State of New South Wales v Kanajenahalli (NSWPICPD1 2023)

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Key Takeaways

The Personal Injury Commission (PIC) is not a Court vested with federal jurisdiction to exercise judicial power to determine a liability dispute between the State and the resident of another State.

The recent decision of Snell DP in Fletcher International Exports Pty Ltd v Lee (NSWPICPD 2022) is not authority for the proposition that a Member in determining a dispute between parties is exercising an administrative power.

Key to the question of jurisdiction is the appropriate characterisation of the power being exercised by the PIC.

Brief Facts

The worker was employed by the State of New South Wales in the capacity of a Trainee in Paediatrics at Dubbo Hospital. He developed a primary psychological injury during the course of his employment with the State on 11 June 2019 (deemed).

Liability was disputed, principally on the basis that the worker’s injury was one to which the provisions of s11A(1) of the Workers Compensation Act 1987 applied.

The Member at first instance declined to uphold the liability dispute and the statutory defence on which it was based before entering a Determination in favour of the worker. The respondent employer appealed the decision.

On Appeal

Deputy President Wood noted that a preliminary issue for determination that was not raised before the Member or initially by the parties on Appeal was whether the PIC was invested with the relevant jurisdiction to determine the matter.

It was common ground that at the time that the proceedings were commenced the worker was a resident of Queensland. Wood, DP noted that s75(4) of the Constitution vests original jurisdiction relevantly between ‘a State and a resident of another State’. Further, s39 of the Judiciary Act 1903 (Cth) vests federal jurisdiction in a Court of the State in matters between a State and a resident of another State.

Wood DP noted that in order for the PIC to have jurisdiction to determine the dispute it must be established that:

• the PIC is a Court of the State invested with relevant jurisdiction; or
• that the PIC was exercising administrative as opposed to judicial power in determining the dispute between the parties.

Judgment

The Deputy President referring to the decision of the Court of Appeal in Orellana-Fuentes v Standard Knitting Mill Pty Ltd (NSWPICPD 2022) per Ipp JA concluded that the PIC is not a Court of the State and therefore was not vested with federal jurisdiction to exercise a judicial power.

The remaining question to be determined was whether the Member in determining the dispute was exercising an administrative as opposed to a judicial power.

In dismissing the submissions of both parties that the power exercised by the Member was administrative in this instance, Wood DP rejected the argument that the decision of Snell DP in Fletcher International Exports Pty Ltd was authority for the proposition that it must follow from the PIC’s status that decisions by its Members must be administrative in nature.

Wood DP referring to the comments of IPPJA in Orellana noted that the judicial powers of the PIC did not necessarily make it a Court and that all its decisions are not necessarily administrative. It is necessary then to consider the character of the particular power being exercised in order to determine whether it is an exercise in judicial power.

Wood DP noted that the decision of the Member under appeal involved the following:

• a consideration of the relevant jurisdiction and applicable authorities;
• an assessment of the evidence; and
• an independent evaluation of each party’s case.

Further, s56 of the Personal Injury Commission Act 2020 (the 2020 Act) provides that the Member’s decision is ‘final and binding’ with limited grounds of appeal, pursuant to s352 of the Workplace Injury Management and Workers Compensation Act 1998.

Considering these factors cumulatively, Wood DP concluded that the Member incorrectly exercised federal judicial power contrary to s75 of the Constitution and that the proceedings should be stayed to allow the worker to pursue proceedings in either the Supreme Court or District Court in accordance with Division 3.2 of the 2020 Act.

Implications

The decision of Wood DP confirms that the PIC is not a Court and in proceedings involving a State and a resident of another State the PIC, is not vested with federal jurisdiction to exercise a judicial power. To do so is contrary to s75 of the Constitution.

This does not necessarily exclude the PIC in such circumstances from exercising administrative power and so close consideration of the character of the power being exercised is required.