Issue 2: February 2015

Rawson v Coastal Management Group Pty Ltd [2015] NSWWCCPD 3

Claim for weekly compensation from 17 September 2012 to 23 September 2014; claim made before 17 September 2012; whether entitlement periods for weekly compensation commence to run from date weekly compensation first paid or payable or from 17 September 2012; application of Kilic v Kmart Australia Ltd [2013] NSWWCCPD 37; ss 33, 38 and 43 of the 1987 Act, as amended by the 2012 amending Act; whether the Commission has jurisdiction to determine a claim for weekly compensation under s 38 of the 1987 Act (as amended); meaning of “work capacity decision” considered; Lee v Bunnings Group Ltd [2013] NSWWCCPD 54 applied

Roche DP

20 January 2015

Facts:

At about 3 am on 18 December 2004, the worker suffered serious injuries when the truck he was driving, which was owned by the respondent, left the road and collided with a tree. He alleged that that accident occurred in the course of his employment because he had just picked up a spot welder for use in his work for the respondent. His injuries included a severe crush injury to his left foot, with multiple fractures involving the mid and hind foot, and a significant rotator cuff injury to his right shoulder, which both required major surgery.

In 2007, the employer’s insurer, Employers Mutual NSW Ltd (Employers Mutual), accepted liability and commenced payments of weekly compensation and hospital and medical expenses. On 7 August 2009, an AMS assessed him to have a whole person impairment of 31 per cent. The respondent agreed to pay the worker $55,000 in respect of a 31 per cent whole person impairment under s 66 of the 1987 Act and $30,000 compensation for pain and suffering under s 67. Employers Mutual continued to make voluntary payments of weekly and other compensation until, having disputed liability in late 2011, they ceased weekly payments on 27 January 2012. On 23 November 2011, the worker sought a review of this decision. On 6 March 2012, Employers Mutual issued an amended notice under s 54 of the (unamended) 1987 Act in which it disputed liability for the worker’s claim on grounds not relevant to the current appeal, but did not dispute that he was incapacitated.

In an Application filed in the Commission on 2 December 2013, the worker claimed weekly compensation from 27 January 2012 to date and continuing. The Arbitrator identified a threshold issue of whether, given that voluntary payments had been made for several years, the insurer was estopped from denying liability (Waltons Stores (Interstate) Ltd v Maher [1988] HCA 7; 164 CLR 387) and whether there was an abuse of process (Batistatos v Roads and Traffic Authority of New South Wales [2006] HCA 27).

The insurer consented to awards in favour of the worker of $616.40 per week from 27 January 2012 to 31 March 2012, and $628 per week from 1 April 2012 to 16 September 2012.

These amounts were calculated under the terms of the 1987 Act, as it stood prior to the amendments introduced by the 2012 amending Act. That was because, as the worker is a “seriously injured worker”, as he has a degree of permanent impairment assessed to be more than 30 per cent (s 32A of the 1987 Act), and as his claim was made before 17 September 2012, the weekly payments amendments introduced by the 2012 amending Act only applied to him on and from 17 September 2012 (cl 2 of Sch 8 of the 2010 Regulation).

Counsel for the respondent informed the Arbitrator that the insurer had resumed weekly compensation payments to the worker, under s 38, from September 2014. Due to the resumption of payments from September 2014, the Application was amended to claim weekly compensation from 17 September 2012 to 23 September 2014 (the closed period). The insurer disputed the Commission’s power to deal with this claim on the grounds that, as the worker had received weekly compensation in excess of 130 weeks, his entitlement to weekly compensation beyond 17 September 2012 fell to be determined under the amended s 38 of the 1987 Act (Kilic v Kmart Australia Ltd[2013] NSWWCCPD 37 (Kilic)) and the Commission has no jurisdiction to determine entitlements under that section (Lee v Bunnings Group Ltd [2013] NSWWCCPD 54 (Lee)). Exactly why Employers Mutual did not pay the closed period and only paid weekly compensation from 24 September 2014 was not explained.

The Arbitrator noted that the following matters were agreed: that the worker was not an “existing recipient” within the meaning of cl 1 of Pt 19H of Sch 6 to the 1987 Act; that the worker had (as at 17 September 2012) received more than 130 weeks of weekly compensation referrable to his injury, and was a “seriously injured worker” for the purposes of the 1987 Act.

The Arbitrator inferred from a document from the insurer dated 17 October 2014 (exhibit A) confirming an electronic funds transfer to him, and an admission from the respondent that the insurer had paid weekly compensation to the worker under s 38 since September 2014, that there was “an assessment for the purposes of section 38(2) in or about September 2014”. Applying Kilic, the Arbitrator held that the worker’s entitlement to weekly compensation had to be determined under s 38, which makes special requirements for the continuation of weekly payments after the expiration of the second entitlement period, that is, after the first 130 weeks of weekly compensation. He further held, applying Lee, that he had no jurisdiction to determine the worker’s entitlement under s 38 and made no order in respect of the claim for weekly compensation from 17 September 2012 to 23 September 2014.

The Commission ordered the employer to pay the worker weekly compensation of $616.40 per week from 27 January 2012 to 31 March 2012; and $628 per week from 1 April 2012 to 16 September 2012. The Arbitrator made no order in respect of the claim for weekly compensation for the period from 17 September 2012 to 23 September 2014.

The worker appealed. The issues in dispute were whether the Arbitrator erred in:

• concluding that he did not have jurisdiction to award weekly compensation under s 38, and
• concluding that he did not have jurisdiction to award weekly compensation under s 38 for any period before the worker had been assessed by the insurer for the purposes of s 38(2).

A further issue was whether Kilic was wrong.

Held: The Arbitrator’s decision was confirmed.

Kilic

1. The principal issue in Kilic was when the entitlement periods introduced in the 2012 amending Act commence to run. If they ran from the date on which weekly compensation was first paid or payable to Ms Kilic, the worker’s entitlement to weekly compensation under the amended s 37 expired on 26 July 2013. If they ran from 1 January 2013, her entitlement to weekly compensation under the amended s 37 would not expire until 2 July 2015. As Ms Kilic was not an existing recipient of compensation as at 1 October 2012 and had claimed compensation prior to that date, it was held that, for the purpose of the application of the weekly payments amendments introduced by the 2012 amending Act, a reference in Div 2 of Pt 3 of the 1987 Act to “a period in respect of which a weekly payment has been paid or is payable” included a period that occurred before 1 January 2013, the date on which the weekly payments amendments applied to her [38]–[39].

2. The combined effect of s 32A of the 1987 Act and cl 9(4) of Pt 19H of Sch 6 was that the entitlement periods commence at the time when weekly compensation was payable and includes periods before the commencement of the amendments. That is, in that case, before 1 January 2013. Even if that view were wrong, it was held (at [54]–[55] in Kilic) that there is a distinction between the calculation of the quantum of weekly “compensation payable” (which, in Ms Kilic’s case, was dealt with in ss 36 and 37) and the calculation of when the entitlement periods commence to run [40].

3. The calculation of the commencement of the entitlement periods is dealt with in s 32A which, in Ms Kilic’s case, did not apply until 1 January 2013. However, it applied to the period “in respect of which a weekly payment has been paid or is payable to the worker”. It was not restricted to payments made after 1 January 2013. Unless otherwise stated in the 1987 Act or the transitional provisions, that included payments made before 1 January 2013 [41].

4. In the present appeal, the appellant’s counsel submitted that Kilic was wrong. However, other than stating that he relied on the submissions made in Kilic, he made no further submissions in support of that assertion [42].

5. For the reasons given in Kilic, the appellant’s submission was rejected. The calculation of when his entitlement periods commence to run is from the date on which weekly compensation was first “paid or payable” to him. As that date was in or about 2004 or 2007, as at 17 September 2012, the worker had been paid in excess of 130 weeks of weekly compensation. His entitlement to weekly compensation from that date fell to be determined in the third entitlement period, that is, under s 38 of the 1987 Act, as amended [43].

The Commission’s jurisdiction under s 38

6. As the Arbitrator inferred, on a date in or about September 2014, the insurer “assessed” the worker “as having no current work capacity” which was “likely to continue indefinitely”. This follows from the fact that Employers Mutual was paying the worker under s 38(2) and had done so since September 2014. However, the acceptance of that proposition, which was clearly correct, was one of the reasons why the worker could not succeed with his claim [63].

7. The insurer’s decision to pay weekly compensation from 24 September 2014 and, critically, not to pay weekly compensation from 17 September 2012 to 23 September 2014 was “a decision of an insurer that” affected the worker’s “entitlement to weekly payments of compensation” (s 43(1)(f)) in the period concerned. Thus, it was a work capacity decision. It made no difference that Employers Mutual failed to give any reasons for not paying the worker in the closed period [66].

8. As the worker sought to challenge a work capacity decision, the Commission did not have jurisdiction to determine the dispute or make a decision inconsistent with the insurer’s work capacity decision (s 43(3)). Section 105 of the 1998 Act did not overcome the restriction on the Commission’s jurisdiction in s 43(3) [67]–[68].

9. Even if the decision not to pay the closed period was not a work capacity decision, the clear terms of s 38 are that the entitlement to compensation after the second entitlement period is dependent upon the insurer’s work capacity decision. If the insurer incorrectly determined that entitlement, by either wrongly calculating the amount of the compensation payable or, as in the present case, by determining that no weekly compensation is payable in a particular period, the worker had the right to seek a review in the circumstances outlined in s 44, or a judicial review in the Supreme Court. This conclusion was consistent with Lee [70]–[72].

10. It was accepted that “assessed” in s 38(2) does not have to be a “work capacity assessment”, as defined in s 44A. As the worker was a “seriously injured worker” the insurer was entitled to make a work capacity decision about him without conducting a work capacity assessment (s 38(5)). Moreover, a “work capacity assessment” is not necessary for the making of a work capacity decision by an insurer (s 44A(3)). However, that did not assist the worker. The insurer made a “work capacity decision” that affected his entitlement to weekly compensation. The Commission does not have jurisdiction to make a decision inconsistent with that decision (s 43(3)) [73].

11. It was also accepted that a worker’s entitlement to weekly compensation pre-dates the date of the work capacity decision. If that were not so, an insurer who delayed the making of a work capacity decision could obtain a windfall through its tardiness. While s 38(4) provides a time within which a “work capacity assessment” must be conducted, it does not provide a time within which a “work capacity decision” must be made. However, that fact does not mean that he has no entitlement to weekly compensation in the period prior to the date of the work capacity decision [75].

12. There will often be a delay between the date from which weekly compensation is sought and the date of the work capacity decision. That is especially so in cases where there is no obligation to conduct a work capacity assessment. It is logical that the work capacity decision should apply from the date from which weekly compensation is claimed and not from the date of the work capacity decision [76].

13. This follows as a matter of basic fairness, but also from s 38, which provides that the entitlement to weekly compensation at the expiration of the second entitlement period, if it exists, commences “after the second entitlement period”. As a matter of statutory construction, having regard to the text and the context of the legislation, this can only mean “immediately after the second entitlement period”. Any other interpretation would leave the worker without any weekly compensation until the insurer got around to making a work capacity decision. That was not the intention of the legislation. Notwithstanding the restrictions in the provisions introduced by the 2012 amending Act, the legislation requires a beneficial construction, if open, in favour of the injured worker, though that does not mean that every provision or amendment to a provision has a beneficial purpose or is to be construed beneficially (ADCO Constructions Pty Ltd v Goudappel [2014] HCA 18) [77]–[78].

14. “Present inability”, in the definition of “no current work capacity” in s 32A, relates to the time from which the weekly compensation is sought and requires a decision about a worker’s “current work capacity” that applies at and from that time, even though the work capacity decision may not be made until a later time. Any other interpretation would led to workers being denied compensation because of the insurer’s delay in making the work capacity decision. In the present claim, an assessment of the worker’s “current work capacity” had to be made from the date on which the new provisions applied to him, (from 17 September 2012) having regard to the available evidence. The fact that the work capacity decision was not made until September 2014 did not change that requirement [82].

State of New South Wales v Stewart [2015] NSWWCCPD 1

Whether, as a result of three separate injuries, the worker suffered three separate and distinct incapacities; whether the worker is entitled to three concurrent awards for weekly compensation; injury; assessment of medical evidence; assessment of incapacity; application of principles in Steggles v Aguirre (1988) 12 NSWLR 693; award for weekly compensation for total incapacity when no claim made for total incapacity

Roche DP

13 January 2015

Facts:

The main issue was whether the Arbitrator erred in finding that, as a result of three discrete injuries to different parts of her body, the worker suffered three separate and distinct incapacities for work that entitled her to three concurrent awards of weekly compensation.

As she worked as an ambulance officer/paramedic for the Ambulance Service of NSW, the worker was exempt from the amendments introduced by the 2012 amending Act (see cl 25 Pt 19H of Sch 6 to the 1987 Act). All references to the 1987 Act are to the provisions in force immediately prior to the amendments introduced by the 2012 amending Act.

The worker started work for the appellant in 1999. In September 2003, the worker was transferred to Eden in southern New South Wales. As Eden is an isolated area, her employment required her to drive long distances. The worker alleged that she suffered the following injuries in the course of her employment:

• deep vein thrombosis in her right leg on 31 October 2007 after a period of lengthy driving (right groin injury);
• lower back injury on 27 December 2007 when she slipped and fell and suffered lower back pain;
• injury to her right and left legs (hips) on 28 September 2010 from driving ambulances and getting in and out of ambulances (injury to the hips);
• lower back injury on 30 May 2011 while carrying a patient up flights of stairs;
• lower back injury on 24 June 2012 while lifting a patient on a stretcher;
• injury to the lower back and legs on 17 July 2012 while getting into and out of an ambulance, and
• injury to the lower back and legs on 20 October 2012 while driving an ambulance for extended periods.

Due to her injuries, the worker stopped work on 19 November 2012. Apart from a light duties trial in February 2013, which she could not continue, she has not worked since. The appellant’s insurer accepted the claim and paid voluntary weekly compensation until 11 April 2013.

The worker filed an Application in the Commission. Essentially, the parties (and the Arbitrator) treated the claim as being based on three discrete injuries, namely:

• a right groin injury on 31 October 2007;
• an injury to the hips on 28 September 2010, and
• a lower back injury with sciatica radiating into the right leg, which the Arbitrator found was an aggravation of a disease which was deemed to have occurred on 19 November 2012, the date when the worker stopped work because of her injuries.

The Arbitrator found that the worker’s three injuries (the right groin injury, the injury to the hips and to the lumbar spine) resulted in separate and distinct incapacities for work from 19 November 2012 and that she was therefore entitled to three concurrent awards of compensation pursuant to s 36 of the 1987 Act. As, by 11 April 2011, she had not received compensation for her first 26 weeks of incapacity, the Arbitrator found her to be entitled to her current weekly wage rate until the end of the first 26 weeks of incapacity.

After the first 26 weeks of incapacity, the Arbitrator said that, as a result of separate and distinct incapacities for work resulting from the three injuries she received, the worker was entitled to three concurrent awards of weekly payments of compensation at the maximum rate for a worker without dependants to 23 April 2014 pursuant to s 37.

In respect of the period from 24 April 2014, the Arbitrator made three concurrent awards of weekly compensation at the maximum statutory rate for a worker without dependants in respect of the three injuries that resulted in three separate and distinct incapacities, such payments to continue in accordance with the provisions of the 1987 Act. The total of the three awards was not to exceed $2,500, the amount she would have earned had she remained in the same or some comparable employment. The Arbitrator made a general order that the appellant pay her reasonably necessary medical and hospital expenses pursuant to s 60 of the 1987 Act.

The employer appealed. The issues were whether the Arbitrator erred in finding that:

• the worker injured her right groin (the right groin injury);
• the injury to the right groin caused a continuing incapacity for work (incapacity from the right groin injury);
• the injury to the hips caused a continuing incapacity (incapacity from the injury to the hips);
• the worker was entitled to an award for total incapacity from 11 April 2013 to 23 April 2014 (total incapacity), and
• the worker has three separate incapacities and therefore an entitlement to three awards of weekly compensation (three separate incapacities).

Held: The appeal was partly successful. The matter was remitted to another Arbitrator to determine the respondent worker’s entitlement to weekly compensation in accordance with the reasons in this decision. The referral to an Approved Medical Specialist to assess whole person impairment of the lumbar spine as a result of injury deemed to have happened on 19 November 2012 was confirmed.

The right groin injury

1. The challenge to the Arbitrator’s finding of injury to the right groin was unsustainable. At no stage did the appellant dispute that the worker suffered an injury to her right groin. The s 74 notices merely disputed, first, that employment was a substantial contributing factor to the injuries, second, whether the worker was incapacitated, and, third, whether she was entitled to hospital and medical expenses [33].

2. The appellant accepted liability for the right groin injury. A claim for the right groin injury had been made and accepted by the appellant in 2007. The appellant did not attempt to resile from that position at the arbitration and it was not open on appeal to argue that the Arbitrator erred in finding that the worker suffered such an injury [34].

3. Even if the consultant surgeon’s opinion, which the Arbitrator accepted, was thought to be ambiguous or inconsistent, given that neither side sought to cross-examine him, or to ask him to clarify his opinion, it was not open to complain on appeal that the Arbitrator accepted the doctor’s clear opinion on causation. It is for the parties to run their cases as they see fit (Fitzsimmons v Coles Supermarkets Australia Pty Ltd [2013] NSWCA 273). However, they must also live with the consequences of the forensic choices they make (Caruana v Darouti [2014] NSWCA 85) [43].

4. The Arbitrator’s acceptance of the evidence of the consultant surgeon was open to him, both on whether the worker injured her right groin and on whether employment was a substantial contributing factor to that injury, and disclosed no error. This ground of appeal was completely baseless. It appears that the real complaint was that the worker suffered no incapacity from this injury and this issue was considered next [45].

Incapacity from the right groin injury

5. The fact that the worker returned to her usual duties after her right groin injury was of limited weight in determining if she had an incapacity as a result of that injury. Once the worker ceased to work for the appellant, her capacity to earn had to be assessed on the open labour market. That she continued with her normal work until her resignation did not mean that she was not incapacitated on the open labour market (Steggles v Aguirre (1988) 12 NSWLR 693, applied in Ranvet Pty Ltd v Vasilevski [2008] NSWWCCPD 81).This is such a basic and accepted principle of workers’ compensation law that the appellant’s contention to the contrary, repeated several times in his submissions, was more than a little surprising [49].

6. The first question for the Arbitrator was whether the effects of the injury were continuing and, second, whether those effects reduced the worker’s physical capacity for doing work in the labour market in which she was working or might reasonably be expected to work (Arnotts Snack Products Pty Ltd v Yacob [1985] HCA 2; 155 CLR 171) [50].

7. The Arbitrator noted the worker’s evidence that she experienced constant right groin and leg pain from November 2007 and that the pain would increase with busy periods of work and long distance transfers. The pain persisted up to the arbitration and caused her to have difficulty driving, climbing stairs, walking long distances and sitting. The Arbitrator also noted the evidence from the worker’s treating general practitioner in his clinical notes for 15 August 2011 that the right groin still hurt with long trips and his note on 31 March 2011 of “[p]ain ++ just coping at work due to pain R groin”. The Arbitrator accepted this evidence and it was open to him to do so [51].

8. The Arbitrator also noted the consistent history recorded by the orthopaedic surgeon qualified by the appellant in November 2013, of the worker having pain and swelling in her right groin that resulted in ongoing difficulties and discomfort and swelling in the leg after prolonged sitting or squatting. This history provided further corroboration that the effects of the right groin injury were continuing and that those effects reduced the worker’s physical capacity for work that required prolonged sitting or squatting. It was open to the Arbitrator to find that the effects of the right groin injury were continuing and that they contributed to the worker’s incapacity on the open labour market. The nature and extent of that incapacity was another matter. As the appeal is partly successful, on another issue, the worker’s incapacity will be re-determined at the next arbitration [52].

9. The Arbitrator’s observation that the worker had only one period of incapacity as a result of the right groin injury was of no consequence and does not assist the appellant. A fair reading of the Arbitrator’s decision as a whole demonstrates that he did not think that she had fully recovered from the right groin injury by 23 November 2007. In his next paragraph, he added that the worker continued to have pain in her right groin [54].

10. The finding that the worker continued to have pain in her right groin had to be read with the Arbitrator’s observations that the worker was a conscientious and dedicated officer who attempted to perform her duties as best she could, and that she did not want to affect her career by making claims for compensation benefits. Furthermore, the Arbitrator accepted the worker’s evidence that she had pain and discomfort in her right groin, hips, legs, and low back and was assisted by her colleagues with her work tasks. The Arbitrator was satisfied that the effects of the right groin injury were continuing and that they contributed to her incapacity on the open labour market. This finding was open on the evidence and disclosed no error. This ground of appeal was rejected [55]–[56].

Incapacity from the injury to the hips

11. The fact that a worker continues with his or her normal duties does not determine if that worker has an incapacity on the open labour market (see [5] above). The same observations are made when dealing with the incapacity from the right groin injury, in circumstances where the worker had returned to her usual duties, were applicable to the question of incapacity from the injury to the hips [60].

12. Once the reports of the worker’s consultant surgeon were read together, and considered with the worker’s evidence, it was open to the Arbitrator to accept that she suffered an incapacity as a result of the injury to her hips, though it appears that the right hip was more affected than the left. This follows from her pre-injury duties as an ambulance officer, which required her to, among other things, sit for long periods and, on occasions, to adopt awkward postures with both her upper and lower limbs [67].

Total incapacity

13. The Arbitrator referred to the evidence from a consultant occupational physician, which he wrongly said the worker relied on in support of her claim that she was totally incapacitated. Her counsel did not assert that the worker was totally incapacitated. Other than referring to the criticism of the consultant occupational physician’s evidence by a neurologist qualified by the appellant, the worker’s counsel made no submission about the evidence from the consultant occupational physician and did not rely on it to support a claim for total incapacity, or indeed the claim for partial incapacity [70].

14. The worker’s counsel only ever submitted that the claim for weekly compensation was for partial incapacity under s 40 of the 1987 Act. Thus, the Arbitrator erred in assessing the claim as one for weekly compensation for total incapacity without first inviting submissions on that issue. It is a denial of procedural fairness, and therefore an error, to decide a case on a basis not argued (Seltsam Pty Ltd v Ghaleb [2005] NSWCA 208; 3 DDCR 1; Workers Compensation Nominal Insurer v Al Othmani [2012] NSWCA 45) [71].

15. Though the consultant occupational physician provided some support for a claim for total incapacity, that was not the claim pressed and, if the Arbitrator was minded to make such an award, he was obliged to give the parties the opportunity to make submissions on that issue. His failure to do so was an error [72].

Three separate incapacities

16. The Arbitrator made no finding as to what the alleged separate incapacities were. He merely found that the worker received three injuries: the right groin injury, the injury to the hips and the injury to the lumbar spine with referred pain down the right leg and that, as a result of those injuries, she was incapacitated. That did not come close to establishing that she had three separate and distinct incapacities from separate injuries [88].

17. There was no evidence that the worker had a separate and distinct incapacity from each of her injuries. The evidence established that, due to the combined effect of her three injuries, she is unfit for her pre-injury employment and unfit for employment that required prolonged sitting, standing and walking, and an ability to jog and run, squat, kneel, bend and twist. That was a single incapacity that resulted from multiple injuries [91].

18. The three injuries each contributed, in varying degrees, to the worker’s inability to perform necessary tasks. That caused her to be incapacitated in the labour market reasonably accessible to her. There was no evidence to support a finding that each injury caused a separate and discrete incapacity. The Arbitrator erred in purporting to find that they did [92].

19. Furthermore, the Arbitrator gave no explanation of what the alleged incapacity was from each injury and, so far as the awards for partial incapacity were concerned, did not apply the five steps required in Mitchell v Central West Health Service (1997) 14 NSWCCR 526 for each injury [93].

20. Though the Arbitrator referred to Cordina Chicken Farms Pty Ltd v Thoa Hong Le [2008] NSWWCCPD 125, and acknowledged that the determination of whether two injuries have resulted in separate and distinct incapacities is not done in the abstract, he failed to apply the principles discussed in that case and to assess the incapacity said to have resulted from each injury. It was not possible for him to do so as there was no evidence that each injury resulted in a separate incapacity [94].

21. The evidence assessed the worker’s incapacity by reference to the combined effect of her three injuries, not by reference to the effect of each injury separately. In the circumstances of the case, that was appropriate and correct as each injury contributed to the same incapacity. Neither injury caused a separate incapacity that gave rise to a separate, quantifiable incapacity [95].

22. With regard to the multiple concurrent awards for total incapacity, it is impossible for a worker to recover multiple concurrent awards for total incapacity (Baker v NSW Police Force [2010] NSWWCCPD 10). Once a worker is totally incapacitated because of an injury, it is impossible to suffer a second total incapacity, covering the same period, as a result of a separate injury. That is because, by definition, the first injury has eliminated the worker’s capacity to earn. Once that capacity is gone, it cannot be further reduced [96].

23. The Arbitrator’s finding that the worker suffered three separate incapacities, and that she was entitled to three concurrent awards of compensation, was revoked and her entitlement to an award of weekly compensation remitted for re-determination before a different Arbitrator [98].

Barn v Secretary, Department of Justice [2015] NSWWCCPD 6

Psychological injury; ss 149 and 151A of the 1987 Act; settlement of common law claim for damages against employer for breach of contract; whether worker recovered damages in respect of her psychological injury; objective approach to interpretation of contracts and consent orders; relevance of surrounding circumstances to interpretation of contracts and consent orders; Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52; 219 CLR 165 applied

Roche DP

29 January 2015

Facts:

This appeal concerned whether the Arbitrator erred in finding that the worker had no entitlement to lump sum compensation under the 1987 Act in respect of an agreed psychological injury because she had recovered damages in respect of the same injury from her employer in previous common law proceedings.

The appellant worker started work with the respondent in 1985. In 1992 and on 14 July 2003, she injured her back, left shoulder, left knee and left wrist in the course of her employment with the respondent.  She recovered and, after brief periods off work, continued her normal duties. On 22 September 2006, she was placed on leave until she could be medically assessed by Health Quest. On 11 December 2006, she was assessed to be fit for her duties but with a restriction on the use of stairs. On 14 December 2006, in response to a letter from the acting Governor to the worker’s injury manager, two doctors from Health Quest subsequently issued a fitness-to-work summary, back dated to 11 December 2006, determining that she was unfit for her position.

On 17 January 2007, the respondent advised the worker that Health Quest determined that she was unable to perform her duties. On 6 February 2007 the worker was medically retired. Upon receiving this news, she became ill and saw her general practitioner. On 28 March 2007, a consultant physician in psychiatry wrote to the worker’s general practitioner thanking him for referring her for treatment for a Major Depressive Disorder, which he agreed was related to her former workplace.

On 5 July 2010, the worker filed a Statement of Claim in the District Court of New South Wales claiming damages against the respondent, for breach of contract in summarily terminating her employment on or about 22 September 2006 without reasonable and proper cause. The worker alleged that she suffered injury, losses and damages as particularised in the Statement of Particulars filed under Rule 15.12 of the Uniform Civil Procedure Rules. The disabilities alleged, which all related to the worker’s psychological condition, included severe anxiety, depression, depressed mood, marked social withdrawal, anxiety and panic response. The particulars claimed out-of-pocket expenses, including future medical care, past loss of income, future loss of income and loss of earning capacity, and domestic assistance and attendant care.

As Health Quest ceased to exist from 1 July 2009, the State of New South Wales was sued as its legal successor. The action against Health Quest was subsumed in the action against the State of New South Wales as the damages were the same. The parties signed a consent order on 12 July 2012, settlement having been reached at a conciliation conference on that day. That document provided judgment for the plaintiff in the sum of $350,000 inclusive of costs of these proceedings. It was accepted that the State of New South Wales has satisfied the judgment in the consent order.

On 26 July 2012, the worker’s solicitor (Mr Weller) made a claim against the respondent for lump sum compensation under ss 66 and 67 of the 1987 Act. The claim for compensation under s 66 was for $37,500 in respect of a 24 per cent whole person impairment. This claim was based on an assessment by a psychiatrist qualified for the worker, in his reports of 27 October 2009 and 18 July 2012 in which he diagnosed the worker to be suffering from “a major depressive episode” and from “a full panic disorder with agoraphobia”.

On 28 February 2013, the worker filed an Application in the Commission seeking lump sum compensation for whole person impairment as per Mr Weller’s letter of 26 July 2012. The date of injury was pleaded as “September 2006 – February 2007” and the following appeared under “Injury description”: “chronic major depressive disorder and panic disorder with agoraphobia.”

The issues argued before the Arbitrator were whether the worker had suffered a primary or secondary psychological injury under s 65A of the 1987 Act and, if she suffered a primary psychological injury, whether the respondent had established that she had recovered damages within the meaning of s 151A(1).

On 2 October 2014, the Arbitrator found that the events causing Ms Barn’s psychological injury in the common law proceedings and the claim for lump sum compensation were identical, and the damages of $350,000 were “in respect of” the psychological injury pleaded in the Amended Statement of Claim and the Statement of Particulars and the respondent had established its defence under s 151A of the 1987 Act.

The worker appealed the Arbitrator’s determination that she recovered damages that have disentitled her to further compensation under the 1987 Act. The issues in dispute and the submissions in support of the appeal were presented as one and the same. That was most unsatisfactory and did not comply with Practice Direction No 6. The discussion and findings are listed under the relevant grounds below, starting at 3.

Held: The Arbitrator’s decision was confirmed.

Grounds 3–6 and 10

1. The complaints were essentially that the Arbitrator should have found that the resolution of the common law proceedings involved an agreement to resolve a claim in contract, as distinct from the recovery of damages “in respect of” an injury. For the reasons that follow, these submissions were not accepted [43].

2. Consent orders are a contract between the parties, as well as an order of the Court, (Chavez v Moreton Bay Regional Council [2009] QCA 348), and that the law of contract applies to consent orders (McElwaine v The State of South Australia (Department of Education and Children’s Services) [2009] SAWCT 35).The appellant’s submissions assumed the meaning of an agreement, such as a consent order, is determined by the parties’ subjective beliefs. This was incorrect [44]–[45].

3. As explained by Mason J in Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24 at [24]; [1982] HCA 24; 149 CLR 337 at 352 (Codelfa):

Consequently when the issue is which of two or more possible meanings is to be given to a contractual provision we look, not to the actual intentions, aspirations or expectations of the parties before or at the time of the contract, except in so far as they are expressed in the contract, but to the objective framework of facts within which the contract came into existence, and to the parties’ presumed intention in this setting. We do not take into account the actual intentions of the parties and for the very good reason that an investigation of those matters would not only be time consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract. [46]

4. The High Court has explained that it is “the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations” (Toll (FGCT) Pty Limited v Alphapharm Pty Limited [2004] HCA 52; 219 CLR 165 at [40] (Alphapharm); Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; 306 ALR 25; 88 ALJR 447) [47].

5. As was further explained in Alphapharm (also at [40]) “[t]he meaning of the terms ... normally, requires consideration not only of the text but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction” (quoted and applied in Mainteck Services Pty Ltd v Stein Heurtey SA [2014] NSWCA 184 (Mainteck)). The same approach applies to the interpretation of consent orders (Bindah v Carter Holt Harvey Wood Products Australia Pty Ltd [2014] NSWCA 264) [48].

6. In the present case, the surrounding circumstances included documents, including the Statement of Claim and Statement of Particulars, filed in the District Court and the consent orders, but excluded what was said or done during the course of negotiating the agreement. Those documents, when considered with the circumstances in which the worker developed her psychological injury, demonstrated conclusively that, for the reasons given by the Arbitrator, the worker recovered damages “in respect of an injury” from the employer liable to pay compensation under the 1987 Act [50].

7. The Arbitrator’s reasoning was that the injuries and disabilities pleaded and particularised in the common law claim were exactly the same as the injuries pleaded in the proceedings in the Commission. That reasoning was consistent with the evidence and was correct. The injury particularised in the common law proceedings was “[e]xacerbation of psychological/psychiatric injury diagnosed as full panic disorder with agoraphobia and major depressive disorder”. That was the same injury pleaded in the Application filed in the Commission, namely, “chronic major depressive disorder and panic disorder with agoraphobia”. [51]

8. The submission that the Arbitrator should have found that the damages “received” by the worker were paid in respect of the breach of contract and were not damages “in respect of an injury” failed to acknowledge the relevant context in which the parties settled the common law proceedings. Section 151A is concerned with whether the worker has “recovere[d] damages in respect of an injury” not with the cause of action that led to the recovery of the damages [52].

9. Even if most of the damages recovered were for breach of contract, and not for the psychological injury, which was not the case, that did not prevent the application of s 151A. That is because the fact that the money may have been paid, in part, in respect of other claims (for example, a breach of contract) does not matter if, in fact, the consent orders, construed in light of the surrounding circumstances known to both parties, establish that the payment was “in respect of” Ms Barn’s psychological injury (Adams v Fletcher International Exports Pty Ltd [2008] NSWCA 238). [54]

10. The submission that the Arbitrator failed to take account of or give weight to the agreement reached between the worker and the defendants in resolving the common law proceedings invited the Commission to ignore the consent orders, and the surrounding circumstances known to both parties that led to the making of those orders, and to focus on “the actual intentions, aspirations or expectations of the parties” (Codelfa at [24]), that is, “what was said or done during the course of negotiating the agreement for the purpose of drawing inferences about what the contract meant” (Chartbrook Ltd v Persimmons Homes Ltd [2009] UKHL 38; 1 AC 1101). That was not the correct approach to the determination of parties’ rights and liabilities under a contract [55].

11. The submission that the Arbitrator should not have placed any reliance on the pleadings filed in the common law proceedings was inconsistent with clear High Court authority, recently considered and applied by the NSW Court of Appeal (in Mainteck) and was rejected. The pleadings and the particulars were part of the factual matrix of the proceedings and clearly set the parameters for the claim and the ultimate settlement. If the consent orders did not reflect the parties’ actual agreement, the proper course was to seek relief in a court with appropriate jurisdiction [56].

Grounds 7–8

12. These grounds related to the evidence from the worker’s barrister in the common law proceedings to the effect that the common law proceedings were brought against the State of New South Wales “for breach of contract and for personal injury against Health Quest for negligence”. He said that it was his belief that the “judgement [sic] that was entered was for the breach of contract claim against the State of New South Wales” and that “[n]o part of the settlement was for compensation for any personal injuries suffered to [Ms Barn]” [57].

13. The Arbitrator said that, relying on Alphapharm at [35], he did not accept that the worker’s barrister could give evidence of what the (settlement) document meant. That statement was correct and disclosed no error [58].

14. In any event, Mr Boyd’s assertion that the claim against Health Quest was in negligence, and the email from the respondent’s solicitor, which stated that the settlement was apportioned 95 per cent against the respondent and five per cent against Health Quest, clearly established that the worker recovered damages in respect of the injury from “some person other than the worker’s employer” (s 151Z(1)) and that she was therefore “not entitled to recover further compensation under [the 1987 Act]” (s 151Z(1)(c)). Even if the Arbitrator erred in relying on s 151A, it was clear that, in the alternative, s 151Z prevented the worker recovering compensation claimed in the present proceedings in the Commission in any event [59].

Ground 9

15. This ground related to a statement from the worker dated 25 September 2014, two days after the conclusion of the case. The worker said in this statement that, during the conciliation of her common law claim, she made known that she did not want the settlement to void her workers compensation benefits or claims and that her barrister and the solicitor for the respondent assured her this would not occur. She said that she accepted the offer to settle with knowledge that her workers’ compensation benefits and her claim for a lump sum settlement for her injury would not be affected. It was her understanding that the money she was receiving was for breach of contract and nothing to do with the injuries she sustained [61]–[62].

16. The worker’s statement was not before the Arbitrator and he did not err in not referring to it. In any event, the worker’s statement made no difference to the outcome. Her subjective belief was irrelevant to the determination of the effect of the consent orders, which is based on an objective interpretation of the contract, determined in light of the surrounding circumstances, and the interpretation and application of s 151A [68].

Grounds 11–12

17. These grounds related to the weight the Arbitrator gave to the notice of judgment. The assertion that the Arbitrator should have given no weight to this document is rejected. The notice of judgment was admitted into evidence at the teleconference on 23 September 2014, without objection from the worker’s solicitor [69].

18. Once admitted into evidence, the document was admitted for all purposes (Walker v Walker [1937] HCA 44; 57 CLR 630; Jones v Sutherland Shire Council [1979] 2 NSWLR 206, and Albrighton v Royal Prince Alfred Hospital [1980] 2 NSWLR 542). The Arbitrator was entitled to consider it in his assessment of the claim [70].

19. The submission that, if the Arbitrator was to place any weight on the document, he should have inquired of the worker or her solicitor as to the circumstances in which it was completed, was rejected. An Arbitrator is required to accord the parties procedural fairness which requires only that a party be given “a reasonable opportunity to present his case” (Deane J in Sullivan v Department of Transport (1978) 20 ALR 323). It does not require a tribunal to give a “running commentary upon what it thinks about the evidence that is given” (SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs [2006] HCA 63) [71].

20. The appellant’s solicitor did not address the notice of judgment at the arbitration. The Arbitrator was entitled to consider the document and place such weight on it as he felt appropriate. The notice of judgment, which described the injury as “psychiatric”, provided further objective support for the conclusion the Arbitrator had independently reached, that the worker had recovered damages in respect of her psychological injury and that s 151A applied [72].

Tray Fit Pty Ltd v Cairney [2015] NSWWCCPD 2

Future medical expenses; claim for proposed three level fusion; order for payment of two level fusion; whether claim for three level fusion included claim for two level fusion; nature of issues in dispute; application of principles in Fletcher International Exports Pty Ltd v Barrow [2007] NSWCA 244; 5 DDCR 247 and Tan v National Australia Bank Ltd [2008] NSWCA 198; 6 DDCR 363; s 60(5) of the 1987 Act; ss 3 and 354(3) of the 1998 Act; system objectives; meaning of “reasonably necessary” discussed; fundamentally flawed approach by insurer to claim for medical expenses

Roche DP

14 January 2015

Facts:

On 10 February 2012 and 2 April 2012, the worker injured his lumbar spine in the course of his employment with the appellant. The appellant’s insurer, Allianz Australia Workers Compensation (NSW) Ltd (Allianz), accepted his claim for compensation and commenced payments of weekly and other compensation. Allianz arranged an examination by neurosurgeon, Dr Casikar, who, in a report dated 10 October 2012, agreed that the worker had a “very large disc prolapse at the L4/5 segment”, but felt the only surgical treatment appropriate was a microdiscectomy at that level.

The worker was referred to Dr Darweesh Al-Kawaja, neurosurgeon, who, in a report dated 10 January 2013, recommended that the worker’s spine be fused from L3 to S1, that is, a three level fusion. Dr Al-Kawaja sought approval from Allianz for this procedure. The worker sought a second opinion from Dr Peter Bentivoglio, neurosurgeon, who, in a report dated 19 February 2013, said that, if the worker had surgery, he needed a fusion at L4/5 and S1 (a two-level fusion), with decompression of both L5 nerve roots. Dr Al-Kawaja, on reviewing Dr Bentivoglio’s opinion, thought that a two level approach was a “fair idea”. Dr Al-Kawaja thought it wise to include the L3/4 level, otherwise it would require further extension later.

On 8 March 2013, Allianz issued a s 74 notice in which it denied liability for the worker’s claim for the surgery requested by Dr Al-Kawaja, namely, the “L3–S1 Anterior Lateral Interbody Fusion” (the three-level fusion). Allianz relied on, among other things, the evidence from Dr Casikar. It asserted that the treatment the worker sought was not reasonably necessary “for a workplace injury”. The s 74 notice expressly referred to Dr Casikar’s opinion that a microdiscectomy was the recommended treatment; Dr Al-Kawaja’s request for approval for a three level fusion, and Dr Bentivoglio’s opinion that the worker have a two level fusion with decompression of the L5 nerve roots. The notice said that Allianz had requested Dr Al-Kawaja and Dr Casikar to review Dr Bentivoglio’s report and the most recent MRI scan to “determine which of the three different surgeries are [sic] more appropriate”. Allianz was well aware that a two level fusion was one of the proposals being considered for the worker and it sought an opinion from Dr Casikar about it.

On 8 March 2013, Dr Casikar reported that the spinal fusions suggested by Dr Al-Kawaja and Dr Bentivoglio were not “sustainable as a consequence of the work related injury, particularly considering the fact that the worker has now both clinical and radiological evidence of improvement”. He thought that the worker would improve with a physical upgrading program and that the plan for surgery should be deferred and revisited later.

On 13 March 2013, Dr Al-Kawaja wrote to Allianz stating that discectomy for back pain is not successful. He added that the worker insisted that his problem was in his lower back not in his legs and that a three level fusion was “the way to go with [the worker]”.

On 22 May 2013, Dr Al-Kawaja again sought approval from Allianz for the three-level fusion recommended in January 2013. On 29 May 2013, Dr John Grant, neurosurgeon, examined the worker at the request of Allianz and noted that the worker had disc bulging at L3/4 and L5/S1 and a “significant disc prolapse at the L4/5 level” related to his employment. He considered the need for surgical management with decompression of the L4/5 segment with consideration being given to stabilisation of the L3/4 and L5/S1 levels.

On 5 July 2013, Allianz issued a second s 74 notice in which it again denied liability for the three level fusion. It again referred to the evidence from Dr Bentivoglio recommending a two level fusion. Essentially, it denied liability because the proposed three level fusion addressed a “non[-]work related injury”, Allianz asserting that the only work injury was to the L4/5 disc. In addition it asserted that it was not clear whether the work related injury was “totally responsible for [the worker’s] current condition and need for surgery”.

On 29 August 2013, Dr Casikar prepared a supplementary report in which he responded to various propositions put to him by Allianz. He agreed that the injury to the L3/4 disc had largely resolved, that surgery (presumably, to that level) would not be required. He agreed with Dr Grant that microdiscectomy at L4/5 was more appropriate. He said that a three level fusion was “not the optimal treatment” and the outcome was “likely to be very poor” and the worker would benefit from a microdiscectomy at L5/S1.

On 17 September 2014, Allianz issued a third s 74 notice declining liability for the proposed three level fusion. Again, this notice referred to Dr Bentivoglio’s evidence recommending a two level fusion. Again, Allianz relied on the opinion of Dr Casikar to deny liability.

On 15 November 2013, the worker filed an Application in the Commission claiming the cost of “[s]urgery – L3 – S1 Anterior Lateral Interbody Fusion”. In a Reply filed on 9 December 2013, the appellant denied liability on the grounds set out in the above s 74 notices.

On 11 December 2013, the Commission referred to an AMS, Dr Michael Davies, the question of whether the proposed “L3 to S1 anterior lateral interbody fusion” was reasonably necessary as a result of the worker’s injury (s 60(5) of the 1987 Act). After examining the worker on 11 March 2014, Dr Davies issued a non-binding MAC and concluded that the worker had sustained a lumbar disc injury (at L4/5). The worker also had “marked modic changes at L4/5 and L5/S1 and the L5/S1 disc [was] quite degenerate” and “desiccation of the L3/4 disc but this had not changed over time”.

Dr Davies said the “main issue” appeared to be whether the worker needed a two level fusion or a three level fusion. He agreed with Dr Al-Kawaja (and Dr Bentivoglio) that the worker’s main problem was back pain rather than leg pain and lumbar fusion was more appropriate, as opposed to lumbar discectomy. He clearly rejected Dr Casikar’s opinions that a fusion should only be done when there are abnormalities in the lower limbs. Dr Davies explained a fusion is to treat back pain and not radicular complaints in lower limbs.

In answer to the specific question of whether an L3 to S1 anterior lateral interbody fusion was reasonably necessary as a result of the injury on 10 February 2012, Dr Davies said it was not necessary to include the L3/4 level in the fusion and a “hybrid operation”, with fusion at L5/S1 and disc replacement would be a “preferable alternative”. Alternatively, a two level fusion at L4/5 and L5/S1 could be undertaken, but this would put the worker at risk of developing adjacent segment disease at L3/4 compared with a hybrid procedure.

The Arbitrator held that “lumbar fusion surgery [was] appropriate and relevant”, noting that, despite the daily ingestion of Panadeine Forte, the worker continued to suffer back pain that affected his ability to walk. He preferred the views of Drs Davies, Bentivoglio, Grant and Al‑Kawaja that surgical intervention was necessary. He said that he was unable to conclude that the three level surgery proposed by Dr Al-Kawaja was “reasonably necessary” treatment pursuant to s 60 of the 1987 Act. However, he was satisfied that the referral (to Dr Davies) could “be taken to include a proposal for surgery at two levels and the opinion of the AMS [Dr Davies] has been given with respect to that treatment”. He was satisfied that surgery by way of fusion at L4/5 and L5/S1 was reasonably necessary treatment.

The appellant challenged the Arbitrator’s determination. The issues in dispute in the appeal were whether the Arbitrator erred in:

• finding that an L4/5 and L5/S1 fusion is reasonably necessary treatment in circumstances where it was not the subject of a claim by the worker, and
• making an order for payment of the costs associated with an L4/5 and L5/S1 fusion in circumstances where a claim had never been made for such treatment.

Held: The Arbitrator’s determination was confirmed.

Discussion and findings

1. The appellant’s submissions did not challenge the Arbitrator’s finding that a two level fusion was reasonably necessary treatment per se. The challenge was that, given the pleadings and the nature of the referral to Dr Davies, the Arbitrator was not entitled to determine whether a two level fusion was reasonably necessary, even though it is of a very similar nature to the treatment proposed by Dr Al-Kawaja. That challenge was rejected [40].

2. The appellant’s submissions overlooked the fact that the Commission “is not a court and is not expected to function as a court” (Fletcher International Exports Pty Limited v Barrow [2007] NSWCA 244; 5 DDCR 247 (Barrow), citing Aluminium Louvres & Ceilings Pty Ltd v Zheng [2006] NSWCA 34; 4 DDCR 358). As such, the Commission is not bound by strict pleadings (Far West Area Health Services v Radford [2003] NSWWCCPD 10). Moreover, it is a tribunal that has a statutory obligation to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms (s 354(3) of the 1998 Act) [41].

3. It was first necessary to consider the history of the matter. While Dr Al-Kawaja recommended a three level fusion, he added that the worker wished to obtain a second opinion. He obtained that opinion from Dr Bentivoglio, who recommended only a two level fusion with decompression of the L5 nerve roots. Allianz considered and rejected both these recommendations, which were clearly presented as alternatives, preferring to rely on the evidence from Dr Casikar that a microdiscectomy was the appropriate treatment. Dr Casikar’s opinion was firmly rejected by Dr Davies, and by the Arbitrator. The appellant did not challenge that finding, but instead argued a narrow technical point which was without merit [42]–[43].

4. The second s 74 notice again acknowledged Dr Bentivoglio’s opinion, which recommended a two level fusion. The s 74 notice again denied liability. It asserted that it was unclear whether the injury was “totally responsible for [the worker’s] current condition and need for surgery”. This was the wrong test. The test in s 60 is whether the proposed treatment is reasonably necessary as a result of the injury. The critical point was that Allianz was well aware, based on the reports from Dr Al-Kawaja and Dr Bentivoglio, two proposals were mooted: the three level fusion recommended by Dr Al-Kawaja and, in the alternative, the two level fusion recommended by Dr Bentivoglio. Allianz rejected both proposals in its subsequent s 74 notice [44]–[45].

5. The real dispute was whether the worker should have surgery in the form of a lumbar fusion, as recommended by Dr Al-Kawaja and Dr Bentivoglio and, if so, whether that fusion should be at two levels or three. That was so notwithstanding that the Application and the referral to the AMS only referred to the three level fusion [46].

6. While regrettable that the Application was not formally amended to make clear that the two level fusion was claimed in the alternative, that caused no prejudice to the appellant or Allianz. Allianz was well aware that the worker had been given different advice as to the appropriate treatment for his injury and it was in possession of Dr Bentivoglio’s opinion, which it considered and rejected. Special procedures apart, cases are determined on the evidence, not the pleadings (Banque Commerciale SA (in liq) v Akhil Holdings Ltd [1990] HCA 11; 169 CLR 279) [47].

7. The Commission should consider and determine a dispute that is properly before it. To suggest that the only dispute in the present matter was whether the worker should have a three level fusion, and nothing else, was unrealistic and artificial. It ignored the history of the matter, and the substantial merits of the claim [48].

8. The Commission may consider the merits of a matter properly before it even though there has not been a claim in accordance with the WorkCover Guidelines (Tan v National Australia Bank Ltd [2008] NSWCA 198 (Tan) and Barrow). Moreover, as explained by Basten JA in Tan, at [42], the objectives of the legislation, which are directed primarily to ensuring compensation for work-related injury, will not be promoted by a narrow reading of a provision which allows recovery of compensation in circumstances where procedural requirements have not been followed [49].

9. In the present case, there was a claim properly before the Commission for proposed surgery to the worker’s back. The medical evidence was in conflict as to which treatment was reasonably necessary as a result of the injury or injuries. Allianz sought and obtained extensive evidence on that issue. That conflict was the subject of three s 74 notices in which Allianz steadfastly disputed the claim, well aware that a two level fusion was one option recommended for the worker. It was specious for Allianz to assert that there was no dispute with respect to the proposed two level fusion. Clearly, there was such a dispute and, equally clearly, the AMS properly expressed an opinion on it, even though he was not formally asked to do so [50].

10. An assessment by an AMS under s 60(5) is non-binding. That opinion is evidence that an Arbitrator is entitled to consider, but it is not conclusive. The requirement for strict compliance with s 325, for a MAC to be valid (Jopa Pty Ltd t/as Tricia’s Clip-n-Snip v Edenden [2004] NSWWCCPD 50), does not apply with the same rigor to a non-binding assessment. It was necessary for the AMS to provide an assessment about the dispute. Dr Davies did that in a way that considered the several different issues, even though the referral only asked about a three level fusion [51].

11. While AMSs should normally confine their assessments to the issue or issues referred to them, in the present case, where Allianz had assessed the proposal for a two level fusion, and where that was, on one view, the main issue in dispute, it was appropriate for Dr Davies to deal with the matter as he did. It was also appropriate for the Arbitrator to consider Dr Davies’s opinion in his assessment of the claim [52].

12. The submission that it was not for the Arbitrator to “speculate” on what treatment would be reasonably necessary was based on the false assumption that that is what the Arbitrator did. He determined the matter according to the substantial merits of the case. His assessment of the evidence included a detailed consideration of the appellant’s case, as outlined in Dr Casikar’s several reports and also Dr Grant’s report. His conclusion that the two level fusion was reasonably necessary as a result of the injuries was open on the evidence and was not challenged on its merits [53].

13. The suggestion that there be a further claim was contrary to the clearly stated system objectives in the 1998 Act. A further claim would involve a further unnecessary delay in the resolution of the claim. Key objectives of the 1998 Act are to provide “prompt treatment of injuries” in order to assist injured workers (s 3(b)) and to be “fair, affordable, and financially viable” (s 3(d)). These objectives would not be met if the worker had to bring a separate claim for the cost of a two level fusion [55].

14. It is not uncommon for doctors to disagree on the proposed treatment of a patient. However, in the present case, the overwhelming weight of the expert opinion supported the worker having a fusion. The real dispute was, as acknowledged by Dr Davies, the extent of the fusion. That issue was well canvassed in the evidence. The appellant had every opportunity to call evidence and make submissions on it. It did so. There was no reasonable ground for making the worker make a fresh claim in respect of a matter that has been fully and fairly considered on its merits [56].

15. It was open to the Arbitrator to determine that the referral to the AMS could be “taken to include a proposal for surgery at two levels” and that the AMS expressed an opinion with respect to that treatment. More accurately, in the terms of s 60(5), with respect to the dispute about the proposed treatment, namely, the proposed surgery, the AMS provided an “assessment” under Pt 7 of Ch 7 of the 1998 Act [57].

16. As earlier noted, the AMS’s assessment was not conclusively presumed to be correct under s 326(1), but was evidence that the Arbitrator was entitled to consider, and did consider, in his assessment of whether the proposed two level fusion was reasonably necessary as a result of the accepted work injuries. The Arbitrator’s finding that the two level fusion proposed by Dr Bentivoglio was reasonably necessary as a result of the work injuries was open to him and disclosed no error [58].

Nyngan Community Homes Association t/as Mick Glennie Hostel v Black [2015] NSWWCCPD 5

Alleged failure to give reasons in support of finding on injury; failure to determine all issues in dispute; failure to determine if worker suffered a second injury in the nature of an aggravation of a disease; relevance of lack of contemporaneous medical evidence; alleged failure to exercise discretion in s 40(1) of the 1987 Act, as it stood prior to the amendments introduced by the 2012 amending Act; failure to amend pleadings to accord with claim made; error in calculating entitlement to weekly compensation; unsatisfactory pleadings

Roche DP

27 January 2015

Facts:

In 2002, the first respondent, the worker, started work for the appellant (the first respondent at the arbitration). She continued working for the appellant until about 30 June 2007 when the second respondent took over the appellant’s business. She continued to work for the second respondent, which work involved heavy lifting.

On 17 November 2005, while still working for the appellant, the worker tripped on a resident’s walking frame and injured her left knee. As a result, she suffered consequential conditions in her right knee and back. The worker also suffered an aggravation of a disease due to heavy work subsequently performed with the second respondent until 18 May 2010.

On 9 January 2013, the worker filed an Application in the Commission in which she claimed against the appellant and the second respondent lump sum compensation, weekly compensation from 19 May 2010, and compensation for medical expenses against the appellant and the second respondent. The claim against the appellant was on the basis of the injury on 17 November 2005. The basis of the claim against the second respondent was not identified. On 29 October 2013, a teleconference was conducted with Arbitrator Perrignon who recorded that weekly compensation was claimed from 1 July 2009 to date and continuing.

In an amended Application filed on 5 November 2013, against both the appellant and the second respondent, the worker claimed weekly compensation from 19 May 2010 to 31 December 2012; hospital and medical expenses under s 60 of the 1987 Act and lump sum compensation under s 66 for whole person impairment as a result of the condition of her lumbar spine, left knee and right knee together with compensation for pain and suffering under s 67.

As the worker was not an existing recipient of weekly compensation immediately before 1 October 2012, the claim for weekly compensation was under the provisions of the 1987 Act, as it stood prior to the amendments introduced by the 2012 amending Act, which amendments did not apply to her until 1 January 2013.

In support of her claim, the worker relied on evidence from an orthopaedic surgeon that the November 2005 fall caused an injury to the left knee, which required a total knee replacement. He added that the altered gait caused by that injury affected the worker’s right knee and back.

The appellant and the second respondent disputed liability on various grounds. The appellant relied on evidence from another orthopaedic surgeon, who said that the worker had sustained an injury on 17 November 2005 that aggravated underlying osteoarthritis in her left knee, and denied that she injured her right knee or suffered a back injury as a result of her employment.

Arbitrator Phillips SC accepted that the 2005 injury was “of some significance” and that it aggravated a pre-existing condition (osteoarthritis) in her left knee. He found that the aggravation continued and ultimately caused her to have a total left knee replacement much sooner than it would normally have occurred. He also accepted that, due to the altered gait caused by the left knee injury, the worker experienced symptoms in her right knee and lumbar spine.

The Arbitrator made no findings or orders with respect to the claim against the second respondent.

In respect of the period between 1 July 2009 and 18 May 2010, for which no weekly compensation had been claimed in the amended Application, the Arbitrator awarded the worker the purported difference between her probable weekly earnings but for her injury ($557) and her actual weekly earnings ($391), namely, $156 per week. Even if compensation had been claimed for this period, the Arbitrator’s calculations were wrong. The difference between $557 and $391 is $166 not $156. In addition, on the evidence in the wage schedules in the amended Application, the worker’s actual earnings were, in one of the schedules, $318.80 per week not $391. To add to the confusion, the other schedule asserted that actual earnings were $557.40. Further, neither schedule, read on its own, established a loss for the period from 1 July 2009 to 18 May 2010.

In respect of the period from 18 May 2010 to 31 December 2012, the Arbitrator assessed the worker to be able to earn $160 per week and he awarded the difference between that amount and what he considered to be her probable weekly earnings if she had not been injured ($557), namely, $397 per week.

The Arbitrator made a general order for the payment of the worker’s medical expenses under s 60 and referred the assessment of the worker’s whole person impairment as a result of her injuries and consequential conditions to the Registrar for referral to an AMS.

The Arbitrator said that there was scant evidence of any injury to the worker’s neck, gastro-intestinal tract or psyche and he made an award for the appellant and the second respondent in respect of those claims. This finding was not challenged on appeal.

The appellant appealed. The issues in dispute in the appeal were whether the Arbitrator erred in:

• failing to provide proper and adequate reasons “in finding liability for the left knee, right knee and lumbar spine rested with the frank injury of 17 November 2005” (reasons);
• failing to “determine on the evidence (including that of [the worker]) the lack of any contemporaneous medical evidence supporting a link between [the worker’s] ongoing knee symptoms and the event of 17 November 2005” (contemporaneous medical evidence);
• failing to “have any or sufficient regard for [the worker’s] evidence that she believed her left knee was caused by the nature and conditions of employment with her employer from 2002 until 18 May 2010” (nature and conditions);
• determining “that there was no real contest as to whether or not [the worker] had an altered gait as a result of the left knee injury; and that there was no dispute as to consequential injury to the lumbar spine or right knee” (altered gait);
• failing to exercise his “discretion pursuant to section 40 of the [1987] Act” (section 40 discretion), and
• in awarding compensation at all pursuant to s 40 for the period 1 July 2009 to 18 May 2010 (date from which the claim for weekly compensation commenced).

Held: The challenge to the Arbitrator’s finding that the worker injured her left knee in a fall at work in 2005 and suffered consequential conditions in her right knee and back was unsuccessful. The challenge to the Arbitrator’s failure to determine if the worker suffered an aggravation of a disease due to work with the second respondent until 18 May 2010 was successful. The challenge to the date from which weekly compensation was sought and the calculation of compensation was partly successful. As a result, significant parts of the claim must be re-determined before a different Arbitrator.

Reasons

1. The extent and scope of a trial judge’s (or Arbitrator’s) duty to give reasons depends upon the circumstances of the individual case (Mifsud v Campbell (1991) 21 NSWLR 725). The obligation to give reasons is related to and dependent upon the submissions presented to the judicial officer. It was therefore appropriate to consider how the parties conducted the case at the arbitration [56].

2. The submission that the Arbitrator failed to provide reasons for finding that the injury to the worker’s left knee, and the consequential conditions in her right knee and lumbar spine, were the result of the injury on 17 November 2005 was plainly wrong. The Arbitrator clearly identified why the worker was entitled to succeed against the appellant [70].

3. However, the 2005 injury was only part of the worker’s claim. The worker also alleged that, in addition to the 2005 injury, she suffered an injury in the nature of an aggravation of a disease caused by her heavy duties up to 18 May 2010. The Arbitrator did not address that issue. His failure was highlighted by the fact that, after he delivered his decision, the second respondent asked for an additional order in its favour. As the Arbitrator made no findings dealing with the claim against the second respondent, it was not open to make that order. It followed that the Arbitrator erred in failing to properly determine all issues in dispute and this part of the claim, and the other matters discussed below, must be re-determined at a second arbitration [71].

Contemporaneous medical evidence

4. In the civil law, the task of a judge (or Arbitrator) is to decide, based on the whole of the evidence (denials and all), what he or she accepts (Chanaa v Zarour [2011] NSWCA 199). Considering the evidence on which the parties addressed, and the issues argued, the Arbitrator accepted the evidence from the worker’s orthopaedic surgeon and appellant’s orthopaedic surgeon and found that the worker suffered an injury to her left knee on 17 November 2005 and that, because of an altered gait caused by that injury, the worker developed symptoms in her right knee and back. Those findings were open on the evidence and disclosed no error. They are not open to challenge at the next arbitration [86].

Nature and conditions

5. This ground raised the real issue on appeal, namely, the Arbitrator’s failure to consider whether, in addition to the injury on 17 November 2005, the worker also suffered an aggravation injury due to her heavy duties with the second respondent. As it was accepted that the Arbitrator failed to determine this part of the claim and that, as a result, the matter must be re-determined, it was not necessary to say any more about it [88].

6. The fact that this issue must be re-determined, and may affect the worker’s entitlement to weekly compensation, means that the awards of weekly compensation must be also revoked and re-determined in light of the assessment of the allegations against the second respondent. This is not to say that the worker did not have an entitlement to weekly compensation against the appellant, but merely that her entitlement must be re-determined in light of the claim against the second respondent [89].

Altered gait

7. First, the reliance on the s 74 notice was misplaced. It did not specifically address the consequential conditions in the right knee and lumbar spine, though it was accepted at the arbitration that it disputed liability for them. Second, at the arbitration, neither employer challenged counsel for the worker’s submission, that she had problems with her right knee and lumbar spine because of her significantly altered gait due to the injury to the left knee. Third, nothing was put against the worker’s credit and there was no reason not to accept her evidence that she walked with an altered gait because of the injury to her left knee [93]–[95].

8. In these circumstances, it was open to the Arbitrator to conclude that nothing was put against the worker having an altered gait (as a result of the left knee injury on 17 November 2005). This ground of appeal was without substance. The Arbitrator’s finding that, as a result of the left knee injury on 17 November 2005, she walked with an altered gait, which contributed to her back and right knee symptoms, is not open to challenge at the next arbitration [96].

9. It was not necessary for the Arbitrator to deal with this issue in any greater detail than he did. It was open to him to accept the evidence of the worker’s orthopaedic surgeon, which he did. He did not have to give reasons for rejecting an opinion the appellant’s orthopaedic surgeon never expressed and upon which no submissions were made. The Arbitrator’s conclusions were consistent with the evidence and disclosed no error. They are not open to challenge at the re-determination [103]–[105].

Section 40 discretion

10. For the reasons discussed below dealing with the wage schedules, the worker’s actual and probable earnings must be re-visited at the next arbitration. That was not to say that the worker was not entitled to an award of weekly compensation, but merely that the period and quantum of that award, including whether it should be for partial or total incapacity, and whether it should be paid by the appellant alone, or by the appellant and the second respondent, must be re-determined [113].

Date from which the claim for weekly compensation commenced

11. It was correct that the amended Application filed on 5 November 2013, a few days after the teleconference on 29 October 2013, only claimed weekly compensation from 19 May 2010. This was an error, though the worker’s solicitor did not concede that it was [122].

12. This conclusion was consistent with the teleconference outcome form completed by Arbitrator Perrignon on 29 October 2013 where he recorded that the claim was “from 1 July 2009” and Arbitrator Phillips’s statement that wages were claimed “from 1 July 2009” [126].

13. There were two conflicting wage schedules in the amended Application. It was asserted, in the amended Application, that the worker relied on one “or” the other but it was never made clear which one. The first wage schedule asserted that actual earnings and comparable earnings between 1 July 2009 and 18 May 2010 were $318.80 per week and that comparable earnings from 19 May 2010 to date were also $318.80. The second wage schedule asserted that actual earnings and comparable earnings between 1 July 2009 and 18 May 2010 were $557.40 per week and that comparable earnings from 19 May 2010 to date were also $557.40 [128]–[129].

14. The wage schedules, when considered separately, did not support the claim for the period from 1 July 2009 to 18 May 2010 and it was not open to combine the schedules in the way the Arbitrator appeared to have attempted to do. In any event, his calculations were wrong and this reason, and the fact that the second respondent’s liability must be re-determined, required that this part of the claim be set aside [133].

Yang v Wilkhahn Asia Pacific [2015] NSWWCCPD 4

Challenge to factual findings; s 352 of the 1998 Act; requirement to establish error; weight of evidence

O’Grady DP

23 January 2015

Facts:

The worker commenced employment with the respondent in 1999 as a sewing machinist. Her duties involved the physically arduous stitching of leather upholstery fitted to office chairs which were manufactured by the respondent. She alleged that, by reason of the physical demands of her work, she suffered injury to her neck, lumbar spine and arms.

In August 2012, she consulted a general practitioner by reason of a worsening of her physical symptoms. In November 2012, she consulted a second general practitioner who issued a medical certificate (not a WorkCover Certificate) on 6 November 2012.

She continued working and was at first reluctant to present the certificate to her employer. She continued with her duties until the Christmas break in December 2012. She stated in evidence that she handed that certificate to her supervisor in December when she was “no longer capable to do the lifting due to severe pain”. Her supervisor, the respondent’s production manager, stated in evidence that in December 2012 he was informed that the worker did not wish to continue as leading hand “because she can’t deal with her colleagues anymore because they don’t like her”. The production manager advised her to consider her position carefully over the Christmas holiday and to speak with him again. No report of injury was made until presentation of a WorkCover medical certificate in January 2013.

On 7 January 2013, the worker, by reason of continuing physical symptoms, consulted a third general practitioner who issued a WorkCover NSW Medical Certificate on that day which described the occurrence of the injury as “long term repetitive sewing leather and heavy lifting for many years”. The date of injury was nominated in that certificate as 25 August 2012. That initial certificate certified the worker as being unfit until 14 January 2013. She presented that certificate to her employer and did not return to duties following the Christmas New Year holiday break. The production manager’s evidence was that this was the first notice received by the respondent concerning her alleged injuries.

The respondent’s orthopaedic surgeon examined the worker on 26 February 2013. His opinion was that there was no evidence the worker had suffered any work related injury at her cervical or lumbar spine and her symptoms were “due to pre-existing degenerative cervical and lumbar spondylosis which is constitutional in origin and not work-related”.

The worker claimed compensation benefits following which weekly benefits and medical expenses were paid by the respondent’s insurer. In April 2013, she was certified as being fit for suitable duties. She returned to work, working three hours per day, initially for three days per week. After one month, the duties were increased to four hours per day, four days per week. On 2 May 2013 the insurer declined liability for further weekly payments. She continued performing part time suitable duties until 1 May 2014 and has not worked since.

The dispute between the parties concerning the worker’s entitlement to weekly compensation came before the Commission. An award was made for the respondent. The worker appealed.

Submissions in support of the appeal included the enumeration of eight grounds of appeal each of which, it was put, constituted error of law on the part of the Arbitrator. The “grounds” relied upon did not identify with precision the error allegedly committed by the Arbitrator in the course of her reasoning. The complaints concerned a suggested failure “to adequately address [the worker’s] case”, as well as a suggested failure to “provide adequate reasons in [sic] dismissing the worker’s case”. The Arbitrator’s finding concerning the insufficiency of medical evidence to establish injury by “disease or aggravation of a disease” was challenged as being “against the weight of the evidence”. General assertions were made concerning the Arbitrator’s reasoning including suggested failure to “make clear” and to “adequately address issues and evidence”. It was also asserted that the Arbitrator “failed to conduct any, or any adequate a [sic] common sense evaluation of the causal chain” and that the Arbitrator had failed “to properly consider the medical evidence from [the orthopaedic surgeon qualified for the respondent]”.

The submissions subsequently put did not address the individual “grounds” relied upon, but rather appear as a narrative criticism of the Arbitrator’s reasoning process. Much of that put in argument appeared to invite a rehearing on this appeal rather than, as is required, the identification of relevant error.

Held: The Arbitrator’s decision was confirmed.

Disposition of the appeal

1. It was argued that the Arbitrator “provided an unsatisfactory explanation as to her reasons on [sic] finding that [the worker] suffered no injury...”. It was asserted that the Arbitrator “showed lack of understanding of [the worker’s] case”. So far as this submission alleged that the Arbitrator had failed, as was her duty, to provide adequate reasons for her conclusion, the argument was rejected [43].

2. In her reasoning and findings, the Arbitrator correctly summarised the state of the evidence concerning the allegation of a frank injury occurring in August 2012. She identified the deficiencies in that evidence and it was clear that her evaluation of the weight of that evidence, which was a matter for her to determine, was founded upon the identified deficiencies. No relevant error was demonstrated [44].

3. With respect to the allegation of “injury being a disease or the aggravation of a disease” the Arbitrator’s conclusion included a plain statement that the medical evidence relied upon by the worker was “insufficient” to establish causation of a disease or aggravation of any relevant disease. That conclusion was reached by the Arbitrator after consideration of all relevant medical evidence, the application of s 9A of the 1987 Act and consideration of the reasoning of the Court of Appeal in Wyong Shire Council v Paterson [2005] NSWCA 74; 5 DDCR 13. No relevant error concerning the Arbitrator’s reasoning for her conclusion was made out [45].

4. A complaint was made in submissions that the Arbitrator “failed to take into account the appellant’s impeccable reputation as a devoted and hard-working employee”. Whilst not expressly stated in the course of submissions, the argument seemed to suggest error by the Arbitrator through her failure to take into account relevant evidence. That argument was rejected. The Arbitrator did not “ignore” the relevant evidence. The evidence was faithfully recorded during the course of a careful summary of relevant facts. That the work duties performed by the worker were arduous was never in dispute. As the appeal was not a rehearing or a review and the submissions concerning the worker’s dedication to her work did not go to any question of relevant error, this argument was rejected [46].

5. A complaint was made that the Arbitrator “chose to dismiss [the worker’s] medical evidence as insufficient, but failed to provide adequate reasoning as to how she came to this conclusion”. The Arbitrator’s reasoning concerning the state of the medical evidence adequately addressed all relevant evidence. Her evaluation of that evidence was a matter for her to determine. Her conclusions were open to her. Any suggestion that the reasoning was such that error was demonstrated must be rejected [47]–[48].

6. The submissions included a somewhat confused argument concerning the Arbitrator’s preference for the production manager’s evidence. The Arbitrator made plain that a relevant conflict existed between his evidence and the worker’s evidence concerning the conversation between them in December 2012. This conflict gave rise to the only relevant dispute between the parties which involved an issue of credit. This conflict, such as it was, was resolved by the Arbitrator having regard to the absence of contemporaneous medical evidence. The Arbitrator’s conclusion was reached following a consideration of the evidence as a whole. The objective circumstances and the state of the evidence led to the Arbitrator’s conclusion as to the probable occurrences on that occasion. No relevant error was demonstrated [49].

7. It was submitted that the Arbitrator “failed to properly understand, or adequately address” the medical evidence from the appellant. It seems to be argued that the Arbitrator’s rejection of the evidence constitutes relevant error. It must be assumed that the error suggested was one of fact. Whilst minds may differ concerning the evaluation of the evidence, the criticism of that evidence made by the Arbitrator was founded upon matters recorded in the relevant reports as well as the evidence generally and no relevant error has been made out. The circumstances addressed by Barwick CJ in Whitely Muir and Zwanenberg Ltd v Kerr (1966) 39 ALJR 505 (at 506) were not  demonstrated, that is 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. [50]–[51]

8. The Deputy President accepted the respondent’s submission that “up to November 2012, the medical evidence, at its highest, showed that [the worker] was suffering from a pre-existing disease and was advised not to do any heavy work (being heavy lifting and/or heavy repetitive work)”. The Arbitrator’s conclusions that the allegation of causation, of both injury simpliciter and relevant aggravation, had not been made out, were available to her on the evidence [52].

9. The submissions included a lengthy criticism of the evidence of the orthopaedic surgeon qualified for the respondent and criticism of the Arbitrator’s acceptance of that evidence. The difficulty with the argument as advanced was that it again appeared that the appellant was seeking a review or rehearing of the dispute. There was a failure to identify in those submissions any relevant error. It also seems to be suggested that the Arbitrator had failed to consider the question of causation as involving a “common sense evaluation of the causal chain” as was discussed in Kooragang Cement Pty Ltd v Bates (1994) 35 NSWLR 452; 10 NSWCCR 796 [53].

10. Whilst it was correct that certain aspects of the orthopaedic surgeon’s evidence were accepted by the Arbitrator, it was clear from her reasoning that the worker’s failure to establish on the evidence that she had received relevant injury had come about by reason of an absence, in the Arbitrator’s opinion, of evidence in her own case capable of satisfying the Commission of that fact. The Arbitrator’s conclusion concerning the persuasiveness of his evidence, was one open to her on the evidence and no relevant error was demonstrated [54].