Federal Jurisdiction and the Personal Injury Commission

Federal Jurisdiction in the Personal Injury Commission

Federal jurisdiction has become a consideration in workers compensation in NSW in recent times.

Last week, Principal Member John Harris, published a decision of Watts v BKFY Pty Ltd [2022] NSWPIC 700 which considered whether that particular matter was federally impacted. Harris’ decision in Watts provides a helpful explanation of situations where Federal Jurisdiction applies and a summary of the decisions involving it so far.

Why federal jurisdiction is important

Ordinarily when there is a dispute involving a workers compensation claim in the workers compensation system in NSW, the jurisdiction for resolving the disputes is the Personal Injury Commission (PIC)… unless Federal Jurisdiction applies. For this reason, understanding Federal Jurisdiction is very important for practitioners in workers compensation in NSW due to the impact it has procedurally on litigation.

Federal Jurisdiction involves the intersection of the Workers Compensation Act NSW 1987, the Workplace Injury Management and Workers Compensation Act NSW 1998, the Personal Injury Commission Act 2020 (the PIC Act) and the Commonwealth of Australia Constitution Act 1900 nonetheless!

Division 3.2 of the PIC Act provides for matters to be heard in the District Court if the determination of the matter by the PIC “would involve an exercise of federal jurisdiction”.

After proceeding to the District Court, the matter can be remitted back to the PIC.

In addition to the procedural considerations for litigation, we note that for an applicant there is also a specific funding policy within the ILARS arm of IRO.

When federal jurisdiction applies

There are three requirements in determining whether a claim is potentially federally impacted. 

If all of the following three apply, then the matter is to be heard in the District Court rather than the PIC:

(a) jurisdiction can only be exercised by a court of a State;
(b) the resolution of the dispute requires the exercise of judicial power, and
(c) the matter is between residents of different States, or between a State and a resident of another State.

The first two requirements are relatively uncontroversial. Case law indicates the PIC is not a court. Equally, case law indicates the PIC does not exercise judicial power.

This sets up the situation that if the third requirement applies in a workers compensation case; i.e. the matter is between residents of different States, or between a State and a resident of another State, then the matter is federally impacted.

This latter requirement has been the subject of some recent decisions in the PIC.

Federal jurisdiction in Ritson

Mr Ritson worked for NSW Police when he sustained a number of injuries in the course of his employment including an injury to his right thumb in 2006. 

Mr Ritson brought a claim in the PIC for $825 for the cost of fractional ablative laser treatment rendered by the Skin Centre by Mr Ritson.

Mr Ritson had moved to QLD after his injury and at the time the proceedings commenced in the PIC, he had been living there for eight years.

Before dealing with the actual claim made, a preliminary issue arose as to whether Federal Jurisdiction applies preventing the matter being dealt with in the PIC.

It was clear that Mr Ritson was bringing a claim against the state noting the employer to be the NSW Police. It also was noted the insurer was the “NSW Self Insurance Corporation as a statutory body representing the Crown and favours a finding that this corporation is properly characterised as the State consistent with the above authorities.”

Principal Member Harris gave the opinion that “at the date of the filing of the application and when the present matter arose, this was a dispute between the State of New South Wales and a resident of another State.”

For this reason Mr Ritson’s application in the PIC was dismissed.

Federal jurisdiction in Lee

Ms Lee worked for Fletchers International Exports. Fletchers International Exports is self-insured. 

Ms Lee alleged serious physical and psychological injury in the course of her employment.

Ms Lee brought proceedings in the PIC for ongoing weekly compensation and treatment.

At the time the PIC proceedings commenced, Ms Lee had moved to QLD.

At first instance Ms Lee was successful in the PIC. Member Whiffin found that Ms Lee had sustained injury in the course of her employment and that this injury continued and awarded weekly compensation and treatment. The Member also addressed the issues raised about Federal Jurisdiction too and found that it did not apply.

Member Whiffin distinguished the situation in Ritson for the circumstances of the case of Lee.

Member Whiffin gave the opinion that Ritson involved the NSW Self Insurance Corporation which is specifically “said to be constituted as a statutory body representing the Crown.” In the same place Member Whiffin stated the respondent, Fletchers International Exports, “is not in the same position, in my opinion.”

The Member indicated that having “been provided with a particular licence by the State Insurance Regulatory Authority pursuant to section 210 of the 1987 Act does not in my opinion make it a state…”

The decision was appealed by the respondent and on appeal, Deputy President Michael Snell found that Federal Jurisdiction applied.

Principal Member John Harris’ decision in Watts

Last week Principal Member Harris has published the decision of Watts v BKFY Pty Ltd [2022] NSWPIC 700.

Ms Watts was employed as a cleaner by BKFY Pty Ltd. She sustained injury in the course of her employment in 2015.

Ms Watts brought proceedings in the PIC this year in relation to a whole person impairment (WPI) claim. At the time the proceedings commenced in the PIC, Ms Watts lived in Victoria.

The respondent submitted the matter was federally impacted and should be dismissed. The respondent referenced the decisions of Ritson and Lee in arguing that the situation did attract Federal Jurisdiction.

Ultimately Principal Member Harris disagreed.

In relation to Ritson, Principal Member Harris stated:

“That decision has been taken out of context. In Ritson the State of New South Wales was the respondent and is obviously a State for the purposes of the Constitution…”

Principal Member Harris went on to say that Ritson

“…does not stand for the proposition, as the parties suggested, that I determined that all self-insurers “are clearly statutory bodies representing the Crown”. Nor do I agree with that as a general proposition.”

Referring then to both Ritson and Lee, Principal Member Harris stated:

“The applicant’s submission that all self-insurers are entities of the State is said to have arisen from Ritson and the decision of Fletcher International Exports Pty Ltd v Lee.[33] That proposition is not self-evident…
“…A self-insurer may or may not fall within the meaning of a “State”. Actual evidence about the corporate structure of the employer such as a securities commission search would show the corporate identity…”
“A private corporation that has the right to hold a license of self-insurance because private funds are secured against potential claims, in circumstances where that company is operating a private business, does not suggest that it is a State. In my view, the bare suggestion that because a company is a self-insurer does not, without more evidence, form an arguable basis that a private company is a State as defined in the Constitution.”

Considering the factual situation of Ms Watts, Principal Member Harris gave the opinion that the respondent was not a State and accordingly Federal Jurisdiction did not apply. Principal Member Harris made an order that the matter will proceed to conciliation and arbitration on the issues involving the WPI claim.

Federal Jurisdiction is a complex area of law.

This recent decision of Principal Member Harris is well worth a read for any stakeholder involved in workers compensation in NSW who believes their matter may be federally impacted.


Paragraph 11 Watts v BKFY Pty Ltd [2022] NSWPIC 700 (13 December 2022)
Paragraph 16-20 http://www7.austlii.edu.au/cgi-bin/viewdoc/au/cases/nsw/NSWPIC//2022/700.html
Paragraph 21-33 http://www7.austlii.edu.au/cgi-bin/viewdoc/au/cases/nsw/NSWPIC//2022/700.html
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