Sparke Compensation Quarterly - Issue 4
24 March 2026
Welcome to the fourth edition of Sparke Compensation Quarterly, aimed at keeping you informed about the latest Commonwealth, state and territory legislations that could impact you as an employer or insurer.
Commonwealth: we look at a recent Federal Court decision on the admissibility of surveillance material in the ART, and the ART decision that a seafarer who had already reached retirement age could not receive income compensation for a subsequent injury.
Victoria: we explore the case of Yarzabal v Victorian WorkCover Authority in which surveillance evidence undermined the plaintiff’s credibility and weakened the medical evidence supporting the claim.
- Queensland: we review the decisions in Grapes v AAI Limited [2025] QCA 60 and Ringelstein v Metro North Hospital and Health Service [2025] QCA 188 which both deal with the statutory limitation period for personal injury claims.
- New South Wales: the Workers Compensation Legislation Amendment (Reform and Modernisation) Bill 2025 was assented to on 11 February 2026.
- South Australia: we look at the introduction of the Return to Work Scheme Impairment Assessment Guidelines, Third Edition (IAG3) and what its early trends mean for insurers.
- ACT: we report at the matter of Agius v Fed Consulting Services Pty Ltd; Agius v Gelo [2026] ACTMC 2 which deals with a construction site safety breach.
- Northern Territory: we review the recent decision in Tattersall v Northern Territory of Australia as well as three other cases centred on the issue of ‘out of in the course of employment’ in remote locations.
Commonwealth Compensation
Federal Court rules on admissibility of surveillance material in the ART
On 6 February 2026, the Federal Court handed down its much awaited judgment in K & S Freighters Pty Ltd v King [2026] FCA 58 (6 February 2026).
While the Court has not given a concluded view on the appropriate timing of the use or otherwise of surveillance material in the ART, it identified the following critical errors in the Tribunal’s decision not to admit surveillance material into evidence at hearing in paragraphs [82] – [83] of its judgment:
82. The Tribunal made at least the following reviewable errors in its decision refusing to grant K & S Freighters leave to rely on the video surveillance material and medical reports at the hearing listed to commence on 12 February 2024.
(1) In deciding that K & S Freighters required leave to rely on the video surveillance material and medical reports because these materials had not been lodged with the Tribunal more than 28 days before the commencement of the hearing in accordance with paras [4.45]-[4.46] of the General Direction and paras [9.4]-[9.5] of the Lodgement Direction, the Tribunal asked itself the wrong question. The correct question was whether those paragraphs of the practice directions were inapplicable and leave was not required because the video surveillance material and medical reports were subject to legal professional privilege.
(2) Relatedly, in failing to decide if the video surveillance material and medical reports were subject to legal professional privilege it failed to determine the central issue upon which K & S Freighters contended that the practice directions were inapplicable and leave was not required. That was a constructive failure to exercise the power conferred on the Tribunal under s 33 and s 39 of the AAT Act or a failure to accord K & S Freighters procedural fairness.
(3) In asking itself if K & S Freighters should be granted leave to rely on the video surveillance material and medical reports at the hearing listed to commence on 12 February 2024 it did so implicitly on the misconstruction of the practice directions and the mistaken assumption that they applied to information that was confidential and subject to legal professional privilege. That was an error of law.
(4) Relatedly, in considering potential prejudice to Mr King if leave were granted and potential prejudice to K & S Freighters if leave were refused, it applied principles that favoured disclosure of video surveillance material to Mr King before the hearing. It did so implicitly on the mistaken understanding and assumption that these principles were applicable to video surveillance material and medical reports that were subject to legal professional privilege. That was also an error of law.
83. The Tribunal’s errors of law and failure to accord K & S Freighters procedural fairness were material because absent the errors there is a realistic prospect that the outcome of the leave hearing would have been different.
The issue has been remitted to the ART to be decided having regard to the errors identified by the Federal Court.
Seafarer’s compensation
In a recent decision concerning whether a seafarer can receive income compensation after having already reached the statutory retirement age, the ART confirmed that they cannot. Although the seafarers’ legislation contains some ambiguity—particularly given the progressive increases to the retirement age over time—the Tribunal held that once a seafarer has reached retirement age, any subsequent injury does not give rise to an entitlement to income compensation. This approach aligns broadly with the position taken under comparable Commonwealth workers’ compensation schemes, which also restrict income-replacement entitlements once a worker has passed the relevant retirement threshold.
Victoria
Psychiatric injury claim partially succeeds: pain and suffering leave granted, economic loss denied
In Yarzabal v Victorian WorkCover Authority [2026] VCC 3 (21 January 2026), the County Court of Victoria has granted a plaintiff leave to pursue pain and suffering damages but dismissed her application for pecuniary loss damages under the Workplace Injury Rehabilitation Compensation Act 2013 (Vic).
The plaintiff, a former police officer, alleged she sustained a permanent psychiatric injury due to workplace bullying between 2018 and 2021. She ceased work in March 2021, attempted a brief return in late 2022 and was ultimately terminated on mental health grounds in July 2023. By late 2023 she had commenced operating a small retail shop and continued treatment for depression, anxiety and sleep disturbance.
A key issue was credibility, with the Victorian WorkCover Authority (VWA) relying on surveillance footage and IME psychiatric assessments to challenge the reliability of her self-reported symptoms. The footage showed the plaintiff socialising, travelling and engaging comfortably in public settings, inconsistent with her claimed avoidance of police, middle aged men and crowded environments. The Court found this undermined her reliability and therefore the weight of medical opinions dependent on her subjective reporting.
On economic loss, the Court accepted she could not return to policing but found she retained capacity for full time work in alternative roles (as she had been doing with her retail shop), which was also consistent with VWA medicolegal evidence. She therefore failed to meet the statutory 40% loss of earning capacity threshold, and her application for pecuniary loss damages was dismissed. However, the Court accepted that the loss of her policing career, which formed a central part of her identity and aspirations, constituted a loss of amenity. Combined with ongoing treatment needs and medication, this satisfied the statutory ‘severe’ test for non-economic loss. Leave was therefore granted for pain and suffering only.
Queensland
Crackdown on fraud in workers’ compensation claims
In December 2025, the Queensland government announced a major crackdown on fraud in workers’ compensation claims. In an effort to prevent substantial increases in WorkCover premiums, WorkCover Queensland and the Office of Industrial Relations are working closely to identify and prosecute fraud within the system.
In 2024-2025, 164 cases of suspected fraud were identified and six prosecutions were commenced. $250,000 was recovered during that period. The plan to tackle fraud includes a targeted taskforce, a tip off form for WorkCover employees to report suspected fraud, an awareness week, and a comprehensive education package in 2026 to enhance awareness and reporting.
Circumstances of the applicant considered in the issue of limitation period extensions
Grapes v AAI Limited [2025] QCA 60
The matter of Grapes v AAI Limited [2025] QCA 60, was heard in the Supreme Court of Queensland in Brisbane in April 2025.
A central issue in the appeal concerned the application of the principle from NF v State of Queensland [2005] QCA 110, where the Court stated: 'Whether an applicant for an extension of time has taken all reasonable steps to find out a fact can only be answered by reference to what can reasonably be expected from the actual person in the circumstances of the applicant.'
Ms Grapes was a paramedic with the Queensland Ambulance Service (QAS). On 2 September 2018, she attended a single-vehicle accident at Mount Tamborine. Ms Grapes remained at the scene of the accident for about an hour with an injured passenger whose arm had been almost completely amputated. Ms Grapes had retrieved the passenger’s humerus bone from where it was lodged in a tree several metres from the vehicle.
Over September and October 2018, Ms Grapes’ ability to cope with her paramedic duties deteriorated and did not improve. Within 12 months of the accident, she had ceased full-time work, and from December 2020 she was unable to work at all. In January 2021, she was diagnosed with post-traumatic stress disorder (PTSD) attributed to her exposure to trauma, including this accident.
Under Queensland law, motor vehicle accident claims generally must be commenced within three years of the accident. However, Ms Grapes did not file her claim within that period. The dispute between the parties focused on whether, before 8 November 2023, Ms Grapes had taken all reasonable steps to ascertain the identity of the driver and the CTP insurer—information essential to her claim. She gave no direct explanation for why she had not instructed a solicitor earlier to obtain these details.
His Honour Bradley JA accepted that, for a period, Ms Grapes' PTSD made her unable to take such steps, however this incapacity did not persist indefinitely. In his view, after seeking legal advice in May 2022 and again in February 2023, Ms Grapes ought to have taken reasonable steps to retain a solicitor to identify the driver and insurer, notwithstanding the state of her health.
Because she had failed to take those steps, Bradley JA held that Ms Grapes could not demonstrate that the identity of the driver and insurer were facts outside her means of knowledge before November 2023. As a result, Bradley JA was unable to extend the limitation period, as Ms Grapes had requested, and held that the trial judge did not err in failing to exercise the discretion to extend the limitation period. The appeal was dismissed.
Ringelstein v Metro North Hospital and Health Service [2025] QCA 188
The judgment in the matter of Ringelstein v Metro North Hospital and Health Service [2025] QCA 188, heard in the Supreme Court of Queensland in Brisbane in September 2025, was delivered on 10 October 2025. In this matter, the court applied the principle from NF v State of Queensland [2005] QCA 110, which guides the assessment of whether an applicant has taken all reasonable steps to discover a material fact.
The appellant, Cheryl Ann Ringelstein, underwent surgery at the Caboolture Hospital on 15 June 2004. She was then 48 years of age, married with four children. Complications arose from that surgery, alleged to have resulted from deficiencies in her surgical and post operative care. She subsequently suffered ongoing pain, numerous distressing symptoms and depression. Despite undergoing several further surgical procedures, her health issues remained unresolved. All of this led to a significant impact on her physical and mental wellbeing, as well as in her day-to-day life. She lodged a complaint with the Caboolture Hospital in 2004 but received no resolution.
Between 2009 and 2010, the appellant approached two law firms seeking assistance. Clewett Lawyers advised that they required $2,200, which she could not afford. Slater & Gordon Lawyers later informed her they could not assist on a no-win no-fee basis and required between $8,000 and $10,000 to proceed with the recommended application—again beyond her financial means.
In May 2022, a friend said that she had seen a television show discussing surgeries performed at the Caboolture Hospital dating back to 2004. The appellant again approached the hospital and was offered a goodwill payment of $10,000. Following this interaction, she approached Slater & Gordon Lawyers again in March 2023, who agreed to act under different arrangements.
A number of circumstances were identified as relevant to assessing whether Mrs Ringelstein had taken all reasonable steps to determine the decisive facts, as follows:
- She had made a complaint to Caboolture Hospital in 2004 but this was ‘shutdown internally’ and resulted in no meaningful outcome. She had sought legal advice in 2008 and 2010, and despite her appreciation of the need to act urgently to obtain a report from a doctor to pursue her claim, her financial situation and personal and family circumstances prevented her from obtaining the medical evidence required to advance the claim.
- She had limited education and familiarity with the legal system and little understanding of how to advance the matter on her own.
- She experienced significant ongoing pain, required the use of a stoma bag, and suffered from depression stemming from her physical condition.
It was His Honour Doyle JA’s view that, having regard to her circumstances, that the appellant had in fact taken all reasonable steps to ascertain the relevant facts, namely:
- She had approached two law firms to represent her but each required fees she simply could not afford.
- Her physical and mental health had been profoundly compromised since the initial surgery and remained so over many years. Her mental state left her demoralised, limiting her ability to pursue the matter further, even though she retained capacity to take steps concerning her medical care.
The appeal was allowed and the limitation time for commencement of proceedings was extended to 23 June 2023.
The full judgments in these matters can be found at Grapes v AAI Limited [2025] QCA 60 and Ringelstein v Metro North Hospital and Health Service [2025] QCA 188
New South Wales
Reforms include new eligibility rules, decision timeframes and dispute pathways
The Workers Compensation Legislation Amendment (Reform and Modernisation) Bill 2025 passed both houses of NSW Parliament in February and was assented to on 11 February 2026 becoming law. The Act makes significant changes to workers’ compensation legislation in NSW especially in relation to psychological claims, with increased evidentiary burdens applying in addition to increased thresholds to access compensation and rights to damages.
It is anticipated that the amendments will have significant impacts on the frequency and costs of psychological claims in NSW, which should ease some pressure on premiums for employers. Part of the Act provides a freeze on insurance premium rate increases by the Nominal Insurer until 30 June 2028.
South Australia
New impairment assessment guidelines: implications for insurers
On and from 1 October 2025, the regime for assessing the extent of a worker’s permanent impairment was dramatically changed due to the introduction of the Return to Work Scheme Impairment Assessment Guidelines, Third Edition (IAG3). Third Edition of the Impairment Assessment Guideline
IAG3 operates on and from 1 October 2025 to all injuries, with very limited exceptions, and represents the second significant change to the permanent impairment assessment process following amendments to the Return to Work Act 2014 (SA) in late 2022, whereby the threshold for a worker to reach the ‘serious injury’ threshold was raised from 30 to 35% WPI (in relation to physical injuries).
Over the last six months, stakeholders have been grappling with these changes, in particular with substantial reforms to the manners in which some injuries are assessed, including injuries which tend to carry significant impairments such as joint replacements, brain injuries and complex regional pain syndrome (CRPS).
However, the early stages of IAG3’s rollout suggest that there may be more informal disputes arising between workers and insurers in the period between a worker lodging a lump-sum entitlement claim and undergoing their permanent impairment assessment. This appears to stem from IAG3’s more prescriptive requirements, which obligate insurers to provide assessors with all relevant medical and allied health documents. In some cases, this may conflict with a worker’s interest in having their assessment completed in a timely fashion. As a result, there have been pockets of increased activity in Applications for Expedited Decisions.
While some of this activity can be attributed to the transitional period between the former IAG framework being phased out and IAG3 coming into effect, we consider it important that insurers reflect on the administrative and risk-management implications of increasing informal disputes about the permanent impairment assessment process
ACT
Construction site safety breach leads to Category 2 convictions under WHS Act
In Agius v Fed Consulting Services Pty Ltd; Agius v Gelo [2026] ACTMC 2, the defendants (Fed Consulting Services Pty Ltd (Fed Consulting) and its director) were charged with Category 2 Work Health and Safety offences contrary to s 32 of the Work Health and Safety Act 2011 (WHS Act). The charges were brought against the defendants after a worker, who was working at a construction site on 17 November 2022, sustained injuries to his right foot as a result of an excavator bucket landing on it. The main issue in dispute was how the incident occurred, and more specifically, whether the director intentionally lowered the excavator bucket while the worker was in its immediate vicinity.
The worker, the director and three other witnesses gave evidence directed to the cause of the incident. The worker’s evidence was that the bucket contacted his right foot after he approached the excavator, obtained the director’s attention, and indicated that he wanted to shovel concrete out of the bucket, and that the director acknowledged this and subsequently lowered the bucket to make it easier for the worker to take concrete from the bucket. This version of events was corroborated by the evidence of three other witnesses and was accepted by Magistrate Temby. The director’s evidence—which was rejected—was that he did not see the worker and merely stopped the excavator when he noticed the worker’s shovel.
Magistrate Temby was satisfied, beyond reasonable doubt, that Fed Consulting failed to comply with its primary duty of care under s 19 of the WHS Act, the director failed to comply with his duty to take reasonable care to ensure that his acts or omissions did not adversely affect the health and safety of other persons at the site under s 28 of the WHS Act, and the defendants’ failure to comply with their respective primary duties exposed the worker to a risk of serious injury. Magistrate Temby found each of the defendants guilty of committing a Category 2 offence, contrary to s 32 of the WHS Act.
Northern Territory
NT Work Health Court rules on ‘out of in the course of employment’
In November 2025, the Northern Territory Work Health Court (WHC) delivered its decision in Karl Tattersall v Northern Territory of Australia [2025] NTWHC 6. Mr Tattersall was a ranger at the Limmen National Park (LNP) and lived at the ranger station in this remote location. The Court accepted the entire area of the LNP constituted his workplace. On a Saturday, while off duty, he walked a short distance from the ranger station and climbed a ridge to photograph the sunrise. While doing so, he placed his hand on a boulder that unexpectedly shifted and rolled onto him, causing serious injuries.
The WHC determined his employment at the park was not an ‘overall period/episode of work’ under Hatzimanolis / PVYW principles but comprised discrete daily work periods. The Court found the injury occurred between two discrete periods of work (the ‘period of work’ being each working day), not within an ‘overall period/episode’ interval.
The judge stated:
‘… the Employer both authorised and reasonably required employees to generally engage in recreation on weekends, when not responding to unprogrammed requirements of the job. It was also expected that Rangers, in the context of their employment, become familiar with LNP, and to act upon anything untoward observed by them in their travels, including when off duty. It may be noticed that the recreational opportunities highlighted by the Employer to the Worker prior to commencement of employment (so in that context induced or at least endorsed) included “bushwalking” and “photography”.’
Despite these findings, the judge concluded Mr Tattersall was not induced or encouraged ‘to the necessary extent or in the relevant sense’.
Other Northern Territory cases dealing with the issue of ‘out of in the course of employment’ in remote locations include:
- In Forno v Relkup (2001), the worker was the manager of the Borroloola Inn and was required to be on call at all times. He was shot in his on-site accommodation engaging in private activity and was found to have been injured in the course of employment.
- In Jonathon Turner v Gebie Civil & Construction (2019), the worker was a FIFO supervisor carpenter working for the employer on Groote Eylandt. On a Sunday (a non-workday), he went on a fishing trip with colleagues and sustained an injury. The Court held the fishing trip was within an overall episode of work on the remote FIFO assignment and the employer had impliedly encouraged the recreational activity, hence the worker was entitled to compensation.
- In Waylexson Pty Ltd t/as v Clarke (2010), a diesel fitter employed by a labour-hire company was deployed to Ranger Uranium Mine at Jabiru, working under the day-to-day direction of an Energy Resources of Australia supervisor. His roster involved long shifts, including a 24-hour ‘shift-change interval’ between day and night shifts, during which workers were required to stay awake to adjust their body clocks and were not permitted to return home. During this interval, the worker joined his supervisor and another worker in a company minibus to go fishing but was injured when the vehicle crashed. The NT Court of Appeal held that the worker’s activity during the interval remained within the course of employment, as the circumstances of his employment effectively induced and encouraged both his presence at the location and his participation in an activity intended to help him remain awake and transition between shifts.
NT WorkSafe
In November 2025, NT WorkSafe charged a local Council over the drowning death of a toddler.
In December 2025, a Darwin based garden maintenance company was fined $10,000 after a refuelling fireball incident injured one of its workers and in January 2026.
NTWS issued a safety alert after a worker was seriously injured from a falling excavator bucket at a Darwin construction site.
In February 2026, the NT office of the Independent Commissioner Against Corruption (ICAC) reported on ‘Operation Falcon’ in relation to ICAC’s investigation ‘into alleged misuse of statutory powers, conflicts of interest and failure to disclose secondary employment at the NT WorkSafe electrical inspectors’ unit.’
