Issue 12: December 2010

Raghavadev v Moonlight Mushrooms Pty Ltd [2010] NSWWCCPD 120

Calculation of probable earnings but for injury; exercise of the discretion in s 40(1) of the 1987 Act where after the injury the worker’s right to work in Australia ceased

Roche DP

16 November 2010

Facts:

Mr Raghavadev, was born in India, where he worked as an electricity linesman for about 21 years. He came to Australia in February 2005 hoping to obtain permanent residency.

In June 2005, Mr Raghavadev started to work as a labourer on the respondent employer’s mushroom farm. In November 2006 he injured his back lifting mushroom boxes. The insurer accepted liability for his claim and commenced voluntary payments. Whilst on restricted duties, the respondent terminated his employment on 4 February 2009.

On 15 July 2009, Mr Raghavadev’s solicitors advised the insurer that Mr Raghavadev’s entitlement to work in Australia had ended and that he wished to return permanently to India. The worker returned to India on 6 August 2009.The solicitors requested the insurer to continue to make voluntary compensation payments to Mr Raghavadev whilst he was overseas. The insurer disputed liability.

Mr Raghavadev sought weekly compensation in the sum of $565 per week from 4 August 2009 to date and continuing and a determination that the incapacity resulting from his injury was “likely to be of a permanent nature”.

The Arbitrator found Mr Raghavadev’s probable earnings were $729 per week and he was capable of earning in suitable employment working 20 hours per week, $364 per week. The difference between Mr Raghavadev’s probable earnings but for his injury and his ability to earn was $365 per week.  The Arbitrator exercised her discretion and reduced the amount to $95 per week because Mr Raghavadev was “no longer able to work in Australia” and having regard to “the economic differences between Australia and India”.

Mr Raghavadev appealed the Arbitrator’s finding of probable earnings on the grounds that:

• the respondent had not filed a wage schedule and the worker’s wage schedule was deemed to be admitted under Pt 15 r 15.5 and that she erred in the exercise of her discretion, and
• the respondent’s counsel had conceded probable earnings to be $788.

He also challenged the Arbitrator’s exercise of the discretion under s 40(1).

Held: Revoked weekly award of $95 and substituted a new award under s 40 in the sum of $175 per week.

Probable earnings

1. Mr Raghavadev was not permitted to argue on appeal that the respondent employer was bound by the figures in Mr Raghavadev’s wage schedule when that point was never argued before the Arbitrator. The respondent employer relied on wages material including the worker’s financial records produced under a Notice to Produce and correspondence from the employer explaining its inability to provide comparable workers’ wage records. It was clear from the way the case was conducted at arbitration that Mr Raghavadev’s probable earnings but for injury were disputed. Although the Arbitrator did not “otherwise order” as permitted by Pt 15 r 15.5, that was the effect of the way the parties conducted the arbitration. [25]

2. Although arbitrators are not bound to accept admissions made by the parties (Damberg v Damberg [2001] NSWCA 87; 52 NSWLR 492 (at [157]), they should not make a finding on a different basis unless the parties have the opportunity to be heard. [26]

3. At the arbitration counsel for the employer conceded probable earnings of $788 per week. The Arbitrator gave no indication that she intended finding a figure lower than that and, given the way the case was presented, her failure to do so amounted to a denial of procedural fairness. [26]

4. At the appeal hearing, counsel for the employer again conceded probable earnings of $778 per week. No contrary submissions were made by the worker. Having regard to the concession and the evidence as a whole, probable earnings but for the injury were found to be $778 per week. [27]

Ability to earn

5. Neither party challenged the Arbitrator’s finding of ability to earn in Sydney of $364 per week. The Arbitrator’s approach in assessing Mr Raghavadev’s ability to earn in Sydney was consistent with the approach taken by Burke CCJ in Taufia v Nonferral (NSW) Pty Ltd & another (1995) 12 NSWCCR 431 (Taufia), by Campbell CJ in Crowhurst v North Sydney City Council (Crowhurst) (unreported, No 35179 of 1998, 26 July 1999) and by Moore ADP in Singh v TAJ (Sydney) Pty Ltd [2007] NSWWCCPD 152 (Singh). [28]

6. This approach is an exception to the general rule that “the labour market reasonably accessible to the worker” (s 40(3)(a)) is the market in the geographical area in which the worker lives (Collins v Days Transport Service Pty Ltd (1999) 18 NSWCCR 116). The exception is appropriate given that the Commission is an expert tribunal with respect to wage rates and labour markets in New South Wales (J & H Timbers v Nelson (1972) HCA 12; 126 CLR 625), but has no expertise with respect to those matters in foreign countries. In addition, it will always be difficult, as this case has demonstrated, for parties to obtain and present reliable evidence as to wage rates and labour markets in foreign countries. [29]

7. Step three of the process in Mitchell v Central West Area Health Service (1997) 14 NSWCCR 526 (Mitchell) requires a calculation of the difference between probable earrings ($778) and ability to earn ($364). That difference was $414 per week. [30]

The discretion – s 40(1)

8. In Australian Wire Industries Pty Ltd v Nicholson (1985) 1 NSWCCR 50 (Nicholson) where McHugh JA (as his Honour then was) said (Kirby P and Mahony JA agreeing) (at 54F-55A):

The third step [step four in Mitchell] in the process requires the Compensation Court to look at the circumstances of the case. The weekly payment awarded must bear such relationship to the differential amount – which is the result of the exercise under the first and second steps – as under the circumstances of the case is proper. This third step therefore calls for the exercise of a judicial discretion of a kind with which courts have long been familiar. It is at this stage that the Compensation Court can and must examine all the facts. The matters which can be examined include such matters as retirement, other supervening illnesses or injuries, the personal employment history of the worker, and so on. (emphasis added)

His Honour added (at 57G):

Compensation for lost earnings as the result of work injuries remains the primary purpose of the statute. Money which was not likely to be earned cannot be regarded as lost earnings for that purpose. [33]

9. As was observed in Mitchell (at 534F) “The discretion is a broad one”. The courts have considered the exercise of the discretion in many cases in recent years and have applied it in the following situations:

• where the worker has retired or suffered some supervening illness or injury (Nicholson, and Australia Iron & Steel Pty Ltd v Elliott (1966) 67 SR (NSW) 87);
• where the worker had been retired for two years before the injury which occurred during a short period of work which was a one-off job (Pratt v Claydon (1996) 14 NSWCCR 86);
• where the worker was imprisoned during a period of partial incapacity (Stranlund v Mid Coast Meat Co Pty Ltd (1999) 19 NSWCCR 91);
• where, since the injury, the worker has been dismissed because of a criminal conviction (Morgan v Commissioner for Railways [1972] WCR 33);
• where, before the injury, the worker chose to work for only limited periods each year (Moy v Eisenhower 1967 WCR 137);
• where the worker was pregnant (Wrigley Co Pty Ltd v Holland (2002) NSWCCR 463);
• where the worker’s visa did not permit him to work legally in Australia (Taufia and Singh), and
• where a worker sustained injury while working two jobs and the court had regard to the practical impossibility of continuing two full-time jobs over any lengthy period (Erisir v Kellogg (Australia) Pty Ltd [1987] NSWCC 4; 3 NSWCCR 92).

10. The employer carries the onus of establishing that grounds exist that justify the exercise of the discretion (Sutherland Shire Council v Wurzel [2010] NSWWCCPD 79 at [92]). [35]

11. The employer’s submission that the Commission should use the discretion to reduce Mr Raghavadev’s entitlement to compensation because he had returned to India and wage rates are much lower in India compared to Australia was rejected. As the worker’s ability to earn was calculated by reference to wage rates in New South Wales, it was not appropriate to apply the discretion to the step two figure. This was consistent with the approach taken by Campbell CJ in Crowhurst v North Sydney City Council (unreported, No 35179 of 1998, 26 July 1999). [51]

12. However, Mr Raghavadev’s evidence established that, as at June 2009, his right to work in Australia ceased and it was then that he decided to return to India. The loss of his right to work in Australia was a decisive factor in his decision to return to India. There was no evidence that his right to work in Australia had been restored and the inference was that he still had no right to work in this country. In these circumstances, his statement that, but for his injury, he would have returned to work in Australia was of limited relevance. If he did return, he would still not be entitled to work legally.[50]

13. The effect of Mr Raghavadev’s inability to work legally in Australia on his entitlement to compensation, as in Taufia and Singh, was substantial because Mr Raghavadev’s employment prospects, assuming he had remained in Australia and remained uninjured, would have been severely restricted by the cessation of his right to work here. Though he may have been able to obtain work, such work would most likely have been irregular and or seasonal and would have paid him less than he earned with the respondent employer. [50]

14. Money that was not likely to be earned cannot by regarded as lost earnings (Nicholson). Therefore, his probable earnings but for his injury would have been (in reality) lower than $778. How much lower was not capable of calculation with scientific precision, however, in the circumstances of the case, in the exercise of the discretion having regard to the worker’s employment history and circumstances, the proper measure of the reduction in Mr Raghavadev’s weekly earnings as a result of his injury was found to be $175 per week.

Mesiti v South West Realty Pty Ltd [2010] NSWWCCPD 122

Fresh evidence on appeal; s 352(6) of the 1998 Act; failure to demonstrate economic incapacity; s 40 of the 1987 Act

Keating P

18 November 2010

Facts:

Mr Mesiti was a self-employed working director of South West Realty Pty Ltd. The company operated a real estate agency known as L J Hooker Hoxton Park.

Mr Mesiti suffered injuries on three occasions in a car accident in August 2007, when he slipped and fell in April 2008 and when he tripped and fell in June 2009.

After each of the injuries Mr Mesiti progressively reduced his working hours and sold his business on May 2010. Immediately prior to the sale, he had reduced his hours to five hours per day, five days per week.

It was a condition of the sale he worked for the new owners for three months after the sale, for which he was not to be separately remunerated. At the end of the three-month transition period, it was agreed between Mr Mesiti and the new proprietors of the agency that he would work for them as real estate agent on a commission basis. He had not begun to work as a commission agent at the time of the arbitration hearing in July 2010.

The insurer accepted liability and made voluntary payments of weekly compensation. In March 2010, it denied liability for weekly payments from 6 May 2010 on the basis that the effects of the injuries sustained in the three subject accidents had resolved. Mr Mesiti brought proceedings in the Commission claiming weekly compensation, medical expenses and lump sum compensation under ss 66 and 67.

The Arbitrator accepted that, as a result of his injuries, which were not in dispute, Mr Mesiti continued to suffer from the effects of the injuries to his neck, back, shoulders and right knee. However, he was not satisfied that Mr Mesiti had established he was suffering any ongoing economic incapacity.

Mr Mesiti appealed and also sought to rely on taxation returns and a statement concerning the sale price of the agency as fresh evidence on appeal.

Held: Arbitrator’s decision confirmed

Fresh Evidence

1. ‘Fresh evidence’ on appeal is governed by s 352(6) of the 1998 Act, and Practice Direction No 6 sets out the process for seeking leave of the Commission to give ‘new evidence’ on appeal.

2. Each application to introduce fresh evidence or additional evidence on appeal is considered on its own facts and circumstances and in the context of the Commission’s obligation to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms (s 354 of the 1998 Act).

3. The Court of Appeal considered the introduction of fresh evidence or additional evidence on appeal in Haider v J P Morgan Holdings Aust t/as J P Morgan Operations Australia Ltd [2007] NSWCA 158; 4 DDCR 634, where Basten JA referred to Akins v National Australia Bank (1994) 34 NSWLR 155 (Akins) and other authorities. In Akins, Clarke JA (Sheller JA and Powell JA agreeing) stated at [160] that three conditions need to be met before ‘fresh evidence’ can be admitted. These are:

“(1) It must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial;

(2) The evidence must be such that there must be a high degree of probability that there would be a different verdict;

(3) The evidence must be credible.”

4. However, in Nowlan v Marson Transport Pty Ltd [2001] NSWCA 346; 53 NSWLR 116, Heydon JA stated at [15]:

Even if the three tests stated in the Akins case are applicable and are not satisfied, a question remains: is it just to admit the further evidence in the case?

5. Mr Mesiti failed to provide any reason why the returns could not have been prepared and tendered in the proceedings before the Arbitrator.

6. The tax returns were only relevant to the determination of Mr Mesiti’s probable earnings whilst working as a self-employed real estate agent. His probable earnings were not in dispute. It is agreed that, had he not been injured, Mr Mesiti would have been earning $694.34 per week.

7. The arbitration took place on 28 July 2010 during the three-month transition period, during which Mr Mesiti was not to be separately remunerated (in addition to the proceeds of the sale).

8. At arbitration Mr Mesiti did not provide any evidence of his anticipated earnings as a commission agent. Mr Mesiti conceded that the quantum of that income would vary depending on the volume of sales and the rate of commissions paid to him. The rate of the commission varied being higher for the sale of properties of clients he introduced to the agency than other sales. The volume of sales he expected to participate in did not rise above mere speculation.

9. The basis for seeking the admission of the documents as fresh evidence on appeal was an attempt to overcome findings made by the Arbitrator concerning a lack of evidence to determine whether Mr Mesiti suffers an economic incapacity.

10. As was observed by Roche DP in Matar v Zeineddine [2008] NSWWCCPD 51 (at [21]), “it cannot be overemphasised that arbitrations are not a trial run where parties can see how things turn out and then attempt to introduce on appeal evidence that was readily available at the time of the arbitration”.

11. In Irvin v LA Logistics Pty Ltd [2010] NSWWCCPD 40 it was held at [48]:

The Commission must balance two competing requirements: the public interest that litigation should not continue indefinitely against the need to ensure that justice is done in all the circumstances of the case. In balancing these matters, the Commission must also keep in mind its statutory duty to act ‘according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms’ (s 354(3) of the 1998 Act), PCR Plastic Fittings Pty Ltd v De Brito (No 3) [2008] NSWWCCPD 82.

12. Mr Mesiti failed to demonstrate that the documents could not have been obtained with reasonable diligence for use at the arbitration. The documents lacked relevance to the issues in dispute. The application was refused.
    

    Ability to earn

13. The Arbitrator attempted to quantify the weekly amount that Mr Mesiti would be capable of earning in suitable employment.
14. The unchallenged evidence was that Mr Mesiti intended to continue working as a real estate agent. He would no longer be self-employed as a principal in a real estate agency owned and operated solely by him, but he would continue to work in the same agency on a different basis – that is, as a commission agent. Mr Mesiti has failed to establish that his employment as a commission agent would derive a greater or lesser sum than his agreed probable earnings of $694.34.
15. The President confirmed the Arbitrator’s findings that in view of the lack of evidence concerning Mr Mesiti’s ability to earn in those particular circumstances he had failed to prove an economic incapacity.

Boral Resources (NSW) Pty Ltd v Gardiner [2010] NSWWCCPD 124

Hip injury; assessment of medical evidence; aggravation of degenerative changes

Roche DP

17 November 2010

Facts:

On 26 July 2006, back pressured concrete struck the worker, Mr Gardiner, on his right groin or thigh and blew him off a step on which he had been standing.

Boral’s insurer disputed liability on the grounds that (a) Mr Gardiner had not received an injury to his hip on or about 26 July 2006; (b) Mr Gardiner had recovered from the effects of any injury occurring on or about 26 July 2006; (c) any condition from which Mr Gardiner suffered was not related to a work injury on or about 26 July 2006; (d) Mr Gardiner had a pre-existing condition in relation to his adductor region of the right groin, and (e) employment was not a substantial contributing factor “in relation to any right thigh and/or right hip condition”.

The Arbitrator found that Mr Gardiner had injured his right thigh and right hip region on 26 July 2006 and rejected the employer’s argument that the continuing right hip symptoms were due to pre-existing osteoarthritis.

Held: Arbitrator’s determination revoked; matter remitted to another Arbitrator

1. Mr Gardiner’s description of where the concrete hit him encompassed the hip: [81].

2. The submission that Mr Gardiner only suffered a groin strain was inconsistent with Boral’s own medical expert, Dr Hitchen, who stated that hip pathology “classically causes groin” pain. This evidence, together with Mr Gardiner’s evidence of the circumstances of the incident, was compelling evidence that Mr Gardiner injured his right hip. It was also consistent with the opinion of Dr Clark (the treating specialist), who believed that Mr Gardiner suffered a capsular injury to the hip in the work injury of 26 July 2006: [82].

3. Dr Ma’s certificate of 9 August 2006, which stated that Mr Gardiner’s groin strain had settled and that he was fit for his pre-injury duties, was relevant but not conclusive.  Mr Gardiner’s evidence, accepted by the Arbitrator, was that he continued to have symptoms after returning to work. There was no persuasive evidence, let alone “incontrovertible” evidence (Fox v Percy [2003] HCA 22; 214 CLR 118), that the Arbitrator erred in accepting Mr Gardiner’s evidence: [83]. Further, the treating general practitioner’s notes and Dr Clark’s reports corroborated Mr Gardiner’s evidence: [84].

4. On 2 April 2008, after getting out of his truck, Mr Gardiner slipped on mud and experienced hip pain. That incident was not determinative. A complaint of hip pain on 5 April 2008 was a manifestation. Dr Clark had already diagnosed Mr Gardiner’s hip problems in October 2007. In any event “it is well accepted that incapacity may result from an injury for the purposes of workers’ compensation legislation even though the incapacity is also the product of other – even later – causes” (Calman v Commission of Police [1999] HC 60; 70 ALJR 1609 at [38]). It was also consistent with the notation in the Early Notification of Injury form dated 5 May 2008 which stated “This is not a new injury”: [85].

5. Dr Matalani (the worker’s qualified specialist) did not have a history of the incident of 2 April 2008.  However, that incident was of little relevance and nothing turned on Dr Matalani’s failure to refer to it. However, Dr Matalani’s history that Mr Gardiner’s hip was asymptomatic prior to 26 July 2006 was relevant.  As hip pathology classically causes groin pain, the entries in Dr Sellathurai’s notes on 10 March and 13 June 2006 when Mr Gardiner complained of an “adductor muscle strain (R) groin” were relevant to whether Mr Gardiner had hip problems before the July 2006 injury.  Dr Matalani’s failure to refer to those problems diminished the weight attached to his evidence.  The Arbitrator erred in saying that the inconsistencies between Mr Gardiner’s evidence (of no prior hip or thigh complaints) and Dr Sellathurai’s notes were “minor”: [86].

6. Dr Matalani did not explain why he concluded that Mr Gardiner’s employment was a substantial contributing factor to his continuing disability. Although he noted Mr Gardiner’s slight limp in November 2007, he took no history of when the limp started or what caused it.  In the absence of evidence on the point, there was no basis for the Arbitrator inferring that the limp resulted from the work incident.  Dr Hitchen noted that Mr Gardiner’s right leg was shorter than his left leg and he walked with his leg externally rotated, as was “classically seen with an old slipped femoral epiphysis”.  Dr Hitchen’s evidence was relevant as to whether Mr Gardiner’s limp was a result of his injury or from some other cause: [87].

7. The Arbitrator erred in accepting Mr Gardiner’s evidence that he had slips and strains from driving a truck and that he distinguished those strains from the incident on 26 July 2006 when he “got hurt” which was a “different injury”, as an explanation for his attendances on Dr Sellathurai. He did not deny that he had complained to the doctor of prior groin symptoms.  The evidence in Dr Sellathurai’s notes, together with the evidence of the narrowing of the right hip space in the x-rays, supported Dr Hitchen’s opinion that the symptoms the worker complained of to Dr Sellathurai were consistent with the evolution of symptoms arising from an arthritic hip.  However, that did not rule out Mr Gardiner having suffered an aggravation or exacerbation or acceleration of the degenerative condition in his hip as a result of the incident on 26 July 2006: [88].

8. There was no evidence upon which the Arbitrator based his finding that the injury to the right hip of 26 July 2006 “caused the onset of osteoarthritis”: [89].

9. Dr Hitchen based his conclusion that the incident on 26 July 2006 was a minor injury on his history that a hose blew causing “liquid concrete to splatter” and “some of the splattering caught Mr Gardiner in the groin causing him to jump down from his truck”. The Arbitrator did not accept that evidence. Mr Gardiner’s evidence was that he was hit with great force by “back-pressured concrete”, was “blown off the truck” and “couldn’t bear any weight whatsoever” on his leg and “couldn’t do anything”. It took him 20 minutes before he could hobble around. That evidence was consistent with Dr Ma’s WorkCover certificate and Dr Clark’s history.  The Arbitrator was right to find that the incident was more than a mere “jarring event”: [92].

10. The matter was remitted to another Arbitrator.  There were important credit issues, and the evidence available on appeal was not sufficient to deal with the issues still in dispute.  Further, QBE (apparently) failed to comply with cl 37 of the Workers Compensation Regulation 2003 in that it did not serve certain medical reports on Mr Gardiner. Clause 37 is in mandatory terms and applies regardless of whether the report supports the insurer’s case (see Beale v Walgett District Hospital & Anor [2009] NSWWCCPD 60 at [41]): [94].

CSR Limited v Gonzales [2010] NSWWCCPD 118

Section 352(2)(a) of the Workers Compensation Act 1987, monetary threshold; section 66A of the Workers Compensation Act 1987, complying agreement; estoppel by agreement

O’Grady DP

5 November 2010

Facts:

Mr Gonzales commenced working with CSR Limited (the appellant) in February 2005 as a machine operator. He alleged that he was injured in the course of his employment on 16 January 2006 as he was carrying out heavy lifting and that this incident caused injury to various parts of the body.  He also alleged that this incident caused him to suffer anxiety and/or depression.

A dispute concerning entitlement to compensation benefits arose and proceedings were commenced in the Commission for orders in respect of weekly payments, lump sums and medical expenses. By consent, an award in favour of the appellant was recorded in a Certificate of Determination dated 17 January 2007 in respect of medical expenses and weekly benefits.  It was noted in the Certificate of Determination that the parties intended to enter into “a complying agreement for lump sum compensation” and “execute an agreement relating to admissions and agreed facts”.

A complying agreement under s 66A dated 9 February 2007 was entered into by the parties.  In accordance with this agreement, Mr Gonzales was paid $17,000 in respect of a 13% WPI and $9,500, for pain and suffering under s 67. Documents headed “agreed facts” and “Admissions” were signed by Mr Gonzales on 9 February 2007 and 16 October 2007 respectively.

On 9 March 2009 Mr Gonzales made a further claim for lump sum compensation in the sum of $3,700 in respect of an alleged 3% WPI “in relation to scarring”. Liability was denied in a s 74 notice on the basis that Mr Gonzales was estopped from recovering compensation benefits as claimed given the agreement made in 2007.  Mr Gonzales filed an Application with the Commission on 15 March 2010 in respect of this claim and the Arbitrator made orders in favour of Mr Gonzales.

The main issue in dispute on appeal was whether the Arbitrator erred in finding that Mr Gonzales was not estopped, from claiming 3% WPI for scarring, by reason of the s 66A agreement.

Held: Arbitrator’s decision revoked.

Section 352(2)(a) – Monetary Threshold

1. If the outcome of the appeal resulted in an assessment to be made by an AMS in relation to the alleged scarring, the provisions of s 322(2) of the 1998 Act would require that all impairments resulting from the injury be assessed together having regard to the Combined Values Chart of the AMA 5.  Any award made following an AMS assessment would be for the total sum calculated and the appellant would have credit for previous payment made to Mr Gonzales in respect of his s 66 entitlement.  The effect of any such order would be a determination that his entitlement pursuant to s 66 is greater than $17,000.  It is in this sense, in the unusual circumstances of this case, that it may be said that the amount of compensation at issue on the appeal exceeds the sum of $5,000.

2. The threshold requirements of s 352(2)(a) were met.

Re Judicata and Issue Estoppel

3. Was Mr Gonzales’s right to lump sum compensation, in the earlier proceedings, “passed into judgment” in the sense addressed by Dixon J in Blair v Curran (1939) 62 CLR 464 at 532 or had issue estoppel arisen?

4. Issue estoppel may arise in those circumstances addressed in Habib v Radio 2UE Sydney Pty Ltd [2009] NSWCA 231 per McColl JA (Giles JA and Campbell JA agreeing) at 186:

Orders made by consent may create an estoppel as between parties, (and, no doubt may be considered for the purpose of determining whether subsequent proceedings would lead to conflicting judgments), however they do so “only as to those matters which are necessarily decided”, to ascertain which “the court will closely examine all such evidence, if any, as is available and admissible, and, by the aid of such materials, will ascertain whether any and what adjudication of matters in dispute was expressed, or necessarily involved, in the actual decision assented to”: Isaacs v Ocean Accident and Guarantee Corporation Ltd (1957) 58 SR (NSW) 69 (at 75), per Street CJ and Roper CJ in Eq; see generally the helpful discussion of the issue by Barrett J in Land Enviro Corp Pty Ltd v HTT Huntley Heritage Pty Ltd [2008] NSWSC 185; (2008) 72 NSWLR 160 (at [63] – [65]); Abigroup Contractors Pty Ltd (at [146]).

5. The Commission’s orders in the earlier proceedings were entered by consent and were not based upon any finding or determination.  Only the intention of the parties to enter into a complying agreement concerning Mr Gonzales’s lump sum entitlements was recorded in the award.  The terms of the award did not finally dispose of the issue, being the entitlement to further lump sum, between the parties.  Mr Gonzales was not estopped by reason of the consent award from bringing the claim. [80]

Estoppel by Agreement

6. The appellant argued that Mr Gonzales was estopped by reason of the existence of those documents which came into being following the consent award (the s 66A agreement dated 9 February 2007 and the admissions made by Mr Gonzales on 16 October 2007).  It was argued that the onus was on Mr Gonzales to establish that the s 66A agreement did not create an estoppel.

7. The onus is upon the party asserting the estoppel (Thomspon v Palmer (1933) 49 CLR 507 per Dixon J at 547). [75]

8. In considering the provisions of s 66A, the Arbitrator concluded that “the word ‘injury’ is interpreted as the body part which has been the subject of the claim”.  The appellant asserted that the word “injury” as it appears in s 66A(1)(a) should be construed as meaning “injurious event”.

9. The term “injury” has been found, having regard to context, to refer to both “injurious event” and “pathology” arising from that event (see Lyons v Master Builders Association of NSW (2003) 25 NSWCCR 423 and Connor v Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2006] NSWWCCPD 124).

10. The clear purpose of s 66A is to provide a means whereby a worker and an employer may reach a final and binding agreement concerning entitlement to lump sum compensation.  The Arbitrator’s construction of the word “injury” would result in s 66A not achieving its purpose of providing finality.  Section 66A(3) makes provision for exceptions.  The exceptions did not extend to this case. [91]

11. Having regard to the text of the agreement, the circumstances known to the parties (Mr Gonzales was aware of the scarring at the time of settlement and the scarring was noted in medical reports) and the purpose and object of the agreement, a reasonable person would have understood that the agreement was intended to finalise liability for, and entitlement to, lump sum compensation (Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd and others [2004] HCA 52; 219 CLR 165 and see discussion by Roche DP in Warwar v Speedy Courier (Australia) Pty Ltd [2010] NSWWCCPD 92).

12. The agreement records that the lump sum payable “represents the full extent of any entitlement” pursuant to s 66 and s 67.  Upon the basis of that acknowledgment the appellant agreed to a payment by way of compromise of the claim brought by Mr Gonzales.

13. There was an estoppel by agreement.  It would be unfair or unjust and put the appellant at a material disadvantage, to allow Mr Gonzales to resile from the agreement that he had received the totality of his entitlement (see Thomspon v Palmer (1933) 49 CLR 507 per Dixon J at 547).

14. The admissions made by Mr Gonzales, contained in the document dated 16 October 2007, were of no relevance given that Mr Gonzales signed that document many months after the terms of agreement had been reached in February 2007.  There was no explanation for the substantial delay. [94]

Rivers v SMS Willoughby Pty Ltd [2010] NSWWCCPD 113

Application to extend time to appeal; credit findings

Roche DP

1 November 2010

Facts:

Mr Rivers alleged he injured his back on 30 September 2005 whilst lifting in the course of his employment. SMS’s insurer (CGU) accepted the claim and made voluntary payments of compensation. On 23 May 2006, Mr Rivers provided CGU with a “Statement of Income and Employment Status” in which he falsely said that he had not performed any work since 30 September 2005.  Mr Rivers was employed as a truck driver during the period he had been receiving weekly compensation.  He pleaded guilty to having made a statement knowing it was false in a material particular when furnishing information to a person concerning a claim.

On 5 August 2009, Mr Rivers claimed lump sum compensation in respect of an 11 per cent whole person impairment alleged to have resulted from his injury.  GCU disputed liability on the grounds that Mr Rivers had not injured his low back and that his employment had not been a substantial contributing factor to his injury.

The Arbitrator made an award in favour of SMS with no order as to costs. The Arbitrator stated that the worker had little credit and had been prepared to exaggerate his claim and make false declarations for the purpose of financial gain.

Held: Leave to appeal refused.

1. The appellant sought an extension of time to lodge the appeal.  He lodged an appeal 52 days after the Commission issued the Certificate of Determination, well outside the 28 day limit in s 352(4) of the 1998 Act. Mr Rivers’s solicitor had advised him that he had 28 days to lodge the appeal.  However, he failed to provide instructions and provided no explanation as to why he did not do so before the time for appeal passed. There were no grounds to extend time in this appeal. [20]-[22].

2. Whether Mr Rivers would suffer any substantial or demonstrable injustice if the Commission refused leave to appeal required an assessment of his prospects of success on appeal.  The Arbitrator considered that the case turned on Mr Rivers’s credit and concluded he could only accept Mr Rivers where there was other evidence to support his claim and there was no such evidence. [24]-[25].

3. On appeal, Mr Rivers sought to rely on “new evidence”. However, that new evidence was not set out in a signed statement as required by Practice Direction 6, but was merely a summary of Mr Rivers’s alleged instructions to his solicitor.  Further, it was not new evidence at all, but was evidence readily available prior to the arbitration and should have been in his statement filed with the original Application. [34].

4. The submission that Mr Rivers “unwittingly” answered “No” to questions by CGU about whether he had been working was simply untenable as the questions were in clear and unequivocal terms.  His answers were demonstrably false and deliberately so. Mr Rivers’s dishonest answers gave rise to serious questions as to his reliability and the veracity of his claim.  The worker’s dishonesty required that his claim be carefully examined for independent corroboration and support:  Malco Engineering Pty Limited v Ferreira (1994) NSWCCR 117.  Such independent corroboration was lacking: [36].

5. Other evidence undermined the worker’s credit. The evidence of SMS’s OHS manager was that Mr Rivers regularly attended vigorous exercise classes at a time when Dr Hawkes had certified him unfit.  The evidence suggested that Mr Rivers’s presentation to Dr Pillemer – that he was very restricted and not really able to do housework as it would leave him in agony afterwards – was false and deliberately so:  [39].

6. Mr Rivers submitted that the work he did (while receiving compensation payments) was “spasmodic casual work” because he could not survive on weekly compensation benefits.  However, he provided no details of that work. The surveillance report suggested that Mr Rivers worked regularly. Mr Rivers did not freely admit that he should not have told CGU the he was not working when he was working as a truck driver. He did not express genuine contrition for his actions, but stated that he worked because he could not meet his living expenses on compensation benefits.  He claimed he was “trialling himself” but he did not do so with the assistance of a rehabilitation provider and/or physiotherapist.  He led Dr Hawkes to believe that he was unfit for any work and obtained certificates to that effect while he was working: [41].

7. The Arbitrator did not err in refusing to allow Mr Rivers to give oral evidence at the arbitration.  The Arbitrator gave the worker considerable latitude to present additional evidence in his supplementary statement that should have been included in the evidence attached to the Application. The “new evidence” which Mr Rivers sought to adduce on appeal made no difference to the result: [44].

8. Counsel for SMS did not have to prove that Mr Rivers suffered an injury as a result of some weekend activity. Mr Rivers carried the onus of proof which he failed to discharge because the Arbitrator did not accept him as a credible witness: [45(a)].

9. Although Mr Rivers worked on his own on 30 September 2005, the Arbitrator was entitled to look at the surrounding circumstances for independent corroboration of his allegations.  There was no corroboration for his assertion that he suffered back pain after 30 September 2005. A finding that the current L4/5 pathology had resulted from the alleged incident on 30 September 2005 depended on an acceptance of Mr Rivers’s evidence. The Arbitrator did not accept Mr Rivers’s evidence: [45(b)].

10. A consistent history of the alleged cause of an injury is often (but not always) critical to the acceptance or rejection of a claim. That is especially so where (as in this case) the particular worker’s credit and reliability is open to doubt, Mr Rivers had not given a consistent history to his treating doctors: [45(c)]

Yang v Topline Holdings Pty Ltd [2010] NSWWCCPD 117

Application to extend time to appeal; s 352(4) of the 1998 Act

Keating P

5 November 2010

Facts:

The appellant, Sui Wen Yang, was employed by Topline Holdings Pty Limited trading as Topline Shower Screens, as a process worker.

Mr Yang claimed he suffered neck, back and chest injuries. The respondent disputed Mr Yang had suffered an injury to his back or chest. It accepted that Mr Yang suffered an injury to his neck on 31 May 2007, but alleged that the injury was a temporary aggravation of a pre-existing degenerative condition, the effects of which had ceased.

He claimed weekly compensation from 18 August 2009 to date and continuing, lump sum compensation in respect of 29 per cent whole person impairment in respect of injuries to the cervical and lumbar spine, and compensation for pain and suffering pursuant to s 67 and s 60 expenses.

The Arbitrator found that the worker suffered injury to his neck and right sternoclavicular joint and made an award of compensation at the rate of $95 per week. The Arbitrator made an award for the respondent in respect of the lumbar spine injury.

Mr Yang appealed challenging the quantum of the weekly compensation and the Arbitrator’s findings in respect of the alleged injury to the back. The appeal was filed 12 days out of time.

In a Notice of Opposition, the respondent submitted that the appeal was filed out of time and that an extension of time ought not be granted because the test of “exceptional circumstances” under rule 16.2 of the 2010 Rules was not satisfied.

Held: leave to appeal refused

1. The appellant failed to provide any explanation for the delay between the date of the Arbitrator’s Certificate of Determination and 11 August 2010, which was the day before the final day for an appeal to be lodged. The explanation that on 11 August 2010, the appellant’s counsel departed Australia to attend the funeral of his grandmother was inadequate. The appeal was signed by the appellant’s solicitor, not by counsel. There was nothing to indicate to what extent, if any, counsel was involved in the preparation of the appeal documents.

2. The New South Wales Court of Appeal recently considered the application of Part 16 r 16.2(11) in Bryce v Department of Corrective Services [2009] NSWCA 188 (Bryce), Allsop P (Beazley and Giles JJA agreeing) at [8]-[10].

3. For the first 27 days of the appeal period, no explanation at all was offered for the failure to lodge the appeal. There was no evidence or submissions as to what steps, if any, were taken to pursue the appeal in this period. Mr Yang failed to demonstrate exceptional circumstances existed so that to lose that right would work a demonstrable and substantial injustice.

4. Whether Mr Yang would suffer a demonstrable and substantial injustice if leave to appeal was refused required an assessment of the merits of the appeal.

5. The President considered the merits of the appeal and was not satisfied that it had any prospects of success for the following reasons:

• the Arbitrator’s conclusions that the totality of the evidence did not support a finding that the worker injured his back in the circumstances alleged demonstrated no error;
• the submission that the Arbitrator failed to have sufficient regard to Mr Yang’s age, education and limited oral English skills in her assessment of the worker’s ability to earn under s 40 of the 1987 Act was rejected because these factors were specifically addressed by the Arbitrator in her Statement of Reasons, and
• the Arbitrator lawfully exercised her discretion to reduce the award because she found that the non-work related back injury would inhibit his prospects of obtaining and retaining suitable employment (Australian Wire Industries Pty Ltd v Nicholson (1985) I NSWCCR 50; Australian Iron & Steel v Elliott (1966) 67 SR (NSW) 87)

State Rail Authority of NSW v Cowles [2010] NSWWCCPD 114

Application for increase in weekly compensation; causation; relevance of non-work incidents

Roche DP

3 November 2010

Facts:

Mr Cowles worked for State Rail as a fettler. He injured his back in the course of his employment in 1989 and again in 1991.  He was unable to return to work as a fettler and ceased working for State Rail. He retrained as a chef and worked for various employers.

In 1992, Mr Cowles obtained a continuing award in the former Compensation Court in the sum of $136.22.  In 1996, he obtained an award for 25% permanent impairment of his back as a result of his 1989 and 1991 injuries.

In September 2006 (during a period when he was employed by Wesley Mission), Mr Cowles was mowing his father’s lawn when he felt a “twinge” in his lower back. About a week later he suffered an episode of severe back pain whilst putting on his work shoes at home.

State Rail disputed liability on the grounds that the September 2006 incidents were an aggravation of the degenerative disease process in Mr Cowles’s lower back.  Because of his persistent symptoms, he had further back surgery in February 2009.

Mr Cowles sought an increase in weekly compensation from 1 October 2006 to date and continuing against State Rail and Wesley Mission.

The Arbitrator found that Mr Cowles had suffered two significant frank injuries to his back in 1989 and 1991 and that those symptoms never fully resolved and he continued to have back pain. Though the claim had not been properly particularised, the Arbitrator treated the worker’s application as an application for review under s 55 of the 1987 Act.  The Arbitrator accepted the medical evidence of Dr Pillemer (Wesley Mission’s medical expert) that Mr Cowles developed significant degenerative changes and canal stenosis at multiple levels in his low back. These problems started with State Rail and persisted.  The two incidents in September 2006 were trivial incidents that were a recurrence of the injuries received with State Rail. The Arbitrator made an award in favour of Wesley Mission.

Held:  Arbitrator’s decision confirmed except as amended in relation to the date of the award and quantum. Award applicant in respect of weekly compensation. Employer to pay worker’s costs of the appeal.

1. State Rail challenged the Arbitrator’s findings against it but did not challenge the award in favour of Wesley Mission.
2. It was not open to State Rail to object on appeal to the fact that the Arbitrator treated the application as one for an increase under s 55.  The inadequate particularisation of the case did not cause State Rail any prejudice as the application referred to the earlier proceedings against State Rail. At the arbitration, counsel for State Rail did not object when counsel for Mr Cowles invited the Arbitrator to treat the application as one for an increase: [40].
3. The issue against State Rail was whether the increased symptoms and incapacity resulted from Mr Cowles’s undisputed injuries in 1989 and 1991, or from some other cause.  State Rail argued that Mr Cowles suffered an “aggravation injury” under s 4(b)(ii) of the 1987 Act in the September 2006 incidents.  Those events did not occur at work and therefore could not be characterised as “aggravation injuries”:  [41]-[42].
4. State Rail selectively quoted from Dr Pillemer’s evidence and virtually ignored the evidence from Mr Cowles that he had continuing back and leg symptoms since 1993. Dr Pillemer took a history of Mr Cowles’s injuries with State Rail and his surgery in 1993.  Mr Cowles told Dr Pillemer that although his symptoms had improved after surgery, he still had ongoing problems with his low back and left lower limb:[43]-[44].  Dr Pillemer believed Mr Cowles had developed significant degenerative changes and canal stenosis at multiple levels of his low back which started with the injuries with State Rail and persisted since: [48].  Dr Pillemer thought it was predictable that Mr Cowles would have ongoing problems with his low back: [49].
5. The only other evidence touching on causation was from Dr Bracken. He concluded that Mr Cowles suffered a disc prolapse as a result of his work with Wesley Mission. He based his conclusion on an incorrect history that Mr Cowles’s symptoms increased in September 2006 while performing heavy work with Wesley Mission. The Arbitrator correctly found that Mr Cowles was not at work in September 2006: [51].
6. Dr Bracken’s conclusions did not support the “aggravation” argument. He attributed none of Mr Cowles’s disability or incapacity to the September incidents but apportioned liability equally between Wesley Mission and State Rail: [52].
7. The Arbitrator’s conclusion was reinforced by the evidence from Dr Smith in his report on 17 January 1991.  He took a history of the 1989 injury and Mr Cowles’s return to work on normal duties. Though he had no back pain, he still had occasional twinges of right leg pain. In October 1990, Mr Cowles was mowing his lawn when he bent over and felt severe back pain and had a recurrence of his leg symptoms.  Dr Smith did not suggest that incident was a new injury. He predicted “major long term problems” for Mr Cowles: [53].  This evidence was consistent with the conclusion that the two incidents in September 2006 were trivial incidents that were examples of the long term problems Dr Smith predicted Mr Cowles would suffer.  Thus, as a matter of commonsense, the compelling conclusion was that the increase in Mr Cowles’s symptoms in September 2006 resulted from his injuries with State Rail.
8. Even if it were thought, contrary to the finding made, that the incidents in September 2006 had made a material contribution to Mr Cowles’s current condition, that does not relieve State Rail of liability. If a worker received an injury in the course of the worker’s employment which rendered the worker vulnerable to increased disability by the effects of further work and the work in a subsequent employment brought about those effects, it is open to the commission to hold that the ultimate incapacity resulted from the first injury:  Cluff v Dorahy Bros (Wholesale) Pty Ltd [1972] 2 NSWLR 435 at 439; see also Calman v Commission of Police [1999] HCA 60; 73 ALJR 1609 at [38]: [57].
9. The submission that s 9A of the 1987 Act applied was fundamentally wrong. Mr Cowles received his injuries with State Rail before s 9A was introduced and that section had no application to his claim against State Rail.  Further, employment only has to be a substantial contributing factor to the injury, not the incapacity: Rootsey v Tiger Nominees Pty Ltd (2002) 23 NSWCCR 725: [61].
10. The Arbitrator erred in making an award from 18 September 2006 when the claim was dated from 1 October 2006 and erred in the quantum of the compensation awarded from 1 March 2010. Mr Cowles conceded the Arbitrator erred on these issues and the appropriate amendments were made to the orders: [63]

Cowles v State Rail Authority of NSW and another [2010] NSWWCCPD 115

Leave to appeal out of time

Roche DP

3 November 2010

Facts:

The facts in this case are identical to the faces in State Rail Authority of NSW v Cowles [2010] NSWWCCPD 114 (Cowles No 1).

After receiving the appeal in Cowles No 1, it was apparent that, as that appeal did not join Wesley Mission as a respondent or seek any relief that affected the award in favour of Wesley Mission, if State Rail’s appeal succeeded, Mr Cowles would be left without a remedy in respect of his rights against Wesley Mission. This appeal sought leave to challenge the Arbitrator’s determination in favour of Wesley Mission.

Held:  Leave to appeal refused. Each party pay his or its own costs of the appeal.

The appeal was lodged 89 days after the Arbitrator’s determination. Mr Cowles filed this appeal to protect his interests in the event that State Rail succeeded in its appeal in Cowles No 1. As State Rail’s appeal has failed and Mr Cowles had not sought any additional or different relief against Wesley Mission to the relief he had already obtained against State Rail, this appeal was otiose and to lose the right to appeal would not result in any injustice.