the insurer in making the decision”. That may provide a limitation on an enquiry into the adequacy of reasons provided that reasons are provided. Such an approach would be consistent with the fact that a merit review must already have taken place. Any issue of inadequate reasons will either have been overcome by the reasons given by the Authority when it provides its review or will be dealt with by an application for judicial review as s 43(1) allows. In that way the process in s 44(1)(c) differs from judicial review where ordinarily there is no merit review at all.

40. I do not think a broad principle can be laid down in relation to whether the procedural review can examine in any way the reasons provided by the insurer for its decision. Rather, I consider that an examination must be made of the Independent Reviewer’s criticisms of what the insurer has done in any particular case to decide if that matters complained of form part of any judgment or discretion exercised. However, the procedural review is not only concerned with matters which pre-date the decision, and it cannot be said that it does not extend to the reasons.

41. Ground 1 fails.

Ground 3

42. The two matters identified by the Independent Reviewer which were said to be non-compliance with the Guidelines were (1) a failure to explain how the figure of $459.20 was derived and calculated, and (2) a failure to inform the worker that she may again become entitled to medical and treatment expenses if she became entitled again to weekly payments.

43. The relevant part of the insurer’s decision said this:

Your entitlement to weekly payments is determined by s 38 of the Act as you have received more than 130 weeks of weekly benefits.

Under s 38 of the Act, an injured worker who is assessed by the insurer as having current work capacity is only entitled to weekly compensation if:

a)   The worker has applied to the insurer in writing for continuation of weekly payments, and

b)   The worker has returned to work in some employment for a period of not less than 15 hours per week and is in receipt of current weekly earnings of at least $173 per week, and

c)   The worker is assessed by the insurer as being incapable of undertaking further additional employment that would increase the worker’s current weekly earnings.

Catholic Church Insurance (CCI) has determined that you are currently capable of working 20 hours per week in suitable employment and earning up to $459.20.

As you are not currently employed, you are not entitled to ongoing payments of weekly compensation under s 38 of the Act as you do not meet the special requirements set out in this section.

3   Reason(s) for the decision

…

You have the capacity to work up to 20 hours per week in light employment.

…

Your nominated treating doctor (Dr Clunas) has issued you certificates of capacity which indicate that you are capable for four hours per day five days per week with the restriction of no repetitive lifting, no lifting more than 2 kgs with your right arm and no lifting above your chest height.

In a functional capacity evaluation report dated 27/06/14 by Interact Injury Management, it has been assessed that you are capable of working in life employment for up to four hours per day three days per week with a graded return to work.

An earning capacity assessment dated 27/06/14 by Interact Injury Management indicates that you could work as either a:

Community support worker (aged care)

Retail sales assistant

Receptionist

Based on the above vocations which have been identified as suitable employment (as defined by s 32 of the Act), you are deemed to be capable of earning up to $459.20 (for 20 hours) per week.

44. It may be accepted that nowhere did the insurer explain how the figure of $459.20 was calculated. An examination of the report from Interact Injury Management does not identify how that figure was obtained.

45. What the insurer was required to assess was whether the worker had current work capacity as defined in s 32A (a present inability to return to her pre-injury employment but an ability to work in suitable employment) and in accordance with the requirements of s 38(3). The amount that the worker could earn in suitable employment was irrelevant to the determination of current work capacity. All that had to be ascertained was whether she was able to work in suitable employment. The insurer provided sufficient and adequate reasons for determining that she was able to work in suitable employment.

46. The reason the decision went against the worker was that she did not comply with s 38(3)(b), that is, the requirement that she had returned to work for a period of not less than 15 hours per week and be in receipt of current weekly earnings of at least $155 per week.

47. It was not necessary for the insurer to calculate or estimate what she could earn in suitable employment. There was no obligation on the insurer, therefore, to provide any basis for its calculation or to say how it had derived that figure. It was irrelevant to the matters which needed to be determined. I note in that regard that the merit review by the Authority, although coming to the same substantive decision and despite finding on not identical grounds that the worker was able to return to work in suitable employment, did not specify what she might have earned in such employment.

48. Since the amount the worker could earn in suitable employment was irrelevant to the determination of her current work capacity, there was no failure on the insurer’s part as asserted by the Independent Reviewer. Nothing in the Guidelines required it. By the reviewer’s regarding that matter as a failure by the insurer, the reviewer has made an error of law on the face of the record, and has taken into account an irrelevant consideration.

49. In relation to s 59A, the reviewer noted that the insurer had reproduced s 59A and then observed that given the present uncertainty surrounding s 59A “it is unlikely the insurer could do any more in explaining s 59A(2) in the present case”. However, the reviewer then went on to note that the insurer had merely reproduced sub-s (3) without any attempt to explain to the worker that she may again become entitled to payment of medical and treatment expenses should she again be entitled to weekly payments. In that way the insurer was said to have failed properly to explain the legislation and failed to comply with the Guidelines.

44. It is difficult to understand what the reviewer is suggesting the insurer has failed to do. Section 59A(3) provides:

If weekly payments of compensation become payable to a worker after compensation under this Division ceases to be payable to the worker, compensation under this Division is once again payable to the worker but only in respect of any treatment, service or assistance given or provided during a period in respect of which weekly payments are payable to the worker.

51. The insurer set that sub-section out along with the remainder of s 59A. The sub-section speaks for itself. It says that the worker will be entitled to compensation in respect of treatment, service or assistance if the worker becomes entitled to weekly payments of compensation at some future time. No further explanation was needed. The Guidelines do not require the insurer to explain the legislation. Rather, the Guidelines in cl 5.3.2 require the insurer to reference the relevant legislation. That was done.

52. Further, the reviewer does not identify what part of the Guidelines the insurer has not complied with in that regard. Clause 5.3.2 relevantly only requires the insurer to:

State the impact of the decision on the worker in terms of their entitlement to weekly payments, entitlement to medical and related treatment expenses and return to work obligations.

That was done. Nothing in the Guidelines suggested the need for any further explanation of what might happen if things altered.

53. In asserting that the insurer had failed in that regard the reviewer has made an error of law on the face of the record and has taken into account an irrelevant consideration.

54. Even if the reviewer had been correct in assessing that the insurer had failed to comply with the Guidelines in the reasons for its decision, an issue would arise about what effect such failure would have on the insurer’s decision, bearing in mind the merit review conducted by the Authority. Every failure to follow the Guidelines could not result in the setting aside of the insurer’s decision. Such a result would be legally unreasonable.

55. Procedural error which amounts to procedural unfairness will amount to an error of law and would ordinarily justify the setting aside of a decision. However, other procedural breaches may not have the same effect. Some light is cast on the result of a breach of a procedural requirement in administrative law by what appears in Aronson & Groves, Judicial Review of Administrative Action (5th ed., (2013) Thomson Reuters) at [6.240]:

It is in the nature of procedural rules that they are frequently broken. Procedure being the servant of substance, invalidity is the least common of the possible consequences of such breaches. Breach of procedure can usually be overlooked by all concerned, "waived" by those adversely affected, or rectified by the parties or the decision-maker, all without risk to the validity of the final outcome. Indeed, the very concept of procedural requirements implies that they are usually of lesser order of importance than substantive requirements, and one frequently sees the term qualified by the adjectival "mere".

56. In Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at [93] the joint judgment of McHugh, Gummow, Kirby and Hayne JJ criticised the former distinction made between directory and mandatory requirements to determine whether a breach would result in invalidity. They said a better test for determining the issue of invalidity is to ask whether it was a purpose of the legislation that an act done in breach of the provision should be invalid.

57. It is difficult to see how it could have been the purpose of the Workers Compensation Act and the Guidelines published under it that any breach of those Guidelines would necessarily result in the invalidity of the decision. That must be the more so where the present scheme in s 44 provides for a merit review before a procedural review. In one sense the reasons of the insurer, and failures to follow the Guidelines in that regard, have been superseded by the merit review which, for reasons that are far from clear, is not subject to the procedural review. It may be that it was thought inappropriate that anything other than a judicial review of the Authority’s merit review was appropriate.

58. Provided that the insurer has asked itself the correct questions when reaching its work capacity decision and provided that it has provided the reasons for its decision in a way that explains the matters set out in the Guidelines, it is difficult to see why an incidental failure should result in the invalidity of the decision.

59. Nothing in the legislation suggests that such should be the result. A conclusion that the decision should be set aside is irrational, illogical and is not supported here by findings or inferences supported by logical grounds: Re Minister for Immigration and Multicultural Affairs; Exp applicant S20/2002 [2003] HCA 30; (2003) 77 ALJR 1165 at [37] and [52]; Minister for Immigration and Multicultural Affairs v SGLB [2004] HCA 32 at [38].

60. In the present case I have held that there was no breach by the insurer of the matters identified by the Independent Reviewer. If I am wrong in that conclusion, I am entirely satisfied that the breaches were so incidental to the insurer’s task and obligations under the Act and Guidelines that the decision of the reviewer to make recommendations that resulted in the setting aside of the insurer’s decision was entirely unreasonable.

61. The only two matters identified by the Reviewer do not produce the result that the work capacity decision of the insurer should be set aside. Ordinarily that would mean that an order in the nature of certiorari would be sufficient. I was asked, however, to make an order in the nature of mandamus. If the worker had appeared at the hearing I would have sought submissions from the parties about whether mandamus was necessary in the circumstances. Out of fairness to the worker I will make an order in the nature of mandamus but the parties may wish to consider if any further procedural review would serve any purpose.

62. Since the review by the Independent Reviewer was prepared the description of the Independent Review Officer has been altered to Workers Compensation Independent Review Officer. That will explain what otherwise appears to be a discrepancy between the orders I will make.

Conclusion

63. I make the following orders:

1. 1.   An order in the nature of certiorari quashing the decision of the WorkCover Independent Review Officer made on 8 May 2015;

2. 2.   An order in the nature of mandamus remitting the application to the Workers Compensation Independent Review Officer for determination in accordance with this judgment.

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Decision last updated: 23 November 2015