Issue 4: April 2013

1. The dispute identified in the Application was limited to a dispute in respect of the cost of proposed hip replacement surgery and associated medical expenses. Therefore, s 60(5) of the 1987 Act was engaged [17].

2. The application of s 60(5) was not considered or determined by the Arbitrator. Consequently the question of whether this dispute should have been referred for assessment under Pt 7 (Medical Assessment) of Ch 7 of the 1998 Act was not determined [18].

3. Compliance with s 60(5) has been held to be mandatory in its terms: Inghams Enterprises Pty Limited v Stanhope [2012] NSWWCCPD 32.

4. Although the issue was not referred to in the proceedings before the Arbitrator, on appeal the Commission must apply the correct statutory provisions: Electricity Commission of NSW v Yates (1991) 30 NSWLR 351 – applied in Department of Environment, Climate Change & Water v J [2010] NSWWCCPD 56 at [114] and in OneSteel Ltd v Devine [2012] NSWWCCPD 52 at [87]. This principle is an exception to the general rule that parties are bound by the conduct of their respective cases at first instance [20].

5. The dispute fell precisely into the category of claims to which s 60(5) was addressed, namely prospective future medical treatment [42].

6. The application of s 60(5) was considered by DP O’Grady in Stanhope. The Deputy President held that the proper construction of s 60(5) required that liability questions concerning whether proposed treatment was as a result of an injury and whether the treatment was reasonably necessary, may only have been answered following remittal to the Registrar for referral to an AMS prior to a determination of those issues. He found that the failure to remit had the consequence that the Arbitrator’s findings and orders concerning the proposed treatment were null and void [44].

7. In Stanhope the Deputy President held that s 60(5) requires that the referral of the dispute by the Registrar for assessment under Pt 7 (medical assessment) of Ch 7 of the 1998 Act “must” take place. He noted that the use by the legislature of the word “must” suggests that the requirement is mandatory rather than simply directory, noting the discussion of the distinction in Baker v Rothmans of Pall Mall (Australia) Pty Ltd [1999] NSWCA 245; 18 NSWCCR 374 and Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at 391. Judge Keating agreed with and adopted the Deputy President’s discussion and conclusions in relation to the mandatory nature of s 60(5) [45].

8. Judge Keating also adopted Deputy President O’Grady’s conclusion that the non-performance of a mandatory statutory provision, such as the requirement of the referral, had the consequence that the findings and orders of the Arbitrator concerning the dispute in relation to the proposed medical treatment were null and void having been made without jurisdiction: Minahan v Baldock [1951] HCA 27; 84 CLR 1: Hatton v Beaumont [1977] 2 NSWLR 211, per Hope JA at 220 [46].

9. Mr Tolevski’s hip condition was not an injury as defined, but was merely alleged to be a consequential condition that had resulted from the accepted injury. The Commission has explained in numerous decisions the difference between an injury and a condition that has resulted from an injury: (Moon v Conmah Pty Ltd [2009] NSWWCCPD 134 at [43], [45] and [50]; Superior Formwork Pty Ltd v Livaja [2009] NSWWCCPD 158 at [122]; Cadbury Schweppes Pty Ltd v Davis [2011] NSWWCCPD 4 at [28]–[32] and [39]–[42]; North Coast Area Health Service v Felstead [2011] NSWWCCPD 51 at [84]; Australian Traineeship System v Turner [2012] NSWWCCPD 4 at [28] and [29]; Kumar v Royal Comfort Bedding Pty Ltd [2012] NSWWCCPD 8 at [35]–[49] and [61]) [48].

10. Ultimately, the determination of whether treatment of Mr Tolevski’s hips results from the injury to his knees, and is reasonably necessary will be a matter for the Arbitrator. Any opinion expressed by an AMS on referral under s 60(5), will be treated as evidence in the resolution of that dispute but will not be conclusive, as such an opinion is not one of the matters listed in s 326 of the 1998 Act that are conclusively presumed to be correct in proceedings before the Commission [51].

11. Whilst there remained in issue a dispute concerning whether the proposed treatment was reasonably necessary as a result of the injury on 30 July 2007, the decision by the Arbitrator to reject Mr Tolevski’s application, without referring the dispute in accordance with s 60(5) for assessment by an AMS under Pt 7 of Ch 7 of the 1998 Act, was an error [52].

(a) failing to apply the “correct test for causation of injury”;

(b) in rejecting the “weight of medical opinion” evidence, which “confirmed [Mrs Leslie’s] conditions of ‘bilateral ulnar neuritis (dysfunction)’ and ‘carpal tunnel syndrome’ were causally related to her work”;

(c) in “substituting her own opinion over (sic) specialist knowledge”;

(d) in failing to find that the onset of symptoms of ulnar nerve and carpal tunnel syndrome occurred “from 1.8.2008”;

(e) in determining that the appellant had failed to discharge the onus of proving that the conditions of bilateral nerve dysfunction and carpal tunnel syndrome were related to employment, and

(f) in misdirecting herself as to the state of the evidence.

Held: The Senior Arbitrator’s determination was confirmed, subject to substitution of order three with an award for the applicant for four per cent whole person impairment resulting from the condition of bilateral epicondylitis

Preliminary matter

1. The matter was again referred to Dr Harrison for assessment of whole person impairment arising only from the condition of bilateral lateral epicondylitis, given some ambiguity concerning the approach taken when relevant assessments were earlier made [17]. A further MAC was issued in which certification was given concerning a four per cent whole person impairment related to that condition. Having regard to that assessment and Dr Harrison’s earlier assessment, of there being a 12 per cent whole person impairment, the quantum, of which Mrs Leslie complained on this appeal she had been denied, was quantified as eight per cent whole person impairment [18].

Submissions, Discussion and Findings

2. Mrs Leslie submitted that the Arbitrator failed to properly apply the “tests” concerning causation as expounded in the decisions of Kooragang Cement Pty Ltd v Bates (1994) 35 NSWLR 452 (Kooragang) and Nguyen v Cosmopolitan Homes [2008] NSWCA 246 (Nguyen). It was put that a proper consideration of the expert evidence supported a finding that the conditions of “bilateral ulnar neuritis (dysfunction)” and “carpal tunnel syndrome” (impugned conditions) were “caused by the work or were consequential conditions caused by the work injuries to the upper limbs” [41].

3. It was suggested that error was committed given the finding that the impugned conditions had an “apparent” onset some 16 months after Mrs Leslie ceased work with the respondent. It was put that the evidence “support an onset of [the impugned conditions] as early as 2008 or that the work was causative of those conditions” [42].

4. Further complaint was made that Mrs Leslie was not cross-examined concerning her stated history of “onset of complaints” and that no weight should be given to the submission that her evidence on that subject “ought not be accepted” [43].

5. The submissions did not include any statement of principle to be found in Kooragang and/or Nguyen which was said to have been overlooked or misapplied by the Arbitrator. As is made clear by Kirby P in Kooragang, such question concerning causation is one of fact and each case is to be determined on its own facts by “a commonsense evaluation of the causal chain”, and the Arbitrator had conducted such an evaluation [49].

6. The evidence supporting causal nexus between the work and the impugned conditions was found in the reports of Dr Hughes, Dr Endrey-Walder and Dr Harrison. That evidence had been rejected by the Arbitrator [50]. The rejection of that evidence as to causation was open to the Arbitrator and her reasons for such rejection were plainly stated. No error was demonstrated. The appeal was not a review and the submission that the evidence of Dr Hughes, Dr Endrey-Walder and Dr Harrison concerning causation should be “accepted” on this appeal was rejected [54].

7. Leaving aside the fact that the Commission’s leave is required to conduct cross-examination, the absence of such questioning of Mrs Leslie was incapable of founding an argument that relevant error had been made. The nature of the dispute as to causation had been known by Mrs Leslie’s representatives at all relevant times [55].

8. The appellant appeared to suggest that the Arbitrator’s finding that the evidence was not sufficient to establish “injury to have occurred as claimed” was an error. It was asserted that there was a “‘fair climate’ of factual evidence” concerning matters relevant to that issue [56].

9. The suggestion that the Arbitrator “assumed” that the medical experts “did not pay proper and sufficient consideration to the facts as they knew them” was rejected [59].

10. The suggestion that the Arbitrator had substituted “her own opinion in place of the expert medical opinion” in the absence of cross-examination “or some contrary expert medical evidence” was rejected. The Arbitrator’s finding as to there being no sufficient evidence of causal nexus did not constitute a substitution of her opinion for that of the witnesses. Her finding related to the relevant burden of proof which had not been discharged [60].

11. The suggested factual error in failing to find that symptoms referable to the impugned conditions occurred “as at the time [Mrs Leslie] was working” and thereafter from “time to time” was not made out [61].

12. The Arbitrator’s findings concerning Mrs Leslie’s failure to discharge the burden upon her concerning proof of causal nexus were challenged [62]. The question before the Arbitrator was one of fact and no error on her part, given her acknowledgment of all relevant evidence, her evaluation of that evidence, her consideration of the factual issues, particularly the history of onset of relevant symptoms, and the availability, having regard to that evidence, of the conclusion reached, was established [64].

13. The suggestion that the Arbitrator erred by “misdirecting herself” when concluding that the impugned conditions were not caused by work, was not made out. That “misdirection” was said to concern treatment by her of the evidence leading to her conclusion that there was no evidence “that during 2008 through to November 2009 [Mrs Leslie] suffered from symptoms in the ulnar two fingers and ulnar side of the hand” [66].

(a) in determining liability on an affirmative answer to the question “Did the worker’s right knee give way in the event in January 2010 as a result of the work injury of 7 [sic] January 2003?”, when the logically anterior question was, “has the worker established that his fall in January 2010 resulted from a failure in his right knee?”;

(b) to the extent that he addressed the anterior question, by ignoring the fact that the worker confessed to Dr Messerschmidt that “he does not recall how he came to fall”, and to Dr Burgess that “he is not sure whether the problem was the knee or what”, and

(c) in his application of Kooragang Cement Pty Ltd v Bates (1994) 35 NSWLR 452; 10 NSWCCR 796 (Kooragang), in ignoring evidence of a clear breach of the commonsense chain of causation, namely, the absence of injury to, or instability in, the knee.

Held: The Arbitrator’s determination was confirmed.

Discussions and Findings 

1. It was not accepted that the Arbitrator failed to assess whether Mr McNeill had established that the fall in 2010 resulted from his knee giving way or that he failed to address the “anterior question”. The Arbitrator acknowledged that Mr McNeill was not sure whether the problem (that caused him to fall) was his knee or something else. That uncertainty did not prevent a finding in favour of Mr McNeill, but required careful consideration of the medical evidence and the histories in that evidence [67]. The Arbitrator’s determination that the fall resulted from the 2003 injury was open on the evidence [70].

2. The fact that there was no reference to Mr McNeill having complained of his knee or thigh at the Darling River Medical Centre between late 2004 and 2008, was not determinative of the dispute and it was open to the Arbitrator to accept, as he did, that Mr McNeill’s symptoms continued in that period and that the fall was caused by the right knee giving way, as it had on a previous occasion after the 2003 injury [72].

3. That Mr McNeill told Dr Messerschmidt that he had no recollection of how the fall happened was not determinative. Dr Messerschmidt’s note of the right leg giving way was consistent with Mr McNeill’s statement on 22 June 2011 and his history to Dr Burgess. His uncertainty was about the exact cause of the giving way and that question had to be determined by reference to all the evidence, including the expert evidence from Dr Burgess, whose opinion was not challenged by any contrary expert evidence tendered by the appellant [73].

4. Causation can be established by a process of inference which combines primary facts like “strands in a cable” rather than “links in a chain” (Seltsam Pty Ltd v McGuiness [2000] NSWCA 29; 49 NSWLR 262 per Spigelman CJ at [91] citing Wigmore on Evidence (3rd ed) para 2497). That was essentially the approach the Arbitrator took when he referred to Mr McNeill’s pain and disability from 2003 onwards, the giving way of the right leg in 2003, the quadriceps weakness and dysfunction, and the giving way on or about 29 January 2010 [75].

5. It was not accepted that the Arbitrator erred in concluding that Mr McNeill’s right knee was affected by instability beyond 2003. While that was not exactly what the Arbitrator found, it was accepted that it was a reasonable inference from his finding. He said that the injury to the right thigh “led to instability in [Mr McNeill’s] right knee”. The Arbitrator’s determination was open on the evidence and disclosed no error [79].

6. If the Arbitrator erred in finding that the fall was because of the right knee giving way, which was not accepted, the same conclusion would have been reached by an acceptance of Dr Burgess’s evidence that the fall was caused by weakness and dysfunction in the injured right thigh caused by the 2003 injury [80].

7. The lack of evidence of laxity in either the posterior or anterior cruciate ligament, was not decisive and was not a matter that required an express comment by the Arbitrator because it was never Mr McNeill’s case that he fell because of ligament laxity. The reference to there being a full range of movement of the knee and no effusion was not determinative and did not rule out a fall because of a lack of strength in the hip and knee, noting that Dr Bentivoglio, Dr Burgess and Dr Patrick all found weakness in both right hip flexion and right knee extension [81].

8. The complaint that the Arbitrator erred in his application of Kooragang, in ignoring evidence of a clear breach of the commonsense chain of causation, namely, the absence of injury to, or instability in the knee, was rejected [82].

9. Kooragang makes it clear that whether a condition has resulted from a relevant work injury is a question of fact. What is required is a commonsense evaluation of the causal chain and the mere passage of time between a work incident and subsequent incapacity is not determinative of the entitlement to compensation. The causative link may be broken because of an intervening act, or because of a “want of a sufficient connection” (Kooragang at 464) [83].

10. However, as was emphasised (at 464) in Kooragang, a judge (or arbitrator) deciding the matter “will do well to return ... to the statutory formula and to ask the question of whether the disputed incapacity or death [or condition] ‘resulted from’ the work injury which is impugned”. The answer to that question in the present case was clearly “yes”. There was no break of the chain of causation. Mr McNeill had consistently complained of difficulties with his right leg since the 2003 injury, which had been documented, and Dr Burgess strongly supported the connection between the fall and the 2003 injury. It was therefore open to the Arbitrator to find causation was established [84].

1. It was made clear in Badawi v Nexon Asia Pacific Pty Ltd t/as Commander Australia Pty Ltd [2009] NSWCA 324; 75 NSWLR 503; 7 DDCR 75 that Mercer v ANZ Banking Group [2000] NSWCA 138; 48 NSWLR 740 should not be followed, where it was there stated “that the test of substantial contributing factor in s 9A was not ‘as stringent’ as the test of ‘arising out of’ employment” [52].

2. The Arbitrator found that Ms Kelly’s and Mr Paunovic’s:

“mutual employment with the respondent and their respective duties have materially contributed to the injury. It was not coincidental that both were at [Nile Street]. As part of their normal duties, they are required to provide services to clients that attend this Centre. Section 4 is therefore satisfied”.

Such finding was made notwithstanding the appellant’s acceptance that the injury arose both out of and in the course of the employment. Such concession was proper and was no doubt made having regard to the undisputed facts [67].

3. The matters relied upon by the Arbitrator permitted a conclusion that there was a causal nexus between the employment and the injury. That again explained the appellant’s concession concerning injury arising out of the employment. However, it was found on appeal that the facts as found did not permit a conclusion, as reached by the Arbitrator, that the employment was a substantial contributing factor to the injury [70].

4. The appellant was correct in its submission that “the strength of the causal linkage between the employment concerned and the injury is the question in issue”. Whilst it was accepted by the Arbitrator that the “respective family members” were in dispute, no evaluation of that fact in the context of causation was made by the Arbitrator in the course of her reasoning. It was found on appeal that there could be no doubt that the family dispute was a substantial cause of the injury. However, it was noted that, as is established on the authorities, there may be more than one substantial cause in any given factual circumstance [71].

5. Employment was not a substantial contributing factor to the injury:

(a) the fact that both Ms Kelly and Mr Paunovic were employed by the same employer and were performing that work at the same location at the relevant time may be seen as causative only in the sense that “but for” the mutual employment and their presence at Nile Street there would be no occasion for injury. Such may not be seen as a substantial contributing factor to the occurrence of injury. Ms Kelly was correct to argue that coincidence does not negate the existence of a relevant causal link. However, such a causal link may not permit an inference that the employment was a substantial contributing factor to the injury;

(b) upon an acceptance that Ms Kelly and Mr Paunovic were more likely to come into contact with each other as a result of their respective work duties than they were outside of work, such was an incident of the employment which gave rise merely to the occasion of the injury. Such a chance encounter could not alone be characterised as a substantial contributing factor to the injury;

(c) the Arbitrator characterised the employment as being the key connection between the parties. That fact provided the opportunity, the time and the place for the confrontation. It was merely a temporal element and could not be seen as a substantial contributing factor to injury;

(d) the Code of Conduct may be seen as an element of the employment which, as stated by Lord Shaw in Thom v Sinclair [1917] AC 127; 33 TLR 247, includes “the nature, conditions, obligations or incidents of the employment”. The code regulates behaviour of the appellant’s workers. However, one needs to distinguish between the existence of a code and conduct in breach of the code. In the present case such conduct in breach, not being relevant to the employment but rather related to a private dispute, did not constitute an element of Ms Kelly’s employment, and

(e) the appellant’s awareness of “conflict” between the families of Ms Kelly and Mr Paunovic, and its failure to act was relied upon by Ms Kelly before the Arbitrator. An attempt was made at the hearing of the appeal to clarify Ms Kelly’s position concerning this matter, particularly given that Ms Kelly’s counsel stated: “I am not suggesting that [the appellant] ought to have had foreknowledge in order to avoid [the crossing of paths] because I don’t think that’s possible”.

The Arbitrator had erred in drawing an inference that the failure to act on the appellant’s part did more than lead to the creation of a temporal connection between the employment and injury. The mere fact that an “opportunity” was afforded to Mr Paunovic to vent his apparent anger did not permit a conclusion that employment was a substantial contributing factor to the injury. [72]

6. The Arbitrator erred in that she gave undue weight to those matters addressed above at [5] in drawing the inference that employment was a substantial contributing factor to Ms Kelly’s injury. The Arbitrator’s reasoning concerning the suggested relevance of the Code of Conduct demonstrated that an irrelevant consideration had been taken into account, namely breach of the code in respect of a non-work related matter, and constituted an error on her part. Those errors had plainly affected the Arbitrator’s decision: s 352(5) and therefore the Arbitrator’s determination was revoked [73].

7. Whilst the appellant’s arguments concerning ‘coincidence’ and the relevance of Ms Kelly’s credit as a witness were not accepted, it was found on appeal that the evidence did not permit an inference that Ms Kelly’s employment was a substantial contributing factor to the injury [74].

(a) rejecting opinion evidence;

(b) misconstruing the evidence, and

(c) concluding that the worker did not have suitable full-time work available to him.

Opinion evidence and misconstruction of the evidence

1. The Arbitrator provided a comprehensive explanation as to why he did not accept the evidence from Dr Smith, orthopaedic surgeon, and Dr Le Leu, occupational physician. Neither his approach nor his conclusion demonstrated any error [56].

2. The Arbitrator did not reject Dr Smith’s opinion because of the existence of the abnormal gait, as the appellant had submitted; he rejected it because the doctor’s opinion on fitness was inconsistent with his findings on examination and because the doctor was not aware of the range of duties required of a plant operator. Those reasons were perfectly sound and did not disclose any error [57].

3. The submission that, based on Hancock v East Coast Timber Products Pty Ltd [2011] NSWCA 11; 8 DDCR 399 (Hancock), the rejection of Dr Smith’s evidence amounted to an error of law was unsupported by any reasoned argument [58]. As there was no Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; 52 NSWLR 705 point in the present case, the reference to Hancock in this context was erroneous. There was no suggestion that the Arbitrator failed to fully replicate, or refer to, the relevant parts of Dr Smith’s evidence [59].

4. The reference to the observations of Tobias JA at [140] in Hancock was equally without merit. In that passage, his Honour referred to (implicit) findings made (by the primary judge in that case) that “at least in part, reflected adversely on” the treating specialist’s credibility and integrity and those “problematic” aspects of the reports “called out for an explanation and the doctor was not given an opportunity to provide that explanation” [61]. Nothing even approaching the issue referred to by Tobias JA in Hancock arose in the present case. The issue was Mr Moy’s fitness for work. There was no issue about the credibility of Dr Smith [62].

The restricted labour market 

5. The submission that the Arbitrator should have considered that Mr Moy had suitable full-time work available to him with the appellant was unsupported by any evidence and was unsustainable [64].

6. In determining Mr Moy’s ability to earn, the Arbitrator had regard to medical evidence from Dr Giblin, orthopaedic surgeon, which he accepted. The Arbitrator’s reference to Mr Moy living at a remote address with the nearest major town being 45–50 minutes’ drive away was appropriate. The Arbitrator’s approach disclosed no error [67]-[70]

Light duties

7. The appellant’s submission that, but for resigning, Mr Moy could have continued working (for the appellant) without loss was not a point made at the arbitration (Brambles Industries Ltd v Bell [2010] NSWCA 162; 8 DDCR 111 (Bell)) [71]. It was made without reference to the evidence and was wrong [72]. It followed that the Arbitrator did not err in failing to refer to a matter that was never put (Bell) [74].

8. Even if Mr Moy had been performing full-time light duties at the time he resigned (which he was not), and was being paid at his pre-injury rate, and therefore suffering no economic loss, that would not have prevented the making of an award in his favour at the maximum statutory rate for a worker with a dependent wife [75].

9. Under s 40, once a worker has ceased earning, then, in assessing his or her ability to earn (applying the legislation as it stood prior to the recent amendments), the Commission must determine the worker’s ability to earn as a worker “in the open labour market” (Steggles v Aguirre (1988) 12 NSWLR 693 at 699A, citing Starke J in Williams v Metropolitan Coal Co Ltd [1948] HCA 8; 76 CLR 431 at 444) [76].

10. The Arbitrator correctly determined Mr Moy’s ability to earn in the open labour market and, on the available evidence, his assessment of Mr Moy’s ability to earn to be $350 per week was open and disclosed no error [77].

The surveillance evidence 

11. The submission that the Arbitrator should have had “reference to the unchallenged” surveillance report was based on the false premise that he failed to consider that report and the incorrect assumption that it was unchallenged [78].

12. The Arbitrator’s conclusion that Mr Moy lifted sawdust and not soil was based on the fact that the appellant had not challenged Mr Moy’s credit and the distance from which the surveillance was conducted. Though there was no precise evidence of that distance, the Arbitrator’s acceptance of Mr Moy’s evidence was open to him [82].

13. Given Mr Moy’s evidence of the weight of the bags, the fact that he lifted only two bags, and the fact that the activities were not outside the restrictions placed on him by his general practitioner, the conclusion that nothing in the surveillance was inconsistent with Mr Moy’s condition was open to the Arbitrator and disclosed no error. It followed that assertion that the activities involved were “moderately vigorous”, as the appellant submitted on appeal, was not accepted [83].

Unmeritorious appeal 

14. This appeal was completely without merit and had no prospect of success. It should not have been filed [86].

15. The appellant’s submissions either misrepresented or ignored the Arbitrator’s reasons, misrepresented or ignored the relevant evidence, referred to authorities that had no relevance to the issues, and made several assertions that were demonstrably false. Moreover, in breach of Practice Direction No 6, the appellant failed to properly identify the grounds of appeal and make submissions on those grounds [87].

16. The appellant’s legal representatives were reminded that an appeal filed without reasonable prospects of success is capable of amounting to unsatisfactory professional conduct or professional misconduct by a legal practitioner (s 345 of the Legal Profession Act 2004; Beale v Walgett District Hospital [2009] NSWWCCPD 60) [88].

(a) the 2006 NSW Police Force investigation into the appellant’s conduct with respect to the conduct of her stepbrother, who had been charged with criminal offences;

(b) the 2008 investigation into the appellant allegedly associating with an outlaw motorcycle gang;

(c) the alleged pressure Senior Sergeant Liddiard placed on the appellant to stay at work to do a statement in relation to Ms AQ’s death, on the same day that she was informed that Ms AQ had taken her life;

(d) Senior Sergeant Liddiard’s comments that the appellant’s entry in her duty book - “LSC [AQ] Died – xxoo – start 7:00am finish at 5:40pm. Statement provided to CI team” – was not appropriate, which made the appellant “extremely upset and traumatised” (the duty book incident);

(e) the appellant’s attendance and involvement in organising Ms AQ’s funeral service, while on duty, which made the appellant feel quite “depressed” and “traumatised”;

(f) the perceived lack of support Senior Sergeant Liddiard provided the appellant following Ms AQ’s death. This included Senior Sergeant Liddiard’s response to the appellant’s request for leave on the anniversary of Ms AQ’s death, that she could have the day off “but just get over it, as you won’t be able to have the day off every year”, and

(g) the appellant’s interactions with Sergeant Nicol with respect to rostered days of work and duties, which made the appellant “feel sick”, “upset and traumatised” and have an anxiety attack, due to being addressed in a hostile manner.

The appellant remained off work from 4 November 2011 until she resumed work part-time on 17 August 2012.

Though provisional liability was accepted, and compensation paid until 26 April 2012, the NSW Police Force’s insurer denied liability in a s 74 notice on the grounds that:

(a) the appellant had not suffered a psychological injury because the death of a co-worker was not compensable within the definition of injury in s 4 of the 1987 Act;

(b) if the appellant suffered a psychological injury, employment was not a substantial contributing factor to that injury;

(c) no bullying or harassment occurred, and

(d) if employment was a substantial contributing factor to the injury, the Police Force acted reasonably with respect to “discipline” and any response to that action was not compensable pursuant to s 11A of the 1987 Act.

Counsel agreed that the appellant suffered from a psychological condition and remained totally unfit for work from 26 April 2012 until 17 August 2012.

The Senior Arbitrator held that the suicide of Ms AQ was the “ultimate” or “principal” cause of the appellant’s psychological condition and, because the case fell “squarely within the principles established in Stewart [Stewart v NSW Police Service [1998] NSWCC 57; (1998) 17 NSWCCR 202 (Stewart)]”, that condition was not an injury arising out of or in the course of employment. She found, any perceived hostility, harassment or lack of support from supervisors was a result of the appellant’s increasing feelings of guilt and distress over Ms AQ’s death and the particular events complained of were “innocuous” events that may have increased the appellant’s depressive illness but did not cause it. The Arbitrator made an award in favour of the respondent.

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

(a) incorrectly considering the “ultimate” cause of the appellant’s psychological condition;

(b) failing to give proper consideration and appropriate weight to events other than the suicide of Ms AQ in considering the cause of the appellant’s psychological condition;

(c) failing to distinguish the facts of the application from those in Stewart;

(d) applying the “but for” test to the issue of causation;

(e) finding that the appellant’s reaction to Ms AQ’s suicide would have been the same irrespective of the manner, time or circumstances of it, and failing to give any reasoning for that finding;

(f) failing to apply established legal principle to her consideration of the appellant’s perception of the conduct of supervising officers in the workplace;

(g) concluding that the appellant’s anxiety attack on 16 June 2010 (the duty book incident) resulted from reasonable action by the Police Force with respect to discipline, and

(h) drawing conclusions adverse to the credit of the appellant in circumstances where those matters were not put to the appellant in cross-examination.

Held: The Arbitrator’s determination was revoked. 

Discussion and Findings 

1. The Senior Arbitrator only appeared to have considered s 4(a) that is, whether the appellant sustained a personal injury arising out of or in the course of her employment, but did not consider if the appellant may have received a disease injury under s 4(b)(i) or an aggravation injury under s 4(b)(ii) [197].

2. Whether a worker has received a personal injury under s 4(a) requires a determination of whether the worker has suffered a personal injury either arising out of or in the course of his or her employment. The phrase “arising out of” involves a causative element. In determining whether the employment has caused the injury, the Commission will adopt a commonsense approach (Nunan v Cockatoo Island Docks & Engineering Co Ltd (1941) 41 SR (NSW) 119; Badawi v Nexon Asia Pacific Pty Ltd t/as Commander Australia Pty Ltd [2009] NSWCA 324; 75 NSWLR 503 (Badawi) at [73]). The phrase “in the course of” involves a temporal element, but does not involve a causative element (Badawi at [72]) [198].

3. In determining the “ultimate” or “principal” cause of the appellant’s condition, the Senior Arbitrator failed to approach the injury question by reference to the terms of s 4(a). It followed that, the Senior Arbitrator failed to determine causation according to correct legal principle [199].

4. Evidence of a vulnerability or predisposition, without more, will not usually be sufficient to establish that incapacity has “resulted from” a work injury (Kooragang Cement Pty Ltd v Bates (1994) 35 NSWLR 452 at 463–4). While it was accepted that the appellant suffered a psychological injury in 2008, in light of the lay and expert evidence that she recovered from that injury at work and returned to her normal work without restrictions or medication, and in the absence of evidence that it caused an erosion in her resilience, such that it contributed to her current condition, or that it had a cumulative effect on her, it was not accepted that the 2008 incident (or the sexual assault as a child) did any more than create a vulnerability to a further episode of depression when faced with a stressful event. It was not accepted that the 2006 incident (in which she was investigated in relation to the conduct of her stepbrother, who had been charged with criminal offences) caused any relevant injury [204].

5. The medical evidence was unanimous that the appellant recovered from the events of 2006 and 2008. The fact that the events in late July or early August 2011 (events following the suicide of Ms AQ) may have brought back “previous thoughts” was of limited probative value in light of the medical evidence, based on her history, that she recovered from the 2008 incident. This conclusion was consistent with qualified medical opinion, that the appellant’s current episode was not related to her previous psychological illness [205].

6. The Senior Arbitrator’s finding that the circumstances fell “squarely within the principles established in Stewart” was an error. The differences between the two cases are stark and critical to the analysis of the issues. [207]–[208]. Zinc Corporation Ltd v Scarce (1995) 12 NSWCCR 566 (Scarce) was also distinguished on facts [224].

7. The Senior Arbitrator said that the events on 2 June 2010 were “of themselves innocuous” and that, if Ms AQ had not taken her own life, it was unlikely that the appellant would have given those actions a second thought. She added that it was likely that the appellant would have reacted in a similar way if she had not been at the workplace and had handled the weapon or ammunition in some other circumstances. Similarly, she added that the appellant’s reaction was likely to have been the same if Ms AQ had obtained a weapon elsewhere, or had taken her life by some other means [217].

8. The Senior Arbitrator’s analysis was erroneous. To say that the appellant would not have given the events of 2 June 2010 a second thought if Ms AQ had not taken her life was irrelevant. The Senior Arbitrator had to deal with the facts as they were. Those facts included the fact that the appellant had, in the course of her employment, handled the gun and ammunition with which Ms AQ took her life and that the appellant had consistently recounted that, because of that experience, she had felt a “bizarre sense of connection with Ms AQ”. Those events formed a part of the history recorded by the treating and qualified doctors [218].

9. Issues of causation are always fact-specific. Considering causation in general, and s 10 of the Damage by Aircraft Act 1999 in particular, the High Court observed (at [14]) in ACQ Pty Ltd v Cook [2009] HCA 28 that “abstract discussion [about causation] is seldom valuable for courts” and it is “undesirable to deal with possible applications of the legislation which are not essential for the decision”. Thus, it was speculative and unhelpful for the Senior Arbitrator to assert that the appellant’s reaction might have been the same had Ms AQ obtained a weapon elsewhere, or taken her life by some other means [220].

10. It does not matter if the event to which the appellant reacted was “relatively innocuous”. Employers take their employees as they find them (State Transit Authority (NSW) v Chemler [2007] NSWCA 249; 5 DDCR 286 (Chemler) per Spigelman CJ at [40]) and a perception of real events can satisfy the test of injury arising out of or in the course of employment (Chemler per Spigelman CJ at [54]). If conduct which actually occurred in the workplace was perceived as creating an offensive or hostile working environment, and a cognizable injury followed, it is open to the Commission to conclude that causation is established (Chemler per Basten JA at [69]). So long as the events within the workplace are real, rather than imaginary, it does not matter that they affected the worker’s psyche because of a flawed perception of events because of a disordered mind (Leigh Sheridan v Q-Comp [2009] QIC 12; 191 QGIG 13) [226].

11. The reference to Senior Sergeant Liddiard’s conduct (in commenting that the appellant’s entry in her notebook - “LSC [AQ] Died – xxoo – start 7:00am finish at 5:40pm. Statement provided to CI team” - was inappropriate) having been reasonable action with respect to discipline was irrelevant. This appears to have been a reference to the s 11A defence. That defence could not succeed without the Senior Arbitrator first finding that the particular action concerned was the whole or predominant cause of the injury. As the Senior Arbitrator did not make that finding, it was not open to dismiss this incident on the ground that it was reasonable conduct with respect to discipline [227].

12. It followed that, as the entry in the notebook was a real event that, on any view of the evidence, caused the appellant distress, and, as the s 11A defence had not been made out, it was necessary to determine if it caused or contributed to a condition. The Senior Arbitrator did not undertake that analysis, but merely said that the suicide was the “ultimate” or “principal” cause of the condition [228].

13. The Senior Arbitrator said that various omissions from the appellant’s statement caused her “some concern as to the veracity of some of the [appellant’s] claims”. This was a clear finding adverse to the appellant’s credit in circumstances where counsel for the employer had made no such attack. As the Senior Arbitrator had not made her concerns known to the parties, and did not give them the opportunity to address them, that was a denial of procedural fairness (Muin v Refugee Review Tribunal [2002] HCA 30 per McHugh J at [123]) and an error. While it was unclear exactly what weight this finding played in the Senior Arbitrator’s overall assessment of the case, it was tolerably clear that it was a factor that led her to reject the appellant’s evidence [231]-[232].

14. The Senior Arbitrator adopted an incorrect approach to the alleged bullying and harassment. This was confirmed by her comment that “any perceived hostility, harassment, or lack of care or support from supervisors was a result of the [appellant’s] increasing feelings of guilt and distress over Ms AQ’s death”. Whether the appellant’s perception of the events she characterised as bullying and harassment resulted from her feelings of guilt over the death was irrelevant. They were real events that occurred at work that caused the appellant distress and had to be considered in that light [238].

15. The Senior Arbitrator erred (by reference to Stewart) in characterising the particular events the appellant complained of as “innocuous” and, apparently, dismissing them in her consideration of causation for that reason. Those events had to be considered with all the other evidence on causation [239].

Re-determination 

16. It was not accepted that the 2008 incident caused or contributed to the appellant’s condition, though it may have made her more sensitive to the events that occurred in 2010 and 2011 [242].

17. It was of no consequence that the diagnoses of the appellant’s condition were slightly different. Though it is preferable that a diagnosis be determined, it is not essential for that to happen before causation can be established (Grace v Elmasri [2009] VSCA 111 at [131]–[137]) and a finding made on injury (Kempsey Shire Council v Kirkman [2010] NSWWCCPD 104 at [82]). Diagnosis in a psychiatric injury case is never an exact science and will always depend on the symptoms with which the patient presents at the time of examination [243].

18. If it were considered necessary to make a finding on the correct diagnosis, a finding that the appellant’s psychological condition was a major depressive disorder would have been made [244].

Personal injury or disease?

19. For a worker to have received a personal injury, it is necessary that the events complained of had physiological effect (Yates v South Kirkby Collieries Ltd [1910] 2 KB 538; Anderson Meat Packing Co Pty Ltd v Giacomantonio [1973] 47 WCR 3). Whether a worker has suffered a physiological effect will depend on the nature and severity of his or her symptoms. Such an effect may be experienced as a result of a specific event, or it may develop over time as a result of exposure to multiple events [247].

20. Given the medical opinions, and the nature and severity of the appellant’s symptoms as they developed over time, it was clear that the appellant had suffered a physiological effect. However, it was unclear exactly when she suffered that effect. While it was arguable that it occurred on 3 June 2010, the Deputy President concluded that, given the way the condition evolved, the better view was that the condition is more accurately characterised as a disease and that the provisions of s 4(b) apply [248].

21. Whichever approach is taken makes no difference to the outcome because the terms “personal injury” and “disease” are not mutually exclusive (Zickar v MGH Plastic Industries Pty Ltd [1996] HCA 31; 187 CLR 310) [249].

22. The evidence presented by the respondent suggested that the appellant suffered a physiological effect (and therefore a personal injury) on or about 3 June 2010 as a result of being told at work of the suicide death of Ms AQ [251].

23. However, it was not accepted that the appellant’s condition was caused solely by the suicide and, on the balance of probabilities, the better view was that it was contracted gradually as a result of multiple events, and the disease provisions applied. If that conclusion was wrong, and the appellant suffered a personal injury on 3 June 2010 when she was told of the suicide, the Deputy President was satisfied that it would make no difference to the result and the appellant was still entitled to succeed [262].

Was the appellant’s psychological condition a disease contracted by a gradual process?

24. There can be no doubt that a recognised psychological condition (such as major depression or PTSD) is a disease (see Federal Broom Co Pty Ltd v Semlitch [1964] HCA 34; 110 CLR 626 (Semlitch); Darling Island Stevedoring & Lighterage Co Ltd v Hussey [1959] HCA 55; 102 CLR 482; International Exports Pty Ltd v Barrow [2007] NSWCA 244; 5 DDCR 247) [264]-[266].

25. Based on the medical evidence, in particular one qualified doctor’s evidence that the condition “evolved gradually” from what may have been a normal reaction to the death into a “more pathological state”, the appellant’s major depressive disorder was found to be a disease of a gradual process to which ss 4(b)(i) and 15 of the 1987 Act applied [268].

Was the disease contracted by the appellant in the course of her employment and was employment a contributing factor?

26. The appellant’s major depressive disorder was contracted gradually in the course of her employment and her employment was a contributing factor to the contraction of that disease. In other words, she suffered a disease injury under s 4(b)(i) of the 1987 Act [298].

Was employment a substantial contributing factor to the injury?

27. Employment will be a substantial contributing factor to the injury if its contribution was “real and of substance” (Badawi). It is not sufficient that the injury was received in the course of the employment or that it arose out of the employment [302].

28. The term “employment” includes all its elements, “its nature, its conditions, its obligations and its incidents” (Thom v Sinclair [1917] AC 127; applied in Smith v Australian Woollen Mills Ltd [1933] HCA 60; Favelle Mort Ltd v Murray [1976] HCA 13). It includes “some incident or state of affairs to which the worker was exposed in the performance of his duties and to which he would not otherwise have been exposed” (Semlitch per Kitto J at 633) and “some characteristic of the work or the conditions in which it was performed” (Semlitch per Windeyer J at 641). One starts with the actual and not the hypothetical, with what the worker was in fact doing in his or her employment that caused or contributed to the “injury” as defined in s 4 (Mercer v ANZ Banking Group [2000] NSWCA 138 (Mercer) at [13]; cited in Pioneer Studios Ltd v Hills [2012] NSWCA 324 at [29]) [303].

29. When “employment” was viewed in light of the above authorities, the connections between the injury and the employment were considered real and of substance:

(a) both the appellant and Ms AQ were police officers and were both required to carry firearms in the course of their duties;

(b) the handling of the gun and ammunition happened in the course of their duties and was incidental to those duties;

(c) the appellant was informed of the death at work in the course of her employment, and

(d) all of the other events relied on (save for one) occurred in the course of or arose out of the appellant’s employment. [304].

30. The appellant’s employment was a substantial contributing factor to the contraction of her major depressive disorder. While employment only has to be a substantial contributing factor, it was the substantial contributing factor to the injury [317].

What was the deemed date of injury?

31. Where the injury is a disease which is of such a nature as to be contracted by a gradual process, the injury is deemed to have happened at the time of the worker’s death or incapacity (s 15(1)(a)(i)). The incapacity referred to is the “incapacity for which compensation is claimed” (GIO Workers Compensation (NSW) Ltd v GIO General Ltd (1995) 12 NSWCCR 187 per Sheller JA at 195F–G (Priestley and Clarke JJA agreeing); P & O Berkeley Challenge Pty Ltd v Alfonzo [2000] NSWCA 214; 49 NSWLR 481; 20 NSWCCR 554 at [24]) [318].

32. The incapacity for which the appellant first claimed compensation started on 22 September 2011 when the appellant’s first initial WorkCover certificate was issued, certifying her unfit from that date, and that was the deemed date of injury [319].

Did the appellant also suffer an aggravation injury under s 4(b)(ii)?

33. In determining if a worker has suffered an aggravation injury, it is necessary to ask the four questions posed by Windeyer J in Semlitch at 638, namely:

(a) Was the appellant suffering from a disease?

(b) If so, was there an aggravation, acceleration, exacerbation or deterioration of it?

(c) If so, was the appellant’s employment a substantial contributing factor to the aggravation, acceleration, exacerbation or deterioration?

(d) If so, did incapacity for work result from such aggravation, acceleration, exacerbation or deterioration? [321]

34. The appellant was suffering from a disease [322]. Having regard to the history, the appellant suffered an aggravation of her major depressive disorder as a result of the incidents that occurred in 2011, which clearly made the symptoms of her disease more grave and more serious in its effects on her. There being no other causes of the aggravation injury, the appellant’s employment was a substantial contributing factor to the aggravation [330].

35. The incapacity for which the appellant first claimed compensation in respect of the aggravation injury occurred on 4 November 2011 and that was the deemed date of injury. The effect of the aggravation was continuing. Even if the effect of the aggravation had ceased, the effect of the s 4(b)(i) injury was clearly continuing [331].

Alternative Finding 

36. If the conclusion that the injury was a disease that was contracted by a gradual process was wrong, and the better view was that the appellant suffered a personal injury on or about 3 June 2010, or that the disease was contracted on 3 June 2010, then the injury was received in the course of the employment and arose out of it, and employment was a substantial contributing factor to it [332]. That is because the injury was not solely caused by the death per se, or by the receipt of the news of the death in the course of the appellant’s employment. It was caused, on this alternative finding, by a combination of the receipt of the news at work and the fact that the appellant had, in the course of her employment, handled the gun and, in particular, the ammunition that Ms AQ used to take her life [333].

Conclusion

37. The Senior Arbitrator erred in her approach and conclusions on liability. It was determined that the appellant had suffered a s 4(b)(i) injury, that is, a disease contracted in the course of her employment and to which her employment was a contributing factor, and a s 4(b)(ii) aggravation injury. Her employment was a substantial contributing factor to the injuries. The deemed date of injury for the s 4(b)(i) injury was 22 September 2011 and for the s 4 (b)(ii) injury was 4 November 2011 [335].

(a) Mr Clarke was totally incapacitated, and

(b) Mr Clarke’s relevant current weekly wage rate was $1,287 per week, when the appellant argued it should have been $973.43 per week.

Held: The Arbitrator’s determination was confirmed subject to amendment of quantum of entitlement. 

Weekly wage rate

1. Mr Clarke conceded that his relevant current weekly wage rate was $973.43 per week and not $1,287 per week [11].

2. With respect to the appellant’s application seeking admission of the industrial award, it was noted that such award operates under the relevant Commonwealth FairWork legislation and is material of which the Commission may take notice and from which it may inform itself: s 354(2) of the 1998 Act. In the circumstances, the application made pursuant to s 352(6) concerning the award was rejected [14].

Mr Clarke’s application

3. Mr Clarke sought leave to tender fresh or additional evidence identified as clinical notes of Concord Repatriation General Hospital. Having regard, to the outcome of the appeal it was determined that there was no need to consider the admission of that evidence, and therefore Mr Clarke’s application was refused [15]-[17].

The Arbitrator’s finding of total incapacity 

4. The question as to the extent of incapacity, that is whether it be partial or total incapacity, is essentially one of fact. It was thus necessary, to succeed on appeal, that the appellant establish that the conclusion reached by the Arbitrator was wrong. Such error may be established by showing, as stated by Barwick CJ in Whiteley, Muir & Zwanenberg Ltd v Kerr (1996) 39 ALJR 505 (at 506) that:

“material facts have been overlooked, or given undue or too little weight in deciding the inference to be drawn: or the available inference in the opposite sense to that chosen by the trial judge is so preponderant in the opinion of the appellate court that the trial judge’s decision is wrong.” [29]

5. Having regard to the medical evidence it was open to inference from the evidence of Dr Giblin that Mr Clarke, as a result of injury, was totally incapacitated. It was clear that the certificate issued by Dr Chara was issued by reason of an express request made by Mr Clarke. In such circumstances the probative value of that certificate was open to question. It was clear that the Arbitrator rejected the certification of fitness as evidenced by that certificate. So far as the certificate of Dr Tang was concerned, it was clear that at the date of the issue of that certificate he was of the view that Mr Clarke was greatly restricted in terms of work capacity. Dr Miniter also stated in his report, dated 17 April 2012, that “[Mr Clarke] is not currently fit for employment and needs to see either a neurosurgeon or an orthopaedic spinal surgeon to have this matter resolved” [36].

6. The Deputy President was unable to accept the appellant’s submission that a concession of partial incapacity may be inferred from anything stated by counsel during the course of the hearing before the Arbitrator [37].

7. The conclusion reached by the Arbitrator with respect to total incapacity was one open on the evidence and the appellant had failed to make out any relevant error. Whilst it was true that the Arbitrator’s reasons for her conclusion were stated very briefly, no complaint was made on this appeal concerning the sufficiency of Reasons as they appear in the Arbitrator’s determination. Having regard to the state of the evidence, the Arbitrator’s conclusion could not be criticised and was consistent with those matters stated by the Court of Appeal in the matter of Lawarra Nominees Pty Ltd v Wilson [1996] NSWSC 584; (1996) 25 NSWCCR 206 (at 213-214) [38].