Issue 2: February 2009
Issue 2 - February 2009 includes summaries of the January 2009 decisions. These summaries are prepared by the Presidential unit and are designed to provide a brief overview of, and introduction to, the most recent Presidential and Court of Appeal decisions. They are not intended to be a substitute for reading the decisions in full.
Welcome to the Second Issue of ‘On Appeal’.
Issue 2 - February 2009 includes summaries of the January 2009 decisions.
These summaries are prepared by the Presidential unit and are designed to provide a brief overview of, and introduction to, the most recent Presidential and Court of Appeal decisions. They are not intended to be a substitute for reading the decisions in full.
Please note that the following abbreviations are used throughout these summaries:
Acting Deputy President
Approved Medical Specialist
Application to Resolve a Dispute
Workers Compensation Commission
Medical Assessment Certificate
Reply to Application to Resolve a Dispute
Whole Person Impairment
Workers Compensation Act 1987
Workplace Injury Management and Workers Compensation Act 1998
Workers Compensation Commission Rules 2006
Section 55 of the 1987 Act – Change of circumstances – three recent cases. 3
(i) Relevant date of commencement of review.. 3
Howlett v Coles Logistics Pty Ltd  NSWWCCPD 5. 3
Coles Logistics Pty Limited v Howlett  NSWWCCPD 6. 3
(ii) Requirement for section 74 notice – challenge to Commission’s jurisdiction. 5
Pages Hire Centre Kogarah v Chapman  NSWWCCPD 9. 5
(iii) Self employed real estate agent 7
Santa Sabina College Ltd v Agius  NSWWCCPD 10. 7
(i) Stating there is “no evidence” is not the same as saying there is “no evidence which I accept” 9
Harmouche v Pentagon Protective Services Pty Ltd  NSWWCCPD 2. 9
(ii) Drawing medical related conclusions in the absence of medical evidence. 12
Smith v OneSteel Ltd  NSWWCCPD 4. 12
Journey claims – section 10 of the 1987 Act 14
Singh v Thompson Health Care Ltd  NSWWCCPD 11. 14
Assessment of ability to earn. 16
Galea v Galaxy Rooflite Pty Ltd  NSWWCCPD 1. 16
Lack of training leads to psychological injury. 19
Sydney South West Area Health Service v Markovski  NSWWCCPD 8. 19
Effect in law of prior Consent Order. 21
Dick v Steelfixed Pty Ltd (in liquidation)  NSWWCCPD 7. 21
Referral to AMS held to be of an interlocutory nature. 23
Ozblue Constructions Pty Ltd v Lang  NSWWCCPD 3. 23
Section 55 of the 1987 Act – Change of circumstances – three recent cases
(i) Relevant date of commencement of review
Howlett v Coles Logistics Pty Ltd  NSWWCCPD 5
Coles Logistics Pty Limited v Howlett  NSWWCCPD 6
20 January 2009
- Mr Howlett suffered injuries to his neck and both shoulders as a result of the nature and conditions of his employment with Coles in 2002. In December 2006 an arbitrator found him fit to perform 30 hours of work per week and awarded weekly compensation of $418.62 pursuant to section 40 of the 1987 Act.
- In July 2007, Mr Howlett started his own business carrying out energy audits and obtained fulltime contract work with Energy Australia from 1 July 2007 to October 2007 often working in excess of 40 hours per week. He then worked fulltime with Repco as a Casual Customer & Sales Officer (38 hrs per week) from February to May 2008 but worked longer hours on occasions. He was unemployed thereafter.
- In July 2008 Coles filed an application under section 55 to review the award on the grounds that the worker’s circumstances had materially changed, being that he was fit to work fulltime (40 hrs per week) from 12 June 2007.
- The Arbitrator accepted that there had been a “change of circumstances” and found that he was fit for 40 hours per week and reduced the award of weekly compensation to $230.85 from 23 July 2008 and continuing.
- Both parties appealed
- Mr Howlett submitted that the Arbitrator had incorrectly calculated his entitlements in accordance with Mitchell v Central West Health Service (1997) 14 NSWCCR 527 (‘Mitchell’) (Howlett v Coles Logistics Pty Ltd  NSWWCCPD 5).
- The employer did not oppose the worker’s appeal, but appealed the Arbitrator’s determination in respect of the date upon which the reduced award commenced, her assessment of the worker’s capacity for work in light of the available evidence and the adequacy of her reasons (Howlett v Coles Logistics Pty Ltd  NSWWCCPD 6).
(1) The Arbitrator’s acceptance of 23 July 2008 (the date of Mr Howlett’s Reply) as the relevant date upon which the review commenced was not supported by the evidence.
(2) Once a change of circumstances is found under section55, the method for calculating weekly entitlement is still under sections 38-40 (-)
(3) There was ample evidence to conclude that Mr Howlett was fit for at least 40 hours per week in suitable duties from the time he commenced his sub-contracting work with Energy Australia on 1 July 2007.
(4) The Arbitrator’s findings that Mr Howlett’s earnings of $381.00 per week with Energy Australia, via his company structure, were not, in this case, prima facie evidence of his ability to earn because of the accountant’s plan that established his “earning power” lower than it should have been.
- Arbitrator’s determination revoked and matter redetermined.
- In determining the worker’s capacity to earn in suitable employment ADP Moore made reference to the decision of Deputy President Roche in Ranvet Pty Ltd v Vasilevski  NSWWCCPD 81  – .
- Worker awarded weekly compensation at the rate of $302.05 from 1 July 2007 to 24 February 2008, $274.34 for the period from 25 February to 15 May 2008 (when the worker earned a higher amount while employed at Repco) and $302.05 from 16 May 2008 to date and continuing.
(ii) Requirement for section 74 notice – challenge to Commission’s jurisdiction
Pages Hire Centre Kogarah v Chapman  NSWWCCPD 9
28 January 2009
Issues on this appeal:
- Whether the Commission had jurisdiction to hear an application by an employer for a review under section 55 of the 1987 Act in circumstances where it had not first served a notice under section 74 of the 1998 Act.
- An employer’s obligation to properly particularise the basis of its claim for relief under section 55 of the 1987 Act.
- Mr Chapman injured his right arm in 1993. In 2002 his employer, Pages Hire Centre Kogarah Pty Ltd, consented to an award in Mr Chapman’s favour of weekly compensation payments of $140.00 per week under section 40 and payment of section 60 expenses.
- In May 2007, the employer’s insurer notified Mr Chapman that under section 54 of the 1987 Act, his weekly compensation payments would cease on the basis that he was not satisfying his job seeking obligations under section 52A(1)(a) of the 1987 Act.
- In June 2007, the employer filed its first application in the Commission seeking to terminate the prior Compensation Court Award under section 52A. At the arbitration hearing the employer sought unsuccessfully to amend the application to rely on section 55 as an alternative ground for reducing the award. The Arbitrator determined the section 52A issue in favour of Mr Chapman, finding that he was totally incapacitated as a result of a supervening psychiatric condition and was neither capable of working nor seeking work.
- The employer filed a second application seeking a reduction of the worker’s award to an amount of no more than $10.00 per week but provided no grounds upon which the application was based. It was not apparent until the second arbitration hearing that this application sought a review under section 55.
- The worker challenged the Commission’s jurisdiction to deal with the dispute on the basis that the matters had not been previously notified; the application had not been served personally on Mr Chapman; the worker remained incapacitated for work and, as an alternative, claimed an increase in the award; his incapacity was not solely due to his psychological impairment and the employer was estopped from asserting that he was not totally incapacitated.
- At the second arbitration a different arbitrator held that the Commission did not have jurisdiction because no notice of dispute had been served under section 74 or section 287 [sic-289A] of the 1998 Act or under 54 of the 1987 Act.
- The employer appealed.
(1) The Arbitrator’s decision was a final determination on the fundamental question of the Commission’s jurisdiction, which, if left unchallenged created an estoppel on that issue between the same parties in any future proceedings for similar relief. Leave to appeal was granted.
(2) Sections 74 and 289A deal with claims for compensation, not applications for a review under section 55 of the 1987 Act. An application for review under section 55 is not a “claim” for compensation but an application that any weekly payments of compensation “be reviewed by the Commission at the request of the employer or the worker or the Authority” (see section 55(1)).
(3) The Commission’s jurisdiction to hear section 55 applications is found in section 105 of the 1998 Act. Therefore the Commission does have jurisdiction to determine section 55 application without the need for a section 74 notice being served.
(4) All applications seeking substantive relief must state the section/s of the legislation on which the application is based and clearly particularise the grounds upon which relief is sought (as to the particulars in general see Dare v Pulham (1982) 148 CLR 658 at 664; 44 ALR 117).
(5) Failure to particularise a claim delays proceedings or, in extreme cases may result in the proceedings being dismissed under section 354(7A)(b) of the 1998 Act.
(6) Rule 8.3(2) of the 2006 Rules requires that service be made at the Respondent’s last known postal address. The purpose of the provisions relating to service of applications such as section 55 review applications are to ensure that the respondent to the application is aware of the orders being sought and has sufficient time to respond.
(7) The second application was served on Firths, Mr Chapman’s solicitors. In the absence of agreement from Firths to accept service the application should have been served at Mr Chapman’s last known postal address. However, Firths filed a Reply wrongly asserting that the rules required the application to be personally served on the worker. The filing of the Reply was an acknowledgment that Mr Chapman had received the application and had instructed Firths to act on his behalf. Therefore the submission that the application had not been served was without merit.
The Arbitrator’s decision was revoked and the matter remitted to a different arbitrator for re-determination.
(iii) Self employed real estate agent
Santa Sabina College Ltd v Agius  NSWWCCPD 10
30 January 2009
- The employer appealed the Arbitrator’s decision to dismiss its application for a review of weekly payments of compensation pursuant to section 55 of the 1987 Act, on the basis that the Arbitrator had erred in determining that there had not been a “change of circumstances”.
- Ms Agius was employed by Santa Sabina College Ltd as a physical education teacher when she injured her left knee in April 1997. She had injured the same knee in 1987 while playing soccer and had undergone surgery at that time.
- In 1998 Mr Agius gave up her employment with the College to pursue retraining as a real estate agent and formed a real estate company in 2000 in which she was employed.
- She made a claim for weekly compensation together with lump sums under sections 66 and 67. In July 2001, Quirk J, of the Compensation Court, awarded the worker weekly compensation of $140.00 per week under section 40 of the 1987 Act and a sum pursuant to section 66, which was reduced by 80% because of her pre-existing condition.
- Ms Agius filed proceedings in the Commission seeking an increase in weekly compensation and in a decision dated 13 January 2005 the College was ordered to pay weekly compensation of $300.00 from 29 April 2004.
- The College appealed this decision in February 2005, relying on a medical report subsequently obtained. ADP Handley refused leave to admit this evidence and confirmed the decision of the Arbitrator (Santa Sabina College Pty Ltd v Agius  NSWWCCPD 58).
- In 2008, the College made an application under section 55 seeking a termination or diminution of the award from 13 June 2005, submitting that Ms Agius was voluntarily accepting a reduction in her pay in order to “grow her business”, was in fact earning less than her ability to earn in suitable employment and that the discrepancy between what the worker paid herself and what she paid her staff was a powerful basis on which to exercise the statutory discretion under section 40.
- These proceedings were referred to a different arbitrator who, on 10 September 2008, dismissed the application on the basis that there was no medical evidence of a change in circumstances or a change in circumstances with respect to the worker’s business.
- The employer appealed this decision.
(1) In finding that there had been a change of circumstances in terms of the wages actually received by the worker and the probable earnings if uninjured since the previous determination of 13 January 2005, ADP Candy noted that the case fell into the category of cases where one is permitted to look beyond what the worker is actually receiving by way of wages in order to determine her earning capacity. Where the worker herself determines how much she is paid it is appropriate to look at what she would be able to earn in employment otherwise than by her own company (J & H Timbers Pty Ltd v Nelson (1972) 126 CLR 625; Cage Developments Pty Ltd v Schubert (1983) 151 CLR 584).
(2) There was no reason why the employer should bear a greater liability for weekly payments by reason of the worker’s preference for working in her own business rather than seeking better paid employment in the marketplace and Aitkin v Good Year Tyre & Rubber Co. (Aust) Ltd (1945) 46 SR (NSW) 20 did not preclude an inquiry as to the value of the worker’s labour rather than what she was actually paid.
(3) In finding that the worker’s ability to earn had increased ADP Candy applied his discretion pursuant to section 40(1) of the 1987 Act, to take into account the circumstances of the case, particularly that the worker would not have been able to continue as a physical education teacher by reason of her pre-existing injury.
- The Arbitrator’s decision of 10 September 2008 to dismiss the section 55 application for the termination or reduction of weekly payments confirmed, but for different reasons.
Treatment of Evidence
(i) Stating there is “no evidence” is not the same as saying there is “no evidence which I accept”
Harmouche v Pentagon Protective Services Pty Ltd  NSWWCCPD 2
Injury; failure to properly determine issues in dispute
9 January 2009
- On 30 November 2000, when working for Pentagon as a security guard at a supermarket, Mr Harmouche was assaulted during a robbery. He returned to work the next day but was told to go home and has not worked for Pentagon since.
- Mr Harmouche consulted his GP, Dr Noussair on 21 February 2001 who recorded that Mr Harmouche was pushed to the floor and then pushed with a leg. There was nothing in the clinical notes to suggest any physical injury, other than with respect to his lip (which was not claimed).
- By a letter dated 24 September 2007, Mr Harmoche made a claim for lump sum compensation. By letter dated 14 May 2008 the insurer, GIO, declined to make an offer of settlement based on an assessment by Dr Machart, orthopaedic surgeon, that Mr Harmouche had no work related impairment but had degenerative multilevel spondylosis.
- Mr Harmouche filed an ARD with the Commission on 24 June 2008, claiming lump sump compensation in respect of alleged injuries to his neck, back and right leg. Pentagon lodged a Reply on 1 July 2008, relying on the matters disputed in GIO’s letter of 14 May 2008.
- The Arbitrator gave Pentagon leave to rely on a section 74 notice in which it disputed whether Mr Harmouche sustained an injury arising out of his employment, whether employment was a substantial contributing factor, entitlement to weekly compensation (although none was claimed), medical expenses (none were claimed) and lump sum compensation. The section 74 notice also disputed whether the claim had been made within the time limit in section 65 of the 1998 Act but the Arbitrator declined to allow Pentagon to rely on that issue.
- The Arbitrator found in favour of Pentagon for the following reasons:
- The Arbitrator accepted the account recorded by Dr Noussair on 21 February 2001, which did not record any physical injury as a result of the assault, save for injury to the lip. Whilst Mr Harmouche had a degenerative back condition, there was nothing to indicate that it was accelerated as a result of the incident.
- If Mr Harmouche did receive an injury as a result of the incident, the evidence would only support it being to his back. The thrust of the evidence was that any aggravation to Mr Harmouche’s back ceased at some stage prior to late 2002.
Issues on Appeal:
Mr Harmouche appealed on the grounds that the Arbitrator failed to properly determine the issues in dispute; that he exceeded his jurisdiction in making decisions that were required to be made by an AMS in finding that there was no evidence to suggest that Mr Harmouche had sustained an aggravation of such a degree or sufficiently long lasting as to be compensable; in failing to refer the determination of the section 66 issues to an AMS and by failing to expressly state whether Mr Harmouche’s evidence was accepted or rejected.
(1) The Arbitrator was obliged to determine the issue of injury and he did that. He found that Mr Harmouche had either “not suffered an injury as a result of the incident” or had “recovered from any aggravation suffered at the time of the incident”. [72a]
(2) The evidence did not “compel” a finding in Mr Harmouche’s favour, as was submitted on appeal. The evidence that the assailant stomped on Mr Harmouche’s back was in his statements prepared in 2008, nearly eight years after the event, and was not corroborated by any contemporaneous evidence. The submission that Mr Harmouche had never suffered back pain prior to 30 November 2000, was contrary to Dr Noussair’s notes. It was also incorrect that Mr Hamouche had always suffered neck pain since the robbery. Dr Noussair’s notes suggested that the neck pain did not commence until 2002. [72c]
(3) In view of the issues involved, the Arbitrator should have considered the evidence in detail and made findings as to which evidence he accepted and which evidence he rejected rather than leaving it to be inferred. [72f]
(4) It is correct that an Arbitrator had no jurisdiction to determine a “medical dispute”, however, whether a worker sustained an “injury” within the meaning of section 4 of the 1987 Act is a matter exclusively within the Commission’s jurisdiction and must be determined before a matter is referred for assessment of the degree of permanent impairment or loss, if any, as a result of that injury. [72h]
(5) The Arbitrator erred when he said that there was “no evidence” that suggested “that any aggravation would be of such a degree or sufficiently long lasting as to be compensable.” There was evidence on that issue and it was for the Arbitrator to consider and weigh that evidence with all the other evidence in the case to determine if Mr Harmouche sustained an injury within the meaning of section 4 of the 1987 Act. In circumstances where the Arbitrator did not review or consider all of the evidence it was not appropriate to read the Arbitrator’s decision as if the words “which I accept” were included. [72i]
- It is not the law that an Arbitrator must accept a worker’s evidence if the worker has not been cross examined  (see Quadi v the Reject Shop (Aust) Pty Ltd  NSWWCCPD 3  to  and Matar and anor v Zeineddine  NSWWCCPD 51 at  to ) or that unchallenged evidence must be accepted (Elllis v Wallsend District Hospital (1989) 17 NSWLR 553).
- A note by a GP three months after the event is not contemporaneous.
- Preparation of the matter was seriously deficient.
The Arbitrator’s determination was revoked because of the significant credit issues involved, the matter was remitted for re-determination before a different Arbitrator.
(ii) Drawing medical related conclusions in the absence of medical evidence
Smith v OneSteel Ltd  NSWWCCPD 4
15 January 2009
- Mr Smith began working for OneSteel Ltd as a plant labourer in 2001. On 16 May 2005, he was injured in the course of his employment, when shovelling loose waste from a scale box pit. Mr Smith also claimed to have further injured his back and right leg as a result of the nature and conditions of his employment between 16 May 2005 and 15 March 2008, as a result of constant and repetitive bending, lifting, twisting and shovelling.
- Mr Smith lodged a workers compensation claim in respect of the first injury on 18 May 2005, which was accepted by his employer. He was treated for this injury by Dr Matthew McDonald, general practitioner, who diagnosed a “strain of both sacroiliac joint ligaments” and said Mr Smith was “fit to return on suitable duties”. Consequently, Mr Smith was employed on light clerical work for about three months before returning to normal duties, although not exactly the same as those duties in which he had been employed prior to the injury.
- Mr Smith claimed that on Saturday 15 March 2008, he developed severe back pain while watching a football match. The following Monday, he sought medical treatment from his general practitioner, Dr Paul Martin, who certified him unfit for work. Mr Smith has not worked since. On 10 April 2008, he completed a workers compensation claim.
- OneSteel denied liability.
- The Respondent to pay the Applicant weekly benefits compensation at the rate of $616.60 per week from 15 March 2008 and continuing pursuant to section 36 of the 1987 Act
- The Respondent to pay the Applicant’s reasonably necessary section 60 expenses resulting from the injuries to his lumbar spine and right leg on 16 May 2005 and 15 March 2008.
- The Respondent to pay the Applicant’s costs as agreed or assessed.
Issues on Appeal:
OneSteel Ltd submitted:
- That the Arbitrator erred in her analysis and interpretation of the evidence, in making findings that were not supported by logically probative evidence and were against the weight of the evidence; in finding that there was an injury to Mr Smith’s right leg or knee resulting from the incident in May 2005 and that there was no evidence to support Mr Smith’s claim that he had radiating pain down his right leg prior to the incident on 15 March 2008.
- The inference that should be drawn from the records of the Wellness Centre is that the problems Mr Smith was experiencing with his knee, for which he was receiving, treatment, were completely unrelated to any employment injury.
- There was no evidence to support a finding that the nature and conditions of Mr Smith’s employment led to the incident on 15 March 2008, when he suffered back pain.
- The Arbitrator should have found that Mr Smith suffered a discrete injury on 15 March 2008, which was unrelated to his employment. A finding that the nature and conditions of Mr Smith’s employment caused a disc to be weakened, was one that must be founded on the evidence of an appropriately qualified expert.
(1) Mr Smith was correct in asserting that the Arbitrator made a finding without reference to supporting evidence in her finding as follows:
“It does not follow that such an event was not the result of the long-term effects of the Applicant’s work. A ‘popping’ or a disc bulge could occur when doing nothing other than sitting and then jumping up, if the back has been significantly weakened in the past.” 
(2) Mr Smith submitted, correctly, that such a finding must be founded on the evidence of a medical expert, (see Design Metal Group Pty Ltd v Glen Wallis  NSWWCCPD 105 at 34-40) and that such a finding, in this instance, was beyond the general knowledge that it can be assumed a Commission Arbitrator will acquire in the course of undertaking his or her duties. In this case the Arbitrator erred in relying, presumably, on her own general knowledge of such matters rather than on medical evidence. 
(3) There appeared to have been insufficient evidence before the Arbitrator to establish causation in relation to the aggravation of a disease. The evidence did not establish a causal chain linking the injury claimed following the incident on 15 March 2008 with the injury suffered on 16 May 2005. (see Koorangang Cement Pty Ltd v Bates (1994) 35 NSWLR 452 at 462-464).
(4) If the Arbitrator had ruled that the injury was a disease of gradual process, contracted as a result of the nature and conditions of Mr Smith’s employment between May 2005 and 15 March 2008, than she has not adequately explained the evidence she relied upon in making this finding. 
(5) The Arbitrator did not provide an adequate statement of reasons for her decision in so far as she failed to set out with sufficient clarity relevant findings on material questions of fact. 
The decision of the Arbitrator dated 23 September 2008 was revoked and the matter remitted to another arbitrator for determination afresh in accordance with the reasons.
Journey claims – section 10 of the 1987 Act
Nurse assaulted at KFC
Singh v Thompson Health Care Ltd  NSWWCCPD 11
Judge Keating, President
30 January 2009
- Mr Singh, an assistant nurse at a Randwick nursing home, drove to work at about 9pm and parked his car in the staff car park. He then walked to the KFC store to buy food, with the intention of returning to work to start his shift at 10pm. When he was buying his meal Mr Singh was the victim of an unprovoked attack by two men and was injured in the attack.
- The question for the Arbitrator was whether Mr Singh was still on a periodic journey to his place of employment (section 10 of the 1987 Act), when he was assaulted, and therefore his injuries were compensible, or whether he had already completed the journey when he drove to work and parked his car.
- The Arbitrator found that Mr Singh had completed his journey prior to the assault and therefore the injuries were not work related.
- Mr Singh appealed on the basis that the Arbitrator failed to properly apply the law in relation to journey claims.
Held on appeal:
(1) Mr Singh was injured during the course of a daily or other periodic journey between his place of abode and place of employment (section 10(3)(a) of the 1987 Act).
(2) The worker’s intention for making the journey was a primary factor (see Mills NSW Workers Compensation (second edition) page 199 and Kerr v New South Wales Club  45 WCR 13 (‘Kerr’)
(3) Mr Singh’s intended journey for the purposes of section 10 of the 1987 Act, commenced when he set out from his place of abode and would have ended, had he not been assaulted, when he returned to his employer’s premises for the purposes of commencing his duties after consuming his evening meal at the nearby KFC store. His intention was to embark on a single journey between his place of abode and his place of employment, which included his attendance at the local shops to purchase his evening meal. Leaving his employer’s premises after parking his car to go the local shops did not deprive it of the character of a daily or other periodic journey.
(4) Parking his car in the space allocated for staff parking at his employer’s premises and thereafter accessing his locker for the purposes of depositing and retrieving certain belongings did not destroy the character of the journey. Mr Singh merely utilised his employer’s premises as a ‘repository’ for his personal belongings, and as a convenient place to park his car, during the course of his journey to his ‘place of employment’ via the local shops. He had no intention of commencing duties when he reached his employer’s premises at about 9pm. His intention in going there was collateral to ultimately reaching his place of employment for the purposes of commencing duties at 10pm (Kerr).
(5) In Vetter v Lake Macquarie Council  HCA 12;(2001) 202 CLR 439 (‘Vetter’) Kirby Jsaid at :
“That Act is intended to apply to the employment journeys of workers in a great variety of employment and domestic situations. It provides a valuable benefit to such workers. This benefit should not be narrowly construed nor confined to journeys in which the employer has some direct or notional interest.” (emphasis added)
(6) The Arbitrator erred by deciding Mr Singh had undertaken two distinct journeys, one between his place of abode and place of employment and one from his place of employment, for private purposes, to the local shops and return. (Kerr and Vetter).
Arbitrator’s decision revoked and matter remitted to a new arbitrator for determination.
Assessment of ability to earn
Galea v Galaxy Rooflite Pty Ltd  NSWWCCPD 1
Partial incapacity; section 40 of the 1987 Act
7 January 2009
- Mr Galea was working for Galaxy Rooflite Pty Ltd when he injured his thoracic spine and right upper extremity on or about 1 May 2003. He worked on suitable duties until Galaxy terminated his employment on 9 September 2004, when he was unable to produce a certificate certifying him fit for work without restrictions.
- Mr Galea initially claimed weekly compensation in the sum of $570.00 per week from 9 September 2004 to date and continuing, lump sum compensation in respect of 14% WPI and $30,000.00 in respect of pain and suffering.
- The insurer denied liability on the basis of evidence from Dr Carr, Rheumatologist, that Mr Galea’s problems were substantially due to his pre-existing Scheuermann’s disease.
- Dr Pillemer, AMS, issued a MAC on 30 July 2008 in which he assessed Mr Galea to have a 5% WPI as a result of his thoracic spine injury and a 0% impairment as a result of his right upper extremity injury.
- A vocational assessment report arranged by the insurer, identified four “vocational goals” for Mr Galea: mowing/maintenance, forklift driving, truck driving and equipment hire. His weekly earning potential in these jobs was described as $724.00 in lawn mowing, $973.00 in truck driving, $759.00 as a forklift driver and $844.00 working in equipment hire.
- Mr Galea started a lawnmowing business normally doing “one lawn per week on average at a cost of $35.00 per job”, averaging $35.00 to $50.00 weekly.
- Surveillance film taken on 10 March 2008, allegedly showed Mr Galea moving without restriction while mowing a lawn, moving large pot plants, bending freely from the waist and using a lawn trimmer or ‘whipper snipper’ with his right arm and hand to trim edges and lawn.
- The insurer issued a section 74 notice denying liability, on the grounds that Mr Galea:
- had “non-specific mechanical backache” and there was “no clinical evidence of any firm pathological diagnosis”, relying on a report from Dr Bodel, Orthopaedic Surgeon;
- was fit for his pre-injury duties and had no incapacity for work and no whole person impairment, and
- was fit to work as a gardener, truck driver, forklift driver or equipment assistant, and, as a result, had an earning capacity in excess of his pre-injury earnings of $478.04 per week.
- Mr Galea’s Application claimed weekly compensation in the sum of $478.00 per week from 9 September 2004 to date and continuing together with lump sum compensation and medical expenses. Galaxy’s Reply relied on the issues identified in its section 74 Notice.
- The matter before the Arbitrator proceeded as a “section 40 case” with the issue being whether Mr Galea had any incapacity and, if so, whether that incapacity entitled him to an award of weekly compensation.
- Probable earnings were agreed to be $500.00 to $560.00 per week. The Arbitrator found that Mr Galea was capable of working full-time and of undertaking lawn mowing and garden maintenance activities with a capacity to work at least 30 hours per week, at $25.00 per hour, giving an earning capacity of $750.00 per week.
- As Mr Galea had a capacity to earn more than his pre-injury earnings, there was no entitlement to weekly compensation.
Issues on Appeal:
Mr Galea argued that:
- Although the Arbitrator had found Mr Galea to have a capacity to earn $750 per week, there was no guarantee that Mr Galea would have continued to work in his old job and the Arbitrator should have found comparable earnings to be $950 per week, giving an entitlement to compensation of $200 per week;
- The Arbitrator erred in not awarding at least a “nominal award” as Mr Galea suffered a disability and was not fit for full duties, and
- Mr Galea was unable to work 30 hours per week and that his true ability to earn was “2 lawns per day being $250.00 per week”.
(1) A worker is not automatically entitled to an award of weekly compensation if he or she has a permanent impairment. (Ric Developments t/as Lane Cove Poolmart v Muir  NSWCA 155 at ).
(2) The AMS considered that Mr Galea’s history was suggestive of a mechanical thoracic problem. He had symptoms of intermittent non-verifiable radicular complaints with pain radiating around his chest wall. The Deputy President accepted that the effects of Mr Galea’s thoracic spine injury were continuing and resulted in 5% WPI and occasionally caused symptoms (weakness) in his right shoulder. The Deputy President did not accept that Mr Galea had any neck symptoms as a result of the injury .
(3) Given the evidence in the film, it was obvious that Mr Galea was capable of performing lawn-mowing duties and that he had performed those duties in his own business since about 2005 .
(4) The proper measure of a worker’s ability to earn when he or she is self-employed is to determine the commercial value of his labour (Hill v Bryant  2 NSWLR 423 at 428). That determination can be made by either calculating the worth of his or her work to the business, or by calculating what it would cost the business to employ someone else to do his or her work (J & H Timbers Pty Ltd v Nelson  HCA 12;(1972) 126 CLR 625 at 631 and Cage Developments Pty Ltd t/as Monaro Mix Specified Concrete v Schubert  HCA 37; (1983) 151 CLR 584). Given the casual nature of Mr Galea’s business, and the fact that its only income came from his labour, the appropriate course in the present matter was to consider the value of his labour by reference to the rate he charged for his services and the rate paid to workers employed in that industry. 
(5) The evidence did not support a submission by Mr Galea that he was only capable of working for 15 hours per week .
(6) The vocational assessment report was of limited assistance in determining Mr Galea’s ability to earn, as it merely identified “vocational goals” and “rehabilitation objectives”. Of the “vocational options”, the option of “mowing/maintenance” seemed to be the only one that might be viable. The other alternatives were unrealistic given Mr Galea’s fitness, qualifications and experience. 
(7) Having regard to the whole of the evidence, Mr Galea’s injury reduced his ability to earn, but only by a modest amount. Whilst he had experience in lawn mowing he had not been able to work fulltime in that activity. In light of this fact, the seasonal nature of that activity, the nature of Mr Galea’s injury, his unsuccessful attempts at securing alternative employment since 2004, and the difficulty he experienced in obtaining and retaining suitable employment, his ability to earn in such employment was assessed at $475.00 per week. This figure allowed an ability to earn $19.00 per hour (the hourly rate for an employed lawn mower/maintenance person) for 25 hours per week and reflected the difficulty Mr Galea had, and would continue to have, in obtaining and securing such employment as a result of his injury. 
The Arbitrator’s determination was revoked and a new decision made in its place in favour of Mr Galea with a continuing award under section 40 for the difference between his probable earnings and his ability to earn. No reduction in the exercise of the section 40 discretion.
Lack of training leads to psychological injury
Sydney South West Area Health Service v Markovski  NSWWCCPD 8
28 January 2009
- Mr Markovski was employed by Royal Prince Alfred Hospital (RPAH), as a ward assistant from 1997. Until early 2007, his duties were exclusively “courier” work within the hospital confines, however following his return from long-service leave in January 2007, he was assigned one day of ward duties, in addition to his courier tasks.
- He had never performed ward duties and complained that as a result of increased workload and lack of training he became stressed. A work performance meeting was held on 23 July 2007, attended by Mr Markovski, a number of representatives from RPAH and his union representative. Mr Markovski claimed that he felt extremely stressed and depressed after the meeting.
- The next day he was diagnosed by his general practitioner, as suffering “anxiety / major depressive disorder” and he was put off work for a number of months before resuming his pre-injury duties with RPAH on 15 January 2008.
- RPAH declined liability on the basis that “the psychological injury was caused by the employer’s reasonable actions with respect to performance management”.
- Mr Markovski filed an ARD claiming weekly benefits from 24 July 2007 to 14 January 2008 together with medical expenses as a result of psychological injury due to the nature and conditions of employment from January 2007 to July 2007.
- He was awarded weekly compensation pursuant to section 36 from 24 July 2007 at the rate of $713.40 per week and pursuant to s38 from 24 November 2007 to 14 January 2007 at a rate of $713.40 per week, and medical expenses pursuant to s60 as a result of his psychological injury.
- RPAH appealed the Arbitrator’s decision alleging error:
- In the application of sections 4 and 9A of the 1987 Act, and
- In determining that the employer’s response in respect of transfer and discipline and/or performance appraisal of Mr Markovski was not reasonable (section 11A).
(1) A convenient summary of the relevant principles as to what constitutes a psychological injury are set out in Department of Corrective Services v Bowditch  NSWWCCPD 244 at  – .
(2) Mr Markovski was not required to show that his injury was wholly or predominantly caused by a particular event.
(3) The notion of a ‘whole or predominant’ cause of injury is one that an employer must discharge if it wishes to successfully rely upon section 11A. It is not a test to be applied to the question of the burden to be discharged by the worker in respect to injury itself.
(4) Although the Arbitrator did not specifically address the section 9A issue, there was ample evidence to conclude that the employment was a contributing factor to injury.
(5) In relation to section 11A it was clear from the totality of the evidence that it was not the transfer to the ward per se that caused the injury, but rather the process involved in this action and the nature of the post transfer work environment which caused problems and in turn caused Mr Markovski’s psychological condition (see Manly Pacific International Hotel Ltd v Doyle  NSWCA 465; (1999) 19 NSWCCR 181).
(6) The Arbitrator was correct in his finding that the injury was not wholly or predominantly caused by action in respect to transfer therefore he did not have to consider whether such action was reasonable or not.
The Arbitrator’s decision was confirmed, subject to an amendment to the rate of weekly payments in line with an agreement between the parties.
Effect in law of prior Consent Order
Dick v Steelfixed Pty Ltd (in liquidation)  NSWWCCPD 7
23 January 2009
- On 13 February 2003 Mr Dick filed an ARD seeking an award against the respondent employer with respect to entitlement to weekly payments, lump sums and medical expenses. The ARD alleged injuries to the right hand, right arm, loss of bowel function, loss of sexual organs function, anxiety, depression, left arm, left leg, neck and back, with dates of alleged injury being from “6/11/97 and 1/7/87 [sic], and nature and conditions from 1/7/87 to 10/11/97.”
- Three different AMS assessed Mr Dick and following a telephone conference the parties reached agreement as recorded in the form of a Consent Order. The Consent Order provided for an award to Mr Dick for payments pursuant to sections 66 and 67 in accordance with the findings of the MACs and certain section 60 expenses, and an award to the employer in respect of the claim for weekly benefits. A Certificate of Determination issued on 23 August 2004 recorded the orders made by consent.
- Following the Consent Order, Mr Dick managed to return to work however was only able to work approximately 6 days because of his alleged incapacity. He continued to experience chronic pain in his back, neck and radiating pain in his left leg. Mr Dick stated in evidence that prior to his injuries he was a social drinker but after the injury he would drink alcohol quite heavily to help relieve his pain. He alleged that his condition had deteriorated significantly since the making of the Consent Order and that he had not been able to perform any work.
- Mr Dick made a further claim on 19 February 2008 in respect of weekly compensation from 20 August 2004 to date and continuing and lump sums pursuant to sections 66 and 67. The injuries alleged were those particularised in the first ARD.
The Arbitrator’s decision:
The arbitrator found for the employer in respect of the claim for weekly compensation and entered an award for Mr Dick in respect of medical expenses. The claim pursuant to section 66 was remitted to the Registrar for referral to an AMS.
Issues on appeal:
- Whether the Arbitrator erred in failing to make an award for weekly payments in favour of Mr Dick.
- Whether the Arbitrator erred in his conclusions as to Mr Dick’s incapacity having regard to his findings as to his alcohol dependence.
- Whether the Arbitrator erred in his findings as to the existence and relevance of “changed circumstances” since the Consent Order of August 2004.
(1) The Arbitrator erred in his approach to the determination of the existence or otherwise of partial incapacity. The Arbitrator improperly took into account a suggested need to establish a deterioration or change in Mr Dick’s condition since the date of the Consent Order. Consideration was given to irrelevant factors such as alcoholism and “unresolved personal issues”. Such matters may properly be taken into account when exercising discretion as to the quantification of any entitlement to weekly payments during a period of partial incapacity. However, those matters are not relevant to the determination of the existence or otherwise of partial incapacity. Such determination is made on a theoretical basis and factors other than the consequences of the subject injury are not to be taken into account. 
(2) The Arbitrator erred in finding that, having regard to the existence of a prior Consent Order, it was incumbent upon Mr Dick to establish a “material change in his medical condition” post dating the Consent Order. This approach was erroneous. The approach adopted by the ADP was that in De Witte v Tawnay Pty Ltd t/as Country Coast Real Estate  NSWWCCPD 109 (‘De Witte’) at .
The Arbitrator’s decision with respect to the claim for weekly payments was revoked and the matter remitted to another Arbitrator for determination afresh of Mr Dick’s entitlement to such payments.
Referral to AMS held to be of an interlocutory nature
Ozblue Constructions Pty Ltd v Lang  NSWWCCPD 3
12 January 2009
The nature of the question to be referred to an AMS was held to be an interlocutory order. Leave to appeal was refused.