Andrew Lyristakis v Argus Real Estate Holdings Pty Limited t/as Ray White (Belconnen)
[2001] ACTSC 101
•1 November 2001
ANDREW LYRISTAKIS v ARGUS REAL ESTATE HOLDINGS PTY LIMITED t/as RAY WHITE (BELCONNEN) [2001] ACTSC 101 (1 November 2001)
CATCHWORDS
APPEAL – application for worker’s compensation – whether finding of partial incapacity necessarily implicit in acceptance of evidence contained in medical reports – whether adequate evidence of wages paid by respondent during the time of the appellant’s employment – whether adequate evidence of earnings and/or capacity to earn following cessation of employment.
Workers’ Compensation Act 1951, s 7, Sch 1
Frost v Mark Foys Ltd (1952) 52 SR (NSW) 95
Woden Valley Glass v Psaila (1993) 44 FCR 140
ON APPEAL FROM THE MAGISTRATES COURT
No. SCA 36 of 2001
Judge: Crispin J
Supreme Court of the ACT
Date: 1 November 2001
IN THE SUPREME COURT OF THE )
) No. SCA 36 of 2001
AUSTRALIAN CAPITAL TERRITORY )
BETWEEN:ANDREW LYRISTAKIS
Appellant
AND:ARGUS REAL ESTATE HOLDINGS PTY LIMITED t/as RAY WHITE (BELCONNEN)
Respondent
ORDER
Judge: Crispin J
Date: 1 November 2001
Place: Canberra
THE COURT ORDERS THAT:
The appeal be upheld.
The order dismissing the appellant’s application for compensation be set aside.
The matter be remitted to the Magistrates Court for determination according to law of the amount, if any, that should be paid to the appellant as compensation for the partial incapacity caused by the stress and depressive illness which developed during the course of his employment with the respondent.
This is an appeal against a decision of a Magistrate dismissing a claim for compensation under the Workers’ Compensation Act 1951. The appellant had been employed by the respondent in a real estate business in Canberra between February 1998 and February 1999. He sought compensation for a continuing incapacity for work said to have been due to stress and a depressive illness which developed during the course of that employment as the result of the demands placed upon him and difficulties in his relationship with another employee.
Her Worship accepted there may have been some tension and friction between the appellant and the employee. However she found that some of his complaints had related to petty and trivial incidents and she did not accept his evidence in relation to others. In particular, she found that the other employee had not attempted to overload the appellant with work or sabotaged the computer as he had claimed, though she did accept that he had believed she had done so. Her Worship accepted the evidence contained in the medical reports of Doctors Middlemiss, Scott, Knox and Carlson and found that the appellant had suffered an injury, consisting of stress and a depressive illness, which arose out of, or in the course of, his employment with the respondent.
Her Worship was not satisfied that the appellant had been totally incapacitated for work since 26 February 1999 when his employment with the respondent ended. She noted that there had been a general consensus from medical practitioners and psychologists that he should not return to work with the respondent, which had in any event ceased to operate the business in which he had been employed, but that there had also been a consensus that he had a continuing capacity to work, albeit in a different type of occupation.
For at least some of the period in which he was employed by the respondent the appellant had worked for that company for only three days a week, devoting the other two days to maintenance and insulation business conducted on behalf of a company, Lyro’s Pty Ltd, of which he and his wife had been the only directors and shareholders. His evidence on this issue was not wholly consistent. At one point in the cross-examination he gave the following evidence:
And the maintenance service, do I have this right, that you were working three days a week at Ray White’s and in the other days you would perform maintenance work and sometimes insulation work for your own customers - - - yes.
Yes, and sometimes you would perform maintenance work for Ray White customers? - - - Right.
Via the business Lyros, so that when you did that you were getting the payment not – Ray White won’t get the payments from the tenant, but it would end up going to you? - - - To my business, yes.
Yes, and after you ceased working with Ray White did you continue to operate Lyros Maintenance?- - - Yes, we did some private work for people that knew us.
Later in his evidence he confirmed that he had been engaged formally for three days a week but added:
But that was the initial engagement. That then became five days a week, full time, for the rest of my duration there.
And when you worked longer hours you were paid more money, weren’t you? - - - Occasionally I was paid more money.
Occasionally? - - - Occasionally, when she could afford to pay me. A lot of the time I wouldn’t put down beyond my thirty-eight hours for the week.
Ms Maughan, who had been a director of the respondent company, said in her statement that the appellant had commenced employment on a part time basis, had later undertaken a full time traineeship which ceased in August 1998 and had then been employed for three days per week.
Her Worship did not make any finding as to which version was correct.
Since ceasing employment with the respondent the appellant had continued to carry on the business for Lyro’s Pty Ltd. The business had experienced financial difficulties since his marriage broke up and he moved to the South Coast in May 2000, but he had readily conceded that, “medically”, there had been nothing to stop him from doing as much insulation work as he had been able to get. He had also admitted doing other work such as dismantling a shed.
Mr Stretton who appeared for the appellant submitted that one project had been of particular relevance to any evaluation of the respondent’s claim. On 28 April 2000 the appellant dismantled a cottage in Queanbeyan and during the course of the same day had a consultation with a medical practitioner seeking medication for his depression. A video tape recorded during the course of that day clearly demonstrates that the appellant was capable of carrying out physical work of that nature. Indeed, he conceded in cross-examination that whatever condition he had been suffering from that day had not prevented him from doing a full days work, though he had apparently been anxious to explain that the work had been different from that which he had undertaken during his employment with the respondent. Having viewed the video tape, I must say that it also seems clear that the appellant had not only been capable of doing physical work but of directing the manner in which the task should be undertaken and supervising the work of others without any obvious sign of stress or depression.
Her Worship said that there had been no evidence as to the actual earnings of the appellant as an employee of the respondent, though Mr Pappas, who had appeared on his behalf, had contended that he had been under paid and tendered a copy of the relevant award. Her Worship took the view that she could only compare his “self employment” earnings prior to and during the period of his employment by the respondent with his earnings since 26 February 1999.
Her Worship then turned to the issue of the appellant’s continuing capacity for work. She noted that when it had been suggested to the appellant that there had not been a day since February 1999 when he had not performed work such as that undertaken on 28 April 2000, he had replied only by stating that insulation work was easy and not too heavy and that he did not have a boss.
The judgment then concluded with the following passages:
52.Based on his work history, the applicant has performed a variety of jobs over the years including labouring, delivery, cook, shop assistant, maintenance, insulation installer and various clerical administrative positions. He said that, since February 1999, he has applied for jobs in marketing, clerical, truck driver, oyster worker and fork lift driver. He has not been successful. On the evidence before me, any difficulties he may have in finding employment additional to the conduct of his insulation and maintenance business cannot in any meaningful way be attributed to the injury which he suffered in his employment with the respondent. Any such difficulty results from the general condition of the employment market which, in his case, may be exacerbated now by the fact that he chose to move to the South Coast, where there are fewer employment opportunities than in Canberra.
53.In short, the applicant was self-employed in his maintenance and insulation business immediately prior to his employment with the respondent and, on all accounts, continued to work in those businesses during and after his employment with the respondent ceased. It may well be that the applicant says that the businesses are not profitable but that does not establish the applicant’s incapacity.
54.In my view the applicant has failed to establish that by reason of his injury he is unable to sell his labour in any market reasonably available to him. (Ruiz v Canberra Rex Hotel Pty Ltd) (1974) 1 ACT R 1) On the contrary, he has worked almost continuously since 26 February 1999 including for a period after he relocated to the South Coast. As well, the applicant has failed to establish that by reason of his injury the amount he has been capable of earning from the sale of his labour following the sustaining of the injury has been reduced below what he was earning immediately prior to sustaining the injury. On the evidence before me I cannot be satisfied that the applicant suffered any incapacity at all.
Mr Pappas, who again appeared for the appellant, attacked the judgment on a number of bases.
First, he submitted that her Worship’s acceptance of the evidence contained in the medical reports of Doctors Middlemiss, Knox, Scott and Carlson involved, or at least required, a finding of partial incapacity.
In a report dated 4 May 1999 Dr Middlemiss diagnosed “depression reactive to his work situation” and stated that whilst he was physically no longer in that situation “the mental stresses from conflict in negotiations [were] continuing [and] the risk of ongoing disorder [was] strong”. Dr Scott, in his report of 31 May 2000, said that the appellant had “a personality problem such as that he [was] likely to be stressed in most situations especially if he [had] to be responsible to, or answer to others”. Dr Knox, in his report of 3 November 2000, found that “the appellant [suffered] from a Major Depressive Disorder . . . [and a] Generalised Anxiety Disorder”. He added:
I do not believe that there has existed any underlying personality disorder, since Mr Lyristakis has been quite functional in his work and social environments over the years except when subjected to specifically injurious events. His personality does however render him vulnerable to emotional decompensation in the face of certain difficult interpersonal situations. As I say, he has poor assertive skills and his interpersonal style is to accommodate and please people rather than fight with them. When people behave aggressively towards him Mr Lyristakis feels threatened and vulnerable. His anxiety and depression have developed in such a context. . . . Mr Lyristakis is not fit to return to work with Ray White Real Estate, and I do not believe that he is, or will become fit to return to similar duties, or indeed other duties which bring him into contact with managers who are likely to be demanding, or for that matter frankly hostile.
Dr Carlson in his report of 15 November 2000 expressed the view that the appellant had “an adjustment disorder with depression which was caused by undue work stressors”. Her Worship’s findings extend to an acceptance to all of this evidence.
Mr Pappas submitted that in view of her Worship’s acceptance of this evidence it could not be said that the appellant had failed to establish that, by reason of his injury, he had been unable to sell his labour in any market reasonably available to him. He argued that, as in Frost v Mark Foys Ltd (1952) 52 SR (NSW) 95, there had undoubtedly been a partial incapacity in the appellant “in that his injury had destroyed his full physical ability to sell labour for wages”, per Herron J at 100. It was clear that he could not return to work in an environment similar to that which had prevailed in the respondent’s workplace and it was implicit in such a finding that his ability to sell his labour in the market place had been reduced at least to that extent. The fact that he had worked almost continuously since leaving the respondent’s employment was germaine only to the extent, if any, to which it may have cast light on his ability to earn income and hence to the amount of compensation payable in respect of the partial incapacity.
I accept that at least some of the evidence in the medical reports mentioned is, at face value, inconsistent with the statement that her Worship had been unable to be satisfied that the appellant had suffered “any incapacity at all”. However, a conclusion that a person has some incapacity for work does not, of itself, warrant an award of compensation. It is necessary for the applicant to demonstrate that any such incapacity has led to a loss of earnings in accordance with the formulae contained in Sch 1 to the Workers’ Compensation Act 1951.
Secondly, Mr Pappas submitted that her Worship had fallen into error in concluding that there had been no evidence to establish the appellant’s earnings from his employment with the respondent. He pointed out that Ms Maughan had conceded not only that the respondent had employed him for three days per week but also that he had been paid according to the award. Those concessions were made in a statement tendered on the respondent’s behalf and there was no reason to doubt their accuracy. Furthermore, it was not disputed that the provisions of the relevant award had been adequately set out in the document tendered which bore the title “Clerks (ACT) Award – National Wage Case June 1998 Adjustment”. I accept that submission. Ms Maughan’s evidence that the appellant had been paid in accordance with the award was not rejected and seems to have been simply over looked. It clearly provided a basis upon which a finding could have been made as to the earnings the appellant received from the respondent during the relevant period.
Thirdly, Mr Pappas submitted that it had been inappropriate to approach the issue of compensation by comparing the income which the appellant obtained from the conduct of the businesses on behalf of Lyro’s Pty Ltd during the period in which he was employed by the respondent and the income derived from that source after that period of employment. Again I accept that submission.
Section 7 of the Workers’ Compensation Act provides, inter alia, that where a worker suffers personal injury arising out of or in the course of his or her employment the employer is liable to pay compensation in accordance with Sch 1 of that Act. The relevant portion of Sch 1 provides that the amount of compensation shall be:
(c) Where the worker is partially incapacitated for work by the injury – a weekly payment during his or her incapacity –
(i)of the amount (if any) by which the weekly amount that he or she is earning, or is able to earn in some suitable employment or business, after the injury is less than his or her weekly pay at the date of injury, or of the amount of $57, whichever is the less; or
(ii)of the amount (if any) by which the weekly amount that he or she is earning, or is able to earn in some suitable employment or business, after the injury is less than the weekly amount that would have been payable to him or her under paragraph (b), if he or she had been totally incapacitated;
whichever is the greater.
Any compensation properly payable to the appellant on the ground of partial incapacity for work should have been calculated by reference to whichever of these two formulas produced the greater net amount. Section 12A of the Act provides for amounts of compensation specified in Sch 1 to be varied in accordance with movements in the Consumer Price Index and it was common ground that the sum of $57 referred to in par (c) has now been increased to $295. Accordingly, the first of these calculations required a comparison between, on the one hand, the weekly amount that the appellant had been earning or had been able to earn in some suitable employment or business and, on the other hand, the weekly pay which he received from the respondent at the time he contracted the stress or depressive illness or the amount of $295, whichever was the less. The comparison referred to in sub par (ii) required a comparison between, on the one hand, the weekly amount that he had been able to earn in some suitable employment or business and, on the other, the weekly amount that would have been payable under par (b) of item 1 of the Schedule if he had been totally incapacitated. Paragraph (b) again provided for payment of $57 per week which, as I have mentioned, has been increased to $295 per week as a result of increases in the Consumer Price Index, but provided further amounts for a dependent spouse and dependent children. In the present case it was not suggested that reliance upon this provision would have produced any greater entitlement than that arising under sub par (c)(i).
Mr Stretton argued that even if the plaintiff’s earnings from the respondent could have been calculated and the lesser of that figure and $295 per week determined, the comparison envisaged by par (c)(i) would still not have demonstrated that the appellant was entitled to any compensation because there had been no evidence of his actual earnings or his earning capacity since he ceased employment with the respondent. Mr Pappas pointed out that there had been evidence that the company, Lyro’s Pty Ltd, had traded unprofitably for all but one financial year, and that even in that year it had made only a very modest profit. He submitted that it had been appropriate for the Magistrate to infer that he had earned no income or at least no significant income from the business during the period since February 1999. He also submitted that there had been ample evidence from the appellant to establish that he had pursued employment opportunities without success and that there had been no evidence to establish that there were fewer employment opportunities on the south coast than in Canberra. He relied heavily upon the observations of Miles J in Woden Valley Glass v Psaila (1993) 44 FCR 140 at 149 where his Honour observed that:
Whilst it may be going too far to say that there is an evidentiary burden cast upon an employer, an evidentiary burden to show what employment opportunities and likely earnings were open to a partially incapacitated worker, a workers’ compensation tribunal may well require little in the way of evidence to establish that the worker has discharged the onus of showing that he is unable to earn in a suitable occupation or business.
However, whilst Mr Pappas was able to point to evidence from the appellant capable of establishing that he had neither earned any significant amounts of income since February 1999 nor that he had been able to do so, there was nothing in the Magistrates judgment to indicate that she had accepted that evidence. It is true that there was equally nothing to indicate that she had rejected it, but this was not a case in which the learned Magistrate offered any general endorsement, whether explicit or implicit, of the appellant’s general credibility. On the contrary, she did not accept his evidence on some issues. Mr Stretton attacked the appellant’s credibility by reference to the transcript and the video tape to which I have referred, and whilst it would be inappropriate for me to make any adverse findings about the credibility of a witness whom I had not seen give evidence, I am unable to be satisfied that the Magistrate had accepted or would have accepted that, whilst he had been able to work, he had been unable to earn any net income. Indeed her Worship’s reference to the fact that he had been able to work for his company continuously since leaving the respondent may well have been intended to convey her skepticism of his claimed inability to have earned a substantial income during that period. It should also be noted that her Worship had expressly said that she had not been satisfied that the appellant had any “incapacity at all” and there is an apparent inconsistency between that finding and the acceptance of all the evidence in the medical reports to which I have referred, that has not been resolved.
In the circumstances I see no alternative but to order that the matter be remitted to the Magistrates Court for re-hearing of the question as to what compensation, if any, should be paid to the appellant for the partial incapacity resulting from the stress and depressive illness which arose during the course of his employment with the respondent.
There were other issues raised on the hearing of the appeal but the matter will have to be substantially re-heard and it would be undesirable to attempt to address them at this stage.
I will hear counsel as to costs.
I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Justice Crispin.
Associate:
Date: 1 November 2001
Counsel for the appellant: Mr J Pappas
Solicitor for the appellant: Vandenberg Reid
Counsel for the respondent: Mr G Stretton
Solicitor for the respondent: Minter Ellison
Date of hearing: 19 October 2001
Date of judgment: 1 November 2001
12
0
1