Issue 12: December 2009

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, nor are they a substitute for a decision maker’s independent research.

Please note that the following abbreviations are used throughout these summaries:

Index

Presidential Decisions:

Severino & anor v Turner [2009] NSWWCCPD 144. 3

S 40(2)(a) of the 1987 Act - probable earnings in the same or some comparable employment for a labourer aged 18 at the time of accident – WCC inform itself – assistance of level and wages in “What Jobs Pay” 10^th edition, 2009

Rail Corporation New South Wales v Arja [2009] NSWWCCPD 151. 5

Withdrawal of admissions - review of findings as to credit of witness - duration of incapacity- liability for lump sums

The Department of Primary Industries v Butler [2009] NSWWCCPD 150. 8

Failure to give reasons

Connelly v Toll Pty Limited [2009] NSWWCCPD 142. 10

S 151A of the 1987 Act – injury - Vanramer Pty Ltd v Higgins (1991) 24 NSWLR 661

Terra Firma (Newcastle) Pty Limited t/as “Amber Tiles Newcastle Pty Limited” v Margaret Smith and Philmar Investments (Newcastle) Pty Ltd [2009] NSWWCCPD 145. 12

S 4 of the 1987 Act – worker - contract of service  - clause 2 of schedule 1 to the 1998 Act - deemed worker

Doci v Qantas Airways Limited [2009] NSWWCCPD 147. 14

Physical and psychological injuries- weight of evidence

Francis and Diane Elsley t/as Frank Elsley Contracting v Wadwell [2009] NSWWCCPD 146  17

Whether the evidence supported the Arbitrator’s findings as to injury – whether a back injury was a temporary aggravation of a pre-existing condition – findings as to incapacity and ability to earn – ss 4 and 40 of the 1987 Act

Carrington Abrasive Cleaners Pty Limited v Standen [2009] NSWWCCPD 143. 19

Change of circumstances - s 55 of the 1987 Act

Tamworth Local Aboriginal Land Council v Tighe [2009] NSWWCCPD 148. 22

Reasons - failure to determine issues in dispute

Box v APK Engineering Pty Ltd [2009] NSWWCCPD 149. 24

“Additional evidence” pursuant to s352(6) of the 1998 Act - application of Haider v JP Morgan Holdings Aust Ltd (t/as JP Morgan Operations Australia Ltd [2007] NSWCA 158, 4 DDCR 634 (‘Haider’)

Severino & anor v Turner [2009] NSWWCCPD 144

S 40(2)(a) of the 1987 Act - probable earnings in the same or some comparable employment for a labourer aged 18 at the time of accident – WCC inform itself – assistance of level and wages in “What Jobs Pay” 10^th edition, 2009

Roche DP

12 November 2009

Facts:

On 5 May 2005, Mr Turner was working as a labourer on a construction site owned by the appellant employers, Alba and Santo Severino. In the course of his duties, Mr Turner fell through a hole on the first floor sustaining a serious closed head injury. Mr Turner was 18 at the time and as a result of his injury is now unfit for pre-injury employment.

The ARD sought weekly compensation from 5 May 2005 at the rate of $606.00 and 22% WPI. It also alleged that Mr Turner would have become a qualified carpenter by mid 2008, so probable earnings from 15 September 2008 were $1600.00 per week. The Severinos disputed liability on the ground that Mr Turner was not a worker or a deemed worker and that his capacity to earn was equal to or greater than $606.00 per week.

At the arbitration the parties agreed that average weekly earnings and comparable wages at the date of accident to 15 September 2009 were $606.00, actual earnings and ability to earn were $524.00 per week from 1 December 2007 to 15 June 2008 and $575.00 per week from 15 September 2008 to date and continuing.

The Arbitrator found Mr Turner to be a worker employed by the Severinos on 5 May 2005. Awards of weekly compensation for the period from 5 May 2005 to 14 June 2008 were by consent. For the period from 15 June 2008, the Arbitrator determined Ryan’s probable earnings but for the injury to be $975.00 per week (on the basis that he would have become a qualified carpenter earning $30.00 per hour for 32.5 hours per week) and that his ability to earn was $615.00 per week in work mowing lawns.  As a result, he made an award in the sum of $360.00 per week under s40.

The employer appealed the Arbitrator’s finding of probable earnings but for the injury of $975.00 per week from 15 June 2008. The appeal raised the meaning of the phrase “the same or some comparable employment” in s40(2)(a) of the 1987 Act.

Held – Matter remitted to another arbitrator for redetermination.

(1) Applying the principles in Johnston v Commissioner of Railways (1973) 128 CLR 632, the Commission is required to form its own view of what Mr Turner would “probably” have been earning but for his injury and how he would have fared in “the same or some comparable employment” had he not been injured. [31]

(2) It was pure speculation to conclude that Mr Turner would have been earning $975.00 per week as a carpenter by June 2008 and it was unclear why the Arbitrator made that finding.

(3) The parties agreed that Mr Turner’s ability to earn from 15 September 2008 was $575.00, not $615.00 as found by the Arbitrator. Though an arbitrator is not bound to act on agreements made by the parties but must determine cases according to law (Damberg v Damberg [2001] NSWCA 87; (2001) 52 NSWLR 492 (at [157]), he or she should not depart from such agreements without giving the parties the opportunity to be heard and giving reasons.  The Arbitrator gave no reasons for not accepting the parties’ agreement as to Mr Turner’s ability to earn. [36]

(4) The question of the workers entitlement to compensation from 15 June 2008 had to be re-determined. At the least, even if the worker remained a labourer, probable earnings would have increased when he turned 20. [37]

(5) DP Roche ordered that the matter be redetermined by another arbitrator, allowing the parties to adduce further evidence on probable earnings and if necessary, ability to earn, notwithstanding the agreement reached at the first arbitration (The Nominal Defendant v Gabriel & Anor [2007] NSWCA 52 at [113]). [38]

The parties were reminded that the Commission is entitled to inform itself on any matter it thinks fit. The Arbitrator who redetermines the matter may find some assistance on the level of wages paid to carpenters and labourers in the publication “What Jobs Pay”, 10th edition, 2009, Yorkcross, by Rodney Stinson. [40]

Rail Corporation New South Wales v Arja [2009] NSWWCCPD 151

Withdrawal of admissions - review of findings as to credit of witness - duration of incapacity- liability for lump sums

O’Grady DP

30 November 2009

Facts:

Mr Arja was employed as a customer service officer with Rail Corp in June 2004.  He alleged a psychological injury as a result of three separate injuries received in the course of his employment on 12 March 2005, 28 July 2006 and 9 February 2007.  His services were terminated in December 2007 on medical grounds.

A dispute arose between Mr Arja and Railcorp concerning his entitlement to compensation benefits and proceedings were commenced in the Commission (No. 9288/07).  Mr Arja sought an award in respect of weekly payments, lump sums and medical expenses.  The arbitrator issued a Direction on 31 March 2008 stating that as there were no issues of liability in respect of s4 and s9A of the 1987 Act, and the matter was remitted the Registrar for referral to an AMS.  An assessment of WPI was not made as the AMS was of the view that Mr Arja had not reached “maximum medical improvement”.

A further ARD was lodged in March 2009 seeking weekly compensation, medical expenses and lump sums.  Weekly compensation and s60 expenses were awarded and the matter was referred to the Registrar for referral to the same AMS.

Railcorp appealed submitting that the Arbitrator had erred by awarding weekly compensation to Mr Arja and failing to correctly apply the principles in Mitchell v Central West Health Service (1997) 14 NSWCCR 527; in failing to provide reasons/adequate reasons for his acceptance of the opinions of particular expert medical witnesses, and in failing to properly evaluate the credibility of Mr Arja’s evidence and that of the expert medical witnesses concerning the question of the existence or and extent of incapacity.

The Arbitrator permitted withdrawal of Railcorp’s admissions, which were said to have been recorded in the Direction of 31 March 2008 (No. 9288/07).  Mr Arja, although not seeking leave to appeal the decision, asserted in his Opposition to the appeal that the Arbitrator had erred in not finding the arbitrator’s Direction in the previous proceedings constituted res judicata or issue estoppel as to the issues of injury (s4) and substantial contributing factor (s9A): reliance was placed on Rail Services Australia v Dimovski & anor [2004] 1 DDCR 648; Seaib v Hays Personnel Services (Aust) Pty Ltd [2008] NSWWCCPD 36.

Held: Arbitrator’s decision part revoked/part confirmed

(1) The principles concerning the withdrawal of admissions were discussed by Brereton J in Hill End Gold Ltd v First Tiffany Resource Corp [2008] NSWSC 866, where the decision of Santow J in Drabsch v Switzerland General Insurance Co Ltd (NSWSC, 16 October 1996, unreported) (‘Drabsch’) is cited.  His Honour noted that the summary of relevant principles as stated by Santow J “…has been repeatedly endorsed” and can be summarised as follows (at 7-8):

“1. Where a party under no apparent disability makes a clear and distinct admission which is accepted by its opponent and acted upon, for reasons of policy and the due conduct of the business of the court, an application to withdraw the admission, especially at appeal, should not be freely granted; Coopers Brewery Ltd v Panfida Foods Ltd (1992) 26 NSWLR 738 per Rogers CJ Comm D, followed in IOL Petroleum Ltd v O'Neill per Young J (Young J, 17 November 1995, unreported).

2. The question is one for the reviewing judge to consider in the context of each particular appeal, with the general guideline being that the person seeking on a review to withdraw a concession made should provide some good reason why the judge should disturb what was previously common ground or conceded; IOL Petroleum Ltd v O'Neill (above), in the context of withdrawing a concession made before the Registrar.

3. Where a court is satisfied that admissions have been made after consideration and advice such as from the parties' expert and after a full opportunity to consider its case and whether the admissions should be made, admissions so made with deliberateness and formality would ordinarily not be permitted to be withdrawn; Coopers Brewery Ltd v Panfida Foods Ltd (above) at 745 and 748.

4. It will usually be appropriate to grant leave to withdraw an admission where it is shown that the admission is contrary to the actual facts. Leave may also be appropriate where circumstances show that the admission was made inadvertently or without due consideration of material matters. Irrespective of whether the admission has or has not been formally made, leave may be refused if the other party has changed its position in reliance upon the admission.”

(2) Having regard to the above principles and the “new” evidentiary material which had come into the hands of Railcorp since the making of the Direction, Railcorp was permitted to withdraw such admission of “liability” in respect of s4 and s9A as recorded in the Direction of 31 March 2008.

(3) Railcorp’s attack upon the credibility of Mr Arja was founded on a number of bases including the suggested exaggeration and inconsistency on Mr Arja’s part when giving relevant history to the various medical practitioners.  Railcorp also relied on Mr Arja’s failure to follow up treatment with medical practitioners and general references made during submissions to his driving record.  None of these latter matters, either alone or in combination, were of sufficient significance to raise doubt concerning the credit worthiness of Mr Arja.  The more troubling aspect of the evidence was the content of the surveillance film which raised considerable doubt as to the reliability of Mr Arja as an historian and whether his statements could be relied upon as foundation for the opinions as expressed by the medical practitioners. [90]

(4) Railcorp’s challenge to Mr Arja’s credit gave rise to particular problems on appeal given the Arbitrator’s acceptance of his evidence and the nature of the proceedings, there being no direct challenge to Mr Arja by way of cross-examination in respect of the matters revealed in the surveillance film.

(5) The appeal required review on the merits and extended to an evaluation of the correctness or otherwise of the Arbitrator’s conclusion as to the credit of Mr Arja.  The approach to be adopted by the Commission may be guided by those matters stated in Cabal v United Mexican Stated (2001) 108 FCR 311 at [223] which was cited in the course of discussion by Hodgson JA in Costa and Another v The Public Trustee of NSW [2008] NSWCA 223 and by the High Court decision of Fox v Percy [2003] 214 CLR 118 at [29].

(6) There was no less need for caution in reviewing the Arbitrator’s findings by reason of the fact that as Mr Arja had not given oral evidence, there could be no suggestion that reliance was placed by the Arbitrator on his demeanour when reaching his conclusions concerning his reliability as an historian and credibility of witness. [95]

(7) The important evidence of the surveillance film and the inferences that may have been drawn from it, including the fact that the surveillance film demonstrated behavior significantly contrasting with the manner in which he presented to the medical practitioners, was the subject of only brief consideration

(8) by the Arbitrator. In these circumstances the Arbitrator’s conclusion concerning the relevance or other wise of that surveillance material required review. [97]

(9) The Arbitrator also erred in characterising the symptoms noted by his treating psychiatrist, such as disturbance of sleep, irritability, difficultly concentrating etc, as being “objective”.  Those symptoms as reported by Mr Arja were subjective and incapable of being established objectively. [102]

(10) A cautious approach must be exercised by the Commission in placing reliance upon material such as surveillance film when assessing questions of an applicant worker’s credibility. In taking this cautious approach it was concluded that the surveillance material contradicted the matters stated by Mr Arja to the Commission in his first statement and his presentation and reporting of symptoms to the various medical witnesses.

(11) Mr Arja made a complete recovery from his condition of post traumatic stress disorder by at the latest 25 February 2009.  Weekly compensation orders revoked and substituted with various orders for a closed period and award made in favour of Railcorp in respect of Mr Arja’s claims for ss66 and 67.

The Department of Primary Industries v Butler [2009] NSWWCCPD 150

Failure to give reasons

Roche DP

25 November 2009

Facts:

Mrs Butler suffered from a Major Depressive Disorder and Panic Disorder with Agoraphobia as a result of workplace harassment and bullying in the course of her employment with the Department. In June 2007, following a report by Dr Roberts (psychiatrist) the Department medically retired her.

Mrs Butler’s claim was accepted and voluntary compensation payments paid by Allianz until liability was declined in a letter dated 8 December 2008, based on reports by Dr Lee (medico-legal psychiatrist) and Dr Lowy (psychologist), with weekly compensation paid until 12 January 2009.

Dr Lee considered that Mrs Butler was no longer suffering from a work related condition.  Dr Lowy was of the opinion that Mrs Butler was fit for pre-injury duties and that any psychological symptoms were related to constitutional factors.

Mrs Butler relied on evidence from Dr Delaforce, psychiatrist, who diagnosed a Major Depressive Disorder and felt that her employment with the Department substantially contributed to the onset and continuation of her condition. She relied on certificates from her GP, Dr Kramer, that declared her totally unfit because of her depression.

The Arbitrator found for the worker because Dr Kramer was the treating doctor and Dr Delaforce had spent considerable time with Mrs Butler.

The Department appealed on the grounds that the Arbitrator failed to provide sufficient reasons for his decision and failed to consider the nature and extent of the injury relied upon by Mrs Butler.

Held –Arbitrator’s decision confirmed save to delete 8 December 2008 and insert 13 January 2009.

(1) The Arbitrator failed to discharge his obligation to provide adequate reasons.

(2) The resolution of disputes between medical experts requires a rational examination and analysis of the evidence and the issues (per Ipp JA in Sourlos v Luv A Coffee Lismore Pty Ltd & anor [2007] NSWCA 203 at [25] citing Wiki v Atlantis Relocations (NSW) Pty Ltd (2004) 60 NSWLR 127). [55]

(3) The Arbitrator’s approach of favouring the opinions of Dr Kramer and Dr Delaforce because the former was the treating doctor and the latter had spent considerable time with the worker did not deal with the issues thrown up by the evidence. [57]

(4) Dr Lee’s statement in his report of 1 July 2008 that the worker was no longer suffering from a work related condition was completely contrary to the conclusions reached in his first report but he provided no explanation for the inconsistency. His opinion was therefore of little persuasive value. [62]

(5) Dr Lowy asserted that Mrs Butler’s symptoms were vague and non-specific and therefore not consistent with a major depressive disorder. That conclusion was inconsistent with the very specific and detailed symptoms listed by Dr Delaforce in both of his reports and substantially repeated in Dr Lowy’s own report. A history of symptoms recorded in a medical report is evidence of the fact (Papercoaters Pty Ltd v Jessop [2009] NSWCA 1 at [42]). [64]

(6) It was on the basis of these symptoms that Dr Delaforce diagnosed a major depressive disorder and a panic disorder with agoraphobia. That diagnosis was consistent with the diagnosis reached by Dr Walker, a psychiatrist retained by the Department in 2007, certifications by Dr Kramer through 2008 and 2009, and Dr Robert’s (for the Department) clear and unequivocal opinion in March 2007.

(7) Dr Delaforce’s opinion that Mrs Butler was totally unfit was consistent with Dr Kramer’s medical certificates and Mrs Butler’s evidence. Her attempt to teach intellectually disabled people basic beading techniques, which she felt unable to continue, was a clear indication of the nature and extent of her incapacity. [71]

(8) DP Roche ultimately agreed with the Arbitrator’s conclusions save to delete the date of commencement of weekly compensation from 8 December 2008 and replaced with 13 January 2009, the worker having received voluntary compensation up to and including 12 January 2009.

Connelly v Toll Pty Limited [2009] NSWWCCPD 142

S 151A of the 1987 Act – injury - Vanramer Pty Ltd v Higgins (1991) 24 NSWLR 661

O’Grady DP

4 November 2009

Facts:

The worker commenced employment with Toll as a truck driver in 1999 and received injury to his left shoulder on four separate occasions (24 November 2003, 10 December 2003, 27 January 2005 and 10 June 2005) in the course of his employment.

On 23 November 2006 the worker instituted proceedings in the Supreme Court of the ACT against Toll alleging that as a result of Toll’s negligence on 27 January 2005, he had suffered injury, loss and damage. These proceedings were settled by consent and a general form consent judgment was filed in the Court registry on 10 October 2007.

On 6 June 2008 the worker claimed lump sums pursuant to the 1987 Act in respect of injuries occurring on 24 November 2003, 10 December 2003 and 10 June 2005.  The ‘body system affected by the injury’ was the left upper limb and the claim was for 8% WPI.  The claim was declined by Toll and a section 74 notice dated 10 November 2008 asserted that pursuant to the provisions of s151A(1) of the 1987 Act, the worker had received compensation in respect of the left shoulder injury and was precluded from recovering additional compensation for that same injury.

An ARD was lodged with the Commission on 13 March 2009. There was no dispute between the parties concerning the occurrence of the four injuries.  Toll argued before the Arbitrator that acceptance by the Commission that the term “injury” meant “pathology” would lead to the conclusion that, by reason of the provisions of s 151A(1)(a), the worker upon recovery of damages ceased to be entitled to any further compensation pursuant to the Acts in respect of all four injuries. The Arbitrator made a finding in favour of Toll.

Appeal submissions

The worker appealed the decision submitting that the Arbitrator had erred in regards to s151A and argued that s151A had the effect of extinguishing rights to compensation benefits only in respect of the injury occurring on 27 January 2005.  He further argued that the Arbitrator’s reference to the provisions of s322 (2) of the 1998 Act and the Commission’s earlier approach to the construction of the word “injury” in that section also led her into error when construing the provisions of s151A.

Toll argued that there was “no distinction between the pathology arising from each of the four incidents” and that the term “injury”, in respect of which the worker had recovered damages, should be taken as “the pathology in the left shoulder which commenced in 2003 and was aggravated by a subsequent aggravation and reoccurred in January 2005.”  Toll submitted that the Arbitrator’s reliance on Department of Juvenile Justice v Edmed [2008] NSWWCCPD 6 (‘Edmed’) permitted her to find no distinction between the pathology arising from each of the four incidents and therefore that “injury” was best described as the pathology in the left shoulder which commenced in 2003.

Oral hearing before DP O’Grady

The worker argued that the principles derived from Edmed did not relate to s151A and that in the common law pleadings the only reference was to the injury of 27 January 2005. He placed reliance on commentary found in Mills Workers Compensation New South Wales (at p 4894) which included a consideration of authorities addressing the meaning of ‘injury’ as it appears in the former s151B(1) being in similar terms to the present s151A(1). Particular reliance was placed upon the Court of Appeal decision of Vanramer Pty Ltd v Higgins (1991) 24 NSWLR 661 (‘Vanramer’).

Toll argued that having regard to the passage of the 1998 Act and the approach taken in the authorities since to the construction of the word ‘injury’, the earlier authorities were of no assistance and that the manner in which the common law action had been particularised supported their argument that the damages received were in respect of the pathology in the worker’s shoulder which was the result of the combined effect of the four injuries received.

Held: Arbitrator’s decision revoked and decision substituted

(1) The Arbitrator erred in concluding that the damages paid in 2007 included compensation for all the impairments which arose from all the injuries.  It was clear from the manner in which the claim for damages had been particularized that it was intended to treat as relevant each injury suffered before and after the allegedly negligent conduct which occurred on 27 January 2005. Any such entitlement must be distinguished from rights the worker may have to benefits under the Acts and such rights under the Acts are to be taken into account in the assessment of damages as occurred in Vanramer. [48]

(2) Guided by the observations of the Court of Appeal in Vanramer, section 151A did not operate to bring to an end entitlement to further compensation except in relation to that injury relied upon by the worker to found his claim at law, being the injury on 27 January 2005.  It has no application to the injuries or their consequences, received on 24 November 2003, 10 December 2003 and 10 June 2005.

(3) The assessment of damages in Vanramer had taken into account continuing entitlement to compensation benefits notwithstanding entry of a judgment and the Court of Appeal confirmed that such an approach was appropriate. [51]

(4) The term ’injury’ as used in s151A can have but one connotation being “injurious event” and on the present facts this was the event of January 2005. [53]

Terra Firma (Newcastle) Pty Limited t/as “Amber Tiles Newcastle Pty Limited” v Margaret Smith and Philmar Investments (Newcastle) Pty Ltd [2009] NSWWCCPD 145

S 4 of the 1987 Act – worker - contract of service  - clause 2 of schedule 1 to the 1998 Act - deemed worker

O’Grady DP

13 November 2009

Facts:

The worker was fatally injured on 25 February 2006 when he received an electric shock whilst in the course of erecting an aluminum flagpole at the business premises of Terra Firm.  He died on 26 February 2006 as a result of his severe burns and other medical complications.

There was no dispute that the deceased worker was in the course of his employment at the time of injury however there existed doubt as to the identity of his employer at that time due to the complex financial arrangements that had been entered into and varied from time to time involving the deceased worker, Terra Firma and the second respondent, Philmar.

Mrs Smith, the widow of the deceased worker, made a claim against both Terra Firma and Philmar.  Both respondents declined liability by reason of doubt as to the identity of the deceased’s employer.

Mrs Smith lodged an ARD in the Commission. It was argued on behalf of Mrs Smith that the deceased worker was employed by Terra Firma based on the suggested “control” that it had over the deceased worker as well as the presence of a number of other indicia.  Terra Firma argued that at no relevant time was there a contract of service between it and the deceased worker and that the evidence supported the existence of the a contract between itself and Philmar, which provided for the provision of services by the deceased as a consultant in return for payment.  Reliance placed on Stephan v Pacesetter Cleaning Service Pty Ltd and another (1995) 12 NSWCCR 19; Boral Roof Tiles v O’Brien (1994) 15 NSWCCR 1 and Andar Transport Pty Ltd v Brambles Limited (2004) 217 CLR 424. Philmar submitted that an assessment of the reality of the situation (Plexvon Ptry Limited (in liq) v Brophy [2006] NSWCA 304) revealed the existence of a contract of service between the deceased and Terra Firma.

The Arbitrator found that a contract of service existed between Terra Firma and the deceased, with insufficient evidence to support a finding that a contract of service existed between the deceased and Philmar.  An award was entered against Terra Firma for s26 and s27A of the 1987 Act expenses and an award in favour of Philmar.

Terra Firma lodged an appeal on the grounds that the Arbitrator had erred in finding that a contract of service existed at relevant times between Terra Firma and the deceased worker and in making the alternative finding that the deceased worker was at relevant times a deemed worker (schedule 1, clause 2 of the 1998 Act).  It argued that the existence of Philmar and that company’s interposition between Terra Firma and the deceased was the strongest indication against the relationship between Terra Firma and the deceased being construed as a contract of service.

Held: Arbitrator’s decision confirmed

(1) The fundamental issue for determination concerned the characterisation of the relationship between the deceased and Terra Firma once Philmar came into being.  In particular, as stated by the Arbitrator at [90] of her reasons, it was “necessary to consider whether and if so to what extent, there was really a change in the identity of the contracting parties”. [80]

(2) The inference may be drawn, having regard to the evidence as a whole and in particular the financial evidence (eg Philmar not holding a bank account) that there may have been intentions to formalise a contractual arrangement between the two companies for the provision of the deceased’s services, however there was no evidence that such an arrangement was embarked upon or concluded by way of agreement. As determined by the Arbitrator, there was no change in the identities of the parties contracting with respect of the deceased worker’s services and the deceased remained a ‘working director’ employed by Terra Firma. [96]

(3) Dacas v Brook Street Bureau (UK) Ltd [2004] EWCA (Civ) 217 held that a contract of employment may be implied from the parties conduct, the surrounding circumstances and work done.  The evidence afforded a sound basis to support the finding that a contract came into existence between the deceased and Terra Firma and remained on foot until the date of his death.

(4) An examination of the indicia of the relationship between the deceased and Terra Firma, established that the contact was one of service and not one for services and that the deceased must be taken to be a “worker” within the meaning of the Acts as at the date of his injury. [109]

(5) If the deceased was not a “worker: he was a deemed worker by operation of he provisions of Schedule 1, Clause 2 to the 1998 Act (see also Scerri v Cahill and anor (1995) 14 NSWCCR 389.

Doci v Qantas Airways Limited [2009] NSWWCCPD 147

Physical and psychological injuries- weight of evidence

Keating P

Facts:

1. Mrs Doci, a cabin cleaner with Qantas, alleged physical injuries to her back and neck as a consequence of having been involved in three motor vehicle accidents driving to work. She also alleged injuries during the course of her employment on 28 September 2002 she injured her back while attempting to pull free a newspaper, which had become wedged between the seats of an aircraft and January 2008 when her foot became caught in a blanket causing her to trip and fall resulting in an injury to her left foot and back.
2. In addition to the physical injuries, Mrs Doci alleges she sustained a psychological injury as a result of intimidation, unfair criticism, abuse, unwelcome sexual advances and inappropriate sexual conduct.
3. The Arbitrator:

(a) made orders by consent, that the parties agreed to injuries to the lumbar spine, cervical spine and left lower extremity sustained on various dates and referred the matter to the Registrar for referral of the worker to an AMS for assessment of the degree of WPI of the cervical spine, lumbar spine and left lower extremity;

(b) was not satisfied that Mrs Doci’s employment was a substantial contributing factor to her psychological condition, and

(c) awarded a closed period of weekly compensation was made for the period 20 February 2009 to 2 April 2009 but was not satisfied that Mrs Doci suffered any incapacity beyond that period as a result of her physical injuries.

Appeal

Mrs Doci appealed the arbitrator’s findings in respect of the alleged psychological injury and the finding that as a result of her physical injuries she had no ongoing incapacity as a result of her physical injuries.

Held: Arbitrator’s decision revoked

Physical Injuries

(1) Although the parties agreed on various dates of injury, in determining incapacity resulting from these injuries, the Arbitrator failed to make any findings as the nature or the cause of the injuries suffered by the worker. That was an error - the award in respect of the physical injuries revoked.

(2) Found Mrs Doci suffered soft tissue injuries to the cervical spine as a result of the motor vehicle collisions on 29 November 2005 and 12 March 2007, the effects of which are continuing.

(3) Mrs Doci suffered injuries to the lumbar spine as a result of injuries on 28 September 2002, 29 November 2005, 12 March 2007, 14 May 2008 and 22 January 2008, the effects of which are also continuing. The combination of those injuries either caused or aggravated the demonstrated disc lesions in the lumbar spine.

(4) In addition the worker suffered an injury to the lower left leg on 22 January 2008.  It is conceded that the worker’s employment was a substantial contributing factor to each of the injuries sustained.

Psychological injury

(5) Accepted that although the worker was vulnerable to developing psychological symptoms by reason of past events, or her domestic situation, found that she had suffered a psychological injury if the injury arose from her perception of real events which occurred in the workplace and were not external to her employment (State Transit Authority of New South Wales v Fritzi Chemler [2007] NSWCA 249; (2007) 5 DDCR 287 (‘Chemler’)).

(6) Accepted the events alleged by the worker were all real events. They included:

1. a supervisor was using derogatory language on 7 May 2008 which Mrs Doci believed were directed to her;
2. her complaint of sexual harassment by a co-worker was dismissed by Qantas, not because it were satisfied it did not happen, but merely because it could not determine the truth of the matter where neither party’s version could be corroborated,
3. alleged intimidation by another co-worker, and
4. her complaint about being overlooked for a full time position on several occasions.

(7) Found Mrs Doci suffered an adjustment disorder with depressed mood in response to her perception of a series of real and significant events occurring in the workplace and that the test for the causal connection to the worker’s employment as discussed by the Court of Appeal in Badawi v Nexon Asia Pacific Pty Ltd t/as Commander Australia Pty Ltd [2009] NSWCA 324 (I.e. for employment to be a “substantial contributing factor” to the injury for the purposes of section 9A of the 1987 Act the causal connection must be “real and of substance”).

Incapacitated as a result of the psychological and physical injuries

(8) Mrs Doci was not fit for her work as a cabin cleaner but was fit for light work, with some restrictions on lifting and walking.

(9) The matter could not be re-determined on appeal because the evidence in relation to incapacity was in such an unsatisfactory state:

1. conflicting particulars of the period of the claim;
2. no evidence concerning the nature of the worker’s pre-injury duties, or the nature of the duties she had undertaken after returning to work;
3. a lack of clarify in respect of the worker’s hours of work immediately before she went off work in January 2008;
4. no evidence as to the nature of the work she was fit to perform;
5. no evidence as to what the worker could be expected to earn in suitable employment, and
6. the only evidence concerning the nature of the worker’s incapacity from her psychological injuries is that she should avoid confrontational situations. Qantas submitted on appeal that Qantas no longer employed two of the workers said to have caused the worker’s psychological condition. Attempts to contact the worker to discuss a return to duties has been frustrated by the worker being overseas or otherwise not contactable. In the circumstances without further evidence on these issues any reliable assessment of the worker’s ability to earn cannot be undertaken.

Remitted.

Francis and Diane Elsley t/as Frank Elsley Contracting v Wadwell [2009] NSWWCCPD 146

Whether the evidence supported the Arbitrator’s findings as to injury – whether a back injury was a temporary aggravation of a pre-existing condition – findings as to incapacity and ability to earn – ss 4 and 40 of the 1987 Act

Moore ADP

19 November 2009

Facts:

Mr Wadwell was employed as a permanent full-time farm hand by Frank Elsley Contracting.  His duties included tractor driving, fencing and general farm hand duties. On 3 September 2003 while working in a trench he claimed that he injured his right knee and twisted his back when the trench collapsed.  He did not consult a doctor or have any time off.

On 27 September 2003 while working on a pipe he claimed to have strained his lower back and was off for a few days before resuming his usual duties. He resigned from his employment with Frank Elsley Contracting on 31 December 2004.  At that time he claimed that the ‘nature and conditions’ of his employment from 3 September 2003 to 31 December 2004 had aggravated the injuries to his back and right knee.

He performed a variety of jobs including tractor driver and labouring and in April 2007 obtained employment as a stockman, remaining in that employment.  In April 2009 Mr Wadwell lodged an ARD in the Commission seeking weekly benefits compensation from 1 July 2003 to date and continuing, medical expenses and lump sum compensation.  Frank Elsley Contracting disputed liability on the grounds that he did not injure his back on 3 September 2003; had suffered only a temporary aggravation of a pre-existing back condition on 27 September 2003 and had not suffered any economic incapacity as a consequence of his injuries.

The Arbitrator made a finding that Mr Wadwell injured his right knee only in the 3 September 2003 incident, injured his back in the 27 September 2003 incident, the consequences of which were ongoing, and was partially incapacitated. He awarded weekly payments at various rates from 1 July 2004 to 30 June 2008.  The matter was also remitted to the Registrar for referral to an AMS for the two injuries.

Frank Elsley Contracting appealed the decision submitting that the Arbitrator had erred in finding the effects of the injury to Mr Wadwell’s back on 27 September 2003 had not resolved and had also erred in awarding weekly payments of compensation.

Held: Arbitrator’s decision part revoked and part confirmed

(1) The main issue was whether Mr Wadwell’s evidence was sufficient to support the Arbitrator’s findings as to the consequences of the back injury on 27 September 2003.  The Arbitrator’s treatment of this issue was ‘scant’ including not referring to the many matters raised by Frank Elsley Contracting in submissions before him and repeated on appeal. He was required to determine whether Mr Wadwell’s back symptoms were caused by the employment injury and to provide adequate reasons for his decisions (Total Steel of Australia Pty Ltd v Waretini [2007] NSWWCCPD 33). [34]

(2) There was considerable evidence to support Frank Elsley Contracting’s contention that Mr Wadwell’s injury of 27 September 2003 was a temporary aggravation of a pre-existing condition from which he recovered and consequently could not have suffered any economic loss.  A similar issue was considered by AP O’Grady in Peric v Chul Lee Hyuang Ho Shin Jong Lee & Mi Ran t/as Pure and Delicious Healthy & Anor [2009] NSWWCCPD 47 (‘Peric’) at [67] and [68], where the question was whether an Arbitrator’s finding that a worker had suffered an injury, but recovered, and there was no basis for the matter to be referred to an AMS, was correct.  [48] - [49]

(3) Mr Wadwell sustained an injury to his back on 27 September 2003 within the meaning of s4 of the 1987 and 1998 Acts and employment was a substantial contributing factor to that injury. There was demonstrable pathology in Mr Wadwell’s back about which there was insufficient evidence to conclude that it was not caused by the work event and some evidence to suggest it was.

(4) The Commission is required to consider all the evidence, not just medical, in order to determine ‘injury’ (see Connor v Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2006] NSWWCCPD 124 (‘Connor’) at [48]).  The totality of the evidence did not support Frank Elsley Contracting’s assertion that the injury on 27 September 2003 was a temporary aggravation of an underlying condition from which Mr Wadwell had recovered. [51]

(5) Although Mr Wadwell’s evidence had not been particularly useful in resolving the issue on appeal, in the absence of any medical evidence from Frank Elsley Contracting to contradict his assertions, Mr Wadwell’s evidence was accepted. [54]

(6) The evidence also supported the Arbitrator’s findings that Mr Wadwell had sustained an injury to his right knee in the incident on 3 September 2003 and that the effects were significant and ongoing. Along with the injury to his back on 27 September 2003, the question remained; did these findings entitle Mr Wadwell to an award of weekly payments?

(7) Even accepting that Mr Wadwell was certified fit for his usual duties on 8 October 2003, that did not determine his entitlement to weekly benefits. (see Adecco Industrial Pty Ltd v Bilaver [2009] NSWWCCPD 77 at [56]).

(8) Mr Wadwell’s evidence, that he continued to have problems with his back and right knee in performing his duties, resulted in a significant incapacity on the open labour market. [68]

(9) Frank Elsley Contracting’s submissions, that there was no evidence to suggest that Mr Wadwell suffered any loss of income in their employ from1 July 2004 to 31 December 2004 as found the Arbitrator, were accepted. [70]

(10) The Arbitrator’s award for weekly payments was revoked and a new award entered for various periods from 1 January 2005 to 30 June 2008.

(11) Although the Arbitrator’ reasons were insufficient in many respects, his ultimate conclusions on the issue of ‘injury/ were correct on all the evidence and his findings on ‘incapacity’ were fundamentally correct, but flawed for the reasons stated.

Carrington Abrasive Cleaners Pty Limited v Standen [2009] NSWWCCPD 143

Change of circumstances - s 55 of the 1987 Act

Roche DP

4 November 2009

Facts:

Mr Standen was a sandblaster/ labourer for the employer, Carrington, from May 1978. On 20 February 1979 he suffered a back injury whilst lifting drums of wet sand. Shortly after surgery to his back in 1984, the then Workers Compensation Commission awarded Mr Standen weekly compensation at varying rates for partial incapacity from 3 May 1980 until 12 January 1984, and then on the basis of total incapacity from 1 April 1984 on a continuing basis.

From 1985 to 1994 Mr Standen worked intermittently for different employers as a console operator. In 1991 Mr Standen and his wife purchased a half share in the Shell Roadhouse where he worked as a console operator and did some managerial duties such as bookwork, ordering stock and talking to trade representatives, delegating heavy work to employees.

In 1994, Carrington sought termination or reduction of the award. Neilson CCJ determined that Mr Standen’s circumstances had changed, reducing the award to $145.00 per week from 16 May 1993 on a continuing basis.

In April 2004 Mr Standen sold the Shell Roadhouse and purchased a café franchise which was unsuccessful. He then worked as a console operator at BP, doing work which aggravated his back, hips and neck. At this time he also started work as an interior house painter, starting his own painting business in May 2007.

In September 2007 Mr Standen sought weekly compensation at the rate of $561.60 from 13 December 1994 (date of Neilson CCJ’s decision) and lump sum compensation in respect of both legs and arms. He also alleged injuring his neck and back in February 1979 but did not plead an injury to his neck in the subsequent ARD filed. The employer disputed that there had been any change in circumstances to justify a s55 review.

An Arbitrator determined the matter in May 2009 and ordered the Respondent to pay Mr Standen the maximum statutory rate from 30 April 2004 (when he sold the Shell Roadhouse) to date and continuing with credit for payments made. The s66 claim for the legs and arms was remitted to the Registrar for referral to an AMS.

Held:  

(1) The evidence was against a finding that Mr Standen injured his neck on 20 February 1979. There was no history in the medical evidence of Mr Standen experiencing any neck symptoms until October 1989, and Mr Standen’s statement made no mention of any neck symptoms until either 1986 or 1987.

(2) The claim for lump sum compensation in respect of the arms could only succeed if it was a consequential loss due to the neck or back injury. As the neck injury did not occur at work and as there was no persuasive evidence that the arm symptoms resulted from the accepted back injury, there was no basis for referring the claim for the arms to an AMS for assessment. However, the claim in respect of the legs, as a consequential loss resulting from the accepted back injury, was remitted to the Registrar for referral to an AMS.

(3) Although the word “may”, as used in s55 of the 1987 Act, generally indicates, if used to confer a power, that the power may be exercised or not (s9 of the Interpretation Act 1987 (NSW)), the Commission would only decline to conduct a review in circumstances where the change of circumstances relied upon made no material difference to the award being reviewed. This was not the situation in the present case. [72]

(4) DP Roche quoted ADP O’Grady’s (as he then was) summary of the principles relating to a s55 review in NSW TAFE Commission – North Sydney Institute v Zuk [2006] NSWWCCPD 148 at [34]. [74] Mills (at 481) also lists the various circumstances in which a review may be triggered. [78]

(5) Having regard to the evidence and the authorities, there were at least 3 relevant change in circumstances:

(i) Mr Standen sold his business in April 2004. His ability to earn had to then be assessed on the open labour market;

(ii) wage rates changed significantly between 1994 and 2004, and

(iii) the medical evidence suggested a change in Mr Standen’s physical condition as a result of the work injury

(6) Applying Mitchell v Central West Area Health Service (1997) 14 NSWCCR 526:

(i) step 1: probable earnings but for the injury (s40(2)(a)) – Mr Standen started with Carrington at 20 years of age. Given the unchallenged evidence that Mr Standen reached “a full painter’s wage” and was a leading hand on some contracts, DP Roche was satisfied that Mr Standen would have reached a supervisory level industrial spray painter earning $1,172.00 per week.

(ii) step 2: actual earnings or ability to earn in some suitable employment (s40(2)(b)) (complicated by the fact that since April 2004 Mr Standen had worked for his own companies for two periods). The methods used to calculate a self-employed worker’s s40(2)(b) earnings are discussed in J & H Timbers v Nelson [1972] HCA 12; (1972) 126 CLR 625; Cage Developments Pty Ltd v Schubert [1983] HCA 37; (1983) 151 CLR 584.

Mr Standen’s evidence of his actual earnings were not a proper measure of his ability to earn. It was therefore necessary to look to the vocational assessment report and have regard to the nature of injury, the restrictions, limited education, age, lack of formal retraining, ongoing pain and disability, He was assessed as having an ability to work for 30 hours per week as a shop manager or in a similar position where he could adapt the requirements of the position to his disability. Allowing an hourly rate of $20.65, the rate of $620.00 per week was derived.

(iii) step 3: deducting the figure in step 2 from step 1 – results in $552.00 per week. The parties agreed that the figures in steps 1 and 2 could be applied for the whole period without adjustment for movements in wage rates.

(iv) step 4: the s40(1) discretion – although work as a painter would not have been suitable for Mr Standen in the long term having regard to his back injury, the neck and shoulder symptoms experienced as a console operator had also clearly affected his ability to perform that work and similar work. As Mr Standen had not injured his neck or shoulders, the figure at step 3 was reduced by $50.00 per week.

(v) step 5: the difference was $502.00 per week.

(7)     Because the injury occurred before 30 June 1987, Mr Standen was not entitled to the 20 per cent increase in weekly compensation introduced by the Workers Compensation (Benefits) Amendment Act 1991. His compensation was calculated under the rates set in Schedule 6 Part 4 clause 4A(2)(b) of the 1987 Act (Workers Compensation (Savings and Transitional) Regulation 1992). [113]

(8)     The sum of $502.00 exceeded the maximum compensation payable. Therefore the award was the maximum statutory rate of weekly compensation applicable for a worker with dependent children as applicable, until further order by the Commission. [113]

Tamworth Local Aboriginal Land Council v Tighe [2009] NSWWCCPD 148

Reasons - failure to determine issues in dispute

Roche DP

24 November 2009

Facts:

On 21 June 2002 Ms Tighe slipped and fell onto her back in the dining room of the Land Council’s office. The occurrence of the work incident was not disputed, however the extent and nature of any injury sustained in the fall was contentious, as was the course of events after the fall including an eight week delay in attending on a doctor after the fall. She alleged that she injured her back, neck, right shoulder, right wrist, left arm and both legs.

Liability was accepted and compensation paid until 21 February 2004. CGU’s s74 notice relied on a report by Dr Sekel that Ms Tighe’s back pain had completely resolved, probably by as early as November or December 2002 and a certification by Dr Bohlsen that Ms Tighe was fit for work from 22 February 2004.

Ms Tighe’s condition deteriorated in 2007 and an MRI scan in 2007 revealed an L4/5 disc prolapse.

The Arbitrator determined that Ms Tighe had not injured any part of her body other than her low back and legs. In respect of the back injury, the Arbitrator found that Ms Tighe continued to be incapacitated. He awarded weekly compensation under s40 at the maximum statutory rate from 1 October 2003 to date and continuing, excluding the period 17 January 2005 until 27 February 2005 when no weekly compensation was not pressed.

On appeal, the essential issue for redetermination was whether the effect of Ms Tighe’s back injury was continuing and whether her disc prolapse in 2007 resulted from the June 2002 work injury.

Held – Matter revoked & remitted to another arbitrator for redetermination.

(1) The Arbitrator failed to properly consider the strength of Ms Tighe’s medical evidence or deal with whether the disc pathology found in the November 2007 scan resulted from the 2002 work injury. [105]

(2) As both parties had breached cl43 of the Regulation, at the oral hearing of the appeal, the parties were directed to elect which medical report(s) they wished to rely upon in compliance with cl43 and cl43AA. This resulted in Ms Tighe’s medical case being substantially diminished compared to the medical evidence in her favour at the arbitration.

(3) Had Ms Tighe been aware that she would not be permitted to rely on all the forensic reports tendered on her behalf at the arbitration, she may have sought further evidence from one or more of her treating doctors or the elected forensic expert, on the issue of causation. Having not done that, Ms Tighe was at a significant disadvantage.

(4) The delay in reporting the work injury to her general practitioner was not adequately explained by Ms Tighe’s evidence, and suggested that the back symptoms were not as severe as she claimed. If Ms Tighe was in excruciating pain, it did not follow that she would have refrained from mentioning her back symptoms until 8 August 2002.  [109]

(5) DP Roche declined to make a formal finding regarding whether Ms Tighe’s back pain had continued beyond cessation of compensation payments February 2004, but he noted that there was considerable evidence that it did, contrary to the history taken by Dr Sekel for the insurer. Also, the proposition that her pain had resolved was not put to Ms Tighe in cross-examination.

(6) DP Roche also declined to make a formal finding regarding whether disc pathology revealed in November 2007 resulted from the June 2002 fall, but noted there was a lack of direct evidence linking the pathology to the fall. To draw a conclusion that a link existed, on the balance of probabilities, Ms Tighe had to establish that “the circumstances raise the more probable inference in favour of what is alleged” (Ipp JA in Flounders v Millar [2007] NSWCA 238 at [35]). [117]

(7) It would have been procedurally unfair and inappropriate for DP Roche to re-determine the matter given the history, state of evidence, issues of credit and effect of cl43 on Ms Tighe’s case. It was therefore remitted to another arbitrator for re-determination. [120] – [122]

Box v APK Engineering Pty Ltd [2009] NSWWCCPD 149

“Additional evidence” pursuant to s352(6) of the 1998 Act - application of Haider v JP Morgan Holdings Aust Ltd (t/as JP Morgan Operations Australia Ltd [2007] NSWCA 158, 4 DDCR 634 (‘Haider’)

Note: Following Haider Practice Direction No. 6 redrafted on 15 November 2007

Snell ADP

25 November 2009

Facts:

Mr Box alleged suffering injury to his back on 7 May 2008 when he lifted a piece of steel.  He said he reported this to his supervisor on the day it happened, left early, and attended Mildura Base hospital.

The insurer’s s74 notice disputed that Mr Box had suffered an injury and that employment was a substantial contributing factor to injury.

Following an arbitration in which Mr Box was cross-examined, the Arbitrator found in favour of the employer. The only seriously contested issue was whether Mr Box had suffered an injury as alleged. The Arbitrator observed that the factual issue had to be determined largely on Mr Box’s credibility as a witness. She found various inconsistencies between Mr Box’s account, medical records from Mildura Base Hospital, the GP and a chiropractor. She also noted the supervisor could not recall a report of the injury being made to him on the day it allegedly occurred.

On appeal, Mr Box sought to adduce evidence additional to that before the Arbitrator. Leave was sought to rely on a statutory declaration of an engineer employed by the Respondent, who shared an office with the relevant supervisor. The engineer stated he “distinctly heard Mr Box inform the supervisor “that he had just hurt his back”. The engineer had originally declined to give a statement to either party, for use at the arbitration hearing.

Mr Box also sought to rely on a statutory declaration by the chiropractor. A poor photocopy of his cards had been interpreted by the arbitrator as indicating Mr Box consulted him about back symptoms the day prior to the alleged back injury. The chiropractor’s statutory declaration was accompanied by a better copy of the cards showing that consultation occurred nine days after the alleged accident, and mentioned Mr Box had hurt himself at work.

The employer opposed use of the additional evidence largely on the basis of the principles set out in Practice Direction No 6, in particular whether there was a ‘high probability’ a different result would have ensued, if the additional evidence had been given at the arbitration hearing.

Held – Arbitrator’s decision revoked. Matter remitted to another Arbitrator.

(1) Applying Haider, it was unnecessary for the worker to demonstrate a high probability of a different result. That principle governed the use of ‘fresh evidence’, but s 352(6) of the 1998 Act also permitted the use on appeal of evidence that is additional to or in substitution for that before the arbitrator.

(2) The evidence of the engineer was apparently credible and probative. It may well be preferred to that of the supervisor on the issue of whether the injury was reported contemporaneously. It could not reasonably have been available at the arbitration as the engineer had declined to give a statement to anyone at that stage. It was admitted as additional evidence.

(3) The better copy of the chiropractor’s cards should be admitted in substitution for the poor copy used at the arbitration hearing. This simply corrected an error that flowed from the poor quality copy. Part of the chiropractor’s statutory declaration was admitted as additional evidence, stating he did not treat Mr Box on the day before the alleged accident. Again, this corrected an error. It was conceded his evidence was credible. It was probative. Those acting for Mr Box would not necessarily have foreseen the interpretation and significance that would be put on the poor photocopy at the arbitration.

(4) Certain other inconsistencies remained. ADP Snell was not able to conclude that admission of the additional evidence would be such that there was a high degree of probability that a different result would have ensued at the arbitration hearing, had it been admitted. However the additional evidence was credible, material and probative, and its admission was in the interests of justice, consistent with the principles referred to in the judgment of Basten JA in Haider.

(5) As the Arbitrator’s decision involved a consideration of Mr Box’s credit, applying Tan v National Australia Bank [2008] NSWCA 198 and the principles in Fox v Percy [2003] HCA 22; 214 CLR 118, the matter was remitted for rehearing by another Arbitrator, the additional evidence admitted on the appeal to form part of the evidence on the rehearing.