Court of AppealSupreme Court

New South Wales

Case Name: Bhusal v Catholic Health Care Ltd

Medium Neutral Citation: [2018] NSWCA 56

Hearing Date(s): 7 March 2018

Decision Date: 26 March 2018

Before: Meagher JA; Simpson JA; Sackville AJA

Decision:

1.    Leave to appeal granted. 2.   Allow the appeal. 3.   Set aside the orders made by Button J on 23 June 2017. 4.   In lieu thereof make the following orders: (1)   Set aside the decision of the State Insurance Regulatory Authority made on 30 June 2016. (2)   Remit the applicant’s application for merit review of the insurer’s internal review decision to the State Insurance Regulatory Authority for determination according to law. (3)   The first defendant pay the plaintiff’s costs of the proceedings. 5.   The first respondent pay the appellant’s costs of the appeal.

Catchwords: ADMINISTRATIVE LAW – judicial review – review of workers compensation merit review by State Insurance Regulatory Authority – where worker’s attention not drawn to the critical issue on which the decision was likely to turn – whether worker denied procedural fairness

Legislation Cited:

Supreme Court Act 1970 (NSW), s 69State Insurance and Care Governance Act 2015 (NSW)Workplace Injury Management and Workers Compensation Act 1998 (NSW), ss 26, 376Workers Compensation Amendment Act 2015 (NSW)Workers Compensation Act 1987 (NSW), s 2A, 9, 43, 44, 44BB, 44BC, 44BF, Sch 6 Pt 19I

Cases Cited:

AZAAD v Minister for Immigration and Citizenship (2010) 189 FCR 494; [2010] FCAFC 156Bhusal v Catholic Health Care [2017] NSWSC 838Kioa v West (1985) 159 CLR 550; [1985] HCA 81Minister for Immigration and Border Protection v WZARH (2015) 256 CLR 326; [2015] HCA 40Re Minister for Immigration and Multicultural Affairs; Ex parte Lam (2003) 214 CLR 1; [2003] HCA 6SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 228 CLR 152; [2006] HCA 63

Category: Principal judgment

Parties:

Sapana Dhakal Bhusal (Appellant)Catholic Health Care Ltd (First Respondent)State Insurance Regulatory Authority Workers Compensation Merit Review Services (Second Respondent)Workers Compensation Independent Review Officer (Third

Respondent)

Representation:

Counsel:E G Romaniuk SC/E Grotte (Appellant)M Robinson SC/C Jackson (First Respondent)Submitting appearance (Second and Third Respondents) Solicitors:Beilby Poulden Costello (Appellant)Astridge & Murray (First Respondent)Crown Solicitor’s Office (Second and Third Respondents)

File Number(s): 2017/193405

Decision under appeal:

Court or Tribunal: Supreme Court

Jurisdiction: Common Law

Citation: Bhusal v Catholic Health Care [2017] NSWSC 838

Date of Decision: 23 June 2017

Before: Button J

File Number(s): 2016/330368

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

HEADNOTE

[This headnote is not to be read as part of the judgment]

Between 2009 and 2014 the applicant was employed as an assistant nurse by

the respondent, Catholic Health Care Ltd (“CHC”). On 2 February 2014 she

suffered injury to her back in the course of that employment. She made a claim

under the Workers Compensation Act 1987 (NSW) (“the Act”). Initially CHC,

through its licensed insurer, Catholic Church Insurance Ltd (“CCI”) accepted

liability to make weekly and other payments under the Act. However, on 25

February 2016, CCI advised the applicant that, following review of her claim, it

had been decided that she had a current capacity to work that disentitled her to

further weekly payments.

The decision was a “work capacity decision” within the meaning of s 43 of the

Act and subject to review under s 44BB of the Act and to judicial review by the

Supreme Court under s 69 of the Supreme Court Act 1970 (NSW), but not

otherwise. By s 44B(1) a work capacity decision is subject to “internal review”

by the insurer; to “merit review” by the State Insurance Regulatory Authority

(“SIRA”); and to procedural review by an Independent Review Officer. By s

44BB(3)(a) of the Act an application for review “must be made within 30 days

after the worker receives notice” of the decision sought to be reviewed.

The applicant sought internal review of the work capacity decision of 25

February 2016. On review, CCI decided that the original decision would remain

in place and notified the applicant by letter addressed to her, care of a firm of

solicitors who had assisted, but not acted, for her, and forwarded to her by

them. The applicant was out of Australia, and did not receive notice of the

internal review decision until 2 June 2016 when she returned to Australia. She

filed an application for merit review by SIRA on 9 June 2016. In the application

it was stated that she had received CCI’s internal review decision on 2 May

2016. On the same day SIRA, by email, notified CCI of the application, noting

that it did not confirm that it had jurisdiction to review the merit review decision.

There was no evidence that a similar reservation was communicated to the

applicant. On 14 June 2016 CCI provided its response to the application, but

did not raise any jurisdictional issue. On 30 June 2016 the Delegate of SIRA

advised the applicant that it did not have jurisdiction to proceed with the merit

review as the application was not made within 30 days of the applicant being

notified of CCI’s internal review decision.

The applicant lodged an application for procedural review by the Independent

Review Officer. The Independent Review Officer dismissed the application. By

summons filed in the Supreme Court, the applicant sought judicial review of the

decisions made by SIRA and the Independent Review Officer. The primary

judge accepted that the word “must” in s 44BB(3)(a) was “mandatory in the true

sense”. He therefore rejected the submission that SIRA ought to have given

the applicant an opportunity to explain why she did not lodge her application

within 30 days from 2 May 2016, and dismissed the summons.

On appeal, the applicant contended that there had been a denial of procedural

fairness in the SIRA decision; in particular by the failure of the Delegate to call

for submissions on the issue of non-compliance with the 30-day period as

being decisive of jurisdiction. The applicant also contended that the

construction and operation of s 44BB(3)(a) of the Act permitted an application

to be filed after the 30 day period had expired; and, further, that the factual

matter of compliance with the 30-day period was a jurisdictional fact and that

the primary judge erred in failing to make factual findings as to compliance.

Held

The Court, allowing the appeal:

(1)   Procedural fairness is concerned with a fair hearing, not a fair outcome. In

determining whether a person has been denied procedural fairness the key

issue is whether the procedures adopted by the decision-maker have caused

“practical injustice” to that person.

SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs

(2006) 228 CLR 152; [2006] HCA 63, cited; Minister for Immigration and Border

Protection v WZARH (2015) 256 CLR 326; [2015] HCA 40, cited; Kioa v West

(1985) 159 CLR 550; [1985] HCA 81, followed.

(2)   The procedure adopted by the Delegate (of SIRA) caused the applicant to

suffer practical injustice. This is not because SIRA’s decision on the

jurisdictional question was wrong but because the applicant was denied the

opportunity to make submissions to SIRA on the issue that proved critical to

the outcome of her merit review application.

(3)   This conclusion does not imply that SIRA, when conducting a merit review,

is obliged to check the accuracy of information provided by an applicant that

appears adverse to his or her case. There was a denial of procedural fairness

here because neither the Delegate nor CCI directed the applicant’s attention to

the critical issue on which SIRA’s decision turned. The applicant was thus

denied the opportunity to be heard on that issue.

(4)   It was unnecessary to determine the remaining grounds of appeal.

JUDGMENT1 THE COURT: By Amended Summons filed on 6 April 2017 in the Supreme

Court the applicant sought, under s 69 of the Supreme Court Act 1970 (NSW),

judicial review of two decisions made under the Workers Compensation Act

1987 (NSW) (the Act). On 23 June 2017 Button J (the primary Judge)

dismissed the Amended Summons.1 The applicant now seeks leave to appeal

and, if leave is granted, appeals against that decision. Although a grant of

leave was initially opposed on behalf of the first (and the only active)

respondent (Catholic Health Care Ltd, to which we will refer as CHC),

ultimately that opposition was withdrawn. This is an appropriate case for leave

to be granted. The second respondent (identified as State Insurance

Regulatory Authority Workers Compensation Merit Review Services) and the

third respondent (identified as Workers Compensation Independent Review

Officer) have entered submitting appearances.

Relevant legislation

2 The relevant legislation is the Act. The long title of the Act is:

“An Act to provide for the compensation and rehabilitation of workers in respect of work related injuries; to repeal the Workers’ Compensation Act 1926 and certain other Acts; and for other purposes.”

By s 9(1):

“A worker who has received an injury (and, in the case of the death of the worker, his or her dependants) shall receive compensation from the worker’s employer in accordance with this Act.”

3 The Act is administered by the State Insurance Regulatory Authority (SIRA)

constituted under the State Insurance and Care Governance Act 2015 (NSW).

1 Bhusal v Catholic Health Care [2017] NSWSC 838 (Primary Judgment).

By s 2A the Act is to be construed with and as if it formed part of the Workplace

Injury Management and Workers Compensation Act 1998 (NSW) (the WIM Act).

4 Section 43 of the Act identifies decisions that are “work capacity decisions”,

one of which is a decision about a worker’s “current work capacity”. Such

decisions are ordinarily made in the first instance by the employer’s licensed

insurer, and are subject to review as provided by the Act. Work capacity

decisions of an insurer are, by s 43(1), subject to review under s 44BB, and to

judicial review by the Supreme Court under s 69 of the Supreme Court Act, but

not otherwise.

5 The material provision of the Act for present purposes is s 44BB which is in the

following terms:

“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).”

Also relevant is s 44BC, which provides:

“44BC  Stay of work capacity decisions

(1)  A review of a work capacity decision in respect of a worker operates to stay the decision that is the subject of the review and prevents the taking of action by an insurer based on the decision while the decision is stayed.

(2)  However, a review operates to stay the decision that is the subject of the review only if the application for review is made by the worker within 30 days after the day on which the worker is notified (or required under section 44BB to be notified) of:

(a)  the work capacity decision to be reviewed (in the case of an application for internal review), or

(b)  the decision on the internal review (in the case of an application for review by the Authority), or

(c)  the findings of the merit review (in the case of an application for review by the Independent Review Officer).

(3)  A stay operates from the time the application for review is made until the worker is notified of the findings of the review (or the application for review is withdrawn).

Note. After a stay is lifted, weekly payments of compensation must not be discontinued or reduced in accordance with the original decision (or any

decision resulting from the review of that decision) until the required period of notice under section 54 has expired. See sections 44BD and 44BE for the effect of a review on that notice period.

(4)  A stay of an original decision to discontinue, or reduce an amount of, compensation does not operate to extend the required period of notice with respect to the discontinuation or reduction.”

6 Relevantly, what s 44BB(1) does is to provide for three progressive layers of

review of a work capacity decision, the second being dependent on the first

having taken place, and the third dependent on the first and second having

taken place.

7 The first layer is “internal review” by the insurer (s 44BB(1)(a)). A work capacity

decision made by an insurer may be referred for internal review, in accordance

with Workers Compensation Guidelines issued under s 376 of the WIM Act.

Review is to be made within 30 days after application is made by the worker.

The second layer of review, which cannot take place until the work capacity

decision has been the subject of internal review by the insurer (unless the

insurer has failed to conduct an internal review and notify the worker of the

decision within 30 days of application (sub-s (3)(b)) is “merit review” by SIRA of

the decision by the insurer following internal review. The third layer of review,

which cannot take place unless the work capacity decision has been the

subject of both internal review by the insurer and merit review by SIRA, is

limited to review of the insurer’s procedures, from which any “judgment or

discretion exercised by the insurer in making the decision” is specifically

excluded. That review is conducted by “the Independent Review Officer”

appointed under s 26 of the WIM Act.

8 Additional provisions relating to review of work capacity decisions, whether by

SIRA or by the Independent Review Officer, are made in sub-s (3) of s 44BB.

Relevantly for present purposes, by par (a), an application for review “must be

made within 30 days after the worker receives notice” of the decision sought to

be reviewed in the approved form.

Factual background

9 Between 2009 and 2014 the applicant was employed as an assistant nurse by

CHC. On 2 February 2014 she suffered injury to her back in the course of that

employment. She made a claim under the Act. Initially CHC, through its

licensed insurer, Catholic Church Insurance Ltd (CCI) accepted liability to

make weekly and other payments under the Act. However, on 25 February

2016, CCI advised the applicant that, following review of her claim, it had been

decided that she had a current capacity to work that disentitled her to further

weekly payments. This was a “work capacity decision” within s 43 of the Act.

10 By letter dated 24 March 2016, through solicitors assisting the applicant, the

applicant sought internal review of that decision. By reason of limitations

placed by the legislation on the entitlement of legal practitioners to be paid or to

recover costs in connection with such reviews, it is not clear whether the

solicitors who assisted the applicant had a retainer to act on her behalf.2

11 On 29 April 2016 CCI completed its internal review and decided that the

original decision “remains in place”. CCI notified the applicant by a letter,

addressed to her, “c/-” the firm of solicitors who had assisted her. On 3 May the

solicitors wrote to the applicant, enclosing the notification. They enclosed an

application for merit review by SIRA under s 44BB(1)(b), which they invited the

applicant to review and sign and return before 1 June 2016. (It may be inferred

that the form of application had been completed by the solicitors.)

12 On 9 June 2016 the solicitors filed the application for merit review by SIRA. In

answer to a question “When did you receive the insurer’s Internal Review

Decision?” the date “02.05.2016” was inserted. On the same day, by email,

SIRA notified CCI of the application and requested:

“… lodgement of a reply to the application in the approved form as quickly as possible and preferably within 7 days of receiving this application for review.”

13 The email continued:

“Please note that this letter of acknowledgement is not a letter confirming that [SIRA] has jurisdiction to review the work capacity decision/s of the Insurer. This is a decision that will be made prior to the review being undertaken, and, in the event that the application is not accepted, both parties will be advised in writing in due course.”

14 There appears to be no evidence that a similar reservation about jurisdiction

was communicated to the applicant.

2 See at [37]-[39] below.

15 On 14 June 2016 CCI provided its response to the application, on the

prescribed form. Its response was:

“The worker’s application for Merit review did not include any new information from the information supplied at the internal review.

The worker has been assessed by CCI has [sic] having a work capacity enabling her to work full time in a sedentary role. Based on the work capacity assessment CCI has received for the injured worker, suitable employment has been identified (Welfare worker - case worker) which would yield a weekly wage of $1193.96.

Based on this, the injured worker does not have an ongoing entitlement to weekly compensation as her PIAWE [which may be taken to mean “pre-injury average weekly earnings] has been determined to be $782.14 (after 52 weeks).”

Notably, no mention of any jurisdictional issue was made in CCI’s response.

16 The application was referred to Ms Stephanie Wigan, a Delegate of SIRA in the

Merit Review Service.

17 On 30 June 2016 SIRA advised the applicant (by letter addressed directly to

her) that it had determined that it did not have jurisdiction to proceed with the

review as requested. It gave reasons for its decision. The reasons included the

following:

“14  No submissions regarding [SIRA’s] jurisdiction to review this matter were provided by [the applicant] or [CCI].

…

16  [The applicant] has specified in the application for merit review that she received the Insurer’s internal review decision on 2 May 2016, being two working days after the date that the Insurer sent notice of the internal review decision.

17  In this matter, I accept [the applicant’s] submission that she received the internal review decision on 2 May 2016.

18  However [the applicant’s] application for merit review was made on 9 June 2016, being the date on which [SIRA] received the application.

19  Thus the application for merit review was not made within 30 days after [the applicant] received notice of the Insurer’s internal review decision in the form approved by [SIRA].

20  As outlined above, [SIRA] is subject to strict legislative requirements with respect to its jurisdiction in order to accept an application for merit review, particularly in matters relating to time limits.

21  Accordingly, as the application for merit review was not made in accordance with section 44BB(3)(a) of the 1987 Act, [SIRA] does not

have jurisdiction to undertake a merit review of the work capacity decision dated 25 February 2016.” (bold in original)

Earlier in the reasons the relevant legislative provisions had been identified.

18 On 29 July 2016 the applicant lodged an application for “procedural review”

with the Independent Review Officer. The applicant’s submissions to the

Independent Review Officer contended that s 44BB(3)(a) of the Act is satisfied

if an applicant lodges a Merit Review Application within 30 days of receiving

actual notice of the insurer’s internal review decision. The applicant stated that

she had not been given the opportunity to place before SIRA any submissions

on the question of jurisdiction and that had she had that opportunity she would

have argued that her application was in fact lodged within the 30 day statutory

time limit. The application to the Independent Review Officer was accompanied

by a statement from the applicant explaining that she had not received actual

notice of the insurer’s review decision until after she returned to Australia on 2

June 2016 from a visit to Nepal.

19 On 5 August 2016 the Independent Review Officer dismissed the application.

The essential reason was given in one paragraph:

“However, in the present case I accept that the applicant has not complied with Section 44BB(3)(a) of the 1987 Act and she is in breach of the review process. Therefore a procedural review cannot be performed.”

20 The “breach of the review process” may be taken to be a reference to the

requirement in s 44BB(1)(c) that, before procedural review may be undertaken,

the first and second layers of the review process must be completed. Since

SIRA had declined jurisdiction, no merit review had taken place. The

Independent Review Officer did not address the applicant’s contention that the

procedure adopted by SIRA denied her the opportunity to put a case on the

question of jurisdiction.

21 On 4 November 2016, pursuant to s 69 of the Supreme Court Act, the applicant

sought judicial review of the decisions made by SIRA on 30 June 2016 and the

Independent Review Officer on 5 August 2016. During the course of the

hearing that followed she abandoned the application for judicial review of the

Independent Review Officer’s decision, and proceeded only in respect of the

SIRA decision.

The proceedings in the Supreme Court

22 Although eight grounds were advanced in relation to the 30 June 2016 decision

by SIRA, they may be encapsulated as follows:

that SIRA mistakenly believed that the requirement in s 44BB(3)(a) that an application for review be made within 30 days after receipt by the applicant of the decision was mandatory, and accordingly failed to exercise the jurisdiction conferred on it (Grounds (a)-(e));

that (notwithstanding the statement in the application form that the date on which she received the Internal Review Decision was 2 May 2016) she in fact received the decision on 3 June 2016. SIRA had proceeded on the erroneous basis that she had received the decision on 2 May 2016 and therefore her application failed to comply with the time limit imposed by sub-s (3)(a). The date of receipt was a jurisdictional fact. SIRA having proceeded on the false basis that the date of receipt was 2 May 2016, it had mistaken its jurisdiction (Grounds (f)-(h)).

23 As indicated above, the claim in relation to the Independent Review Officer’s

decision was abandoned.

24 Over objection, the primary judge received affidavit evidence from the

applicant, to the following effect. On 23 April 2016 she left Australia for

overseas. Prior to leaving the country, she advised the solicitors who had

assisted her of her intention to do so. She also advised Ms Lauren Skillicorn (a

Workers Compensation Case Manager employed by CCI) of her intention to

leave the country, and to return on 3 June 2016. She in fact remained out of

Australia until that date. On her return she received the letter from the solicitors

enclosing the application for external review and advising that any submissions

were required to be returned to his office by 1 June 2016.

25 The applicant was cross-examined in the proceedings before the primary

judge. It was not suggested to her that she was not out of the country between

the dates she asserted, nor that she had received notice of the decision while

she was out of the country; although there was some tentative exploration of

her assertion that she had advised Ms Skillicorn of her proposed absence, that

evidence was not really challenged.

The primary judge’s reasons for dismissing the application

26 The primary judge accepted that “receipt” as envisaged by s 44BB(3)(a) is

personal receipt by the worker. No challenge was made on behalf of the

respondents to that conclusion.

27 The primary judge did not expressly make a finding of fact about when the

applicant received the notification of the Internal Review Decision. However, it

is not in dispute that she was out of the country at the time the notification was

sent, first to the solicitors, and then to her, and that she did not receive it until

her return on 3 June 2016. The primary judge proceeded on that basis.

28 The primary judge rejected an argument that for SIRA to extinguish the right of

review without having heard from the parties or checked that the disentitling

statement as to notice was factually correct constituted a denial of procedural

fairness.

29 The primary judge accepted, further, that the word “must” as it appears in

s 44BB(3)(a) is “mandatory in the true sense”. He therefore rejected a

submission made on behalf of the applicant that SIRA ought to have given her

an opportunity of explaining why she did not lodge her application within 30

days from 2 May 2016. The construction of the time requirement remains in

issue in this application.

30 The primary judge rejected the proposition that the date on which the applicant

received notice of the Internal Review Decision is a jurisdictional fact.

The appeal

31 In the Draft Notice of Appeal, the applicant identified grounds that asserted

error on the part of the primary judge in the construction of s 44BB of the Act.

Specifically, it was asserted that the 30 day period specified in sub-s (3) as the

period in which an application for merit review “must be made” did not exclude

the jurisdiction of SIRA to proceed to merit review even where an application

was made outside that time. It asserted error in the failure of the primary judge

to find, on the facts, that the application was made within that time, and it

asserted error:

“… in failing to find that the question of the fact of notification of the Insurer’s internal decision and the making of an application for an independent merits review were jurisdictional facts”

and consequent error in failing to make findings as to the jurisdictional facts.

32 At the conclusion of the hearing, the applicant was given leave to file an

Amended Notice of Appeal. That amended notice recast the applicant’s case to

reflect the way it was put in oral argument in this Court. She now pleads that

the primary judge erred:

“1  …

(a)  … as to the construction and operation of s 44BB(3)(a) of [the Act] by failing to construe that provision as being procedural, permitting an application to be filed after 30 days;

(b)  … in failing to find that there had been a denial of procedural fairness by the decision maker not calling for submissions on the matter of non-compliance of the 30-day period as being decisive of jurisdiction;

(c)  … in failing to find that the factual matter of compliance with the 30-day period in s 44BB(3)(a) was a jurisdictional fact, and erred in failing to make factual findings as to compliance;

…

(e)  … in failing to grant relief in the nature of judicial review.”

33 The applicant identified the orders sought as:

“2.  …

(b)  If the Appellant success on Grounds (1)(a) and/or (1)(b):

(i)  a declaration that pursuant to Section 69 of the Supreme Court Act 1970 (NSW) the decision of the Second Respondent dated 30 June 2016 is void and of no effect; and

(ii)  the matter is remitted to the Second Respondent to be dealt with according to law,

(c)  If the Appellant succeeds on Ground (1)(c), the Court make affirmative findings as to the jurisdictional fact of compliance with the 30-day period in s 44BB(3)(a);

…

(e)  The First Respondent pay the Plaintiff’s costs of the proceedings.

3.  The Respondents pay the Appellant’s costs of the appeal.”

Procedural fairness

34 It is convenient to consider first Ground 1(b) of the Amended Notice of Appeal.

In substance, the applicant contended that the primary Judge erred in failing to

conclude that SIRA denied procedural fairness by not calling for submissions

on the significance of the applicant’s apparent non-compliance with the 30 day

time limit for the lodging of her application for review of the insurer’s work

capacity decision (Merit Review Application).

Preliminary matters

35 In considering whether the primary Judge should have upheld the applicant’s

procedural fairness argument, four matters must be borne in mind. The first is

the answer the applicant gave to the critical question on the Merit Review

Application form: “When did you receive the insurer’s Internal Review

Decision?” The applicant’s answer was 2 May 2016, 38 days before she

lodged the Merit Review Application with SIRA.

36 Secondly, as has been noted, it was common ground in this Court that the

expression “receives notice … of the insurer’s [internal review] decision” in

s 44BB(3)(a) of the Act means personal receipt of the notice by the worker, not

receipt by a lawyer or other person assisting the worker. Since the applicant

did not personally receive the notice informing her of the insurer’s internal

review decision earlier than 2 June 2016, the date she returned to Australia

from Nepal, she in fact lodged the Merit Review Application within the 30 day

period prescribed by s 44BB(3)(a) of the Act.

37 Thirdly, as has been pointed out, the applicant was assisted by solicitors in

preparing her Merit Review Application, although it is not clear whether the

solicitors had a retainer to act on her behalf. This perhaps unusual situation is

explained by the terms of the Act and Work Capacity Guidelines issued

pursuant to s 376(1) of the WIM Act.

38 Prior to amending legislation, s 44(6) of the Act provided that a legal

practitioner acting for a worker was not entitled to be paid or recover any

amount for costs incurred in connection with a review of a work capacity

decision of an insurer. While the Workers Compensation Amendment Act 2015

(NSW) repealed s 44(6) with effect from 4 December 2015, it also inserted Item

8 of Part 19I of Schedule 6 into the Act with effect from 21 August 2015. This

item retained the position under s 44(6) by providing that a legal practitioner

was not entitled to be paid or recover any amount for costs in connection with a

review of a work capacity decision until the commencement of s 44BF of the

Act. Section 44BF did not enter into force until 16 December 2016. Item 8 of

Part 19I of Schedule 6 of the Act was therefore in force at the relevant point in

time.3

39 Despite the prohibition on payment or recovery of costs in connection with a

review of a work capacity decision, cl 7.2.1 of the Work Capacity Guidelines

provided that a worker could be assisted in completing the application by

another person such as the insurer, a support person, a union representative

or a legal representative.

40 Fourthly, CHC accepted that SIRA, when reviewing the insurer’s work capacity

decision pursuant to s 44BB(1)(b) of the Act,4 was bound to afford procedural

fairness to the applicant. CHC further accepted that this obligation extended to

the process leading to SIRA’s decision that it lacked jurisdiction to entertain the

Merit Review Application lodged by the applicant. The dispute in this Court was

essentially as to whether the procedure adopted by the Delegate caused the

applicant to suffer practical injustice, having regard to the information she

provided in her Merit Review Application.

Submissions

Applicant’s submissions

41 This Court was not taken to the precise terms of the applicant’s submissions to

the primary Judge on procedural fairness. It is clear, however, that the primary

Judge understood the applicant to contend that procedural fairness required,

as a general rule, that SIRA check the accuracy of information provided by an

applicant seeking review of an insurer’s decision, at least where the information

was adverse to the applicant’s interests.

42 This understanding of the applicant’s submissions appears from the primary

Judge’s reasons for rejecting the applicant’s argument, as follows:5

“[40]   First, I cannot accept that it was incumbent upon SIRA to contact the [applicant] in order to check that the document that she had signed and that, on its face, disentitled her to review, was indeed correct. One can accept that

3 Section 44BF(1) of the Act now provides that a legal practitioner is not entitled to be paid or recover legal costs for a legal service provided in connection with review of a work capacity decision if, relevantly, the regulations do not fix any maximum costs for providing the service. The Workers Compensation Regulation 2016 (NSW) prescribes the maximum costs payable or recoverable for such a service (cl 99B(1)).4 Section 44BB(1)(b) of the Act is reproduced at [5] above.5 Primary Judgment at [40]-[42].

SIRA was generally obliged to provide the [applicant] with procedural fairness; the question is one of statutory construction as to the particular ways in which that obligation was to be fulfilled.

[41]   I do not accept that the regime set up by the Act should be construed as placing such a responsibility on SIRA. It would be remarkable if a statute setting up such an authority were to impose upon that authority such a duty, to be fulfilled every time an applicant provided the authority with information that was adverse to that applicant.

[42]   And speaking in practicalities, I consider that I am entitled to infer from the documentary evidence placed before me (not least the appearance of the document containing the application for review itself) that SIRA receives a very large volume of such applications. An asserted obligation to provide procedural fairness needs to be seen in the context of the real world and based on the circumstances of the case, not on some theoretical plane: see Kioa v West (1985) 159 CLR 550; [1985] HCA 81. I consider that it would be thoroughly unworkable to expect SIRA to check the correctness of every document that it receives that is adverse to the person submitting the document.” (Emphasis added.)

43 The applicant’s submissions in this Court on procedural fairness did not

emerge until oral argument. As has been noted, the notice of appeal filed in

this Court did not include a ground challenging the primary Judge’s rejection of

the applicant’s case founded on a denial of procedural fairness. Nor did the

applicant’s written submissions identify procedural fairness as an issue on the

appeal. Nonetheless, Mr Romaniuk SC, who appeared with Ms Grotte for the

applicant, contended in his oral submissions that the primary Judge erred in

concluding that SIRA had not denied the applicant procedural fairness. Mr

Romaniuk submitted that SIRA’s failure to accord the applicant procedural

fairness constituted a jurisdictional error and that the primary Judge erred in

law in rejecting the applicant’s argument to this effect.

44 It was after the Court pointed out that the notice of appeal made no reference

to a want of procedural fairness that Mr Romaniuk sought leave to amend the

notice of appeal by adding Ground 1(b).6 Mr Robinson SC, who appeared with

Mr Jackson for the first respondent, did not object to the amendment and,

accordingly, the Court granted leave to file the amended notice of appeal.

45 It is not entirely clear whether the argument on procedural fairness put to the

primary Judge was as sweeping as his Honour seemed to think. In any event,

the applicant’s argument in this Court in support of the ground in the amended

notice of appeal was framed more circumspectly. Mr Romaniuk submitted that

6 Reproduced at [32] above.

the Delegate, who was exercising the powers of SIRA, should have alerted the

applicant that the information included in the Merit Review Application

suggested that her application had been lodged outside the 30 day time limit

specified by s 44BB(3)(a) of the Act. The Delegate should then have informed

the applicant that her apparent non-compliance with s 44BB(3)(a) of the Act

would result in dismissal of the Merit Review Application on jurisdictional

grounds unless she could persuade the Delegate otherwise.

46 Mr Romaniuk submitted that the finding that the applicant lodged the Merit

Review Application outside the time limit specified by s 44BB(3)(a) of the Act

was the critical factor in the Delegate’s decision that SIRA lacked jurisdiction to

entertain the Merit Review Application. The Delegate’s finding was based

exclusively on the applicant’s statement in the Merit Review Application that

she received notice of the insurer’s Internal Review Decision on 2 May 2016.

Yet neither the Delegate nor CCI in its written submissions to SIRA warned the

applicant that a finding would be made that she had not complied with

s 44BB(3)(a) of the Act and that the Delegate would reject her Merit Revue

Application on the ground of want of jurisdiction. Accordingly, so Mr Romaniuk

submitted, the applicant had been deprived of the opportunity to make

submissions on the critical questions, namely whether the Merit Review

Application had in fact been lodged within the 30 day period imposed by statute

and, if not, whether non-compliance deprived SIRA of jurisdiction to entertain

the Merit Review Application.

47 Mr Romaniuk said that had the applicant been afforded the opportunity to make

submissions, she would have been able to demonstrate (as she attempted in

her submission to the Independent Review Officer) that she did not personally

receive notice of the insurer’s internal review decision before 2 June 2016. This

would have established that, having regard to the proper construction of s

44BB(3)(a) of the Act, she had lodged the Merit Review Application within time

and that the Delegate was bound to undertake merit review of the insurer’s

work capacity decision. The applicant also would have been afforded the

opportunity to challenge the Delegate’s assumption that non-compliance with s

44BB(3)(a) of the Act deprived SIRA of jurisdiction to act on the Merit Review

Application.

CHC’s submissions

48 Mr Robinson supported the reasoning of the primary Judge insofar as his

Honour considered that it would be unworkable for a high volume decision-

maker like SIRA to be required to check on whether each applicant had

correctly completed the relevant form and understood the significance of the

information provided on the form. Mr Robinson submitted that the Delegate had

made a finding of fact on the material before her, namely that the Merit Review

Application had been lodged outside the 30 day period stipulated by s 44BB(3)

(a) of the Act. The finding of fact was not amenable to judicial review and, in

any event, was entirely justified by the applicant’s own statement in the Merit

Review Application.

49 Mr Robinson further submitted that procedural fairness did not require the

Delegate to go behind the material submitted by the applicant. While SIRA had

a statutory power to require the parties to provide further information, the

Delegate was under no obligation to undertake independent inquiries into

matters that had been specifically addressed by the applicant herself. Mr

Robinson pointed out that the applicant apparently had assistance (albeit

unpaid) from a solicitor at the time she lodged the Merit Review Application.

She was therefore not in the position of an unrepresented person who might

lack the capacity to understand the significance of particular information

provided to SIRA or to appreciate the statutory framework for the decision-

making process. The Delegate had no reason to suspect that the applicant’s

answer to the question about the date she received notice of CIC’s internal

review decision was based on a misapprehension or that a further inquiry of

the applicant would yield a different answer to a straightforward question.

Reasoning

50 Procedural fairness is concerned with a fair hearing, not a fair outcome.7 In this

case it is common ground that the decision by the Delegate that SIRA lacked

jurisdiction to entertain the Merit Review Application was wrong. This

conclusion follows from the undisputed evidence of the applicant that she

lodged her Merit Review Application within 30 days of receiving personal notice 7 SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 228 CLR 152; [2006] HCA 63 (SZBEL) at [25] per curiam; Minister for Immigration and Border Protection v WZARH (2015) 256 CLR 326; [2015] HCA 40 (WZARH) at [54]-[55] (Gageler and Gordon JJ).

of the insurer’s internal review decision. But this conclusion is not sufficient to

make out the applicant’s case on procedural fairness.

51 In order to establish that she was denied procedural fairness, the applicant

must show that she did not receive a fair hearing by SIRA. It is well established

that what is required for a fair hearing depends on the statutory framework

within which the decision-maker operates and the particular facts and

circumstances of the case.8 Neither party suggested in their submissions that

the terms of the Act were of particular significance in determining the nature

and scope of SIRA’s duty to afford procedural fairness to the applicant in the

present case. Nonetheless, the starting point for a consideration of the

applicant’s procedural fairness argument must be the terms of the governing

legislation.

52 Section 44B(1)(b) of the Act entitles an injured worker to refer a work capacity

decision of an insurer for “merit review” by SIRA, provided the “dispute” has

been the subject of internal review by the insurer. SIRA may decline to review

a decision because the Merit Review Application is “frivolous or vexatious or

because the worker has failed to provide information requested by [SIRA]” (s

44BB(3)(c)). The worker and insurer must provide such information as SIRA

may reasonably require for the purpose of the merit review (s 44BB(3)(d)).

SIRA is to notify the insurer and worker of the findings of the review and may

make recommendations to the insurer based on the findings (s 44BB(3)(e)). If

SIRA makes any such recommendations, they are binding on the insurer and

must be given effect (s 44BB(3)(g)).

53 Under this legislative scheme, once the applicant refers the insurer’s work

capacity decision for review in accordance with the Act, SIRA is required to

undertake the merit review. That obligation has to be discharged in the context

of what the Act characterises as a “dispute” between the applicant and the

insurer. SIRA is required to make findings and, if appropriate,

recommendations concerning the dispute. Any such recommendations bind the

insurer. SIRA therefore effectively has a decision-making function in relation to

the dispute between an applicant and the insurer.

8 SZBEL at [26].

54 In the present case, the dispute between the applicant and CIC related to CIC’s

decision to terminate the benefits the applicant had been receiving as a

consequence of a work related injury. This decision necessarily had significant

financial consequences for the applicant. Her interests were therefore directly

affected both by CIC’s decision and by SIRA’s response to her Merit Review

Application.

55 The Act does not contemplate that SIRA must discharge its review functions by

adopting the adversary procedures customarily employed by courts. For

example SIRA, unlike courts, is empowered of its own motion to require the

parties to the dispute to provide such information as it may “reasonably require”

for the purposes of the review. Nonetheless, SIRA’s role is not to conduct an

inquiry at large into an applicant’s entitlement to compensation.

56 SIRA is required to review the insurer’s decision in the context of the “dispute”

between the insurer and the applicant. The nature of the dispute will determine

the issues that must be addressed by SIRA, although it may be entitled to

examine other issues as well. In the absence of any provision in the Act limiting

the scope of SIRA’s duty to afford procedural fairness to the parties (none was

suggested), SIRA was obliged to provide each party with a fair opportunity to

be heard on the issues arising in the review. Those issues clearly included the

fundamental question of whether SIRA was entitled to exercise the jurisdiction

invoked by the applicant in review of CIC’s internal review decision.

57 The authorities make it clear that the touchstone for determining whether a

person has been denied procedural fairness, where the decision-maker is

under a duty to act fairly, is whether the procedures adopted have caused

“practical injustice” to that person.9 In Kioa v West,10 Mason J emphasised the

importance the law attaches to the need to bring to a person’s attention the

critical issue or factor on which the administrative decision is likely to turn, so

that the person may have an opportunity of dealing with it. This principle is

often relied on in cases where the decision-maker acts on information adverse

to the person concerned but fails to disclose the information or to give the

9 Re Minister for Immigration and Multicultural Affairs; Ex parte Lam (2003) 214 CLR 1; [2003] HCA 6 at [34], [38] (Gleeson CJ); WZARH at [33] (Kiefel, Bell and Keane JJ).10 (1985) 159 CLR 550; [1985] HCA 81 at 587.

person an opportunity to comment on its accuracy or significance.11 The

principle is also invoked where a decision-maker fails to warn the relevant

person that issues not previously thought to be in dispute might be the subject

of adverse findings.12 But these are not the only circumstances in which a

failure to alert a person to the critical issue for determination can result in

practical injustice.

58 In the present case, the Delegate relied on the applicant’s answer to the

question concerning the date of lodgement of the Merit Review Application to

support a finding that it had not been lodged within the time limit specified in s

44BB(3)(a) of the Act. The Delegate did not direct attention to whether it

necessarily followed that SIRA lacked jurisdiction to entertain the Merit Review

Application, presumably because the Delegate regarded the result as self-

evident.

59 The answer given by the applicant to the standard question on the Merit

Review Application did not necessarily mean that she had failed to comply with

the time limit specified in s 44BB(3)(a) of the Act. Whether this was the effect of

her answer depended upon whether her understanding of the question (“When

did you receive the Insurer’s Internal Review Decision?”) reflected the true

construction of the statutory provision. The primary Judge made no finding as

to the reason the applicant (or the solicitors assisting her) answered the

question in this way. But the answer proceeded either on a misapprehension

as to the meaning of s 44BB(3)(a) of the Act or a failure to appreciate the

possible significance of the answer on the question of jurisdiction. So much is

made clear by the applicant’s submissions to the Independent Review Officer.

In fact, as the evidence demonstrates, the applicant did not “receive” the notice

within the meaning of s 44BB(3)(a) of the Act until 2 June 2016 at the earliest

and thus the Merit Review Application was lodged within the time prescribed by

statute.

60 The standard form completed by the applicant did not explain that if the Merit

Review Application was lodged outside the statutory 30 day period not only

would the applicant contravene s 44BB(3)(a) of the Act but SIRA would lack

11 Kioa v West itself was such a case.12 See, for example, AZAAD v Minister for Immigration and Citizenship (2010) 189 FCR 494; [2010] FCAFC 156.

jurisdiction to entertain the Merit Review Application. The document stated only

that:

“The full set of rules and requirements regarding reviews of work capacity decisions by WorkCover are outlined in:

•   Section 44 of the WC Act …

•   Division 3 of the ‘Review guidelines’”

The document gave no guidance as to the meaning of the word “receives” in

s 44BB(3)(a) of the Act.

61 The absence of information on these matters would be of little moment if the

applicant’s attention had been drawn to them and had she been given an

opportunity to make submissions prior to the Delegate deciding that SIRA

lacked jurisdiction to undertake the merit review. But this did not happen. The

Delegate decided that SIRA lacked jurisdiction to entertain the Merit Review

Application without communicating further with the applicant or those assisting

her.

62 SIRA considered the question of jurisdiction to be significant enough to draw it

to the attention of the insurer in the email of 9 June 2016.13 Yet no similar

advice was given to the applicant. CIC provided its response to the Merit

Review Application on the prescribed form after it had received SIRA’s email,

but the response made no reference to the jurisdictional question. It is

presumably for this reason that the Delegate recorded in her reasons that no

submissions regarding SIRA’s jurisdiction were provided by either the applicant

or CIC.14 The difference between them, however, was that the insurer had

been alerted to the issue but the applicant had not. Thus one party to the

dispute had been given an opportunity to make submissions on the issue

(although it did not do so) but the other party, as a practical matter, had no

such opportunity. The applicant was left entirely in the dark about the existence

of any jurisdictional issue.

63 Had CIC addressed the jurisdictional question in its response, the applicant

would have been alerted to the need to provide further material in order to

persuade the Delegate that SIRA had jurisdiction to deal with the Merit Review

13 See at [13] above.14 See at [16] above.

Application. Anyone reading CIC’s response would assume that there was no

issue as to SIRA’s jurisdiction to deal with the Merit Review Application and

that the only matters in dispute concerned the merits of CIC’s review decision.

64 The procedure adopted by the Delegate in this case caused the applicant to

suffer practical injustice. This is not because SIRA’s decision on the

jurisdictional question was wrong but because the applicant was denied the

opportunity to make submissions to SIRA on the issue that proved critical to

the outcome of her Merit Review Application. Specifically, the applicant was

denied the opportunity to make submissions:

showing that she had lodged the Merit Review Application within the time limit imposed by s 44BB(3)(a) of the Act, having regard to the proper construction of that provision; and

that, in any event, non-compliance with the time limit did not deprive SIRA of jurisdiction to entertain the Merit Review Application.

65 It is no answer to say, as did Mr Robinson, that the Delegate was entitled to

take at face value the applicant’s answer to the question as to when she

received CIC’s internal review decision. Her answer was not necessarily

determinative of the factual issue the Delegate regarded as critical, namely

whether the applicant had complied with s 44BB(3)(a) of the Act. At the most

basic level, so far as the Delegate was aware, the applicant’s answer may

have been the product of a simple dating error in completing the form. As it

happens, the applicant, if given the opportunity, could have provided SIRA with

information that, despite appearances, would have shown that she had lodged

the Merit Review Application within the time limit specified by statute.

66 Nor is it an answer that the applicant received assistance from solicitors in

preparing and lodging the Merit Review Application. The evidence does not

reveal the nature of the assistance the applicant received but it can readily be

inferred that the solicitors assisting the applicant did not appreciate the

potential difficulty in stating that notice of CIC’s review decision had been

received on 2 May 2016. In any event, for the reason already given the answer

was not necessarily determinative of either the factual or legal questions that

the Delegate had to consider before concluding that SIRA lacked jurisdiction to

entertain the Merit Review Application. The fact that the applicant had received

assistance did not detract from the need to afford procedural fairness by giving

her the opportunity to make submissions on the critical issue that determined

the outcome of the Merit Review Application.

67 The conclusion that the applicant was denied procedural fairness does not

imply that SIRA is obliged, when conducting a merit review of an insurer’s work

capacity decision, to check the accuracy of information provided by an

applicant that appears to be adverse to his or her case. There was a denial of

procedural fairness in this case because neither the Delegate nor CIC directed

the applicant’s attention to the critical issue on which SIRA’s decision turned.

The applicant was thus denied the opportunity to be heard on that issue.

68 Ground 1(a) of the Amended Notice of Appeal raises some difficult questions

concerning the effect of non-compliance with the time limit specified in s

44BB(3)(a) of the Act, in particular whether a failure to comply with the time

limit deprives SIRA of jurisdiction to determine a Merit Review Application.

Although the parties addressed this question, the issues were not canvassed in

depth. In the absence of full argument it is neither necessary nor desirable to

determine Ground 1(a).

69 Ground 1(c) overlaps to some extent with Ground 1(b) and was approached in

a similar way. It is not necessary to determine whether a finding as to

compliance or non-compliance with s 44BB(3)(a) of the Act is a finding as to a

jurisdictional fact.

Orders

70 The following orders are made:

1.   Leave to appeal granted.

2.   Allow the appeal.

3.   Set aside the orders made by Button J on 23 June 2017.

4.   In lieu thereof make the following orders:

(1)   Set aside the decision of the State Insurance Regulatory Authority made

on 30 June 2016.

(2)   Remit the applicant’s application for merit review of the insurer’s internal

review decision to the State Insurance Regulatory Authority for determination

according to law.

(3)   The first defendant pay the plaintiff’s costs of the proceedings.

5.   The first respondent pay the appellant’s costs of the appeal.

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