Issue 7: July 2010

Injury; aggravation of disease; credit issues; failure to consider relevant evidence; failure to consider and determine claim pleaded; relevance of failure to cross-examine; application of principles in Browne v Dunn (1894) 6 R 67 to proceedings in the Commission

Roche DP

7 June 2010

Facts:

Ms Drar was a material handler for EDS. Her duties required her to pick and pack products in preparation for distribution. She alleged that she felt pain in her lower back and right shoulder in June 2006 and had 3 days of work in July 2006. Ms Drar alleged having mentioned her back pain to a co-worker named “Tolini”. Her back and right shoulder pain increased when she lifted boxes in April 2007, when she was certified fit for suitable duties on 14 May 2007 and then certified unfit for work from about 17 May 2007.

CGU accepted provisional liability but then disputed liability based on a report from a qualified orthopaedic surgeon. CGU disputed that Ms Drar had received an injury in the course of or arising out of her employment with the respondent and, if she had received an injury, that her employment had been a substantial contributing factor to that injury.

The amended ARD claimed s60s and 19% WPI in respect of the low back and right shoulder. The injuries were said to have been due to a specific lifting incident on 28 July 2006, heavy lifting in April 2007 and as a result of excessive packing and lifting of boxes between 1 May 2006 and 15 May 2007 (deemed date of injury 15 May 2007 being first date of incapacity).

The arbitrator found in favour of EDS on the ground that the worker was not a truthful witness and failed to establish that the claimed injuries arose out of or in the course of employment.

The worker argued on appeal that the arbitrator failed to properly assess her evidence that her injuries were caused by the nature of her duties between 1 May 2006 and 15 May 2007 and/or were a disease of gradual process which was aggravated by the duties, and that she was not cross-examined in circumstances where her evidence was supported by a number of witnesses.

Held: Arbitrator’s decision revoked. Worker to be paid s 60 expenses, claim for ss66/67 to be remitted to Registrar for referral to AMS.  

1. Hospital records confirmed that Ms Drar complained on 9 May 2007 about low back pain associated with repetitive lifting. There was no suggestion that she performed repetitive lifting anywhere other than in the course of her employment with EDS. On the balance of probabilities, the symptoms developed as a result of her duties with EDS. A co-worker had also stated that Ms Drar had complained to him of back pain at work in April 2007.

2. It was not determinative that the first complaint to a doctor of a work-related injury was not until 14 May 2007. The medical histories were consistent that the injury had resulted from employment, and that it was a substantial contributing factor to the injury.

3. The statements from a supervisor and co-worker confirmed that Ms Drar’s work required her to repetitively lift boxes of up to 16kg. The histories recorded by the doctors regarding Ms Drar’s duties provided a fair climate for the acceptance of their opinions on injury resulting from the employment (Paric v John Holland Constructions Pty Ltd [1985] HCA 58; 59 ALJR 844; [1984] NSWLR 505 at 509-510).

4. The employer’s qualified specialist incorrectly applied s 9A of the 1987 Act  when stating that employment was not a substantial contributing factor to her “current presentation”. The doctor also wrongly placed weight on the lack of a “specific accident or incident” and his conclusion was inconsistent with the objective evidence in the CT and MRI scans.

5. Co-workers’ statements about Ms Drar’s lack of complaints in 2006 was inconsistent with the worker’s evidence. The consistency of the co-workers’ statements and the lack of any documented complaints at work in 2006 raised an issue as to the reliability of Ms Drar’s evidence that required the rest of her evidence by carefully assessed.

6. The treating GP’s notes corroborated Ms Drar’s evidence that she had back symptoms in July 2006 but there was no mention of the cause of those symptoms. The doctor did not mention work but did not suggest a non-work cause for symptoms.

7. The 2006 symptoms must be seen in context. Ms Drar continued working until May 2007 and was described in December 2006 as an “extremely hard working” and “outstanding” employee. On balance, Roche DP accepted that symptoms in 2006 resulted from work with the respondent, but it was unlikely that they were serious or disabling. At most, Ms Drar was off work for 3 days.

8. Although Ms Drar was not cross-examined, Browne v Dunn (1894) 6 R 67 did not apply. Ms Drar’s evidence as to the reporting of her symptoms in 2006 was expressly challenged by EDS’s witnesses in circumstances where Ms Drar had the opportunity to respond and did so (see Quadi v The Reject Shop (Aust) Pty Ltd [2008] NSWWCCPD 3) for a full discussion of the applicability of the principles in Browne v Dunn in the Commission). It was open to the arbitrator to accept or reject the evidence without cross-examination.

9. A Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 inference could not be drawn against Ms Drar because she did not call Tolini. It was not essential for her to prove that she reported her symptoms to Tolini. In a case where EDS denied the worker’s allegation that she reported her symptoms in 2006, it would have been more natural for EDS to call Tolini to rebut the worker’s allegation (Manly Council v Byrne & Anor [2004] NSWCA 123 at [71] and [72]).

10. Given Ms Drar’s good performance appraisals (which reflected favourably on her credit), the nature of her duties (which required lifting heavy boxes), the hospital records and the histories by treating doctors, Roche DP accepted that Ms Drar injured her back and right shoulder in the course of her employment between 1 May 2006 and 15 May 2007.

11. The injury was in the nature of an aggravation of a disease, being degenerative facet joint arthrosis and disc degeneration in the lumbar spine. The deemed date of injury was 15 May 2007, being the first day of incapacity, for the purpose of s 16(1)(a)(i) of the 1987 Act.

Begovic v Tamworth Building Supplies Pty Ltd [2010] NSWWCCPD 61

Incapacity; weekly compensation; s 40(2) of the 1987 Act; calculation of probable earnings but for injury; calculation of amount worker is earning or is able to earn where worker self-employed.

Roche DP

3 June 2010

Facts:

Mr Begovic is a musician and worked as a casual truck driver for the respondent from January 2002. On 20 June 2002 he slipped and fell at work whilst carrying building materials, injuring his low back. He reported the injury but worked until his employment was terminated in late 2002.

Mr Begovic’s claim for compensation was accepted. The parties registered a s66A agreement in April 2004 for 6% WPI in respect of his back injury. Weekly compensation was paid until April 2006, when the insurer declined liability based on a medical report from Mr Begovic’s treating GP that he was fit for pre-injury duties. He changed GP’s, the latter certifying him fit for suitable duties.

After his injury, Mr Begovic continued to work as a musician but also set up a recording studio.

After the first arbitration, Mr Begoci was awarded weekly compensation under s 40 from 1 May 2006 to date and continuing. On appeal, Candy ADP revoked the arbitrator’s decision on the ground that the arbitrator had erred in assessing Mr Begovic’s ability to earn by reference to his hypothetical ability to earn as a truck driver (Tamworth Building Supplies Pty Ltd v Begovic [2008] NSWWCCPD 77). Because of the state of the evidence, Candy ADP was not able to redetermine the award for Mr Begovic so the matter was remitted to another arbitrator for redetermination.

The second arbitrator found in favour of the employer and dismissed Mr Begovic’s claim for weekly compensation on the ground that Mr Begovic had not established that he had a partial incapacity as a result of his injury.

Held: Arbitrator’s decision revoked. Mr Begovic has been and remains incapacitated for pre-injury employment as a truck driver, but fit for alternative full-time employment. An award under s 40 was made in favour of the worker.

1. Given the objective findings on MRI scan (a small L5/S1 protrusion), the evidence from treating doctors, and Mr Begovic’s evidence of continuing symptoms, the effect of the injury had continued to date and Mr Begovic remained unfit for unrestricted duties.

2. However, whilst the effect of the back injury was continuing, the evidence did not establish Mr Begovic to be as incapacitated to the extent that he claimed. No doctor recommended anything other than conservative treatment and the GPs restriction on work for only 2 to 3 hours per day was not explained by that doctor.

3. The test in Mitchell v Central West Area Health Service (1997) 14 NSWCCR 526 was applied to determine Mr Begovic’s entitlement to weekly compensation. Step one involved assessing the worker’s probable earnings but for injury. Roche DP accepted Mr Begovic’s submission that his earnings as a musician be disregarded because he worked as a musician both before and after the injury. Given that the injury did not materially influence Mr Begovic’s ability to earn as a musician, only his earnings as a truck driver were considered. This approach will not be correct in all cases (see [92] to [96]) and the authorities cited). Usually, earnings (as a worker) from all sources will be taken into account in determining probable earnings (Hill v Bryant [1974] 2 NSWLR 423).

4. An assessment of probable earnings under s 40(2)(a) requires a determination of the “weekly amount which the worker would probably have been earning as a worker but for injury and had the worker continued to be employed in the same or some comparable employment”.  The calculation is a hypothetical one that assumes that the worker’s pre-injury employment continued (Australian Wire Industries Pty Ltd v Nicholson (1985) 1 NSWCCR 50; Singh v Taj (Sydney) Pty Ltd [2006] NSWCA 330; (2006) 4 DDCR 557).

5. The evidence was that, had he remained uninjured and continued to work in the same or some comparable employment, Mr Begovic’s weekly wage between 2006 and 2009 would have fluctuated between $580.00 and $816.74. Roche DP took the 2006 figure of $664 and adjusted it by 3% per annum to allow for general wage movements.

6. Step two required a determination of what Mr Begovic was earning or able to earn in some suitable employment (s 40(2)(b)).  If a worker is working, then, prima facie, his earnings are taken to be the measure of his ability to earn (Aitkin v Goodyear Tyre & Rubber Co (Aust) Ltd (1945) 46 SR (NSW) 20). Due to significant inconsistencies in Mr Begovic’s tax returns, Roche DP did not accept that his actual earnings were a proper measure of his ability to earn. It was therefore appropriate to determine his ability to earn and accept whichever was the higher (Hill v Bryant [1974] 2 NSWLR 423).

7. To assess ability to earn, Roche DP considered the nature of Mr Begovic’s incapacity (modest), the nature of his pre-injury work (heavy lifting and prolonged driving), Mr Begovic’s age (43), education (Mr Begovic has a demonstrated ability to complete further education at TAFE or university level), his skills and work experience (sound recording, sales and truck driving), his place of residence (regional NSW), and the contents of the medical evidence and rehabilitation reports.

8. Step three was the deduction of figures at step two from the figures at step one. Step four required the application of the s 40(1) discretion to determine the amount of the reduction in the worker’s earnings or earning capacity that was “proper in the circumstances of the case”. The employer argued that the discretion would be applied because of Mr Begovic’s obesity, other health problems and because of his ability to operate his sound studio. Mr Begovic was obese before his accident and had worked without restriction. There was no evidence that his other medical conditions (leg ulcers and diabetes) adversely affected his ability to earn. His ability to work as a sound engineer (as alternative work) was considered at step two of the Mitchell process. Therefore there were no grounds warranting the exercise of the discretion.

New South Wales Police Force v Cursley [2010] NSWWCCPD 66

Compensation for pain and suffering resulting from impairment; s 67 of the 1987 Act

Roche DP

16 June 2010

Facts:

On 22 October 2007, Mr Cursley, a member of the police diving unit, injured his lower back while lifting a 100kg cylinder from a trailer. Liability was admitted and he received weekly benefits. Mr Cursley also sought lump sum compensation under ss66 and 67.

The Commission referred the claim for s66 to an AMS who assessed 12% WPI, paid by consent by the employer. Following an arbitration, the arbitrator awarded $20,000 (40% of a most extreme case) for pain and suffering compensation.

On appeal, the employer argued that the arbitrator awarded pain and suffering compensation due to the “injury”, rather than for the “permanent impairment” that resulted from the injury.

The employer also submitted that the factual situation in this matter was similar to that in New South Wales Police Service v Westling [2008] NSWWCCPD 99. Candy ADP in Westling took into account the injured police officer’s relative youth, his inability to partake in previous sporting activities and the impact upon his relationships to assess $12,500 for s 67 (25% of a most extreme case). Using Westling as a guide, Mr Cursley was slightly younger than Mr Westling and suffered 12% WPI compared to Mr Westling’s 10% WPI. On the basis of Westling, Mr Cursley should therefore be awarded $15,000 (30% of most extreme case).

Held: Arbitrator’s decision confirmed.

1. S 67 compensation is only available for the pain and suffering that resulted from the impairment. Mr Cursley suffered his impairment from the time of his back injury. There was no suggestion that his pain, distress and anxiety arose from something other than his impairment. There was no difference between pain and suffering resulting from the injury to his back and the pain and suffering that resulted from his impairment. They were effectively one and the same. All of his pain and suffering therefore resulted from his impairment (Fugen Holdings Pty Ltd v Brassington [1999] NSWCA 107). [38], [39]

2. The distinction was illustrated by Snell ADP in Brewster v Proline Plumbing Pty Ltd [2010] NSWWCCPD 32. In that case, the worker received multiple injuries, including injuries to the back, right knee, toe fracture, scarring and blunt injury to the chest. Some injuries were unconnected with impairments later identified in the MAC. The effects of the injury were thus not “co-existent with the effects of permanent impairment” (Brewster at [39]). The facts in Brewster were in contrast to the present appeal, where there was a precise correlation between Mr Cursley’s injury to his back and his resulting impairment.

3. Each case must be assessed on its own facts, especially in a case involving assessment of compensation for pain and suffering, therefore Westling could not be used as a guide in the way the employer argued. The level of pain experienced by Mr Cursley as a result of his impairment was severe and likely to continue into the foreseeable future. The Arbitrator’s determination fell within the reasonable range of compensation payable.

4. Determining quantum under s 67 involves “in a sense, a value judgment” (Alvorac General Engineering Pty Limited v Arlotta (1993) 29 NSWLR 734 at 739A). Its resolution involves “questions of fact and degree, matters of opinion, impression, speculation and estimation calling for the exercise of common sense and judgment (Dell v Dalton)” (Galley v Pasminco Mining Limited (1993) 9 NSWCCR 288 at 297).

5. The submission on proportionality compared the present case to the pain and suffering of a quadriplegic. Whilst quadriplegia may represent a most extreme case, it is not the only example of a most extreme case. As noted by Kirby P (as his Honour then was) in Jones Bros Bus Co Pty Ltd v Baker (1992) 26 NSWLR 322 (at 338F) “it was not necessary to establish ‘the most extreme case’ as being the apex of a descending list of injuries catalogued according to their severity”. For a young man with a high impairment, and substantial ongoing pain and anxiety, Roche DP did not accept that 40% was an incorrect assessment of proportionality relative to a most extreme case.

Trustees for the Roman Catholic Church for the Diocese of Maitland-Newcastle v Barrett [2010] NSWWCCPD 62

S 10(1D) of the 1987 Act

Snell ADP

4 June 2010

Facts:

Mr Barrett, employed as a teacher by the appellant, had a motor vehicle accident on his way home from work on 21 July 2001. He was knocked unconscious and taken by ambulance to hospital where it was recorded he suffered multiple injuries.

Weekly compensation was paid on a voluntary basis. Mr Barrett claimed 5% WPI for neck impairment which the employer disputed, based on a report by its qualified specialist that Mr Barrett’s neck symptoms resulted from a constitutional condition and not the MVA.

At the arbitration the employer sought leave to plead a defence under s 10(1D) of the 1987 Act. The employer accepted that Mr Barrett was on a journey at the time of the motor vehicle accident, and that the personal injury fell within s 10(3)(a), but submitted that s 10(1D) applied because the injury resulted from the medical or other condition, being “tiredness or a microsleep”, and the journey did not cause or contribute to the injury.

The arbitrator held that tiredness was not a medical condition and remitted the matter to the Registrar for referral to an AMS for WPI assessment.

Held: Arbitrator’s decision confirmed.

1. Snell ADP rejected the employer’s argument that tiredness is a response by the body to a physiological need. A worker may be distracted whilst driving, due to hunger, thirst or coldness and his/her hands may slip on the steering wheel. These examples represent a response by the body to a physiological need or stimulus but could not be characterized as conditions of the same kind as medical conditions. Tiredness of itself is not a condition of the same kind as a medical condition (see Simeon Wines t/as Buronga Hill Winery v Bobos [2004] NSWCA 342). [40]

2. This case was distinguishable from NSW Police Force v Cox [2009] NSWWCCPD 20. In Cox there was a specific finding of fact that the worker suffered from a viral infection that gave rise to a coughing fit, and that this coughing fit caused the injury. A viral infection is a medical condition. This may clearly be contrasted with tiredness. Cox contained no consideration of the meaning of the phrase “or other related condition” in s 10(1D).

3. S 10(1D) also required that “the journey did not cause or contribute to the injury”. The journey consisted of travel as a driver of a motor vehicle on a highway, with a speed limit of 100km at the place the accident occurred. The occurrence of a microsleep would not, of itself, be expected to result in injury. What resulted in the capacity for injury was the occurrence of the microsleep whilst driving a motor vehicle on a highway. These circumstances had the consequence the motor vehicle ran out of control, ultimately colliding with two other vehicles. The journey clearly contributed to the injury. Thus, even if the first question had been answered in the employer’s favour, it still would have failed to make out the defence pursuant to s 10(1D).

Evans-Toyne v Dream Homes (NSW) Pty Ltd (in liquidation) [2010] NSWWCCPD 64

Ss 53 and 162 of the 1987 Act; clause 43 of the 2003 Regulation

O’Grady DP

9 June 2010

Facts:

Mr Evans-Toyne, a builder/ carpenter/ site manager, worked as a working director for the respondent. On 18 June 2004, whilst traveling between jobs, he had a motor vehicle accident (‘MVA’). He alleged injury to his neck and back as a result.

The respondent paid voluntary weekly compensation until the worker relocated to the United Kingdom in December 2007. Voluntary payments ceased on 27 February 2008.

The worker, without legal representation, had sought to reinstate his weekly compensation by relying on s 53, although payments to date had been voluntary and not subject to an award. Following an arbitration through telephone link to the worker via the UK, the arbitrator found in favour of the respondent.

The issues on appeal were whether the appellant received any injury as alleged, whether the worker suffered any incapacity giving rise to an entitlement to weekly compensation payments since cessation of voluntary payments and whether the incapacity is likely to be of a permanent nature.

Held: Arbitrator’s decision revoked. The worker is totally incapacitated and the incapacity is likely to be of a permanent nature. The matter was remitted to another arbitrator to calculate the worker’s entitlement to weekly compensation.

1. The terms of s 53 require that a determination be made as to whether the worker was entitled to receive weekly compensation under an award at the time he ceased to reside in Australia. In order to continue receiving weekly compensation, his incapacity for work must be found to be likely to be of a permanent nature.

2. Reference to pain in the “upper back” was made by the worker soon after the MVA but the first record of specific complaints of neck symptoms did not occur until some months later. The medical evidence overall established that the worker’s neck symptoms had lessened over time and had basically settled. O’Grady DP found that the worker received a strain injury to his neck which resolved within weeks, and further that the worker did not receive any injury to his thoracic spine as a result of the collision.

3. The respondent’s unexplained failure to tender evidence of Dr Bye (the respondent’s qualified specialist) and its objection to the appellant’s attempted tender of his report led to a Jones v Dunkel inference (1959) 101 CLR 298 that Dr Bye’s evidence would not have advanced the respondent’s case.

4. Since the MVA, the worker has experienced significant pain and discomfort in his lumbar spine. His treating specialist recorded that his spine has become progressively dysfunctional and has deteriorated, while his GP certified him as unfit for work from 19 February 2008 to date. The evidence therefore established that the worker has since February 2008 been totally incapacitated for work.

5. The appellant is entitled to an award in respect of weekly payments. Due to the state of the evidence, the matter is to be remitted to another arbitrator for further evidence to be adduced in order to calculate the weekly entitlement. Whether such entitlement is to the maximum statutory rate (s 37) could not be determined on appeal.

6. Incapacity is likely to be of a permanent nature for the purpose of s 53 “if it is an incapacity that is lasting and likely (on the balance of probability) to be of an indefinite duration. It does not mean a perpetual state of affairs that will continue for all time” (Universal Consultancy Services Pty Ltd v Datta [2008] NSWWCCPD 87, Roche DP at [52]).

7. The worker’s symptoms have deteriorated since June 2004, he has undergone spinal surgery at two levels and continues to undergo rehabilitation following that surgery and his permanent impairment caused by the injury has been assessed at 20% WPI. O’Grady DP was satisfied that the evidence established that incapacity was likely to be of a permanent nature.

Gunnedah Shire Council v Brookes [2010] NSWWCCPD 68

Disease; deemed date of injury under section 16 of the 1987 Act; Stone v Stannard Brothers Launch Services Pty Limited (2004) 1 DDCR 701.

Keating P

28 June 2010

Facts:

Mr Brookes was employed by Gunnedah Council as a plant operator, maintaining public lawns and gardens, from 2 April 1986 until his retirement on 1 February 2008.  As a result of exposure to sunlight, in the course of his employment with the Council, he suffered multiple skin cancers around his face, ears, neck, temple, back and arms.

Council did not dispute that his employment was a substantial contributing factor to the injuries he sustained (being an aggravation of a disease).  The issue in dispute concerned the application of s 16 and the deemed date of injury for the purpose of establishing which of two insurers indemnifying the Council was liable for medical expenses incurred in the treatment of Mr Brookes’ injuries.

Council was entitled to indemnity between 30 June 1987 and 30 June 2004 from Allianz Australia (Nominal insurer by its scheme agent) and from 30 June 2004 to 1 February 2008 from StateCover Mutual Limited (specialised insurer).

Mr Brookes’ claim, made in late 2008 or early 2009, for s 60 medical expenses for the treatment of his injuries between 24 September 2003 and 10 June 2009, was rejected by both insurers; each alleging the other was liable.

In 2009 Mr Brookes filed an Application in the Commission claiming weekly compensation (which was discontinued), medical expenses under s 60 and lump sum compensation pursuant to s 66.  A MAC, issued by the Commission on 16 October 2008, assessed that Mr Brookes had suffered 13 % WPI.  The date of injury for the s 66 claim was deemed to be 1 February 2008.

The Arbitrator, applying the provisions of s 16, held that the deemed date of injury was on or about 7 or 8 April 2004, being the date the worker first ceased work and sought medical treatment for his skin cancer.  Allianz was ordered to pay compensation, being the insurer on risk at that time.

The Council, in the interests of Allianz appealed.

Held:  Arbitrator’s decision revoked.  Council, in the interests of StateCover Mutual Limited, ordered to pay reasonable medical expenses incurred by the worker in the treatment of his injury (aggravation of a disease – skin cancer).

1. The issue on appeal was whether the Arbitrator had erred in deeming the date of injury for the purpose of s 16, to have occurred on or about 7 or 8 April 2004 when Mr Brookes was absent on sick leave and was treated for a significant skin cancer excision.

2. Skin disease caused by prolonged exposure to the sun in the course of employment falls within s 16 of the 1987 Act if contracted prior to the commencement of employment but aggravated by it (Stone v Stannard Brothers Launch Services Pty Limited (2004) 1 DDCR 701).

3. Incapacity referred to in s 16(1)(a) does not mean physical incapacity for work in the sense explained in Arnotts Snack Products Pty Ltd v Yacob [1985] HCA 2, but means incapacity for which weekly compensation is claimed, per Handley JA in Stone at [5]. [83]

4. In Alto Ford Pty Limited v Antaw (1999) 18 NSWCCR 246 the Court of Appeal held that s 15 could operate to deem one date of injury for the purpose of payment of compensation under ss 66 and 67 and deem another date of injury for the purpose of weekly compensation. Antaw was approved in Stone by the Court of Appeal which applied the same reasoning to an injury to which s 16 applied.

5. Mr Brooke’s sun exposure during the whole of his employment, up to 1 February 2008, contributed to the aggravation of his disease (skin cancer) and it was common ground in the appeal that the deemed date of injury in respect of the claim for lump sum compensation was 1 February 2008.

6. The worker’s disease manifested itself in various forms at various times at which time the worker took time off to attend various medical practitioners for treatment, however, there was no evidence of incapacity on any of those occasions. The worker expressly said that he was not unfit for work.

7. StateCover was the only insurer on risk after 2 December 2004, therefore consideration of whether there should be multiple deemed dates of injury was irrelevant. [111]

8. The Arbitrator fell into the error made by Burke AJ (the primary judge) in Stone, equating incapacity with the worker consulting his doctor rather than by reference to incapacity giving rise to an entitlement to weekly incapacity.  That incapacity did not occur until 2 December 2004, the first material incapacity, when he underwent surgery and was incapacitated for a one month period. [112]

9. The deemed date of injury was 2 December 2004. StateCover Mutual, being the insurer at risk at this time was liable for the reasonable expenses incurred under s 60 in respect of the worker’s skin cancer condition.

Berri Limited v Khaey [2010] NSWWCCPD 65

Injury; consideration of evidence; s 40 of the 1987 Act; application of Mitchell v Central West Area Health Service (1997) 14 NSWCCR 526; unmeritorious appeal; obligation of legal practitioners to comply with s 345 of the Legal Profession Act 2004 when certifying reasonable prospects of success in Part 3 of Appeal Against Decision of Arbitrator

Roche DP

16 June 2010

Facts:

Mr Khaey was employed as a leading hand at Berri. On 7 January 2009, he carried a bowl of citric acid up a set of steep stairs but slipped, causing him to fall down steps onto his back, while his left leg “dangled” on the hand rail post. He was taken to hospital where it was recorded he had incomplete or partial paralysis of uncertain aetiology.

Mr Kahey’s ARD claimed weekly compensation from 7 January 2009 to date and continuing, and s 60 expenses. He alleged injuries to his head, neck, back, forearm and left knee.

QBE disputed liability on the ground that Mr Khaey either did not suffer any pathological or physiological consequences from the incident, or if he did, the effects had ceased.

There was no issue that Mr Khaey suffered an injury in the course of his employment on 7 January 2009. The issues in dispute were whether he injured his lower back and/or left knee and, if so, the extent of any incapacity having regard to the worker’s significant non organic presentation.

The worker had a previous left knee injury which the arbitrator found was aggravated in the fall on 7 January 2009. Mr Khaey was awarded weekly compensation for total incapacity for the period 7 January 2009 to 26 June 2009 and thereafter under s 40 based on the statutory rate for a worker with a dependent spouse and four dependent children.

Held: Arbitrator’s decision confirmed.

1. Mr Khaey stated, and the arbitrator accepted that, in the period immediately preceding the January 2009 fall, he had no problems with his left knee. This was also consistent with the treating specialist’s report. On examination post-injury, the treating specialist found that the ligament laxity had worsened since 2007.

2. Given that the employer called no medical evidence to rebut the treating specialist’s conclusion, the arbitrator’s acceptance of the specialist’s evidence of injury to the left knee was logical and consistent.

3. The evidence established that Mr Khaey suffered an aggravation of a pre-existing degenerative condition in his lumbar spine. His treating GP and specialists had diagnosed that Mr Khaey was unfit for his pre-injury work because of his back pain and left knee pain.

4. The worker had physical limitations that prevented him from working in his pre-injury employment, which involved carrying up stairs ingredients weighing up to 25kg. The finding of partial incapacity was based on the evidence of treating specialists. The arbitrator accepted that there was a “non-organic component” to the worker’s presentation to doctors. However, he excluded the non organic component from his assessment of the worker’s entitlement to weekly compensation.

5. Having regard to the  matters in s 43A of the 1987 Act, and contrary to Mr Kahey’s presentation of significant incapacity, Mr Khaey was found to be fit for full-time work in alternative employment such as clerical positions, courier driving and process work, and assessed to be able to earn $605.20 per week in such employment (“ability to earn”).

6. The appellant employer did not suggest any other employment for which Mr Khaey would be fit having regard to the evidence and the terms of s 43A. The figure of $605.20 was generous to the employer because the evidence suggested that Mr Khaey’s ability to work as a clerk was restricted because of his limited English skills. In addition, that finding made no allowance for the difficulty he will have in obtaining and retaining employment given that he had had no rehabilitation or re-training.

7. Deducting the figure of $605.20 per week (“ability to earn”, step two of Mitchell v Central West Area Health Service (1997) 14 NSWCCR 526) from probable earnings but for injury (step one) (the statutory cap under s 40(2)(a)), resulted in a difference of over $1,000 (step three) which was in excess of the maximum compensation payable for a worker with a dependent wife and four dependent children.

8. It was at step four that discretionary factors were to be considered to reduce the figure at step three (Australian Wire Industries Pty Ltd v Nicholson (1985) 1 NSWCCR 50). As Mr Khaey’s exaggeration and non-organic presentation were taken into account in assessing his ability to earn at step two, it was not permissible to use exaggeration as a reason for the exercise of the discretion at step four. There were therefore no factors that justified the exercise of the discretion in this case.

Litigation Lending Management Pty Limited v Powell [2010] NSWWCCPD 70

Section 40 of the 1987 Act; probable earnings but for injury; ability to earn.

O’Grady DP

30 June 2010

Facts:

The worker commenced employment as a full time secretary and personal assistant with the appellant employer in 1999.  Her workload increased significantly resulting in an increase in keyboarding activity. In June 2001 she developed symptoms of paraesthesia including pins and needles with associated pain along her forearms, neck and shoulders.

She ceased work and sought medical treatment. After a short absence she returned to work, continuing to receive treatment, but ceased work again on 16 July 2001 due to her ongoing symptoms and did not resume employment with the appellant. Since 2003 the worker has been the sole proprietor of a business. The work she performs, on a part-time basis, is that of a receptionist/clerical worker and homeopathic consultant.

A claim was made for compensation and weekly payments were made, pursuant to s 40, by the appellant’s insurer up until 23 August 2009, at which time termination of the payments were effected by service of a notice pursuant to s 54 of the 1987 Act.

The worker lodged an Application in the Commission in relation to her entitlement to continuing weekly compensation. The Arbitrator awarded the worker s 40 weekly compensation from 23 August 2009 and continuing at various rates.

An appeal was lodged by the employer.  The issues in dispute were whether the Arbitrator had erred in:

• calculating the worker’s probable earnings but for injury (s 40(2)(a));
• determining the worker’s ability to earn in some suitable employment (s 40(2)(b), and
• the manner in which the worker’s actual earnings had been taken into account for the purpose of determining the quantum of her entitlement to compensation.

Held:  

1. The Arbitrator had erred in her calculation of the worker’s probable earnings. The worker would have accumulated very considerable experience and in all probability have specialised in a particular field of legal practice since her injury in 2001 [65].

2.The Commission, as a specialist tribunal, may draw on its general knowledge of the labour market enabling a conclusion that wage rates have steadily risen since the date the worker became incapacitated [66].

3. In addressing the question of the proper method of determining the worker’s ability to earn it was necessary to examine the factual matters concerning the worker’s work activities since receipt of her injury. There is a need to determine the quantum of earnings or ability to earn as a worker.

4. In circumstances where an incapacitated worker is conducting a business, various approaches may be taken to determine the weekly amount.  These approaches were summarised by Glass JA in Cage Developments v Schubert (1991) 2 NSWLR 227 at 230. [73]

5. The appellant’s argument that the Arbitrator had erred in her determination of the weekly amount in s 40(2)(b) was accepted.  The weekly sum the Arbitrator arrived at represented the net earnings of the business following deduction of expenses which were not explained and in some cases not identified.

6. A proper determination of the worth to the business of the worker’s labour required a calculation which takes into account a fair and proper hourly rate for such work [74].

Hrvat v Thiess Pty Ltd and Hachtief AG Australia [2010] NSWWCCPD 69

Interlocutory decision; extension of time to appeal; further evidence; inconsistency between decision of Arbitrator and opinion of Approved Medical Specialist; sections 326, 352(6) and 352(8) of the Workplace Injury Management & Workers Compensation Act 1998; rule 16.2(11) of Workers Compensation Commission Rules 2006

Candy ADP

28 June 2010

Facts:

The worker was employed as a concreter with the respondent in 2005.  On 25 February 2006 he suffered injury to both shoulders while in the course of his employment. He was certified fit for light duties until 3 May 2006.  He was retrenched in June 2006 and commenced working for his own concreting company until March 2007 when he ceased as he was unable to cope with the shoulder pain.

He claimed compensation and received payments in respect of his treatment until 3 May 2006. The insurer issued a s 74 notice denying liability on the basis that a doctor considered that the worker had a chronic condition of his shoulders which was not due to his employment during February 2006.

The worker lodged an Application in the Commission making claims for weekly compensation, medical expenses and lump sum compensation pursuant to ss 66 and 67.

The Arbitrator issued a COD on 1 September 2009 (first COD) determining that the worker suffered an injury to his shoulders in the course of his employment and that employment was a substantial contributing factor to the injury. The matter was remitted to the Registrar for referral to an AMS.  The respondent was ordered to pay the worker’s s 60 expenses up until 3 May 2006 and an award was made in favour of the respondent in respect of the claim for weekly benefits after 3 May 2006.

An AMS assessed the worker as having a combined WPI of 19%.  A further COD (second COD) was issued on 7 December 2009 ordering the respondent to pay the worker s 66 and s 67 compensation. This was by consent.

On 31 December 2009 the worker appealed the first COD.  The appeal application was rejected by the Registrar as it was considered to be filed out of time and no submissions had been made in support of an extension of time to appeal.  The worker re-lodged the appeal application submitting that the first COD was interlocutory and time did not begin to run until the second COD was issued. The application was rejected and re-filed again with written submission in support of an application to extend time.

Held:  Leave to appeal refused.

1. The appeal could and should have been brought after the first COD was issued.

2. Relying on the decisions in Andrew Bryce v Department of Corrective Services [2009] NSWCA 188 at [8] and Rockhard Products Pty Ltd v Economidis [2009] NSWWCCPD 159 at [30] a determination of whether exceptional circumstances exist as a precondition to an extension of time was not required.  What was required was a consideration of the composite expression used in rule 16.2(11) which refers to demonstrable and substantial injustice as well as exceptional circumstances. Assuming that the worker had an arguable case on appeal nonetheless time to appeal should not be extended because of the worker’s conduct in failing to advise the employer of an intended appeal before agreement was reached as to lump sum compensation and because no exceptional circumstances had been demonstrated.

3. On consideration of the parties’ submissions on appeal, relevant authorities and the evidence, including the assessment by the AMS and the second COD, there were sufficient grounds for concluding that the effect of the injury of 25 February 2006 had resolved by 3 May 2006.  If leave to appeal had been given the appeal would have been dismissed on its merits.