Supreme Court
New South Wales
Case Name: / CSR Limited v Busbridge
Medium Neutral Citation: / [2015] NSWSC 1268
Hearing Date(s): / 15 July 2015
Date of Orders: / 10 September 2015
Decision Date: / 10 September 2015
Before: / Hamill J /
Decision: / (1) The summons is dismissed.
(2) The plaintiff to pay the first defendant’s costs of the proceedings.
Catchwords: / CIVIL LAW – workers compensation – merits review of work capacity decision – calculation of post-injury earnings – jurisdictional error – where plaintiff put different basis for calculation before the decision maker – whether delegate erred by failing to consider alternative basis not put by either party – procedural fairness – whether delegate denied plaintiff opportunity to put alternative case
Legislation Cited: / Workers Compensation Act 1987 (NSW)
Workplace Injury Management and Workers Compensation Act 1988 (NSW)
Cases Cited: / Allesch v Maunz [2000] HCA 40; 203 CLR 172
Ansett v Minister (1987) 72 ALR 469
Asiamet (No 1) v Federal Commissioner of Taxation [2003] FCA 35; 196 ALR 692
Bojko v ICM Property Service Pty Ltd [2009] NSWCA 175
Campbelltown City Council v Vegan [2006] NSWCA 284; 67 NSWLR 372
Collector of Customs v Pozzolanic Enterprises Pty Ltd [1993] FCA 456; 43 FCR 280
Hoffmann-La Roche v Trade Secretary [1975] AC 295
Jamal v Director of Public Prosecutions [2013] NSWCA 355
Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; 185 CLR 259
Muralidharan v Minister for Immigration & Ethnic Affairs (1996) 136 ALR 84
Re Minister for Immigration and Multicultural Affairs and Anor; Ex Parte Miah [2001] HCA 22; 206 CLR 57
Rodger v De Gelder [2015] NSWCA 211
Sinnathamby v Minister for Immigration (1986) 86 ALR 502
SZCBT v Minister for Immigration and Multicultrual Affairs [2007] FCA 9
Texts Cited: / Guidelines for Work Capacity Decision, Internal Reviews by Insurers and Merit Reviews by the Authority
Category: / Principal judgment /
Parties: / Plaintiff – CSR Limited
First Defendant – Stephen Busbridge
Second Defendant – WorkCover Authority of NSW
Representation: / Counsel:
Plaintiff - C Jackson
First Defendant – P R Stockley
Solicitors:
Plaintiff - Leigh Virtue & Associates
First Defendant – Steve Masselos & Co
File Number(s): / 2014/355100
Publication Restriction: / Nil
Judgment
1The plaintiff seeks judicial review of a decision made by a delegate of the WorkCover Authority of New South Wales (the second defendant) by which the first defendant (Mr Busbridge or the defendant) was found to be entitled to weekly payments of compensation in a maximum amount of $610.30 per week in accordance with s 37(2) of the Workers Compensation Act 1987 (NSW). The decision was made following a merit review of a “work capacity decision” made by the plaintiff in accordance with s 44(1)(b) of the Act.
2The decision was made in the context of significant amendments made to the Act in 2012. The parties agree that it is not necessary to consider in detail the history of the workers compensation system or to dwell upon the overall nature of the scheme as it exists following the amendments. The parties also agree that the current dispute is a relatively confined one. It concerns whether the delegate fell into jurisdictional error in her application of sections 32A and 35 of the Act.
3The plaintiff’s contention is that the delegate fell into jurisdictional error in that she failed to understand or apply properly the statutory test to be applied in assessing weekly payments under s 35 (ground 1), that she erred by taking into account irrelevant considerations (ground 2) and, in the alternative, that she failed to afford the plaintiff procedural fairness in the conduct of the merits review (ground 3).
4The background facts of the matter are not in dispute. Mr Busbridge worked for 17 years as a production operator. His exposure to cement dust over a number of years gave rise to an allergy or dermatitis and he developed a rash. He was unfit to work in the job he had held for 17 years. A doctor certified him to be fit for normal duties provided that he was not exposed to cement dust. However, the plaintiff was unable to provide work that did not so expose him. As a result, Mr Busbridge was unable to return to his pre-injury employment and, for a period, the plaintiff made payments of workers compensation to him in accordance with the Act. In the meantime, Mr Busbridge obtained alternative employment as an assistant miller.
5On 10 June 2011 the plaintiff conducted a work capacity assessment and made a work capacity decision (to use the terms of the statute) reducing Mr Busbridge’s entitlement to weekly payments to $64.50 per week under s 37 of the Act. Following the defendant’s application dated 2 July 2014, the plaintiff conducted an internal review. It notified Mr Busbridge of the result of that review by letter dated 20 July 2014. He remained dissatisfied with the outcome. On 26 August 2014, he made an application to the second defendant for a review of the decision. A delegate of the second defendant identified correctly that the nature of that review was a merits review rather than a review of the processes of the insurer. She was required to consider all of the information before her on its merits and make findings and recommendations in the light of that information. There is no dispute on the part of the plaintiff that this is what the delegate attempted to do. However, in one quite particular yet important respect, the plaintiff says that she fell into jurisdictional error. That was in respect of her assessment of the first defendant’s ability to earn income in suitable employment.
6Put simply, the weekly payments to which the worker was entitled was to be calculated by deducting the amount he was able to earn in “suitable employment” after the injury from his “pre-injury average weekly earnings.” Suitable employment is defined in s 32A as follows:
"suitable employment", in relation to a worker, means employment in work for which the worker is currently suited:
(a) having regard to:
(i) the nature of the worker’s incapacity and the details provided in medical information including, but not limited to, any certificate of capacity supplied by the worker (under section 44B), and
(ii) the worker’s age, education, skills and work experience, and
(iii) any plan or document prepared as part of the return to work planning process, including aninjury management plan under Chapter 3 ofthe 1998 Act, and
(iv) any occupational rehabilitation services that are being, or have been, provided to or for the worker, and
(v) such other matters as the WorkCover Guidelines may specify, and
(b) regardless of:
(i) whether the work or the employment is available, and
(ii) whether the work or the employment is of a type or nature that is generally available in the employment market, and
(iii) the nature of the worker’s pre-injury employment, and
(iv) the worker’s place of residence.
7The definition of suitable employment was inserted by the 2012 amendments to the Act and constituted a significant change to the manner in which such payments are calculated. Prior to the amendments, the post-injury earning capacity was essentially determined by the amount that the worker was actually earning. It will be seen by the matters that are now to be disregarded (such as whether the work or employment is available and the worker’s place of residence) that the calculation is now based on the worker’s capacity to undertake suitable work rather than their ability to find such work.
8Section 35 provides the formula by which the weekly payments are to be calculated:
“35 Factors to determine rate of weekly payments
(1) For the purposes of the provisions of this Subdivision used to determine the rate of weekly payments payable to an injured worker in respect of a week:"AWE"means the worker’spre-injury average weekly earnings."D"(or a"deductible amount") means the sum of the value of each non-pecuniary benefit (if any) that is provided by the employer to a worker in respect of that week (whether or not received by the worker during therelevant period), being a non-pecuniary benefit provided by the employer for the benefit of the worker or a member of the family of the worker."E"means the amount to be taken into account as the worker’s earnings after theinjury, calculated as whichever of the following is the greater amount:
(a) the amount the worker is able to earn in suitable employment,
(b) the workerscurrent weekly earnings.
"MAX"means the maximum weekly compensation amount.
(2) If the determination of an amount for the purpose of determining the rate of weekly payments payable to an injured worker results in an amount that is less than zero, the amount is to be treated as zero.”
9There was (and remains) no controversy as to Mr Busbridge’s pre-injury average weekly earnings. As the delegate put it:
“52. It would appear that the Insurer has calculated Mr Busbridge's pre-injury average weekly earnings in accordance with section 44C(l)(b) of the 1987 Act to be $1,464 70 per week. Further, the Insurer has applied section 82A of the 1987 Act and indexed Mr Busbridge's pre-injury average weekly earnings to $1,530 per week.
53. Mr Busbridge makes the following submission in his application for merit review:
“I think it [the decision] should be changed to be increased to the difference between my AWE of $1,530 per week and my current wage (whatever that might be) as there is no evidence to suggest that I am able to earn more than I am currently earning.”
54. Having considered Mr Busbridge's application for merit review, it is clear that he does not dispute the figure arrived at by the Insurer for his pre injury average weekly earnings. Rather, he disputes the figure the Insurer has arrived at for the amount to be taken into account as his earnings after the injury ("E").
55. In these circumstances, I do not consider a review of the amount of Mr Busbridge's pre-injury earnings is required, and I make no finding or recommendation in that regard. The effect of this is that the Insurer's decision about the amount of Mr Busbridge's pre-injury average weekly earnings remains unchanged.”
10The controversy arises in relation to the other side of the equation, that is “E”; “the amount to be taken into account as the worker’s earnings after the injury”.
11The delegate had a number of sources of information available to her in relation to Mr Busbridge’s capacity for work and his incapacity to work in an environment which exposed him to cement dust. She also had information as to his successful attempt at obtaining alternative employment and a variety of employment options which were held to be, or not to be, suitable employment for the purpose of the application of s 32A and 35. The delegate analysed those options in her comprehensive and cogent reasons. The following passages of her findings are not subject to dispute:
“34. Mr Busbridge's transferable skills are documented as the ability to receive and count stock items, pack and unpack items, verify inventory, store items, mark stock items, clean and maintain supplies, tools, equipment and storage areas, determine proper storage methods, keep accurate records and examine and inspect stock. Mr Busbridge also has the ability to provide assistance and direction, operate machinery, observe equipment operations, lift raw materials, finished products and packed items either manually, or while using a hoist and mark or tag identification on parts. Finally, Mr Busbridge is able to load and unload items, assist production workers, clean and lubricate equipment, drive a forklift and perform data entry/administrative duties.
35. The role of Warehouse Administrator has been identified as suitable employment for Mr Busbridge. A Warehouse Administrator administers and coordinates storage and distribution operations within an organization. The vocational assessment notes that Mr Busbridge disclosed that he had three months of Warehouse Administration experience while at CSR on suitable duties. While I acknowledge this, I do not consider three months experience in a suitable duties capacity to be sufficient evidence to determine that Mr Busbridge possesses the necessary skills, education and experience to undertake this role in the open labour market. Further, I have not been provided with any further information in regards to the role of Warehouse Administrator that would allow me to determine whether Mr Busbridge would in fact have the necessary education, skills and experience to undertake this role. Accordingly, I am not satisfied the role of Warehouse Administrator is suitable employment for Mr Busbridge.
36. The role of Production Manager has been identified as suitable employment for Mr Busbridge. A Production Manager plans, organises, directs, controls and coordinates the manufacturing activities of an organisation including physical and human resources. AW Workwise note that Mr Busbridge has 17 years of experience as a Production Operator and as a result, considers he has the transferable skills to perform this role. While I acknowledge 17 years as a Production Operator would be advantageous, I am not satisfied that this experience is transferable to a Production Manager role. Mr Busbridge's work history does not indicate that he has held a management role, particularly in production, and in the absence of any further information in relation to the specific requirements of this role, I am not of the view that the role of Production Manager is suitable employment for Mr Busbridge.
37. Finally, the role of Production Operator has been identified as suitable employment for Mr Busbridge. A Production Operator records and coordinates the flow of work and materials between departments, examines goods for orders and prepares production schedules. Mr Busbridge was employed as a Production Operator for CSR for 17 years and I note that AW Workwise have indicated that Mr Busbridge was able to return to his pre-injury role provided he was not exposed to cement dust in the workplace. I accept that one could reasonably infer that given Mr Busbridge has had 17 years experience in a Production Operator role, he would possess the necessary skills, work experience and education to be suited to the role. Further, in view of Dr Woolnough having imposed only one restriction on Mr Busbridge's capacity for employment, that being, to avoid exposure to cement dust, I am satisfied that Mr Busbridge would be able to undertake a role outside of this particular environment, having regard to the nature of his incapacity.
38. In view of the above, I find that the role of Production Operator to be suitable employment for Mr Busbridge in accordance with section 32A of the 1987 Act.
39. I consider it appropriate to note that the role of Production Clerk was identified as suitable employment for Mr Busbridge in the vocational assessment of 17 May 2013, however, was replaced by Production Operator in the amended vocational assessment of 7 August 2013. Upon review of both assessments, I have concluded that the information provided for both Production Operator and Clerk are identical and as such, I have assessed Production Operator as suitable employment for Mr Busbridge, as documented in the most recent amended vocational assessment. For this reason, I do not consider it necessary to assess the role of Production Clerk as suitable employment.”
12The delegate went on to find that the job of assistant miller (the job that Mr Busbridge had obtained and in which position he was actually working) was also suitable employment:
“42. Dr Woolnough places no restrictions upon Mr Busbridge other than he is not to work around cement products. The description of duties above does not indicate that Mr Busbridge works with cement dust, therefore, I am satisfied that he is not contravening this particular restriction. Further, Mr Busbridge has been able to maintain this role for almost a year with no reported difficulties. Accordingly, I consider that Mr Busbridge's current employment as an Assistant Miller is suited to the nature of his incapacity.
43. Accordingly, I find that Mr Busbridge is able to, and has, returned to work in suitable employment. I therefore find that Mr Busbridge has current work capacity pursuant to section 32A of the 1987 Act.”
13The delegate then set out the entitlement periods for ongoing weekly payments and the basis upon which such entitlements were to be calculated:
“Calculation of Entitlement
47. "E" is described in section 35 of the 1987 Act as:
E means the amount to be taken into account as the worker's earnings after the injury, calculated as whichever of the following is the greater amount
(a) the amount the worker is able to earn in suitable employment
(b) the workers current weekly earnings
MAX means the maximum weekly compensation amount
48. "D" is the amount of any non-pecuniary benefits which in Mr Busbridge's case is nil.
49. "AWE" means the worker's pre-injury average weekly earnings.
50. "Pre-injury average weekly earnings" is defined by section 44C of the 1987 Act.
51. Mr Busbridge is not an existing recipient of weekly payments of compensation, therefore his pre-injury average weekly earnings are to be calculated using the definition provided by section 44C of the 1987 Act.”
14I have already set out the delegate’s consideration of Mr Busbridge’s pre-injury average weekly earnings in [9] above. It is clear that the delegate identified and applied correctly the legislative parameters of her statutory function. There is nothing up until that point in the delegate’s report that is controversial as between the parties to the present litigation. The difficulties and dispute arises in relation to what follows:
“Ability to earn in suitable employment
56. As noted above, I have found the role of Production Operator to be suitable employment for Mr Busbridge to perform. Upon review of the vocational assessments produced by AW Workwise, particularly the Labour Market Analyses, I note that I have been provided with three amounts aProduction Operator may be remunerated as follows:
(1) Job Markets Australia - $1,389 per week
(2) Manufacturing and Associated Industries Occupations Award 2010 - $670 20 per week
(3) Local Labour Market - $1,000 per week
57. In assessing the amount that Mr Busbridge may earn in "suitable employment', I am required to have regard to the matters contained in the definition of "suitable employment" in section 32A of the 1987 Act. That definition requires that I take into consideration, among other things,the nature of Mr Busbridge's incapacity, his age, his education skills and experience. In my view the best information that is before me that reflects Mr Busbridge's ability to earn in suitable employment, as defined, is his current rate of pay. In view of the vastly differing amounts I have been provided in the vocational assessments for the role of Production Operator, I consider it appropriate to assess Mr Busbridge's current employment as an Assistant Miller, which I have also determined to be suitable employment, with respect to his ability to earn in suitable employment.”
15The delegate identified three apparently conflicting bases upon which to determine the “amount the worker is able to earn in suitable employment” as a production operator. These figures came from an appendix to an amended vocational assessment report prepared by a rehabilitation consultant working for “AW Workwise”. At the lower end of that range was the award of $670.20 per week. The middle of the range was represented by what was described as the “local labour market” in which production operators were paid $1,000 per week. The high end of the range, and the figure which the plaintiff now contends ought to have guided the delegate’s application of s 35, was the “Job Markets Australia” figure of $1,389 per week.