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The Supreme Court recently provided guidance on the exercise of the Workers Compensation Commission's jurisdiction in work injury damages (WID) matters. The decision of Favetti Bricklaying Pty Ltd v Milan Benedek & Anor [2017] NSWSC 417 highlights that until liability for an injury has been determined by the Commission, the Registrar cannot refer the matter to an approved medical specialist (AMS) even if the matter relates to a WID matter.

What were the circumstances of the case?

On 5 October 2005, Mr Benedek sustained an injury to his lumbar spine while laying concrete blocks at work. He brought a claim for lump sum compensation of 14% whole person impairment (WPI) against his employer, Favetti Bricklaying, which was resolved in November 2008 through an agreement between the parties.

In April 2015, Mr Benedek gave notice of another claim for lump sum compensation based on a further 7% WPI arising from an injury to his thoracic spine, allegedly caused by the same incident. Liability was declined by the insurer for the further lump sum claim and a s 74 notice was issued under the Workplace Injury Management and Workers Compensation Act 1998 (NSW) (WIMWC Act), on the basis that the worker had not sustained an injury to his thoracic spine nor further permanent impairment.

In October of the same year, Mr Benedek filed an application for an assessment by an AMS for a WID threshold dispute. A response was filed on behalf of the employer requesting the matter be listed for a teleconference, so the issue concerning the thoracic spine injury could be determined by an arbitrator before being referred to an AMS.

Mr Benedek's representatives objected to the matter being referred to an arbitrator on the grounds that the Commission had no jurisdiction to determine issues relating to a WID claim. This objection was upheld by the Delegate of the Registrar and the matter was directly referred to an AMS in December 2015. The Respondent employer filed a summons in the Supreme Court of NSW seeking judicial review of the Registrar's decision on 13 January 2016.

Submissions

The employer argued that s 321(4) of the WIMWC Act made it mandatory for the Registrar to refer the matter to an arbitrator for determination because there was an issue of liability, evidenced by the issuing of a s 74 notice. It was submitted that s 105(2) of the WIMWC Act provided the Commission with jurisdiction over matters arising under part 6 of chapter 7 and that this included threshold disputes. Such disputes concerned permanent impairment assessable under part 7 of chapter 7 and, accordingly, the provisions of s 321(4) applied.

The employer put forward that the literal interpretation of s 105(2) of the WIMWC Act was consistent with the parliamentary intention for injury issues to be determined by the Commission rather than the District Court. The Registrar's interpretation, it was argued, would allow injuries that aren't classified as work injuries to be included in referrals, leading to matters where issues of injury had not been finalised proceeding to the District Court.

This line of reasoning was supported by s 322A coming into operation, which precludes more than one Medical Assessment Certificate (MAC) from being issued in respect of any particular injury, as well as the operation of s 314(2)(b), which precludes an employer from raising a threshold issue if a MAC has been issued in a matter with findings of 15% WPI or greater. It was also argued that the reference to liability issues under s 321 of the WIMWC Act was a reference to issues of injury, which does not offend the issues of liability for determining a WID claim—being breach of duty, causation and damages payable.

The Defendant worker and the State Insurance Regulatory Authority, who appeared as amicus curiae, opposed the application. They asserted that injury, for the purposes of a threshold dispute, meant "alleged injury" and that a finding above the injury threshold would only satisfy the threshold issue rather than prevent the Court from later determining such an issue. They also claimed that the Commission's determination of liability issues in a WID matter before referral to the Court was acting beyond its jurisdiction.

The jurisdictional boundaries

On Monday 24 April 2017, His Honour quashed the decision of the Registrar. In doing so, he accepted the argument that the plain meaning of s 321(4)(a) prevented the Registrar from directly referring the matter to an AMS because there was a liability issue involving a permanent impairment threshold dispute between the parties. He rejected the alternative view that the restrictions under s 321(4) only applied to permanent impairment claims and accordingly restrained the Commission from taking any further steps to refer the matter to an AMS, until liability is determined.

The decision confirms the Commission's jurisdiction to determine injury issues in matters involving threshold disputes or other entitlements to compensation. Importantly, this case will provide a precedent to prevent matters for which liability for injury has not been determined (in favour of the worker or accepted by an employer) from proceeding to the District Court where injuries reach the required threshold, reducing the number of WID matters and litigation costs in the future. The decision is timely given the likely increase in threshold disputes arising from the operation of s 39 of the Workers Compensation Act 1987 (NSW) (cessation of weekly benefits after five years) on pre-2012 claims.


Ms Sarah Pritchard SC and Mr Graham Barter of Counsel appeared on behalf of the Plaintiff employer in this matter, instructed by Sparke Helmore.

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