Djuric v Kia Ceilings [2011] NSWCA 34

Independent contractor; whether regularly carrying on trade or business in own name; deemed worker; Sh 1 cl 2(1) of the 1998 Act.

3 March 2011

McColl JA

Handley AJA

Sackville AJA

Facts:

Mr Djuric, a contract gyprocker, appealed the decision of a Presidential member of the Workers Compensation Commission that he was not a deemed worker within cl 2(1) of Schedule 1 of the 1998 Act (Djuric v Kia Ceilings Pty Ltd [2010] NSWWCCPD 20).

It was common ground that Mr Djuric had made a contract with the respondent to perform work exceeding $10 in value, that he did not carry on business under a business or firm name and that he had not sublet the contract or employed any worker for its performance.

There was no dispute that the appellant was an independent contractor. The issue was whether he was covered by cl 2(1) in that the contract work for the respondent was not "work incidental to a trade or business regularly carried on" by the appellant in his own name.

Issue on appeal

The principal issue on appeal was that the Presidential member had erred in law in finding that the worker was not a deemed worker under s 5 and cl 2(1).

Held

1. The meaning and application of the words "work incidental to a trade or business regularly carried on" in the comparable provision in the Victorian Act as explained by Sir Owen Dixon in Humberstone v Northern Timber Mills [1949] HCA 49, 79 CLR 389, 401-2 was accepted as a correct statement of the law.

2. There were many facts which supported the Presidential member’s conclusions (substantial business deduction shown in his tax returns, his having an ABN, rendering invoices to the companies that employed him on a weekly and fortnightly basis and being paid at piece work rates).

3. The appellant did not establish that the decision of the Presidential member was affected by legal error.

Hesami v Hong Australia Corporation Pty Ltd [2011] NSWWCCPD 14

Compensation for gratuitous domestic assistance; s 60AA of the Workers Compensation Act 1987; whether compensation is payable for care provided before the establishment of a care plan; meaning of “in accordance with”; circumstances in which previously unnotified matters may be heard or otherwise dealt with by the Commission; ss 289A and 74 of the Workplace Injury Management and Workers Compensation Act 1998

Roche DP

11 March 2011

Facts:

On 5 December 2005 Mr Hesami sustained a serious back and shoulder injury in the course of his employment with Hong Australia Corporation Pty Ltd. He underwent back surgery on 22 March 2006, returned to work on light duties after surgery and ceased work in July 2006. He did not return to work.

Mr Hesami was severely disabled because of his injuries and was unable to care for himself. His wife and brother-in-law provided gratuitous care to him and Mr Hesami claimed compensation for that domestic assistance under s 60AA of the 1987 Act.

He commenced proceedings in the Commission on two occasions seeking domestic assistance compensation and discontinued each application because the insurer had not prepared a “care plan” as required by s 60AA(1)(d).

The insurer finally prepared a care plan on 19 January 2010. Mr Hesami claimed $226,498.20 for domestic assistance in a third application lodged with the Commission on 5 July 2010.

The insurer did not serve a s 74 notice until 9 July 2010. It disputed liability on the basis that Mr Hesami’s wife and brother-in-law had not provided evidence that they had lost income or foregone employment as a result of providing assistance to Mr Hesami (s 60AA(3)).

The insurer filed a Reply on 16 July 2010 in which it relied on the issue in the late s 74 notice and alleged, as it had in the earlier proceedings, that assistance had to be provided “in accordance with a care plan”.

The insurer settled the claim for gratuitous domestic assistance provided by Mr Hesami’s brother-in-law from 18 July 2009.

At the start of the arbitration, counsel for Mr Hesami raised a “threshold point” as to whether, because of the late s 74 notice, the insurer had ever denied the claim. Counsel for the respondent submitted that it had been assumed that s 74 notices had been served and it had always been the situation that the claim for the cost of gratuitous domestic assistance was disputed. The Arbitrator did not rule on that point, but heard submissions on the substantive claim and reserved her decision.

With respect to the threshold point, the Arbitrator stated that it was in the interests of justice to “permit the dispute to be dealt with”. She found that Mr Hesami had “not met the onus of establishing that his wife has foregone employment and lost income as a result of providing domestic assistance” and that the conditions of s 60AA and the Guidelines had not been met. She made an award for the respondent employer. Mr Hesami appealed.

The issues in dispute on appeal were whether:

(a) the Arbitrator erred in permitting the respondent employer to rely on the s 74 notice dated 9 July 2010;

(b) the Arbitrator erred in finding that Mr Hesami’s wife had not established that she had lost income or foregone employment as a result of providing domestic assistance him, and

(c) the provider of the domestic assistance could recover compensation for gratuitous assistance provided before the preparation of a care plan.

In respect of the late s 74 notice, Mr Hesami submitted that:

(a) the Arbitrator only considered prejudice to Mr Hesami, but failed to consider the other matters in Mateus v Zodune Pty Ltd t/as Tempo Cleaning Services [2007] NSWWCCPD 227; 6 DDCR 488;

(b) the insurer provided no explanation as to why it had not served a s 74 notice until 9 July 2010;

(c) in view of the history of the matter, he was entitled to see the real issue as the institution of a care plan, not the question of lost income or foregone employment, and

(d) the Arbitrator identified deficiencies in the evidence on the issue of whether his wife had lost income or foregone employment as a result of providing domestic assistance to him. That conclusion “flies in the face of her conclusion that there’s no prejudice to the Applicant” (appeal hearing T9.28).

The respondent submitted that the insurer served the s 74 notice just a few days after the application was lodged in the Commission, Mr Hesami had about two months to deal with the issues raised, and the “delay of one week was not prejudicial”.

In relation to the fact that there was no care plan prepared until January 2010, Mr Hesami submitted that the words in s 60AA should be given their ordinary meaning. The dictionary meaning of “in accordance” is “correspondence, agreement, conformity, harmony and consistency”. He agreed that there could be no liability until a care plan was instituted, but once instituted, its terms simply serve to limit the quantum of the assistance that is compensable, so long as what has been provided is “in accordance, agreement, conformity, harmony, consistent with that plan” then, subject to any other statutory qualification, liability is made out. The section does not require that assistance be provided “pursuant to” a care plan.

The respondent submitted that a care plan had to be established by the insurer before assistance could be provided and there was no requirement to pay for gratuitous assistance until a care plan has been established.

Held: The Arbitrator’s determination was revoked. The matter was remitted to a different Arbitrator to determine the only issue remaining in dispute, namely, whether Mr Hesami’s wife had lost income or forgone employment to provide domestic assistance to him.

Section 74 notice

1. The s 74 notice was several months out of time (see s 279 of the 1998 Act), not a few days as the respondent had submitted. The length of the delay and the lack of explanation for that delay strongly militated against allowing the insurer to rely on the late notice. [31]

2. However, as the application had attached to it a considerable body of evidence that could only have been relevant if the insurer disputed the entitlement to compensation for gratuitous domestic assistance, it was difficult to see that Mr Hesami’s legal advisers were taken by surprise by the issue in the s 74 notice. [32]

3. At the teleconference on 9 August 2010, neither party took issue with the late notice. The main function of the teleconference is to deal with preliminary matters of this kind to ensure that the matter is ready to proceed to conciliation and arbitration. Neither party raised the issue of the late s 74 notice at the teleconference and that was unsatisfactory. [33]

4. The Commission has a statutory duty to act according to equity, good conscience and the substantial merits of the case. Given the long history of the matter, the issues in the previous replies filed, the fact that the notice only raised one issue, and the nature of the evidence attached to the worker’s application, the Arbitrator did not err in giving the insurer leave to rely on the notice. [34]

5. However, in giving leave to rely on the notice in the course of her reserved decision, as opposed to at the hearing, and then finding that, because of deficiencies in the evidence, Mr Hesami had not met the onus of establishing that his wife had foregone employment and lost income as a result of providing domestic assistance, the Arbitrator deprived him of the opportunity of seeking to call oral evidence to address the alleged deficiencies in his case or seeking an adjournment to cure the defects. [35]

6. The deficiencies in the evidence only became critical once the Arbitrator gave the insurer leave to rely on the late notice. Mr Hesami therefore suffered a significant prejudice and was deprived of the opportunity to fully meet the issue raised by the late reliance on the s 74 notice. [36]

The care plan

7. In interpreting s 60AA the following was considered:

(a) section 60AA must be construed having regard to its legal and historical context and the text and structure of the Act: Wilson v State Rail Authority of New South Wales [2010] NSWCA 198 at [12];

(b) the workers compensation legislation is “beneficial legislation” [44];

(c) the principle thatbeneficial legislationshould be given a liberal construction does not entitle a court to give it a construction that is unreasonable or unnatural (per McColl JA in Amaca Pty Ltd v Cremer [2006] NSWCA 164, citing IW v City of Perth [1997] HCA 30; 191 CLR 1 (at 11–12) per Brennan CJ and McHugh J) [44];

(d) section 60AA represents a significant extension of the benefits payable [under the 1987 Act] and it is appropriate that claimants should establish their entitlement in accordance with the legislation [45];

(e) the use of the conjunction “and” between each of the sub-sections in s 60AA(1) makes it clear that each of the requirements in the sub-sections must be satisfied before an employer is liable to meet the cost of domestic assistance [46];

(f) the intention of the section is that, provided certain conditions are met, employers are liable for the cost of domestic assistance that is reasonably necessary as a result of the injury [47];

(g) there is no logical reason why compensation can only be recovered for assistance provided after the preparation of the care plan. The need for and provision of domestic assistance will always occur before the insurer establishes the care plan. The position contended for by the employer would allow liability under s 60AA to be avoided altogether, or substantially reduced, by delaying in obtaining a care plan [48];

(h) domestic assistance is to be provided “in accordance with” a care plan but that does not mean that there is no liability for assistance provided before the creation of a care plan [49];

(i) “in accordance with” should be construed as meaning “in conformity with” or “consistently with”: Walker v Wilson [1991] HCA 8; 99 ALR 1 (at 11) [50];

8. Regardless of when the domestic assistance was provided, if it was in conformity with or consistent with the care plan, then, provided the other conditions in s 60AA are satisfied, the claimant is entitled to succeed. [51]

9. The cost of gratuitous domestic assistance is to be calculated in accordance with cl 7.4 of the Guidelines and Kajic v Hawker De Havilland Aerospace Pty Ltd [2009] NSWWCCPD 136. The claim for $226,498.20 was not consistent with Guidelines or Kajic. [55]

10. The conduct of this matter by both sides would not be a model to be followed in future claims of this type. [56]

Northern Co-operative Meat Company Ltd v Kitto[2011] NSWWCCPD 16

Partial incapacity; ability to earn in some suitable employment; s 40 1987 Act; exercise of discretion where worker resigns

16 March 2011

Roche DP

Facts:

Ms Kitto, worked for the appellant employer as a full-time casual meat-packer in its Casino abattoir. In April 2005, she injured her left dominant shoulder whilst transferring heavy boxes of meat from scales to a conveyor belt. She subsequently performed light duties for 32 hours per week over four days per week, but continued to have pain and discomfort. She underwent surgery in May 2008. That surgery did not relieve all her symptoms, but she was able to return to light duties.

In March 2009, she commenced a new light duties position that required her to work full-time over five days. The new duties caused an increase in her pain and discomfort, and she resigned on 27 March 2009, effective on 3 April 2009. In December 2009 she moved to Ormeau in Queensland with her family.

Ms Kitto’s WorkCover certificates certified her fit for suitable duties with lifting restrictions up to 7.5 kg, the avoidance of overhead duties and restricted pushing or pulling with the left arm. The final WorkCover certificate of 4 December 2009 added “overhead duties very restricted – not sustained [sic] not repetitive”. There was no restriction in the certificates on the amount of hours Ms Kitto could perform.

On 8 June 2010, the parties settled Ms Kitto’s claim for whole person impairment in the sum of $8,750 being seven per cent whole person impairment as a result of her shoulder injury.

In July 2010, Ms Kitto lodged an Application in the Commission claiming weekly compensation in the sum of $700 per week from 3 April 2009 to date and continuing.

In its Reply, the employer disputed incapacity and her entitlement to weekly compensation under s 40 of the 1987 Act as Ms Kitto had rejected suitable employment within the meaning of s 40(2A) of the 1987 Act when she resigned.

The Arbitrator found that Ms Kitto had not unreasonably rejected suitable employment when she resigned. He found her probable weekly earnings but for injury were $700 per week and that Ms Kitto had an ability to earn $380 per week working 20 hours per week as a shop assistant at $19 per hour. He was not persuaded that there were any relevant matters that required the exercise of discretion under s 40(1), and made an award for Ms Kitto in the sum of $320 per week from 3 April 2009 to date and continuing.

Issue on Appeal:

The appellant employer challenged the Arbitrator’s determination on the following grounds:

(a) that there was no evidence to support the finding that the worker was restricted to working only 20 hours per week;

(b) the Arbitrator’s finding that the worker was only able to work 20 hours per week was against the weight of the evidence;

(c) the Arbitrator misdirected himself in assessing the evidence as to the worker’s ability to earn in the open labour market;

(d) the Arbitrator misinterpreted the evidence when determining the worker’s capacity for work in the open labour market, and

(e) the Arbitrator failed to exercise his discretion when he considered whether there ought to be a reduction in the weekly benefit under the test in Mitchell v Central West Health Service (1997) 14 NSWCCR 526 (Mitchell).

Held – for the reasons given in this decision, the Arbitrator’s determination confirmed. Appellant employer to pay the respondent worker’s costs of the appeal assessed at $600 plus GST.

1. There was no medical evidence that Ms Kitto was only fit to perform light duties for 20 hours per week. However, the Arbitrator was required to look at, and did look at, the totality of the evidence in concluding that, because of her injuries, Ms Kitto would have difficulty working full-time as a shop assistant because that work required “physical work and lifting”. The assessment of a worker’s ability to earn is not purely a medical question (Guthrie v Spence [2009] NSWCA 369 at [196]-[197]). Although the Arbitrator accepted that Ms Kitto had a capacity to be employed as a shop assistant, he did not accept that she was fit for unrestricted work in that area. [49]-[51]

2. The employer’s submissions on appeal wrongly assumed that Ms Kitto was fit for unrestricted work as a shop assistant for at least 32 hours per week, that that work was available to her, and that, therefore, her ability to earn was $608. There was no basis for those assumptions. Ms Kitto had never worked as a shop assistant and had not been assessed to determine if such work would be suitable with her restrictions. That Ms Kitto applied for work at Woolworths demonstrated that, to her credit, she had sought employment. However, merely applying for a particular job provided little relevant guidance about her ability to earn. More importantly, she was unsuccessful in obtaining employment because the jobs she applied for required her medical history. She believed this meant she “had no chance of finding a job”. [52]-[54]

3. The physical requirements of work as a shop assistant vary greatly depending on the particular job. However, all such jobs require some degree of lifting and handling of goods. Further, there is a skill requirement for work as a shop assistant as the job involves handling cash and meeting and dealing with customers. Ms Kitto is 47 years old and has no experience as a shop assistant. These factors, together with her injury and disability, will tell heavily against her in her attempts to obtain suitable employment as a shop assistant. [55]-[56]

4. Further, any shop assistant job would need to be within the restrictions in her WorkCover certificates. Determining a worker’s incapacity is a “practical exercise” that “involves the assessment of capacity ‘for work’ having regard to the realities of the labour market in which he [or she] is to be engaged” (Mahony J in Lawarra Nominees Pty Ltd v Wilson (1996) 25 NSWCCR 206 at 213). It was not accepted that Ms Kitto was fit to perform unrestricted duties as a shop assistant. [57]

5. Although Ms Kitto worked on selected duties for the employer for 32 hours per week, this provided little guidance of her ability to earn in the open labour market. Such suitable employment was provided under the employer’s obligations under legislation. The assessment of a worker’s ability to earn requires more than the identification of a particular job or jobs that a worker might be able to perform. Allowance must be made for the availability of that work in the labour market (Mangion v Visy Board Pty Ltd [1991] NSWCC1; 8 NSWCCR 175, Burke CCJ at 180). His Honour said:

When one assesses an ability to earn under section 40(2), one is really arriving at a weighted average. Wage rates for jobs within capacity that are rarely available, though perhaps highly paid, rate poorly in such an assessment. Conversely, the income derivable from more readily available work rates highly.

This approach was approved by the Court of Appeal in Cowra Shire Council v Quinn (1996) 13 NSWCCR 175. [59]-[61]

6. The Commission must take into account “the practical realities of the worker, in his or her injured condition and with his or her actual age, abilities, limitations and circumstances in life, being able to get and keep employment” (Ric Developments Pty Ltd t/as Lane Cove Poolmart v Muir [2008] NSWCA 155; 6 DDCR 339 at [50]). Ms Kitto left school at the age of 16. She attended technical college, trained as a hairdresser, and worked in that field for several years until she took several years out of the workforce to raise her family. Her only other work experience was as a meat-packer with the appellant employer. Given her age, disabilities, work experience, and lack of training, her prospects of obtaining and retaining suitable employment as a shop assistant were remote. This was a significant factor to consider in determining her ability to earn. [63], [65]

7. Though there might be suitable light duties jobs as a full-time or 32-hour per week shop assistant, that did not mean that the wage for such a job was the measure of Ms Kitto’s ability to earn. There will likely be long periods when Ms Kitto is unable to find any suitable work, or only find part-time suitable work. It was therefore appropriate to consider a “weighted average” in determining her ability to earn. In adopting such an approach, it was reasonable to determine her earning capacity based on an average of 20 hours per week in suitable employment as a shop assistant. That was not because the doctors had restricted her to work as a shop assistant for 20 hours per week, but because of her injury, education and training, and her prospects of obtaining and retaining suitable employment as a shop assistant were severely restricted. The best she could hope to achieve over time was an average of 20 hours of suitable work per week. [66] Her ability to earn in some suitable employment was $380 per week.

8. Given the worker’s evidence of the difficulty she has had in obtaining suitable employment to date, the figure of $380 was arguably generous to the employer. However, Ms Kitto had not sought an increase in the award.

9. The employer submitted that the Arbitrator should have taken into account the worker’s voluntary resignation without further consultation about the provision of further light duties and the fact she removed herself from the area. The employer did not present any argument in support of this issue at the arbitration. There was no evidence of what other duties were available to Ms Kitto, what they would have paid or how long they would have been provided. As the employer gave Ms Kitto the wrong “suitable” duties in her new position on 2 March 2009, and given that even the correct duties caused a significant increase in her symptoms, it was understandable that she felt she had no alternative but to resign. Her evidence that she felt “physically and mentally broken” was accepted. Her decision to resign was not “folly” or “irresponsibility” or an unreasonable rejection of suitable employment. Once she resigned she was entitled to have her ability to earn determined on the basis of her ability to earn in the labour market reasonably accessible to her (Novello v Zinc Corporation Ltd (1988) 14 NSWLR 25. [71], [77], [78]

Greater West Area Health Service (Dubbo Base Hospital) v Palmer [2011] NSWWCCPD 15

Section 4(b)(ii) of the Workers Compensation Act 1987; aggravation, acceleration or exacerbation of a disease; weight of expert evidence; proof of causal nexus between work and injury

O’Grady DP

14 March 2011

Facts:

Ms Palmer commenced employment with Greater West Area Health Service (the appellant) in 1994 as the Medical Records Manager at Dubbo Base Hospital. She was to perform a minimum of 18 hours per week. A maximum number of hours was not stipulated.

In February 1998 she took maternity leave and returned to work in March 1999 to find that her position had been changed to Assistant Medical Records Manager, as a full-time Medical Records Manager had been appointed during her leave. That person resigned in February 2003. Ms Palmer then performed the duties of both positions until January 2005 which required her to perform in excess of the minimum of 18 hours. The work required prolonged sitting at a desk, some lifting and bending and transferring of records from place to place.

She began to notice pain in her low back (late 2004) and experienced pain radiating into each of her legs (January 2005). An MRI scan revealed a right paracentral disc protrusion at L3/4 which was producing a “significant mass effect upon the thecal sac”. In July 2005 she underwent lumbar spinal surgery, disc excision, and was absent from work until September 2005.

Ms Palmer had ceased work in March 2005 due to her back disability and made a claim for workers compensation benefits. That claim was accepted and weekly benefits and medical expenses were paid by consent. Those weekly benefits included payments under s 40 following her return to suitable duties in September 2005.

On 25 September 2008 liability in respect of workers compensation benefits was denied. The s 74 notice disputed the occurrence of injury in the course of employment; that Ms Palmer’s employment was a substantial contributing factor to her injury in terms of s 9A of the 1987 Act; that she was incapacitated and that medical expenses were incurred by reason of a compensable injury.

In June 2010 the dispute was referred to the Commission and Ms Palmer sought orders for weekly compensation, medical expenses and lump sums in respect of whole person impairment and pain and suffering resulting from the alleged injury.

On 28 September 2010 she was told not to return to work as the suitable duties had been withdrawn.

A Certificate of Determination issued on 11 November 2010 made orders in favour of Ms Palmer.

The issues in dispute in the appeal were whether the Arbitrator erred:

(a) in determining that Ms Palmer had received injury arising out of or in the course

of her employment, and

(b) in his assessment of the quantum of Ms Palmer’s entitlement to weekly compensation.

The appellant challenged the finding by the Arbitrator that Ms Palmer’s work caused aggravation of the pre-existing degenerative condition of her lumbar spine and the Arbitrator’s acceptance of Dr Evans’s evidence. It was said that she failed to prove that she had been required to work “50 to 60 hours per week” which was assumed by Dr Evans.

Held: Arbitrator’s decision confirmed.

1. The evidence did not support a finding that the history as recorded by Dr Evans was correct with respect to the hours of work performed but the evidence did support that Ms Palmer was required to work extended hours at work and at home due to staff shortages. [57]

2. The question of admissibility of expert opinion evidence and the proper approach to the evaluation of such evidence as relevant to proceedings conducted before the Commission was considered by the Court of Appeal in Hancock v East Coast Timber Products Pty Ltd [2011] NSWCA 11. Beazley JA stated (at [82]):

Although not bound by the rules of evidence, there can be no doubt that the Commission is required to be satisfied that expert evidence provides a satisfactory basis upon which the Commission can make its findings. For that reason, an expert’s report will need to conform, in a sufficiently satisfactory way, with the usual requirements for expert evidence. As the authorities make plain, even in evidence-based jurisdictions, that does not require strict compliance with each and every feature referred to by Heydon JA in Makita to be set out in each and every report. In many cases, certain aspects to which his Honour referred will not be in dispute. A report ought not be rejected for that reason alone.

Beazley JA said (at [83]):

In the case of non-evidence-based jurisdiction such as [the Commission], the question of the acceptability of expert evidence will not be one of admissibility but of weight. This was made apparent in Brambles Industries Limited v Bell [2010] NSWCA 162 at [19] per Hodgson JA.

3. In relation to Dr Evans’s report it was found (at [63]) that:

the Arbitrator was incorrect when he stated that the absence of proof concerning the hours of work did not “detract” from that evidence. That is not to say that the evidence of Dr Evans is devoid of any probative value. However it is my view that the opinion as expressed by Dr Evans that Ms Palmer’s work ‘significantly accelerated and aggravated’ her lumbar spinal disease is not of sufficient weight, alone, to prove a causal nexus between the work and aggravation giving rise to the need for surgery.

4. The totality of the medical evidence supported the drawing of an inference that there was a causal nexus between Ms Palmer’s work and her symptoms. [68] The symptoms were caused by the disc prolapse and Ms Palmer’s work caused the prolapse which resulted in incapacity. Her underlying disease was exacerbated and accelerated.

5. Partial incapacity continued and Ms Palmer was entitled to weekly payments under s 38 from the date of the appellant’s withdrawal of suitable duties in September 2010.

Bourke Shire Council v Rankmore[2010] NSWWCCPD 17

Disease, deemed date of injury; two insurers; s 15 of the 1987 Act

29 March 2011

Roche DP

Facts:

Mr Rankmore started work for the Council in the parks and gardens department in about 1989. His duties required him to work outdoors and exposed him to sunlight. He resigned in 1998 and from July 1998 to 20 March 2000, Mr Rankmore worked as an outdoor pool attendant. He resumed work with the Council in March 2000 and remains in that employment. His evidence was that his work for the Council was spent outdoors.

The Council was insured by GIO up to 30 June 2002 and by StateCover from 1 July 2002 to date.

Mr Rankmore claimed weekly compensation for five separate periods of incapacity between 4 May and 14 December 2009 and medical expenses for the treatment of skin cancer. He alleged a deemed date of injury of 15 September 2009.

Mr Rankmore first received treatment for skin cancer in 1993, 1996 and 1997. In 1997 he required time off work (1 September-18 September) for a “substantial procedure” on his nose. He claimed sick leave for any periods off work.

On 17 December 2009, StateCover entered into a complying agreement under s 66A of the 1987 Act in which it agreed to pay Mr Rankmore $23,350 in respect of a 14 per cent whole person impairment (bodily disfigurement) and $12,500 for pain and suffering. The agreed date of injury was 30 October 2009, the date on which Mr Rankmore claimed lump sum compensation.

The only issue before Senior Arbitrator Moore was the correct deemed date of injury under s 15 of the 1987 Act for Mr Rankmore’s weekly payments claim. StateCover submitted it was the first date of incapacity (1 September 1997) and GIO submitted it was the first date of incapacity for which compensation was claimed (4 May 2009).

The Senior Arbitrator found that Mr Rankmore had received an injury (skin cancer) arising out of or in the course of his employment and that injury was of such a nature as to be contracted by gradual process. In the alternative, she found that his injury was an aggravation, exacerbation or deterioration of a disease. She found the deemed date of injury of 4 May 2009 (the first date of incapacity for which compensation was claimed). She made an award against the Council in the interests of StateCover and an award in favour of GIO.

Issue on Appeal:

Whether the Senior Arbitrator erred in determining the deemed date of injury to be 4 May 2009 and not 1 September 1997.

Held – Senior Arbitrator’s determination confirmed; appellant employer in the interests of StateCover is to pay the costs of the respondent worker and GIO

1. StateCover submitted that, under s 15(1)(a)(i) of the 1987 Act, the (deemed) date of injury in a claim for weekly compensation is the first “period of incapacity”, in this case it was September 1997 when Mr Rankmore was unfit for work because of treatment he received for skin cancer. StateCover submitted the Senior Arbitrator erred in drawing a distinction between “incapacity where compensation is claimed, and incapacity giving rise to an entitlement to compensation”. It argued that ss 15 and 16 “simply make reference to incapacity, and are not qualified by an injured worker claiming compensation”. They relied on the decision of Fitzgerald JA (at [49]) P & O Berkeley Challenge Pty Ltd v Alfonzo [2000] NSWCA 214; 49 NSWLR 481; 20 NSWCCR 554 (Alfonzo), where his Honour held that the worker was entitled to compensation for the aggravation of her disease by her employment which resulted in the worker’s material injury. [30]-[32]

2. In GIO Workers Compensation (NSW) Ltd v GIO General Ltd (1995) 12 NSWCCR 187 (GIO v GIO) the Court of Appeal, per Sheller JA (at 195F-G) (Priestley and Clarke JJA agreeing) said:

In the case of the worker’s claim, the injury, being a disease of such a nature as to be contracted by gradual process, is deemed to have happened at the time of incapacity. I have no doubt that is a reference to the incapacity for which compensation is claimed. (emphasis added) [37]

3. In Alfonzo, Priestley JA (Clarke A-JA agreeing) approved the reasoning in GIO v GIO that, as between two insurers, the relevant deemed date of injury was not the date of the incapacity when the worker first had time off work, but the date of incapacity for which compensation was claimed or entitled to be claimed, namely, the date when the worker claimed continuing weekly compensation. [42]

4. Alfonzo was also cited with approval by Hodgson JA (Mason P agreeing) in Stone v Stannard Brothers Launch Services Pty Ltd [2004] NSWCA 277; 1 DDCR 701.Therefore the Commission is bound to follow and apply that approach. [46]

5. Mr Rankmore had time off work for treatment for skin cancer in 1997, but made no claim for compensation for that period. The “incapacity for which compensation is claimed” is the incapacity that commenced on 4 May 2009. The Senior Arbitrator correctly found that to be the deemed date of injury. [47]

Baldwin v Greater Building Society Ltd [2011] NSWWCCPD 18

Psychological injury; whether employer’s conduct with respect to performance appraisal and disciple was reasonable; non-compliance with s 74 of the 1998 Act; unsatisfactory pleadings

30 March 2011

Roche DP

Facts:

Ms Baldwin started work with the respondent as a branch supervisor in September 2007. After a training period, she filled in for 8 months at the Lake Haven branch, and was transferred to work as a branch supervisor at the Gosford branch.

Ms Baldwin failed to follow the respondent’s procedures on three occasions in March 2009. Her failures were:

1. On 9 March 2009, auditors found Ms Baldwin to have $638 above the permitted cash limit in her teller’s cash drawer;

2. On 12 March 2009, she failed to process a “cash float transfer” on her terminal and did not count the “bulk coin”, which resulted in a “false balance”, and

3. On 17 March 2009, Ms Baldwin’s balance was short by $20. On 18 March 2009, she balanced her account by having another staff member transfer $20 from Ms Baldwin’s account to the “terminal”.

She received two caution letters on 13 March 2009 about the first two breaches. After the third breach, the respondent removed her as a branch supervisor on 30 Mach 2009 and told her that she would be placed as a member services officer (teller) at another branch. Ms Baldwin felt “disgraced and humiliated” by these actions. She stopped work immediately and has not returned to work since. She submitted a claim form stating she received a psychological injury “through harassment and victimisation at work”.

The Arbitrator accepted that Ms Baldwin suffered a psychological injury in the nature of an adjustment disorder with anxious and depressed mood. She was satisfied that the action taken by the respondent “with respect to discipline and performance appraisal” was the principal cause of Ms Baldwin’s injury and that those actions were reasonable. She made an award for the respondent.

Issues on Appeal:

The issues in dispute on appeal were whether the Arbitrator erred in:

1. her application of s 11A of the 1987 Act;

2. finding that the respondent’s actions in respect of Ms Baldwin’s performance issues, discipline and promotion were fair and, in all the circumstances, reasonable, and

3. failing to give proper reasons for finding that the respondent had established a defence under s 11A.

Issues also arose as to the unsatisfactory s 74 notice (which failed to identify the specific ground relied on in s 11A) and poor pleadings.

Held – Arbitrator’s determination revoked; matter remitted to a different Arbitrator for determination of the applicant worker’s entitlement to weekly and other compensation

1. The s 74 notice did not comply with the 1998 Act as the notice stated that Ms Baldwin’s psychological injury had been wholly or predominantly caused by reasonable actions taken with respect to all seven grounds in s 11A. The Commission has repeatedly held that, if insurers intend to rely on s 11A as a defence, they must properly particularise the ground upon which they rely as establishing that defence: Gray v Busways Gosford EMP Pty Ltd [2009] NSWWCCPD 124 at [6]. [5]

2. The pleadings were rambling and discursive and bore no relation to the evidence. Pleadings in the Commission should briefly and succinctly state how the alleged injury occurred. Broadbrush allegations are objectionable because they demonstrate a complete lack of consideration of the real cause of injury. [8]-[9]

3. Although the s 74 notice and the Reply were unsatisfactory, the omissions in those documents were overcome (without any prejudice or objection) by the filing of the document “Respondent’s Reasons for Disputing Liability” on 5 August 2010 which relied on “discipline”, and by counsel’s statement at arbitration (not objected to) that the respondentrelied on “performance appraisal and/or discipline”. [76]

4. Ms Baldwin’s first error was a minor one which occurred when the respondent was understaffed and she was the only teller. Whether it even warranted an “official caution” was doubtful. Although the second error was more serious, the respondenthad a procedure in place to ensure such mistakes were recognised and recorded the next day, and all branches conducted audits of the previous day’s transactions to identify and correct bulk coin and note transfers. The letters of 13 March 2009 made no reference to any of the (undisputed) mitigating circumstances. [78]-[79]

5. However, given the short space of time between the first and second error, and that the second error occurred after specific instructions from the branch manager (Ms Hodgson) and the auditor, it was accepted that the respondentwas entitled to take action to rectify the problem. [82]

6. The third error was more problematic as Ms Baldwin approached a teller to ask her to transfer $20 from Ms Baldwin’s account to Ms Baldwin’s terminal due to the shortfall on 17 March 2009. This was a breach of the respondent’s policy for handling “shortages”, which required a withdrawal from petty cash. This incident occurred after a meeting between Ms Baldwin and the regional manager described as an “informal coaching session” in which Ms Baldwin was handed the two caution letters dated 13 March 2009 regarding the first two errors. This demonstrated Ms Baldwin’s lack of understanding of procedures. However, the amount was a very modest amount and there was no question of dishonesty or loss of funds. Further, Ms Baldwin openly disclosed her error and corrected it. [83], [84], [87]

7. The respondentwas entitled to take action with respect to performance under its Enterprise Agreement with its workers. Pursuant to that agreement, to ensure the respondent’s objective of “open communications, ensuring the continued maintenance of high quality employee and customer relations” was maintained, the enterprise agreement had a “performance counselling procedure”. [89]

8. The procedure stated the line manager should take the opportunity to discuss issues of concern with an employee on an informal basis. A timeframe was to be set for improvement and if necessary, formal documented proceedings were to commence. Although Ms Hodgson regularly reminded staff of the need to keep drawer limits below the amount set by the respondent and randomly checked Ms Baldwin’s cash counts, she did not say they were in breach. Although she counselled Ms Baldwin about the failure to complete transfers as required, she did not set a time limit within which Ms Baldwin had to improve. Nor were there formal meetings about that problem. [91]-[92]

9. As counselling had not achieved the desired outcome concerning the “false balances”, the enterprise agreement required formal documented proceedings - a document setting out the date of the discussion, the parties to the discussion, the issue of concern, a summary of the discussion highlighting any possible alternatives or constraints to the desired outcomes, details of specific action required and a time for that action, the setting of a follow up meeting, and the document signed by the employee and line manager. The caution letters of 13 March 2009 did not comply with this requirement. [93]

10. A second meeting should have taken place if there was no significant improvement. Even if the meeting on 18 March 2009 was considered as the first meeting, it set no action required or a timeframe for the action. If the meeting on 30 March 2009 was regarded as the “second meeting”, it did not require Ms Baldwin’s performance to improve within a specified period, but immediately demoted her without asking for her explanation about the incident. [94]

11. The enterprise agreement provided an exception to the above procedure if the actions of the employee in the first instance were “clearly of a serious nature”. In that situation, the respondent reserved the right to issue a first and final warning, and the employee may request the attendance of an independent representative and avail themselves of the provisions afforded under the dispute settlement clause of the enterprise agreement. The respondentdid not follow this procedure. If the letter of 13 March 2009 regarding the false balances was a final warning, it was not accepted that it was reasonable to issue such a warning in relation to a common error and where there were exceptional circumstances surrounding the first error. Even if a “first and final warning” is issued under the procedure, that merely triggers the dispute settlement clause in the enterprise agreement. It did not entitle the respondent to dismiss or demote a worker without following appropriate procedures. The procedures were in place to ensure compliance with general principles of reasonableness and fairness. [95]

12. The test of whether an employer acted reasonably is an objective one (Jeffery v Lintipal Pty Ltd [2008] NSWCA 138). Consideration must given to all relevant circumstances including the seriousness of the conduct that resulted in the disciplinary action, the nature of the employer’s business, and the worker’s position in the business. It was a relevant factor for the Arbitrator to take into account the fact that Ms Baldwin was a supervisor and it was her job to ensure the tellers followed correct procedures. [96]

13. However, the Arbitrator erred in finding that the respondenthad commenced a process of performance appraisal by mid-March. There was no discrete process on that date that could be described as performance appraisal as there was no assessment or evaluation of Ms Baldwin’s performance. She was merely given two letters and spoken to about breaches of security. [97]

14. Following the meeting on 18 March 2009, the regional manager recommended a “performance management counselling document be prepared” at which time she would return to Gosford to speak to the worker. No such document was prepared. A Performance Management Record was created, but it was undated and was prepared after the meeting on 30 March 2009, and after Ms Baldwin’s demotion. [98]

15. The respondent’s actions were consistent with the operation compliance officer’s email of 13 March 2009 which stated that, after discussions with the operations manager, it had been decided to remove Ms Baldwin as supervisor. This demonstrated that management had made up its mind before any performance management counselling took place. [99]

16. The hasty way the respondent acted to demote Ms Baldwin strongly suggested that it did not view Ms Baldwin’s case objectively or fairly. It failed to follow its own procedures. Applying an objective test, it was not reasonable for the respondent to demote Ms Baldwin without offering performance management counselling. The respondentwent from a formal warning in the letters of 13 March to demotion on 30 March 2009. That was unreasonable. [100]-[101]

17. The respondent’s submission that a course of conduct may be reasonable even if particular steps in the action were not, was rejected. Looking at the whole process, the steps taken were not reasonable as the respondent failed to have proper regard to the terms of the enterprise agreement and failed to give Ms Baldwin the opportunity to address her perceived shortcomings. [105]

Kara v Australian Integrated Suppliers t/as Guven Kebab Factory [2011] NSWWCCPD 11

Proof of injury; s 4 of the 1987 Act; determination of liability; need for referral to Approved Medical Specialist; s 65(3) of 1987 Act; admission of forensic medical reports; cl 49 of the Workers Compensation Regulation 2010

O’Grady DP

3 March 2011

Facts:

In 1982 Mr Kara was injured whilst working with James Hardie. As a result of that injury he underwent surgery to his lumbar spine, being laminectomy and disectomy.

On 5 December 2003 Mr Kara was injured in the course of his work as a labourer with Australian Integrated Suppliers Pty Ltd (the respondent). He alleged injury to his right shoulder, low back and neck as a result of a fall.

Mr Kara made a claim for workers compensation entitlements against the respondent in 2007. That dispute was settled and the Certificate of Determination made provision for referral to an AMS for the purpose of assessing any whole person impairment with respect to his lumbar spine, right upper extremity, scarring/disfigurement and expressly noted that “Matters concerning [Mr Kara’s] cervical spine may be addressed by the parties at a later date”.

A MAC was issued by the AMS certifying a whole person impairment of 9% (7% - right upper extremity and 2% scarring). The AMS found that Mr Kara had a 10% whole person impairment in respect of the lumbar spine but following deduction under s 323 of the 1998 Act a finding of 0% whole person impairment was made with respect to that part of his body. A Certificate of Determination was issued in accordance with the MAC.

Mr Kara made a further claim for weekly payments, lump sum compensation and medical expenses against the respondent. Liability in respect of that claim was declined and the s 74 notice disputed liability for the lumbar spine upon the basis that any permanent impairment or incapacity was the result of the injury sustained whilst working with James Hardie. The neck injury was disputed upon the basis that Mr Kara suffered a degenerative condition of his cervical spine and medical expenses claimed were stated not to be “reasonable or necessary workers compensation expenses”.

The issues in dispute were referred to the Commission. Mr Kara did not pursue the claim for weekly payments.

The Arbitrator entered an award for the respondent in respect of the cervical spine injury, a s 60 order in respect of the lumbar spine injury and the assessment of the upper right extremity injury was referred to an AMS. On appeal, Mr Kara did not pursue his claim for medical expenses in respect of the neck injury.

The issues in dispute on appeal were whether the Arbitrator erred:

(a) in finding that Mr Kara did not receive injury to his cervical spine on 5 December 2003, and

(b) in failing to remit the matter to the Registrar for referral to an AMS for assessment of any whole person impairment that resulted from injury to Mr Kara’s cervical spine.

Mr Kara submitted that:

(a) the reasons expressed by the Arbitrator (at [59] of Reasons) “seem self contradictory”;

(b) the Arbitrator relied upon the evidence of Dr Breit, Dr Habib and Dr Bhatia which had been wrongly admitted, and

(c) the Arbitrator’s determination concerning the allegation of neck injury was against the evidence.

The respondent conceded that the “wording adopted by the Arbitrator was perhaps inelegant” and argued that there was a “primary finding” that Mr Kara did not receive injury to his neck in the fall. The respondent argued that the Arbitrator had in mind “the notion that ‘injury’ involves a consideration of not only the injurious event but also the physiological or pathological consequences of that injury”.

Held: Paragraph 2 of the Arbitrator’s decision was revoked and replaced with an order that the cervical spine injury be referred to an AMS for assessment of whole person impairment. The balance of the Arbitrator’s decision was confirmed.

1. Mr Kara’s argument concerning the Arbitrator’s wrongful admission and subsequent reliance upon the reports of Dr Breit, Dr Habib and Dr Bhatia was well founded. The admission of those reports occurred in contravention of the provisions of the repealed 2003 Regulation. However, the relevance of cl 43 of that Regulation was not argued before the Arbitrator. The repeal of the 2003 Regulation and the enactment of the 2010 Regulation removed any basis upon which Mr Kara could object to those reports remaining in evidence on appeal. The new cl 49(4)(c) of the 2010 Regulation, which was the governing provision at the time of the appeal, permitted the tender of all three medico-legal reports. [25]

2. The Arbitrator found that Mr Kara experienced an increase of symptoms in his neck as a result of the fall. The acceptance of the manifestation of such symptoms represented a finding that an injury within the meaning of s 4 of the 1987 Act had been received by Mr Kara. Inconsistency existed between the Arbitrator’s express finding of no injury to the neck and the finding of increased symptoms in that part of the body occurring as a consequence of the fall. [48]

3. Had Mr Kara continued with his s 60 claim, the question as to whether the pathology and subsequent symptoms which had been caused by the injury as found had ceased or otherwise would have required determination as in Peric v Lee and Ran t/as Pure & Delicious Healthy [2009] NSWWCCPD 47; 7 DDCR 215 (Peric). The circumstances which prevailed in Peric were distinguished. The only question to be answered in this matter as to liability was in relation to the occurrence of injury. [61]

4. The evidence established that Mr Kara received injury to his neck in the fall. The assessment of any resultant whole person impairment is a medical dispute which the Commission has no jurisdiction to decide and must be determined by an AMS.

5. Greater Taree City Council v Moore [2010] NSWWCCPD 49 (between [93] and [103]) “makes it clear that, in circumstances where liability with respect to the occurrence of injury is in dispute and the only claim before the Commission is in respect of lump sum entitlement, the proper course is that the Arbitrator determines the liability question and must, if it arises, refer the question of any whole person impairment to the Registrar for referral to an AMS.” [69]

Marnell v Nugan Quality Foods Pty Ltd [2011] NSWWCCPD 12

Injury; disease; aggravation of disease; s 4 of the 1987 Act

7 March 2011

Roche DP

Facts:

The appellant worker, Mr Marnell, worked most of his adult life as a shearer. He ceased work as a shearer in August 2006 after being diagnosed with carpal tunnel syndrome, and being certified unfit for shearing work. Following surgery he did not return to work as a shearer and claimed compensation from that employer.

He then worked for a number of employers before commencing employment with Nugan as a labourer and general hand on 3 December 2007.

In May 2008, Mr Marnell complained to his general practitioner, Dr Mahmoodi, of pain in both hands. He was certified fit for light duties which he continued working until he stopped work in December 2008. He submitted a claim form on 30 May 2008, alleging he had suffered a “flare-up of carpal tunnel”. Allianz denied liability on the grounds that he no longer suffered symptoms consistent with a compensable injury, and that his employment was not a substantial contributing factor to his “current symptoms”.

In July 2010, Mr Marnell lodged an Application in the Commission in which he claimed weekly compensation from 2 December 2008 to date and continuing, hospital and medical expenses, and lump sum compensation for injuries to his left and right wrists, left and right shoulders and injury to his neck. Mr Marnell also lodged an Application against the employer who employed him as a shearer. Essentially, the claim against Nugan was that Mr Marnell aggravated a disease in his neck and shoulders as a result of his heavy work. The Arbitrator heard that matter at the same time as the proceedings against Nugan, but the proceedings were not consolidated.

The Arbitrator found that Mr Marnell suffered injury to both his hands and wrists in the course of his employment as a shearer prior to 8 August 2006, and that such injury was a disease contracted in the course of his employment as a shearer and to which his employment had been a contributing factor. The Arbitrator found that Mr Marnell had not recovered from the disease injury to his hands and that that injury incapacitated him.

The Arbitrator made an award in favour of Nugan on the ground that Mr Marnell had not suffered an injury to his neck or shoulders Mr Marnell appealed the award in favour of Nugan.

Issues on Appeal:

The issues on appeal were whether the Arbitrator erred in:

(a) failing to give proper consideration to the worker’s uncontradicted evidence as to his duties, which were relatively physical and sometimes “extremely heavy”;

(b) assuming that the worker’s solicitor was in possession of reports from Dr Mahmoodi, but did not tender those reports;

(c) considering whether Mr Marnell suffered a frank injury when he had never pleaded such an injury to his neck and shoulders, but merely relied on the “nature and conditions of his employment”, and the disease provisions in ss 15 and 16 of the 1987 Act;

(d) finding that, apart from the evidence from Dr Dixon in his report of 10 November 2009, there was no medical evidence to support the contention that Mr Marnell suffered a neck injury in the course of his employment with Nugan;

(e) making a finding on credit that Mr Marnell did not suffer symptoms associated with his work duties when he said he did;

(f) failing to consider the worker’s duties and the medical evidence “regarding the contribution of such duties to any disease process” and failing to “engage ss 15 and 16 of the 1987 Act”;

(g) failing to apply the “appropriate legal test” in considering the “disease” allegations (Austin v Direction General of Education (1994) 10 NSWCCR 373 (Austin));

(h) failing to consider the relevance and impact of Dr Dixon’s undisputed evidence, and

(i) failing to make an award for Mr Marnell.

Held – Arbitrator’s determination confirmed; each party pay his or its own costs of the appeal

1. There was no evidence to support the claim that Mr Marnell’s duties with Nugan caused the symptoms and restrictions emanating from his cervical disease and rotator cuff injuries to his shoulders to become more serious. Mr Marnell’s 53-page statement said nothing about him having shoulder or neck symptoms while working for Nugan. The medical reports from Dr Frawley (orthopaedic surgeon), and Dr Mahmoodi’s WorkCover certificates and clinical notes did not support Mr Marnell’s assertion. Whilst Dr Mahmoodi referred to neck pain and swelling in his notes on 25 September 2008 and 5 November 2008, he had a “long discussion” with the worker on 20 October 2008 to explain that the problem was “arthritis not carpal tunnel or [a] neck problem”. Mr Marnell complained to Dr Mahmoodi of neck symptoms when he was working on light duties. Dr Mahmoodi did not suggest that Mr Marnell developed neck symptoms in the course of or as a result of his duties with Nugan. [89]-[90].

2. Mr Marnell made no mention of any neck or shoulder symptoms in his claim form on 30 May 2008, but referred to a “flare-up of carpal tunnel”. The body parts referred to were “right & left” wrists. [91] Further, he made no mention of neck or shoulder symptoms as a result of his duties with Nugan in his 53-page statement. The only reference to shoulder symptoms were the shoulder injury in the 1990s and the symptoms noted by Dr Ashton in his report of 12 December 2006. [92]

3. The Arbitrator erred in suggesting there were reports from Drs Reimers, Bookless and Mahmoodi in Mr Marnell’s possession, but that error was not critical to the outcome. No adverse inference was drawn on appeal from the failure to tender evidence from those doctors. [94]

4. The pleadings and submissions on appeal identified two potential injuries: a “personal injury” alleged to have been caused by the “nature and conditions” of employment from 3 December 2007 until 2 December 2008, or an injury under the “disease provisions”. The Arbitrator did not make a finding on whether Mr Marnell received a “frank injury” but carefully considered and rejected the arguments on whether Mr Marnell had received a “personal injury” or an injury under the disease provisions. [95]-[96]

5. The Arbitrator did not err in saying that, apart from the evidence from Dr Dixon, there was no medical evidence to support the contention that Mr Marnell suffered a neck injury in the course of his employment. Dr Mahmoodi’s reference to neck pain and swelling in September and November 2008 did not establish an injury. Dr Van Der Rijt found no swelling at his examination in November 2008 and took a specific history that Mr Marnell did not “have any history of neck pain or other neck symptoms” or “any symptoms involving the proximal aspect of the arms”. [97]

6. The Arbitrator did not make an adverse finding on credit against Mr Marnell. He recorded that Dr Dixon’s assertion that Mr Marnell suffered neck and shoulder strains was not consistent with Dr Frawley’s opinion or Dr Mahmoodi’s notes. [98]

7. The Arbitrator did not err in observing that had Mr Marnell complained about his neck and arm, there would have been records to that effect. It was not a question of whether Mr Marnell was aware that the nature and conditions of his work contributed to the degenerative condition in his neck and/or problems with his shoulders, but whether he experienced symptoms in those parts of his body during his employment with Nugan. [99]

8. The Arbitrator did not fail to apply the appropriate legal test in considering the disease allegations. He carefully reviewed the evidence and correctly noted that a history of injury contained in a medical report can be received as evidence of the fact by reason of the operation of s 60 of the Evidence Act 1987, but the absence of direct evidence from Mr Marnell of the circumstances of the alleged neck and shoulder injuries did not advance his case. [100] Dr Dixon’s reference to the development of neck symptoms was not supported by the contemporaneous clinical notes from Dr Mahmoodi, nor the reports from Dr Frawley. [101]

9. The submission that the Arbitrator did not apply the legal test considering the disease provisions as set out in Austin was rejected as there was no persuasive evidence that he suffered an aggravation of a disease to which his employment with Nugan was a substantial contributing factor. [104]

10. The submission that Mr Marnell’s employment with Nugan caused an increase in “vulnerability” to posteriorly induced pain was not supported by the evidence and, even if it were correct, would not necessarily support a finding of injury. A vulnerability to the development of pain is not an injury under s 4 of the 1987 Act. What was necessary to establish an aggravation injury under s 4(b)(ii) was evidence that the disease was made “more grave, more grievous, or more serious in its effects upon the patient” (Federal Broom Co Pty Ltd v Semlitch [1964] HCA 34; 110 CLR 626 at 639). [105] Although Mr Marnell had mild spondylosis in his cervical spine, a condition which is a disease within the terms of the legislation, and some of his duties required physical exertion, the evidence did not establish that his employment made the disease “more grave, more grievous, or more serious in its effects” upon him.[106]

11. The submission that the “various diseases in the neck and shoulders continued to manifest symptoms of the injuries until the Appellant/Employee had to cease his employment with the Respondent on 02.12.2008” was inconsistent with the evidence and wrongly assumed that Mr Marnell received an injury in the course of his employment with Nugan. Mr Marnell worked on light duties due to his hand symptoms from late May 2008 until those duties were withdrawn on 2 December 2008. He ceased work due to the withdrawal of those duties. The neck and shoulder symptoms did not increase because of the work he performed at Nugan. There were no references to shoulder symptoms in Dr Mahmoodi’s notes between 30 May 2008 and 10 March 2009, nor in the report of Dr Frawley in November 2008. Mr Marnell did not establish that he suffered an injury in the course of his employment with Nugan. [108]-[109]

12. Mr Marnell tendered no persuasive evidence that the condition of his neck or shoulders was a disease “contracted” by him “in the course of his employment and to which employment was a contributing factor”. Nor was there evidence that his employment with Nugan was “employment to the nature of which the disease [of spondylosis or bursitis – assuming that bursitis is a disease] was due” (s 15(1)(b)). [111]

Woolworths Ltd v Meake [2011] NSWWCCPD 13

Failure to notify issues in dispute; ss 74 and 289A of the 1998 Act

8 March 2011

Keating P

Facts:

Ms Meake injured her right ankle in August 2004 when she slipped and fell working for Woolworths Ltd t/as Dick Smith Electronics. After a period off work, Ms Meake returned to work on selected duties but working normal hours.

On 15 May 2007 her employment was terminated after she was accused by her employer of stealing. She was subsequently charged and convicted. However, at all times she maintained her innocence. After ceasing employment with Woolworths, she has been unable to secure alternative employment.

Ms Meake made claims for lump sum compensation and weekly compensation from the date her employment was terminated to date and continuing on the basis that she was partially incapacitated.

Woolworths relied on s 74 notices denying liability on the basis that any ongoing symptoms were not as a result of the work injury.

Ms Meake bought proceedings in the Commission. The parties settled the lump sum claims. The claims for weekly compensation and medical expenses proceeded to hearing. No oral evidence was called.

In submissions before the Arbitrator, Woolworths sought to rely on the provisions of s 40(2A) of the 1987 Act. It alleged that, having regard to the circumstances of the termination of Ms Meake’s employment, she had unreasonably rejected suitable employment, and that there was effectively no difference between the current weekly wage rate in her pre-injury employment and the current weekly wage rate in suitable employment after the injury.

The Arbitrator rejected Woolworths reliance on s 40(2A). It was not referred to in any of the correspondence from Woolworths, its insurers or lawyers to Ms Meake prior to or after the commencement of the proceedings. There was no reference to it in either of the dispute notices. The matter had not been raised at the teleconference, nor had there been any application under s 289A(4) for leave to raise the issue as a further matter in dispute at any stage prior to or during the conciliation and arbitration hearing.

The Arbitrator made an award in favour of Ms Meake for weekly compensation benefits for partial incapacity.

Woolworths appealed, challenging the Arbitrator’s decision refusing to allow it to rely on s 40(2A) of the 1987 Act.

Held – Arbitrator’s decision confirmed

1. The s 74 notice must give the worker notice in clear and unambiguous language of the issues that are genuinely in dispute and the reasons for the dispute. Woolworths did not do that.

2. Neither of the s 74 notices made any reference to the circumstances of the termination of her employment or any reference to reliance on the provisions of s 40(2A).

3. The case that Ms Meake came to the Commission to meet was one that put in issue her fitness for employment and causation. The employer led no evidence concerning the circumstances of the worker’s termination of employment.

4. Woolworths offered no explanation either at the arbitration hearing or on appeal for its failure to put the allegation of unreasonable refusal of employment by Ms Meake in dispute. No application was made before the Arbitrator to exercise his discretion under s 289A(4) of the 1987 Act.

5. To have allowed Woolworths to argue that the s 40(2A) issue would have resulted in irreparable prejudice to Ms Meake. Had the issues been properly ventilated in the s 74 notice or at least at the telephone conference, she could have, and would have, applied for leave to adduce further evidence on the issue of her denial of the allegations of dishonesty.

6. The Arbitrator was also correct to find that the employer had failed to discharge the onus of establishing that there were any relevant matters to justify a reduction in the amounts found at step three of the Mitchell formula. Irreparable prejudice would have occasioned to Ms Meake if Woolworths had been permitted to rely on those unnotified issues to justify a diminution of the worker’s benefits under s 40(1) as it was under s 40(2A).

Witt v Q B Interiors (NSW) Pty Ltd [2011] NSWWCCPD 19

Burden of proof; proof of injury; weight of evidence; sufficiency of reasons

O’Grady DP

30 March 2011

Facts:

Mr Witt commenced employment with Q B Interiors Pty Limited (the respondent) as a gyprock plasterer on 9 June 2005. He alleged that, on 20 June 2005, he received a head injury when he struck his head on a T-bar, or ceiling grid, while standing on a ladder in the course of that work.

After this alleged incident the following events occurred:

(a) he alleged that he reported the injury to his supervisor;

(b) Mr Witt ceased work early on 20 June 2005 and returned home;

(c) he remained absent from work, due to severe headaches, nausea and vomiting, until his return on 27 June 2005;

(d) he attended the Emergency Department of Wyong Hospital on 23 June 2005 where he was diagnosed as suffering from tension headaches;

(e) he was absent from work on two further occasions;

(f) on 18 July 2005 his employment came to an end;

(g) he was eventually referred to an otolaryngology specialist and an MRI examination of his skull conducted on 17 September 2005 revealed chronic bilateral subdural haematomas;

(h) Mr Witt underwent surgical treatment at Royal North Shore Hospital on 19 September 2005, and

(i) he did not return to gainful employment.

Liability in respect of a workers compensation claim, submitted to the respondent on 4 February 2008, was declined. The s 74 notice dated 30 July 2009 stated that the injury suffered by Mr Witt was not an injury within the meaning of s 4 of the 1987 Act.

The dispute was referred to the Commission and the Arbitrator entered an award for the respondent.

The issues in dispute in the appeal were whether the Arbitrator erred in:

(a) failing to give any, or any proper weight to the evidence of Dr Patrick and Dr Evans;

(b) failing to provide sufficient reasons for the evaluation of the evidence of Dr Evans;

(c) rejecting the evidence of Dr Evans in circumstances where that witness had not been cross-examined nor given a fair and reasonable opportunity to reconcile her report with her notes of the consultation, and

(d) failing to exercise appropriate caution when evaluating the evidence being histories as recorded by medical practitioners and hospital staff.

Held: Arbitrator’s decision confirmed.

1. Dr Patrick’s opinion was largely founded on history provided to him by Mr Witt. “The question as to whether the Arbitrator was correct in his evaluation of the weight of the evidence of Dr Patrick turns on the fundamental question as to the correctness of his conclusion that Mr Witt had failed to prove the occurrence of the disputed injury.” [50]

2. The Arbitrator correctly concluded that Mr Witt had failed to prove the occurrence of the injury as alleged and therefore the Arbitrator did not err in his treatment of Dr Patrick’s evidence. [64]

3. There was no reference to a work injury in Dr Evans’s notes concerning Mr Witt’s attendance on her on 30 June 2005. The first reference in her notes to a work injury appeared on 13 February 2008. [53] This was inconsistent with Mr Witt’s evidence. It was therefore appropriate for the Arbitrator to decline to accept Dr Evans’s evidence as contained in her report. Mr Witt carried the burden of proof and he could have adduced evidence to explain the apparent inconsistency as to history. [55]

4. “The Arbitrator’s careful analysis of the evidence of Dr Evans led him to the conclusion that the evidence of that witness concerning causation needed to be evaluated in light of the fact that there was no reference to a work injury until 13 February 2008 following receipt of correspondence from Mr Witt’s solicitor. The clinical notes demonstrated an absence of complaint contemporaneous with the occurrence of injury.” [57]

5. The reasons stated by the Arbitrator for his evaluation of Dr Evans’s evidence were of a standard which discharged his obligation as a finder of fact to reveal the reasoning process which led to his conclusion. Meagher JA stated in Beale v GIO (NSW) (1997) 48 NSWLR 430 at 443 “reasons need not be lengthy or elaborate” but “relate to the functions to be served by the giving of reasons”. [57]

6. Mr Witt was unable to complain that the respondent had not tested Dr Evans’s evidence by cross-examination as he had ample opportunity to provide supplementary evidence to explain the inconsistencies. [58]-[59] See Boston Clothing Co v Margaronis (1992) 27 NSWLR 580 at 590.

7. The Arbitrator acknowledged in Reasons the requirement to treat evidence found in written records of medical practitioners and hospitals with caution and he referred to the decisions of Davis v Council of the City of Wagga Wagga [2004] NSWCA 34 and Fitzgibbon v The Waterways Authority [2003] NSWCA 294.

8. The Arbitrator adopted a cautious approach to the contemporaneous medical notes and considered that evidence together with the totality of the evidence in reaching his conclusion. The following was stated (at [63]) of the Arbitrator’s approach:

He considered it inappropriate to form any view of Mr Witt’s credit on the basis of his demeanour given the brevity of his evidence (at [19] of Reasons); no adverse inference concerning Mr Witt’s failure to call his former wife was drawn (at [58] of Reasons); the weight of the respondent’s evidence concerning injury report procedures was appropriately discounted as noted at [56] of Reasons, and he has taken into account objective facts and circumstances revealed in the evidence when reaching his conclusion that the evidence of Mr Witt concerning the occurrence of injury was unreliable. The Arbitrator’s conclusion that he could not accept Mr Witt’s evidence (at [63] of Reasons) and his conclusion that there was no other lay evidence to corroborate his evidence of injury were conclusions open to him on the evidence.