Zanardo & Rodriguez Sales & Services Pty Ltd v Tolevski [2013] NSWCA 449

Court of Appeal

17 December 2013

WORKERS COMPENSATION - dispute over proposed treatment - whether referral to AMS mandatory before dispute determined - construction of the 1987 Act, s 60(5) - no basis for departing from ordinary grammatical meaning

Facts:

Mr Tolevski suffered a fall while working for Zanardo & Rodriguez Sales & Services Pty Ltd and injured his left knee. His claim for workers compensation was accepted. Mr Tolevski began to experience symptoms in both hips which he claimed was precipitated by the fall. As a result, Mr Tolevski requested approval for bilateral hip replacement surgery, as recommended by his orthopaedic surgeon. That request was refused on the basis that there was no causal connection between the condition of his hips and the injury suffered in 2007.

A Commission Arbitrator found that Mr Tolevski had not discharged the onus of proving that he suffered from a consequential condition in his hips as a result of the original injury to his knee. He found in favour of the respondent.

Mr Tolevski appealed. The question on appeal was whether it was mandatory under s 60(5), to refer every dispute to an AMS under Part 7 (Medical Assessment) of Chapter 7 of the Act where the dispute concerned a claim for future medical treatment. The President concluded that referral is mandatory in such cases. The Arbitrator's decision was revoked and the matter was remitted for referral to an AMS in accordance with s 60(5) of the 1987Act.

An appeal to the Court of Appeal was lodged on the basis that the President erred in “holding that it was mandatory to refer to an AMS the dispute or disputes between the parties before determining causation”.

Held: Appeal dismissed.

Leeming JA (Beazley P and Tobias AJA agreeing)

Section 60 of the 1987 Act

1. Section 60(1) is an indemnity provision, imposing an obligation on the employer to pay the cost of the treatment or service or related travel expenses: New South Wales Sugar Milling Co-operative v Manning [1998] NSWCC 33; (1998) 44 NSWLR 442. Subsections (2), (2A), (2B), (2C), (3) and (4) qualify and amplify the statutory indemnity in sub-s (1). Subsection (5) is of a different character. It expands the authority of the Commission to decide disputes about prospective treatment and was enacted in response to Widdup v Hamilton [2006] NSWWCCPD 258; (2006) 5 DDCR 85 (Widdup) where it was held that the Commission did not have the power to determine disputes concerning future medical treatment [12].

Construction of s 60(5)

2. As a matter of statutory construction, the starting point must be the text (Commission of Taxation v Unit Trend Services Pty Ltd [2013] HCA 16; (2013) 87 ALJR 588; Bindaree Beef Pty Ltd v Riley [2013] NSWCA 305) [17].

3. Section 60(5) expands the jurisdiction of the Commission to extend to disputes about prospective treatment. "Any such dispute" in the second sentence of sub-s (5) is a reference to the class of disputes identified in its first sentence, namely, the new class of disputes concerning proposed treatment, which otherwise were outside the Commission's jurisdiction [18].

4. The proposition that there are some disputes (such as those confined to causation) to which the second sentence of sub-s (5) does not apply, leads to one of two unattractive consequences. Either those disputes do not fall within the first sentence of sub-s (5), or else "Any such dispute" means something less than the entire class of disputes falling within the first sentence of the subsection [19].

5. The ordinary literal meaning of "Any such dispute" is that it means every such dispute, and not merely disputes confined to particular issues (such as causation). The grammatical meaning of s 60(5) is unambiguous [22].

6. The amendment introducing s 60(5) ameliorated the situation in Widdup, but it did so in qualified terms. In construing sub-s (5), considerations of the overriding object of improving the speed at which medical treatment is obtained did not assist. Nor did the principle that where two constructions of the Act are available, that which favours the worker should be preferred: see Construction Forestry Mining & Energy Union v Mammoet Australia Pty Ltd[2013] HCA 36; (2013) 87 ALJR 1009 at [40] [24].

7. The text of s 60(5) is controlling. There is no sound basis for departing from its ordinary grammatical meaning. It is far from irrational for the new power to determine disputes about payment for the (necessarily uncertain) expenses for future medical treatment to be qualified by there having been an assessment by an AMS [25].

8. That conclusion is supported by the regulation-making power, which was inserted in sub-s (5) and permits its mandatory operation to be displaced. (That power had not been exercised.) Further, the fact that the regulation-making power had been enacted was a corroborating indication that the second sentence of sub-s (5) otherwise operates invariably [26].

9. Section 60(5) operates differently from and independently of s 321. It is not discretionary, but mandatory, and it is not a referral of a "medical dispute" but of the new class of dispute, not otherwise within the jurisdiction of the Commission, namely, "a dispute about compensation payable under [s 60] concerning any proposed treatment or service and the compensation that will be payable under this section in respect of any such proposed treatment or service" [29].

10. The applicant suggested that it was better to characterise the dispute as being as to causation, as opposed to a dispute as to the proposed bilateral hip replacement; he emphasised that there was nothing to indicate that the parties were in dispute as to the treatment, but merely whether it was causally connected to the injury in the workplace. That submission was not well-founded for the following two reasons [30].

11. The first was that it is no answer to a statutory command to refer a class of disputes to assessment to say that the particular dispute is better described by different language. The only safe approach is to ask whether the particular dispute answers the statutory description. The statutory language does not discriminate as to the various reasons for the dispute; it merely asks whether there is a dispute which "concerns" "any" proposed treatment [31].

12. The second reason was that one could imagine a case where the dispute extended not merely to whether the condition was causally connected with the injury, but also as to the appropriateness of the proposed treatment. Disputes, one of whose elements is causation, are not antithetical to being referred pursuant to s 60(5) [32].

13. The applicant accepted that the practices of those involved in administering the regime could not control its legal meaning; there is no room in the Australian legal system for deference to the construction of legislation given by executive agencies: Enfield City Corporation v Development Assessment Commission [2000] HCA 5;(2000) 199 CLR 135; cf Chevron USA Inc v Natural Resources Defense Council Inc [1984] USSC 140; 467 US 837 (1984). Even if that was not so, the fact that a construction of the statute alters the familiar processes in the Commission carries very little weight where, as in the present matter, a new head of jurisdiction is being conferred, which operates in a very different way - by means of mandatory referral of something which is not (or at least need not be) a "medical dispute" as defined in s 319. The previous practice of discretionary referral under s 321 says nothing as to the proper construction of s 60(5) [33].

14. While the above resolved the question of construction, the Court added the following reasons [34].

15. It is not clear that questions of causation are foreign to "medical disputes" (s 319) in any event, or that there is utility in appealing to a dichotomy between liability disputes and medical disputes. While this point was not decided, the Court said that the language of causal connection which is squarely within both the definition of "medical dispute" and the conclusive effect of s 326 suggests that it may be best to avoid speaking in generalities to the effect that "issues of liability" are matters for the Commission and "medical issues" are for an AMS. Still less is it helpful to refer to "primary causation" and "secondary causation". Commonsense suggests that there is not a bright line delineating causation from medical evidence. Issues of causation often involve disputed medical opinions. Thus, in the present case the decision of the Arbitrator was based upon his evaluation of the medical evidence which had been tendered by the parties (and where, as the recommendation of Mr Tolevski's orthopaedic surgeon revealed, he did not shrink from expressing an opinion as to causation). That tends to emphasise that there is nothing antithetical in the Commission making determinations of this nature informed, in addition, by the opinion of an AMS [35].

16. It followed that the Presidential Member was right to set aside the Arbitrator's decision. He referred to what the High Court said in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) [2009] HCA 41; (2009) 239 CLR 27 as to the starting point being the ordinary and grammatical sense of the statutory words having regard to their context and legislative purpose. He was correct to proceed on that basis [37].

Bina v ISS Property Services Pty Limited [2013] NSWWCCPD 72

Journey claims; meaning of “real and substantial connection” s 10(3A) of the Workers Compensation Act 1987; injuries arising out of employment; principles of statutory interpretation

Keating P

19 December 2013

Facts:

The appellant, Ana Filicia Bina is employed by the respondent, ISS Property Services Pty Limited (ISS), as a cleaner at Guildford West Public School (the school). At the time of her injury she worked a broken or split shift. Her normal hours of work were 5.30 am-8.00 am and 3.00 pm-6.30 pm on weekdays.

Ms Bina regularly drove a motor vehicle to and from her place of employment. At 8.20 am on 27 July 2012 she was driving a motor vehicle from the school to her home, when her vehicle was involved in a collision with another vehicle. She suffered multiple injuries as a result of the accident, and as a consequence was unable to return to her employment.

Ms Bina made a claim against ISS for weekly compensation benefits from the date of the accident. ISS declined liability principally for the following reasons:

• the injury did not arise out of or in the course of employment, and
• the injuries sustained in the motor vehicle accident on 27 July 2012 had no real and substantial connection to Ms Bina’s employment (s 10(3A) of the 1987 Act);

The Arbitrator entered an award for the respondent. He was not satisfied that the injury arose out of Ms Bina’s employment, and was not satisfied that there was a real and substantial connection between the employment and Ms Bina’s accident or indeed any connection. Ms Bina appealed the Arbitrator’s determination.

The issues in dispute on appeal were whether:

• the subject accident arose out of Ms Bina’s employment with ISS, and
• there was a real and substantial connection between the subject accident and Ms Bina’s employment.

Held: The Arbitrators determination was confirmed.

Did the injury arise out of the employment – s 4?

1. The argument before the Arbitrator proceeded, in part, on the basis that it was unnecessary for Ms Bina to invoke s 10 as her injuries fell within the definition “injury” in the 1987 Act as they arose out of her employment within the meaning of s 4 of the 1987 Act [54].

2. The Arbitrator was correct to observe that it is beyond dispute that the phrase “arising out of the employment” requires a causal connection with the employment (Zinc Corporation v Scarce (1995) 12 NSWCCR 556; Badawi v Nexon Asia Pacific Pty Ltd t/as Commander Australia Pty Ltd [2009] NSWCA 324 (Badawi) [56]-[58].

3. The test in relation to causation discussed in Kooragang Cement Pty Ltd v Bates (1994) 35 NSWLR 452; 10 NSWCCR 796 makes it clear that the issue of causation is a question of fact. What is required is a commonsense evaluation of the causal chain. The test is not the proximate cause test or the “but for” test [61].

4. The Arbitrator’s identified and applied the correct causal connection test to his consideration of whether the injuries sustained by Ms Bina during the journey arose out of her employment. He concluded that the mere fact that a worker must travel to or from work, of itself, does not establish a causal connection between her injury and the activities of, or incidental to, her employment. There was no causal relationship between Ms Bina’s employment and her injury [62].

5. It followed that the appellant’s complaints that the Arbitrator failed to take into account relevant facts and apply them to the legal principles failed. The Arbitrator considered, consistent with Smith v The Australian Woollen Mills Limited [1933] HCA 60; (1933) 50 CLR 504, whether it was any part of Ms Bina’s employment to hazard, to suffer, or to do that which caused her injury, and correctly answered that question in the negative [65].

6. The Arbitrator was correct to observe that if injuries sustained during the course of a journey to or from work arose out of the employment, there would have been no need to enact the journey provisions and those provisions would be superfluous [67]. By making that observation in the form of a rhetorical question the Arbitrator was doing no more than acknowledging that the express statutory provisions in s 10 must be given meaning and effect (Commonwealth v Baume [1905] HCA 11; 2 CLR 405) [67]-[68].

7. The Arbitrator’s conclusion that Ms Bina’s injury did not arise out of the course of her employment did not disclose any error [69].

Real and substantial connection between the employment and the injury – s 10(3A)

Approach to statutory construction

8. As a general principle of statutory construction, legislation is to be read according to the plain ordinary and natural meaning of its words, having regard to the context and purpose of the particular provision (Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; 239 CLR 27; OV & OW v Members of the Board of the Wesley Mission Council [2010] NSWCA 155; Norrie v NSW Registrar of Births Deaths and Marriages [2013] NSWCA 145) [91]-[94].

9. Every passage in a document must be read as part of the whole instrument. Therefore, the word by word dictionary analysis in Mitchell v Newcastle Permanent Building Society Limited [2013] NSWWCC 371 (Mitchell) is not the preferred approach to statutory interpretation. However, the President did not consider that the adoption of the Mitchell approach made any difference to the result in the present case, or in Mitchell itself [97].

Section 10(3A)

10. The word “connection” is wide and imprecise (Australian National Railways Commission v Collector of Customs (SA) [1985] FCA 312; 69 ALR 367). The phrase “in connection with” has been held, in an entirely different context to the one before me, to be capable of describing a spectrum of relationships ranging from the direct and immediate to the tenuous and remote (Collector of Customs v Pozzolanic Enterprises Pty Ltd [1993] FCA 456; 115 ALR 1) [100].

11. Considering the whole of the relevant phrase in s 10(3A), and the provision as a whole, and interpreting it so that it works in harmony with the other provisions of the Act, the Arbitrator’s analysis was correct, and was not inconsistent with Commissioner for Superannuation v Benham (1989) 22 FCR 413 or Phillips v Commissioner for Superannuation [2005] FCAFC 2. Section 10(3A) talks about a real and substantial connection with the employment. The mere fact that the worker was driving to and from work does not provide that connection. However, for a worker to succeed, he or she does not have to prove that the accident was caused by the employment. If the employment caused the accident then, depending on the circumstances, there is every likelihood that the accident arose out of the employment, and there will be no need to rely on the journey provisions [101].

12. The Arbitrator expressed no concluded view on whether satisfaction of s 10(3A) involved a causative element. He merely and correctly observed that the test in s 9A involves a test of causation of injury, whereas, the word “connection” in s 10(3A), may, but does not necessarily, convey the notion of a causal relationship [102].

Conclusions and application

13. The President agreed with the Arbitrator’s essential conclusions:

• that a substantial connection is one “of substance” (Badawi);
• that “employment” in s 10(3A) is the same as in s 9A, that is, it is the activities of, or incidental to the employment, as opposed to the (mere) fact of being employed (Federal Broom Co Pty Ltd v Semlitch [1964] HCA 34);
• the mere fact that a worker must travel to and from work is insufficient to establish a real and substantial connection between the employment and the accident - there must be some real relationship (connection) between the activities of the employment and the accident out of which the personal injury arose, and
• if merely travelling to and from work was sufficient to establish the relevant connection, s 10(3A) would be otiose [112]

14. Applying the rules of statutory construction it is important to construe s 10(3A) in a way that best achieves a harmonious result with the whole of the 1987 Act: Commissioner of Police v Eaton [2013] HCA 2 [113].

15. To achieve a harmonious result and a consistent interpretation of the legislation as a whole in the instant case, it is appropriate to consider, as the Arbitrator did, the meaning of “substantial connection” and “employment” by reference to the interpretation of those words in s 9A and s 4 of the 1987 Act, respectively. This interpretation follows not from a word by word analysis of the provision, but from “the ordinary and grammatical sense of the statutory words having regard to their context and legislative purpose”: Zanardo & Rodrigues Sales & Services Pty Ltd v Tolevski [2013] NSWCA 449. This may involve a causal relationship between the employment and the accident, but that is not necessarily so [114].

16. There was no connection between Ms Bina’s accident and her employment, other than the fact that, at the time of the accident, she was driving home from her place of employment. That did not provide a real and substantial connection between her employment and the accident [115]

17. It is not a question of whether the journey has arisen out of the employment, but whether there is a real and substantial connection between the employment and the accident out of which the injury arises. If the injury arose out of the employment (in the sense that as a matter of common sense it was caused by the employment) the worker may well have satisfied the “arising out of” test in s 4 without the need to rely on s 10. However, if the injury did not satisfy the arising out of test, it is possible, depending on the facts, that it may satisfy the s 10(3A) test [116].

18. Section 10(3A) has work to do. Its purpose is found in the words used in the subsection, read in the context of the 1987 Act as a whole. The purpose of the provision is to ensure that injuries received in the circumstances provided for are injuries that are deemed to arise out of or in the course of employment and compensation is payable accordingly. The subsection will usually be satisfied, depending on the facts, when there is a real and substantial connection between some feature of what the worker is reasonably required, expected or authorised to do, by reason of his or her employment, and the accident or incident out of which the personal injury arose [117].

19. The Arbitrator’s conclusions made it perfectly clear that he did not accept that the fact that Ms Bina was travelling home from work when the accident happened was sufficient (on its own) to satisfy the provisions of s 10(3A). As is usually the case when a worker finishes his or her work for the day, Ms Bina was free to spend the time between shifts as she pleased. The evidence merely established that it was her practice to travel home between shifts [118].

20. The Arbitrator considered but correctly rejected the fact of a lack of convenient public transport, or that Ms Bina was working a split shift and making two journeys to and from work each day, were sufficient to bring her within the terms of provision. Therefore the submission that the Arbitrator’s Reasons failed to make clear which facts he took into consideration when applying the test in s 10(3A) could not be sustained. It followed that the submission Ms Bina was denied procedural fairness was also rejected [119].

21. Whether, and in what circumstances, s 10(3A) will be satisfied will be a question of fact, applying the words of the provision, in a commonsense and practical manner in each case (The State of South Australia v Brophy (1997) 68 SASR 97) [120].

22. For the above reasons it was open for the Arbitrator to conclude that at the time of the accident there was no real and substantial connection between Ms Bina’s employment and the accident out of which the personal injury arose [121].

BlueScope Steel Ltd v Markovski [2013] NSWWCCPD 69

Psychological injury; whether injury wholly or predominantly caused by reasonable action with respect to transfer; s 11A of the 1987 Act; right to cross appeal

Roche DP

17 December 2013

Facts:

The respondent worker worked with the appellant employer driving cranes. He alleged that he suffered a psychological injury (Adjustment Disorder with anxiety) on 5 January 2012 as a result of being “treated less favourably than other workers following a work injury”. The work injury was an injury to the worker’s right shoulder in November 2004, which required surgery on 24 February 2010 and extensive rehabilitation.

After the surgery, the worker returned to work on selected duties, but was unable to operate all cranes. The employer held several meetings in 2010 and 2011 to assist the worker return to his pre-injury duties. Certain issues arose during those meetings, with the worker believing that he was being treated differently and unfairly compared to other injured workers. After modifications to one of the cranes in about December 2011, which were made to accommodate the worker’s restrictions, he was able to operate all cranes, though he did not have a formal medical clearance to do so.

Due to a reduction in steel production and a subsequent number of voluntary redundancies, it was necessary to distribute the remaining workers across the four crews in the Slab Yard. Though a qualified worker volunteered for the transfer to another crew, the worker’s manager decided to transfer the worker instead. The worker was informed of that decision in a meeting held on 5 January 2012, following which he suffered a panic attack.

The employer disputed liability on the ground that the worker had not suffered a psychological injury to which his employment was a substantial contributing factor. In the alternative, if the worker had suffered an injury, the employer argued that the injury was wholly or predominantly caused by reasonable action taken, or proposed to be taken, by or on behalf of it with respect to the transfer.

The Arbitrator found that the worker had sustained a psychological injury on 5 January 2012 in the course of his employment with the appellant and to which his employment was a substantial contributing factor. The Arbitrator also found that the employer’s actions with respect to the transfer were “not unreasonable”. However, he was not satisfied that the actions of the appellant with respect to the transfer were the whole or predominant cause of the onset of the psychological injury and, as a result, the employer’s s 11A defence failed. The employer challenged the Arbitrator’s finding on causation.

The worker argued that, if the employer’s appeal against the causation issue succeeded, he was still entitled to retain the award in his favour because the Arbitrator erred on the reasonableness issue. The employer opposed the worker arguing the reasonableness issue, primarily because it was not an issue in “reply” to the appeal. While there is no provision for a cross appeal, it was determined that the worker’s challenge could be determined on appeal (s 354(1) of the 1998Act, r 1.6(2) of the 2011 Rules).

The issues in dispute on appeal were whether:

• the Arbitrator erred in his conclusion that the employer had not established that the whole or predominant cause of the worker’s psychological injury was action taken, or proposed to be taken, with respect to his transfer, and
• the action taken, or proposed to be taken, was reasonable.

Held: The Arbitrator’s determination was confirmed.  

Causation

1. The Arbitrator erred in determining the causation issue (in the context of s 11A) on a basis that the parties never argued, it having been conceded by the worker’s counsel at arbitration that the injury had been caused by the meeting on 5 January 2012. As that meeting only dealt with the worker’s transfer, and as the worker did not suggest any other cause, the whole and predominant cause was not an issue for the Arbitrator to determine (Workers Compensation Nominal Insurer v Al Othmani [2012] NSWCA 45; Seltsam Pty Ltd v Ghaleb; [2005] NSWCA 208) [125].

2. The Arbitrator’s main reason for finding that he was not satisfied that action with respect to transfer was not the predominant cause of the injury appeared to have been that there were “other causes” that played a role [126]. An assessment of those “other causes” demonstrated that the Arbitrator’s determination on causation could not stand and required re-determination [135].

3. The test of causation in workers compensation matters is the commonsense test, not the proximate cause test or the but for test (March v E & MH Stramare Pty Ltd[1991] HCA 12; 171 CLR 506; Kooragang; Zinc Corp Ltd v Scarce (1995) 12 NSWCCR 566). This test must be applied by reference to the statutory subject, scope and purpose (Allianz Australia Insurance Ltd v GSF Australia Pty Ltd [2005] HCA 26; 221 CLR 568). Scientific certainty is not required, but the decision maker must feel actual persuasion of the occurrence or existence of the fact in issue before it can be found (N O M v DPP [2012] VSCA 198) [136].

4. It is accepted that the meaning of “predominantly caused” is “mainly or principally caused” (Ponnan v George Weston Foods [2007] NSWWCCPD 92) and that the employer carries the onus of proof (Department of Education and Training v Sinclair [2005] NSWCA 465(Sinclair); Commissioner of Police v Minahan [2003] NSWCA 239 at [25]; [2003] NSWCA 239; 1 DDCR 57) [137].

5. The evidence led to only one conclusion, namely, that the worker’s psychological injury was wholly or predominantly caused by the employer’s actions on 5 January 2012 with respect to the proposed transfer of the worker [138].

6. First, while the worker demonstrated episodes of irritability and frustration in 2010, and at meetings in 2011, there was no satisfactory evidence that the events that caused his frustration caused his psychological injury [139].

7. Second, the worker had no time off work and sought no treatment for emotional symptoms before 5 January 2012. However, while such matters are relevant they are far from determinative and it is necessary to consider the whole of the evidence. There will be many cases where, depending on the evidence, a failure to have time off work, or seek medical treatment, will be of little relevance in determining the whole or predominant cause of a psychological injury [140].

8. Third, the medical evidence supported the conclusion that, as a matter of commonsense, the events on 5 January 2012 were the whole or predominant cause of the psychological injury [143].

9. While it was accepted that the panic attack occurred on a background that the worker felt that, since his surgery, management had singled him out, even if it was accepted that the background made the worker more vulnerable, it did not detract from the meeting being the main or principal cause of the injury [147].

10. It followed that, given the medical histories, the “shock” the worker said he felt when he attended the meeting, his dramatic and immediate physiological reaction to being told that he was to be transferred, the reference to dreams about the manager (which clearly related to the meeting), his reference to the distress that everything had been done voluntarily (except for him), his reference to the unfairness of it (the meeting and the transfer), the compelling conclusion was that the action with respect to transfer in the meeting on 5 January 2012 was either the whole, or, more likely, the predominant cause of the psychological injury. That action consisted of the way the meeting was convened and the way the worker was told of the decision to transfer him and not the worker who had volunteered [148].

Reasonableness

11. Dealing with the first issue argued by the worker, it was not accepted that the Arbitrator did not consider if the decision to transfer the worker (as opposed to the action with respect to the implementation of that decision) was reasonable. The Arbitrator took into account the “whole chain of events” leading up to the meeting on 5 January 2012, including what he regarded as the worker’s “disturbed state psychologically throughout 2010 and 2011”. While he did not expressly say that the decision to transfer was reasonable, the compelling inference was that that was his view [161].

12. If the Arbitrator failed to properly consider whether the decision to transfer was reasonable, the Deputy President did not accept the submission that that decision was not reasonable. The submission on this point merely identified background matters to the decision to select the worker for the transfer. They were relevant to the reasonableness of the implementation of the decision, but those matters, considered either individually or together, did not establish that the decision to transfer the worker was not reasonable [162].

13. On the second issue, failing to consider relevant evidence, the appellant made the same submission as he made on the first issue, namely, that the Arbitrator failed to consider whether it was reasonable to transfer the worker at all. It was not accepted that the Arbitrator made that error, and if he did, it did not affect the result [165].

14. The third issue related to the implementation of the decision to transfer and whether giving the worker any notice of the meeting would have made any difference [166].

15. The Arbitrator erred in stating that to adopt the course suggested in Shore v Tumbarumba Shire Council [2013] NSWWCCPD 1, namely, giving notice of a meeting at which the transfer would be discussed, would have put the worker in a more stressful position. The evidence was to the contrary. The Arbitrator’s comment ignored the positive outcome from a meeting on 11 February 2011, which took place after the worker had received notice of the purpose of the meeting and had the opportunity to have a union delegate and a co-worker present. While there was no direct evidence that the meeting had a positive outcome because of these matters, that was the compelling inference when one considered the outcome of that meeting compared to the meetings just one month earlier when the worker had no support person and had not been given notice of the agenda [171].

16. The fourth point was that the Arbitrator considered irrelevant evidence, namely, whether there was misconduct [172]. As the Arbitrator noted, there was no suggestion of misconduct by the worker. Therefore, the suggestion that someone not accused of misconduct, such as the worker, should be given less procedural fairness than a person accused of misconduct (as the Arbitrator wrongly believed Mr Shore had been) was illogical and erroneous. That there was no suggestion of misconduct by the worker was therefore not relevant to the determination and the Arbitrator erred in considering it [174].

17. The fifth point was that the Arbitrator failed to weigh the evidence on the reasonableness of the decision to transfer the worker. It was not accepted that the Arbitrator only looked at the reasonableness of the communication of the decision to transfer. Nor was it accepted that the decision to transfer was not reasonable [175].

18. The sixth point was that the Arbitrator erred in his statement that the worker had used the grievance procedure effectively, before 5 January 2012, and subsequently. The Arbitrator erred in making that statement when assessing whether the employer’s actions with respect to the transfer were reasonable. Given that he referred to the grievance process, or grievance procedure, on three occasions, and referred to steps the worker could take if he felt “aggrieved at the decision”, it was clear that it played an important part in his consideration of the issue and in the determination [182].

19. The seventh point was that the Arbitrator applied the wrong test when he said that, the decision to call the worker to a meeting to explain to him the decision was “not unreasonable”, having regard to the alternatives [183].

20. To succeed with a defence under s 11A, an employer must establish that the psychological injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer with respect to, in this case, transfer. The statute does not require “that the action be demonstrated to be ‘unreasonable’ in order for the claimant to succeed, but rather ... that compensation will not be payable if the action were ‘reasonable’” (Jeffery v Lintipal Pty Ltd [2008] NSWCA 138) [184]. It followed that, the extent the Arbitrator approached the question by reference to whether the employer’s actions were “unreasonable”, he erred [185].

21. Last, it was argued that the Arbitrator erred in failing to weigh the worker’s rights against the employer’s objectives, as required by v Director General of School Education (unreported, Compensation Court of NSW, Geraghty CCJ, 18 June 1998, No 14068 of 1997) (Irwin). The Arbitrator looked at the alternatives available to the employer and concluded that the approach taken was not unreasonable. That did not comply with the accepted approach to matters of this kind [187].

22. The test of reasonableness is one of fairness, having regard to the rights of the employee and the objectives of the employer. The employer’s objective was to arrange its workforce in the most effective way to meet its business needs and to ensure the efficient running of the Slab Yard. To that end, it decided to transfer the worker [194].

23. Weighing the rights of the worker against the employer’s objectives, and having particular regard to the events in 2010 and 2011, the employer’s actions with respect to the implementation of the decision to transfer the worker were not reasonable. This conclusion was largely, but not exclusively, based on the failure to give the worker any notice of the meeting at which he was told of the transfer, and on the way the meeting was conducted, which included the failure to give the worker the opportunity to have a support person present [195].

24. Even though the decision to transfer the worker was reasonable, viewing the “whole process”(Sinclair), particularly the action with respect to the implementation of transfer on 5 January 2012, which was the predominant cause of the psychological injury, the employer’s actions with respect to the transfer was not reasonable and the s 11A defence was not made out [199].

Karkamaz v Future Form Pty Limited [2013] NSWWCCPD 68

Section 54 and former s 52A of the 1987 Act; requirements of notice of termination of weekly payments; whether such notice brings to an end an award of the Commission; proof of ground upon which such notice is founded

O’Grady DP

3 December 2013

Facts:

This matter concerned the consequences in law of service of a notice by an insurer upon a worker informing him of its intention to discontinue compensation payments. Notice of such intention is required to be given to a worker who has received such payments for a continuous period exceeding 12 weeks: s 54 of the 1987 Act.

On 3 November 2005, the worker had received an injury arising out of and in the course of his employment with the respondent. The Commission entered an award for payment of continuing weekly benefits in respect of the worker’s partial incapacity.

On 17 January 2012, that payment of weekly benefits ceased, as anticipated by the terms of a notice which had been served on 6 December 2011 in accordance with s 54. The worker disputed the validity of the notice before the Commission.

An Application seeking the following relief was then filed in the Commission:

• an order that the insurer’s termination of weekly payments is null and void and of no effect, and
• an order that the worker’s weekly payments be resumed as and from 17 January 2012.

The Commission entered an award for the worker that weekly payments of compensation (under s 40 of the 1987 Act) for the period between 18 January 2012 to 21 January 2012, but found that the worker’s rights to compensation thereafter were abrogated by operation of the repealed s 52A of the 1987 Act (which provided for the discontinuation of weekly payments for partial incapacity after two years).

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

• section 52A could be used by the insurer to terminate an award of weekly compensation of the Commission;
• the failure of the respondent to provide 6 weeks clear notice of termination of payments (as required by s 52A) did not invalidate the notice such that it had no effect, and
• the respondent had a proper and reasonable basis, on the information that it then had, to issue a s 52A notice and erred in allowing the respondent to cure this by reliance upon subsequent evidentiary material.

Held: The Arbitrator’s determination was confirmed.

Ground 1

1. Notice validly served in compliance with s 54, founded upon grounds under s 52A, may have the consequence that entitlement to weekly compensation payments made pursuant to an award of the former Court of Commission is terminated (PCR Plaster Settings Pty Ltd v De Brito [2007] NSWWCCPD 159; Sippel v Carey’s (Tamworth) Pty Ltd [2000] NSWCC 4 (Sippel); Manpower Pty Ltd v Harris [2011] NSWWCCPD 10). The appellant’s submissions that those decisions were “wrongly decided” and that the Arbitrator had erred in his adoption of the reasons found therein were rejected [32].

2. Section 52A has application according to its terms and, subject to proof of matters relied upon in support of termination of continuing payments of compensation in respect of partial incapacity, and following service of a notice pursuant to s 54, such notice has the consequence that the appellant’s right to such payments is terminated (Royal Society Mothers and Babies v Bowers [2000] NSWCA 212; Sippel).

Ground 2

3. It was agreed that having regard to the date of posting of the notice (6 December 2011), and operation of s 76(1) of the Interpretation Act1987, termination of payments on 17 January 2012 had occurred four days short of the six week period specified in s 54 [33].

4. The proper application of s 54 and the consequences of non-compliance by an insurer were considered by the Court of Appeal in BW Esler Services Pty Ltd v Dulhunty [2000] NSWCA 349, where Giles JA said “s 54 does not provide that a discontinuation of payment of compensation is ineffective if no notice or a non-complying notice has been given” [39]-[40]. Giles JA further expressed the view that the former s 54(2) “confers an entitlement to compensation in respect of a discontinuation for which the prescribed period of notice was not given” [41].

5. The 1987 Act makes express provision for correction of any shortfall of payments:            s 54(2). It is that provision which demonstrates that failure to provide the prescribed period of notice is not fatal to the efficacy of the notice. The legislature is not to be taken to have intended to invalidate the notice. A correction as permitted by s 54(2) was correctly made by the Arbitrator in this matter (PCR Plaster Settings Pty Ltd v De Brito (No 3) [2008] NSWWCCPD 82) [43].

Ground 3

6. The appellant alleged that, at the time of service of the relevant notice, the insurer had no evidence nor knowledge of the facts relevant to the ground relied upon for termination of payments and therefore the notice was “defective and invalid” [44].

7. The subject notice contained an extensive and comprehensive statement of matters relevant to the insurer’s “decision to terminate” the worker’s weekly payments. Matters particularised concerned repeated and numerous attempts by the insurer to contact the appellant by post and by telephone, and his failure to communicate concerning his obligations with respect to a return to suitable duties [46].

8. There was no obligation upon the employer to establish “actual knowledge” that the worker was not “suitably employed or seeking suitable employment” at the relevant time. Where an insurer has a basis to conclude that a worker is not “suitably employed” etc, such is sufficient to permit particularisation of such a ground in any notice that may be issued [47].

9. The task before the Arbitrator was to determine whether the existence of the ground at the time of service of the notice had been established. As to the question of onus of establishing relevant facts it was accepted that such was upon the employer (Camilleri v Western Sydney Area Health Service [2000] NSWCC 45; [2000] 20 NSWCCR 499) [48].

10. The facts known to the insurer at the relevant time permitted issue and service of the notice founded upon s 52A. In the absence of evidence at the hearing from the worker concerning matters relevant to the disputed allegation it was open to the Arbitrator to conclude that facts relevant to the ground relied upon by the insurer existed at the relevant time (Hadchiti v New South Wales Police Force (No 1) [2009] NSWWCCPD 87) [50].

Inghams Enterprises Pty Ltd v Lynch [2013] NSWWCCPD 70

Boilermaker’s deafness; notice of injury; notice of claim; procedural fairness; ss 254 and 261 of the 1998 Act; awareness of receipt of injury

Roche DP

17 December 2013  

Facts:

This appeal concerned the notice of injury and notice of claim provisions in ss 254 and 261 of the 1998Act in the context of a claim for compensation for industrial deafness under             s 17 of the 1987Act. The employer did not contest that it was the last relevant noisy employer.

The respondent worker worked as a process worker for the appellant employer until 4 January 2008.

In March 2004, the worker, on the advice of her union delegate, saw her general practitioner and asked to have an assessment for industrial deafness. The worker was referred to a specialist for assessment, who advised that her audiogram was not consistent with noise induced hearing loss.

On 8 July 2011, an audiologist assessed the worker’s hearing and told her that she had industrial deafness for which she could claim compensation and that she should seek legal advice.

On 12 August 2011, the worker saw her solicitor who arranged for an examination with another specialist. On 22 November 2011, that specialist confirmed that the worker had industrial deafness caused by exposure to noise in her employment.

On 1 December 2011, the worker again saw her solicitor, who advised her that she could make a claim for hearing loss. On 29 December 2011, the worker signed a claim form claiming compensation for industrial deafness. She claimed lump sum compensation and the cost of hearing aids on 9 January 2012. It was accepted that that date was the date on which the worker gave notice of her injury.

The Arbitrator made no finding about, or comment on, whether the worker had given notice of injury as required by s 254. She determined that the worker first became aware that she had received an injury when she had a hearing test on 8 July 2011 and the audiologist advised her that she suffered industrial deafness caused by exposure to loud noise at work. Though the claim was made more than six months after 8 July 2011, the Arbitrator was satisfied that the worker was not aware whether she could make a claim and that constituted “reasonable cause” under s 261(4) for failing to claim within time.

The issues in dispute on appeal were whether:

• the Arbitrator erred in failing to determine whether the worker gave notice of injury as soon as possible after the injury happened and before she voluntarily left the employment in which she was at the time of the injury (s 254 of the 1998 Act);
• the Arbitrator erred in finding that the worker became aware that she had received her injury on 8 July 2011, instead of March 2004, as the employer argued, or in August 2011, as the worker argued (s 261(6) of the 1998 Act);
• whether the worker’s failure to claim compensation within six months of becoming aware she had received her injury (assuming that she became aware on 8 July 2011, as the Arbitrator found) could be excused because of “other reasonable cause” (s 262(4)), and
• whether the Arbitrator denied the employer procedural fairness by determining the issue of “other reasonable cause” on a ground not argued.

Held: The Arbitrator’s determination was revoked and the matter was remitted to a different Arbitrator to determine the notice of injury issue and re-determine whether the failure to claim within six months is excused by s 261(4) of the 1998 Act.  

Notice of injury – s 254

1. The Arbitrator did not deal with s 254(2) and (3) and erred in failing to do so [22]. That error did not mean that there should be an award in favour of the appellant on this issue. If the worker’s argument on the issue of lack of prejudice, because of the absence of notice, was upheld, the failure to give notice would not be a bar to the recovery of compensation (s 254(3)(a)). In view of the issues involved, it was determined that this issue be remitted to a different Arbitrator for re-determination [23].

Reasonable cause – s 261(4)

2. It was submitted that the Arbitrator determined the s 261(4) question by reference to whether or not the worker “was reasonable” rather than whether there was “other reasonable cause” for having not claimed within the six months [25].

3. It was clear that a claim made on 9 January 2012 was not made “within 6 months” (s 261(1)) after 8 July 2011, the date on which the Arbitrator found the worker became aware she had received her injury [27].

4. The Arbitrator may have considered that the combination of factors listed by her led to the conclusion that “other reasonable cause” had been established. If that was her view, she did not explain how that was so. It followed that the Arbitrator failed to properly deal with s 261(4) [33].

5. A reasonable inference from the evidence was that the worker was never aware of the fact that she had to claim within six months of first becoming aware that she had received an injury. As the Arbitrator did not properly deal with that issue, the matter was also remitted to a different Arbitrator for re-determination [35].

Procedural fairness

6. It was submitted that the appellant was denied procedural fairness because, when dealing with the “reasonable cause” issue, the Arbitrator had regard to a number of matters on which the worker’s counsel had made no submissions [36].

7. As the “reasonable cause” issue had to be re-determined in any event, it was not necessary to decide this point [37].

Awareness

8. It was submitted that the Arbitrator erred in failing to find that the worker was aware that she had received an injury at the time she saw the specialist doctor in 2004 [38].

9. The Arbitrator rejected the submission that the worker became aware that she had received an injury in 2004. Her reasons were that the specialist the worker saw in 2004 told the worker that she did not suffer from noise induced hearing loss and it was clear she relied on that advice [41].

10. The Arbitrator’s approach and conclusion on this issue disclosed no error and was clearly supported by the evidence. The evidence plainly and unmistakably established that the worker was not aware in 2004 that she had suffered an injury in the form of sensorineural hearing loss [43].

11. The evidence was clear that the worker was first aware on 8 July 2011 that she had sensorineural hearing loss and that that loss had been contributed to by her employment with the appellant. That was sufficient to establish that she was aware that she had received an injury (Unilever Australia Ltd v Petrevska [2013] NSWCA 373 (Petrevska)). To be aware that she had received an injury, the worker did not have to be aware of all the procedural steps necessary to make a valid claim (Petrevska) [57].

Conclusion

12. As the Arbitrator erred in not determining the notice of injury issue and on the s 261(4) issue, those matters were remitted to a different Arbitrator to be re-determined [58].

Knudsen v Baradom Holdings Pty Ltd [2013] NSWWCCPD 73

Former s 40(2)(a) of the 1987 Act; probable earnings but for injury; application of principles stated in Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298; availability of inference; rejection of uncontradicted evidence; requirement to state basis for rejection

O’Grady DP

20 December 2013

Facts:

The appellant worker had been employed by the respondent to perform varied duties including those of a rigger and dogman, commencing in December 1994. It was not in dispute that, on 3 February 1995, the worker injured his right leg and right arm in the course of that employment.

The worker’s claim against the respondent in respect of weekly compensation pursuant to the former s 40 from 1 July 1998 to 30 June 2007 was denied.

The matter came before the Commission and the Arbitrator entered an award for the employer.

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

• making an incorrect calculation for the purposes of s 40(2)(a) of the 1987 Act;
• failing to give the “necessary weight” to the “Browne v Dunn inference”, and
• failing to give the appropriate weight to the appellant’s medical evidence and the appellant’s own statement of evidence.

Held: The Arbitrator’s determination was confirmed.

Ground 1

1. The appellant argued that the Arbitrator erred when determining the issue as to the quantum of the worker’s probable earnings by failing to take into account “his actual earnings at the time of the accident”. Further error was suggested in that the Arbitrator relied on “a publication [“What Jobs Pay”] that uses broad figures and fails to take into account a worker’s personal circumstances” [40].

2. The appellant’s first ground of appeal failed to acknowledge the Arbitrator’s findings that the worker failed to establish that he was partially incapacitated at relevant times. That finding had the necessary consequence that the worker’s claim in respect of weekly compensation pursuant to the former s 40 failed regardless of the evidence as to relevant earnings [41]-[42].

3. Notwithstanding that finding, it appeared that the Arbitrator, as a cautionary measure, considered the question as to whether the evidence as to relevant earnings demonstrated that the “comparable earnings in respect of the relevant period exceeded [the worker’s] actual earnings or ability to earn” [43].

4. The Arbitrator found that there was “inadequate evidence, or a lack of probative evidence” concerning probable earnings. Relying upon the decision of the Commission in Manpower Pty Ltd v Harris [2011] NSWWCCPD 10 the Arbitrator determined that it was proper to make reference to “What Jobs Pay” [47]. Had there been a necessity to determine the question of entitlement to weekly compensation, the Deputy President was of the view that the approach adopted by the Arbitrator was appropriate [48].

Grounds 2 and 3

5. The appellant challenged the Arbitrator’s factual finding that the worker had not suffered partial incapacity as a result of the subject injury [49]. It was also submitted that the Arbitrator failed to take into account expert medical evidence and the absence of medical evidence when concluding that he did not suffer incapacity [50].

6. It was not disputed that the worker had been examined by a specialist doctor on behalf of the respondent of which no evidence had been tendered. The appellant incorrectly relied upon Browne v Dunn (1893) 6 R 67 (Browne) (instead of Jones v Dunkel [1959] HCA 8; 101 CLR 298) to assert that the Arbitrator failed to draw an inference in the worker’s favour [51]. The Arbitrator had also fallen into the same error in reliance on Browne in his Reasons. It was clear that the inference that the appellant suggested should have been drawn, or was disregarded by the Arbitrator, was that the evidence of the specialist doctor would not have assisted the respondent’s case [52]-[53].

7. Notwithstanding the error in identification of relevant authority, it was clear that the inference that may have been drawn in the circumstances was in fact drawn by the Arbitrator. The Arbitrator stated “...it is appropriate to draw the inference that the contents of any resulting report [of the specialist doctor] would not assist the respondent” [54]. The error suggested was that, whilst the inference was drawn, there had been a failure “to give the necessary weight” to that inference [55].

8. The Arbitrator acknowledged both the absence of the evidence and the argument advanced concerning the availability of an inference and he proceeded to accept such argument. The “weight”, or persuasive value, of such inference was a matter for the Arbitrator to determine. He proceeded to address the balance of the evidence and reached a conclusion unfavourable to the worker, notwithstanding that he had drawn that inference [56].

9. It was also suggested that the Arbitrator erred by rejecting uncontradicted evidence [58]. The question before the Arbitrator required a determination as to whether the uncontradicted evidence established the fact of partial incapacity. That task, as stated in Moukhayber v Camden Timber & Hardware Co Pty Ltd [2002] NSWCA 58 required consideration of all the circumstances and, as stated in Read v Nerey Nominees Pty Ltd (unreported, Supreme Court of Victoria, Marks J, 19 December 1977, No 7402 of 1976), if such evidence is rejected, disclosure of reasons for so doing [61].

10. The uncontradicted evidence was found to be wanting with respect to proof of partial incapacity resulting from the subject injury. The circumstances which led the Arbitrator to his conclusion were made clear in the course of his Reasons and, notwithstanding the fact that relevant evidence had not been contradicted, he was not satisfied that partial incapacity had been made out. That was a conclusion open to the Arbitrator on the evidence [63].

11. The Arbitrator’s finding of fact followed an evaluation of all relevant matters including the presence of the inference. Acceptance by the Arbitrator that the specialist doctor’s evidence would not assist the respondent could not, alone, lead to a conclusion that, on the balance of probability, the worker was relevantly incapacitated [65].

Alder v Allworks & Trades Pty Ltd [2013] NSWWCCPD 71

Claim in respect of ‘consequential loss’; proof of causation; challenge to factual findings

O’Grady DP

18 December 2013

Facts:

The late Gregory Phillip Alder (the deceased) commenced proceedings against the respondent employer in August 2012. The claim was in respect of lump sums pursuant to s 66 and the former s 67 of the 1998Act. The deceased had received injury to his left shoulder on 24 August 2007 in the course of his employment.

The deceased had been paid a lump sum, it seemed, in 2010. A complying agreement was entered into by the deceased and the respondent. That compensation was agreed by the parties to be in respect of the left shoulder injury and resultant whole person impairment.

The deceased subsequently alleged that he had suffered a consequential condition, namely right shoulder disability, as a result of favouring his left arm and shoulder and overuse of his right arm and shoulder. A claim in respect of a further lump sum and pain and suffering was declined by the insurer.

Following the death of the deceased, an order was made substituting the deceased’s children as applicants for the purpose of further conduct of the proceedings (r 18.4 of the 2011 Rules). The claim in respect of pain and suffering did not survive following the death of the deceased: former s 67(5).

The matter came before the Commission and an Arbitrator entered an award in favour of the respondent employer.

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

• asking the wrong question, being whether injury to the right shoulder was received, and
• applying an incorrect test to determine liability in respect of the condition of the right shoulder.

Held: The Arbitrator’s determination was confirmed.

Submissions, Discussion and Findings

1. It was argued that the Arbitrator had erred by approaching “the case not on the basis of whether [the deceased] suffered from a consequential condition, but rather whether he sustained a right shoulder injury” [36].

2. The Arbitrator made reference to “injury” on a number of occasions in the course of his Reasons. However, it was clear that the Arbitrator was not addressing a requirement to prove “injury” in terms of s 4 of the 1987 Act, but rather consequential loss as has been addressed in many decisions of the Commission (Bouchmouni v Bakhos Matta t/as Western Red Services [2013] NSWWCCPD 4) [37].

3. The Arbitrator appeared to have accepted that the deceased had experienced painful symptoms in his right shoulder, and it was clear that he accepted that there were “restrictions in the right shoulder movement”. The Arbitrator stated that “the only explanation before me as to the difficulties with the right shoulder comes from Dr Machart”. It was reasonably clear that the Arbitrator had accepted the evidence of Dr Machart that the condition diagnosed was “degenerative” and had no causal nexus to the 2007 injury. That conclusion was open to the Arbitrator on the evidence and no relevant error had been demonstrated [43].

4. It seemed that factual error was suggested having regard to the Arbitrator’s reference in the course of reasons to “activities... of a sufficient magnitude to create an injury in the right shoulder”, and the evidence that the deceased “was not doing anything strenuous”. The Arbitrator appeared to remark upon the absence of any evidence concerning activity involving overuse of the right shoulder joint. The reference to “strenuous” activity made by the Arbitrator reflected the history recorded by Dr Machart. No relevant error was made out [44].