All Australian Greetings Pty Limited v Houghton

[2007] NSWWCCPD 236

WORKERS COMPENSATION COMMISSION

DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR

CITATION:All Australian Greetings Pty Limited v Houghton [2007] NSWWCCPD 236

APPELLANT:  All Australian Greetings Pty Limited

RESPONDENT:  Jacqueline Ann Houghton

INSURER:Employers Mutual NSW Limited

FILE NUMBER:  WCC2924-07

DATE OF ARBITRATOR’S DECISION:          9 July 2007

DATE OF APPEAL DECISION:  3 December 2007

SUBJECT MATTER OF DECISION:                Leave to appeal; determination of an interlocutory nature; section 352(8) Workplace Injury Management and Workers Compensation Act 1998.

PRESIDENTIAL MEMBER:  Acting Deputy President Kevin O’Grady

HEARING:On the papers

REPRESENTATION:  Appellant:      Stephen Lee Legal     

Respondent:   Ens Lawyers

ORDERS MADE ON APPEAL:  1.    Leave to appeal is refused.

2.The Appellant is to pay the Respondent’s costs of the appeal.

BACKGROUND TO THE APPEAL

1. On 1 August 2007 All Australian Greetings Pty Limited (‘the Appellant’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 9 July 2007.

1. The Respondent to the Appeal is Jacqueline Ann Houghton (‘the Respondent’).

1. The Respondent, who was born on 11 June 1967, was employed by the Appellant as a Picker, Packer, Driver, Sales Representative and Merchandiser between February 2001 and July of 2005.  In May of 2005 the Respondent experienced painful symptoms in her neck and back following loading duties performed in the course of that employment.  Those symptoms subsequently extended to the Respondent’s right arm involving numbness in her right thumb, index and middle fingers.  It appears that, by reason of her symptoms, the Respondent was unable to perform her duties and that she received weekly compensation following a claim against her Employer with respect to workers compensation benefits.  The Respondent resumed employment in July 2006 performing light security duties with an organisation described as Yates Security.

1. The Respondent was examined by Dr Allan W Searle, Consultant Orthopaedic Surgeon, on 5 April 2006. Following that examination a claim was made on behalf of the Respondent by her Solicitors against the Appellant and its Insurer with respect to lump sum entitlement pursuant to section 66 of the Workers Compensation Act 1987 (‘the 1987 Act’). That claim was made by letters dated 13 June 2006. Agreement with respect to the Respondent’s entitlement to lump sum compensation was not reached between the parties and the Respondent, on 26 April 2007, registered an Application to Resolve a Dispute (‘ARD’) with the Registry of the Commission. That ARD alleged injury to the Respondent’s neck and right arm, the date of occurrence being particularised as 31 May 2005. The only claim brought before the Commission was in respect of an entitlement to lump sum compensation, as earlier claimed, with respect to 7% Whole Person Impairment.

1. A Reply to the Respondent’s ARD was filed on behalf of the Appellant with the Registry of the Commission on 15 May 2007.  Part 3 of that Reply raised the following matters as being in dispute between the parties:

“1.The Applicant did not suffer injury to her neck and right arm as alleged or at all whilst employed by the Respondent.

2.If the Applicant did suffer injury in the form of an aggravation of a pre-existing degenerative condition, that aggravation has ceased, and the Applicant’s clinical status has returned to the “pre-aggravation” status.  She has completely recovered from any temporary aggravation of the degenerative condition.

3.Any disturbance to underlying pathological structures has ceased and the Applicant is not suffering any work related injury.

4.The effects of a work related aggravation have ceased and the Applicant’s current clinical condition is solely reflective of an unrelated degenerative condition.

5.The Applicant is not entitled to the compensation as alleged or at all pursuant to Section [sic] of the Workers Compensation Act 1987.

6.A Section 323 Workplace Injury Management [sic] Act 1998 deduction is appropriate.”

1. The Respondent’s Application came on for hearing before an Arbitrator on 21 June 2007 and a Certificate of Determination issued on 9 July 2007.

THE DECISION UNDER REVIEW

1. The ‘Certificate of Determination’ dated 9 July 2007 records the Arbitrator’s orders as follows:

“The determination of the Commission in this matter is as follows:

1.That the matter be remitted to the Registrar for referral to an AMS for assessment of Whole Person Impairment.

2.That the Respondent pay the Applicant’s costs as agreed or assessed.”

ISSUES IN DISPUTE

1. The issues in dispute in the appeal are:

   (i)whether the Arbitrator erred in law in referring the matter for assessment by an AMS;

   (ii)whether the Arbitrator erred in law in her interpretation of section 4 of the 1987 Act;

   (iii)whether the Arbitrator erred in law in failing to determine the matters in dispute raised in the Reply with respect to section 4 of the 1987 Act;

   (iv)whether the Arbitrator erred in law in failing to determine the matters in dispute raised in the Reply with respect to the liability, if any, of the Appellant in respect of permanent impairment, and

   (v)whether the Arbitrator erred in law in finding that the AMS was to determine a threshold issue as to the liability of the Appellant in respect of permanent impairment such issue being whether or not the Worker had fully recovered from the effects or symptoms following the injury alleged.

1. The summary of the issues as set forth above is taken from the Appellant’s stated “Grounds of Appeal” set forth at paragraph 2.6 of its Application filed with the Registry.

ON THE PAPERS REVIEW

1. Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act”) provides:

“(6)     If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”

1. Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by the parties that the appeal can proceed to be determined on the basis of these documents, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.

LEAVE

1. The right of a party to bring an appeal against a decision of the Commission constituted by an Arbitrator is regulated by the provisions of section 352 of the 1998 Act.  Before the Commission grants leave to proceed with an appeal it must be determined as to whether the requirements of that section, particularly with respect to time limitations and quantum as specified, have been met.  Section 352 of the 1998 Act was the subject of amendment following the enactment of the Workers Compensation Legislation Amendment (Miscellaneous Provisions) Act 2005, which came into force on 1 November 2006. Of particular significance in the present matter that amending Act provided, inter alia, for the inclusion of the following subsection:

“(8)  In this section, “decision” includes an award, interim award, order, determination, ruling and direction, but does not include any award, order, determination, ruling or direction of an interlocutory nature prescribed by the regulations.”

1. The submissions which accompanied the Appellant’s Application for Leave to Appeal addressed the time and quantum requirements contained in the provisions of section 352 as well as the question of construction and application of section 352(8).  In dealing with that last mentioned subsection the Appellant placed reliance upon the decision of Deputy President Roche in P&O Ports Ltd v Hawkins [2007] NSWWCCPD 87 (‘Hawkins’).  The Respondent in her submissions addressed the threshold matters of time and quantum prescribed by section 352 however no attention in those submissions was given to the relevance or otherwise of the provisions of section 352(8).

1. On 19 October 2007 the decision of Bagtrans Pty Limited vSimunic (2007) NSWWCCPD 212 (‘Bagtrans’) was delivered by Acting President Byron.  This decision post dates the filing by the parties of their submissions with respect to the present appeal.  Having regard to the matters addressed by the Acting President in the matter of Bagtrans, a Direction was issued by the Commission to the parties which drew attention to that decision and included a direction that the parties make written submissions with respect to the following issues:

“Ÿ     whether the current appeal is against an order, ruling, determination or direction of an interlocutory nature, and , if so,

Ÿthe basis on which leave to appeal can be granted.”

That direction was issued on 31 October 2007 and submissions in response have since been received by the Registry and are before the Commission for its consideration.

Operation of Section 352(8) of the 1998 Act

1. Having regard to the terms and effect of the Arbitrator’s determination made 9 July 2007 it becomes necessary to determine whether such constitutes a “decision” within the meaning of section 352 of the 1998 Act.  It is argued on behalf of the Appellant that the Arbitrator’s determination “is a final decision not an interlocutory decision” (paragraph 6 of Supplementary Submissions).  Reliance is placed by the Appellant upon the decision of Licul v Corney [1976] 50 ALJR 439 (‘Licul’) and Hawkins.

1. It is further argued on behalf of the Appellant that the Arbitrator’s referral to an AMS for assessment of Whole Person Impairment before “ventilation of the issue of “injury” as raised by the Appellant Employer in the Reply thereby disposes of the Employer’s rights in relation to the issue of injury and its entitlement to defend the claim on the basis of the evidence, which is properly before the Commission” (paragraph 12 Supplementary Submissions).  It is argued that “the determination of the Arbitrator in this case is final …”.  Following the Appellant’s argument with respect to the “finality” of the Arbitrator’s determination with respect to the issue of injury it is noted by the Appellant that the Arbitrator made no order or direction with respect to referral back to her following assessment by the Approved Medical Specialist.  The Appellant seeks to draw an inference from the absence of such order or direction that the Arbitrator had “an intention to introduce finality” (paragraph 17 Supplementary Submissions).

1. It is further argued on behalf of the Appellant that to treat the Arbitrator’s determination as interlocutory thereby compelling the Appellant to pursue its rights to appeal following a determination of the Commission made after receipt of the Medical Assessment Certificate would offend the objectives of the Commission (paragraph 20 Supplementary Submissions).

1. The general thrust of the Appellant’s arguments with respect to section 352(8) is to be found at paragraph 25 of its Supplementary Submissions:

“25.The decision appealed against effectively relates to a failure to make a threshold finding as to liability for permanent impairment before referral to an Approved Medical Specialist thereby effectively transferring the exclusive jurisdiction of the Commission to the medical practitioner practicing as a Approved Medical Specialist.  This it is submitted is not and never has been the intention of the Workers Compensation Legislation.”

1. The Appellant’s last mentioned submission should be considered in context with what was stated at paragraph 4 of its Supplementary Submissions:

“4.The Appellant Employer in these proceedings has raised an issue of injury and it is submitted that in accordance with the decision of Total Steel of Australia Pty Ltd –v- Waretini [2007] NSWWCCPD 33 (2 February 2007) and Spicer –v-[sic] Axle Australia Pty Ltd –v- Merza [2007] NSWWCCPD 148 (27 June, 2007) it was incumbent upon the Arbitrator to make a determination of whether the symptomatic effects of the injurious event had completely resolved or alternatively whether the symptomatic effects were continuing so as to provide the Arbitrator with a mandate to refer the matter to the Registrar for ongoing referral to an Approved Medical Specialist.”

1. The Respondent in its Supplementary Submissions argues that the Arbitrator was correct in her approach to the dispute between the parties.  The Respondent notes what is described as an “admission” which was noted by the Arbitrator at the hearing and is recorded at page 6 of the Transcript of those proceedings (‘Transcript’).  It was there recorded:

“… I also note for the record that the Respondent in this matter has conceded that the Applicant sustained an injury in the course of her employment on 31 May 2005 and that her employment was a substantial contributing factor to that injury …”

1. It is argued that in light of the “admission” made by the Appellant  “it is for an AMS to make the final determination in relation to a degree of impairment dispute” (paragraph 8 of Supplementary Submissions).  It is asserted by the Respondent that “the matter should never have been before the Arbitrator in all the circumstances …” and further that “it begs the question as to whether the decision of the Arbitrator was appellable as the matter should never have been before the Arbitrator”.

1. Reference is made by the Respondent to the decision in Bagtrans and it is argued on behalf of the Respondent that:

“… To the extent that the case applies in this matter it supports the position that the Arbitrator’s decision is not appellable.”

It is put by the Respondent that:

“By necessity, the decision of the Arbitrator must have been an interlocutory one as the Arbitrator correctly decided that an AMS is to make the final determination.  Bagtrans supports this proposition and leave to appeal should be refused.” (paragraph 12 of Supplementary Submissions).

1. The question as to whether the Arbitrator’s determination in the present matter is “interlocutory in nature” within the meaning of section 352(8) of the 1998 Act gives rise to a number of difficulties.  It was pointed out by the Acting President in Bagtrans that whilst clause 200B of the Workers Compensation Regulation 2003 [as amended] (‘the Regulation’) provides that “for the purposes of section 352(8) of the 1998 Act, all preliminary or interim orders, determinations, rulings and directions of an interlocutory nature are prescribed” (Bagtrans at paragraph 22) neither the Act nor the Regulation contain any “useful and workable definition of the term “interlocutory” for the particular purposes of the Workers Compensation jurisdiction.” (Bagtrans at paragraph 23)

1. A summary of relevant authority concerning the proper construction and application of section 353(8) is to be found in the Acting President’s determination in Bagtrans at paragraphs 23 – 26 (inclusive) and I respectfully agree with the matters there stated. The approach taken by the Commission in those authorities cited involved an adoption of the general principle as stated by Gibbs J, as he then was, in Licul (at 443 – 444):

“The test is:  does the judgment or order, as made, finally dispose of the rights of the parties?”

1. The test as stated in Licul must be applied in the context of the statutory scheme governing compensation law as provided by the 1987 Act and the 1998 Act.  That legislative scheme gives rise to a need to consider factors that are in no way relevant to the consideration of the meaning of “interlocutory” in the context of the common law.

1. The Commission in Bagtrans was dealing with facts which must, in important respects, be distinguished from the facts in the present case.  The Appellant/Employer in Bagtrans disputed the occurrence of an injury to a particular part of the Respondent/Worker’s anatomy (his thoracic spine).  It was conceded in argument by each of the parties in Bagtrans that the order made by the Arbitrator, the subject of the appeal, was “interlocutory” in nature.  In the present case the Appellant, as noted above, has admitted the occurrence of an injury having been received by the Respondent on 31 May 2005.  It remained in dispute between the parties as to whether, at the time of hearing before the Arbitrator, the Respondent continued to experience incapacitating effects of that admitted injury and was therefore not entitled to lump sum compensation.  It was the Appellant’s argument before the Arbitrator that whilst the admitted injury caused an aggravation of a pre-existing degenerative condition, that aggravation had ceased as at the date of hearing and there was no entitlement to lump sum compensation.  The Appellant, as outlined above, asserts that the determination made by the Arbitrator was not interlocutory in nature.

1. The Arbitrator in the present matter acknowledges in the course of her Statement of Reasons for Decision (‘Reasons’) at paragraph 19 that:

“There is a clear line of authority that supports the proposition that causation is a matter to be determined by an Arbitrator and not by an AMS.”

1. When dealing with the relevant authorities the Arbitrator (at paragraph 21 of Reasons) made reference to the decision of Roche ADP (as he then was) in Connor v Trustees of the Roman Catholic Church for the Arched Diocese of Sydney [2006] NSWWCCPD 124 (‘Connor’).  The Arbitrator noted that the decision in Connor included reference to the decision of Neilson J in Lyons v Master Builders Association of NSW (2003) 25 NSWCCR 423 (‘Lyons’) in which matter his Honour when addressing the issue of “injury” within the meaning of the 1987 Act drew a distinction between the injurious event and its resultant pathology.  The Arbitrator proceeds to cite the following extract from the Commission’s decision in Connor:

“Therefore the determination of the issue of ‘injury’ requires not only an examination of whether the ‘injurious event’ occurred in compensable circumstances but also whether the pathology found to exist (if any) has been caused by the work event.  These are both threshold liability issues to be decided by the Commission not by an AMS or an Appeal Panel.  Employment must be a substantial contributing factor to the work event and to the pathology found before liability arises under the legislation.  The determination of these issues requires a consideration of all of the factual and legal issues in the case.  It is not simply a medical question.”

1. There was before the Arbitrator evidence that the injurious event had caused aggravation of pre-existent but previously symptomless cervical spondylosis and that the Respondent’s ongoing symptoms were permanent and cause a moderately severe degree of disability (Dr Searle’s report dated 11 April 2006 tendered on behalf of the Respondent).  It was the opinion of Dr Roger Rowe, Orthopaedic Surgeon, as expressed in his report dated 7 September 2005 tendered on behalf of the Appellant that, at the time of an earlier report, he:

“...anticipated progressive resolution of the work related aggravation over the next couple of months.  Thus I anticipated that the aggravation would be resolved by approximately 16 October 2005.”

It may be seen that both Dr Searle and Dr Rowe were of the view that the injurious event had caused aggravation of pre-existing degenerative changes in the cervical spine.  Those witnesses have differing views as to the consequences of that aggravation.

1. It is correct, as argued by the Appellant, that the Arbitrator declined to address the question as to whether the effects of the aggravation referred to by the medical witnesses had persisted or had ceased.  Following her summary of relevant authority the Arbitrator stated (paragraph 23 of Reasons):

“23.However, it is not clear in my view that what the Respondent seeks to have determined in this matter is a causation issue.  The cases referred to above deal with causation as determined under section 4 and section 9A of the 1987 Act.  They are not authority for nor do they provide any support for the Respondent’s proposition in this case that the Arbitrator, not the AMS, should determine the question of whether the Applicant continued to suffer and [sic] symptoms or effects from an injury.”

1. The Arbitrator’s reasoning with respect to the task before her is succinctly stated at paragraph 28 of her Reasons:

“28.The AMS in the assessment process determines the degree of permanent impairment of the worker as a result of an injury and whether any proportion of the permanent impairment is due to any previous injury or pre-existing condition or abnormality.  This assessment is made on the basis of the evidence provided by both parties and normally following an examination of the worker by the AMS.  In making his assessment the AMS in effect determines the question of whether the Applicant continued to suffer and [sic] symptoms or effects from an injury in relation to the claim for permanent impairment.  The determination of this question involves, in my view, the determinations of a medical issue not a legal issue.  In Merza v Registrar of the Workers Compensation Commission & Anor (2006) NSWSC 939 in considering the role of the AMS and whether there was jurisdictional error, Hoeben J commented: “Most of that material supported or assumed a causal connection between the problem at the L4/5 level of the plaintiff’s back and the work injury of 15 September 2001.  The issue was clearly before the AMS.  In a detailed and compellingly argued analysis the AMS concluded that there was in fact no such causal connection.  This was a medical issue, not a legal issue.”.”

1. Notwithstanding the Arbitrator’s observations, as above noted, that the AMS “in effect determines the question of whether the Applicant continued to suffer and [sic] symptoms or effects from an injury in relation to the claim for permanent impairment”, in my view  it remains open to the parties to refer the question as to the persistence or otherwise of the effects of the aggravation of degenerative changes resulting from the subject injury for determination by the Commission following conduct of the assessment of Whole Person Impairment by the AMS. Such course is consistent with the provisions of section 293(2) of the 1998 Act. There is, in my view, no impediment by reason of the provision contained in section 293(3) of the Act, to the Registrar acting in accordance with the Arbitrator’s determination given that the occurrence of “injury”, the threshold issue as to liability, has been admitted by the Appellant.  As was stated by Deputy President Roche in Spicer Axle Australia Pty Limited v Merza [2007] NSWWCCPD 148 (at para 45) (‘Spicer’):

“45.  I do not accept the Appellant Employer’s argument before the Arbitrator that the Commission’s role is merely to determine whether the injurious event occurred in compensable circumstances and the nature of the pathology following from that event is to now be decided by an AMS.  For the reasons explained in Connor v Trustees of the Roman Catholic Church for the Archdiocese of Sydney[2006] NSWWCCPD 124 (‘Connor’) the issue of whether the pathology found to exist has been caused by the injurious event is a liability issue over which the Commission has exclusive jurisdiction (section 105 of the 1998 Act).  The determination of that issue does not merely require a medical assessment but involves legal, factual and medical considerations based on all of the available evidence.”

1. The matter of Spicer, a sequel to Merza v Registrar of the Workers Compensation Commission & Anor (2006) NSWSC 939, involved a review by an Arbitrator of all relevant evidence including the original MAC which was issued by the AMS following examination of the Worker, Mr Merza, prior to the Supreme Court proceedings. The Arbitrator concluded that as a result of the subject injury Mr Merza had sustained a disc injury at the level of lumbar 4/5. Such conclusion conflicted with the opinion as expressed by the AMS. On appeal Deputy President Roche confirmed the Arbitrator’s determination including his finding with respect to injury at the L4/5 lumbar level of the Worker’s spine.

1. The question as to whether an injury proven in proceedings before the Commission has resulted in a permanent aggravation of underlying degenerative changes found in the anatomy of a worker is an issue which commonly arises for determination.  That question involves a mixture of issues, as was found in Spicer, being “legal, factual and medical”.  With respect to the present matter, should the parties seek a determination on that question of persistence or otherwise of the aggravating effects resulting from the subject injury, such question is to be determined by the Commission in the light of all the evidence including, it may be expected, the findings by the AMS as contained in the anticipated MAC.

1. The decision of the Arbitrator provided that this matter be remitted to the Registrar for referral to an AMS for assessment of whole person impairment.  Whilst the provisions of section 326 of the 1998 Act provide that such assessment concerning “the degree of permanent impairment of the Worker as a result of an injury is conclusively presumed to be correct” (section 326(a)) it is to be noted that, adopting the words of Fleming DP in Jopa Pty Limited v Edenden [2004] NSWWCCPD 50 (‘Jopa’) (at paragraph 27):

“… the issue of a MAC does not equate to a determination of the dispute by the Commission ….”

1. In the present case, as above noted, the question as to the persistence or otherwise of aggravation of underlying degenerative changes resulting from the subject injury remains in dispute between the parties.  It was observed by Fleming DP in Jopa that the circumstances of that matter illustrate why a dispute must be returned to an Arbitrator for final determination.  It is my view that, in the present circumstances, the dispute between the parties needs to be returned to an Arbitrator to permit argument with respect to the outstanding issues in the light of all available evidence.  I am of this view notwithstanding the fact that the Arbitrator, in the course of her Reasons, characterised that dispute as being “… a medical issue not a legal issue”.  It was held by the Commission in Connor that:

“…The expression “as a result of an injury” in section 326(1)(a) means “as a result of a compensable injury”.  Whether an injury is compensable is to be determined by applying the provisions of the legislation and the relevant authorities to the facts as
found by the Arbitrator at a hearing.  Neither an AMS nor an Appeal Panel is equipped to determine such matters….” (at paragraph 43)

1. It may be seen from the matters that I have attempted to outline above that I am of the view that the Arbitrator’s determination which is the subject of this appeal does not “finally dispose of the rights of the parties” as addressed in the authorities cited above.  It follows that it is my view that the Arbitrator’s determination is of an interlocutory nature within the meaning of section 352(8) of the 1998 Act and leave to appeal must be refused.

DECISION

1. For the reasons above stated, leave to appeal the Arbitrator’s determination dated 9 July 2007 is refused.

COSTS

1. The Appellant is to pay the Respondent’s costs of the appeal as agreed or assessed.

Kevin O’Grady

Acting Deputy President  3 December 2007

I, MELANIE CURITN CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF KEVIN O’GRADY, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.

ASSOCIATE