Anijies Pty Limited t/as Anita Villa v Marchant
[2006] NSWWCCPD 118
•14 June 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Anijies Pty Limited t/as Anita Villa v Marchant [2006] NSWWCCPD 118
APPELLANT: Anijies Pty Limited t/as Anita Villa
RESPONDENT: Marjorie June Marchant
INSURER:Employers Mutual Indemnity (Workers Compensation) Limited
FILE NUMBER: WCC2370-05
DATE OF ARBITRATOR’S DECISION: 13 July 2005
DATE OF APPEAL DECISION: 14 June 2006
SUBJECT MATTER OF DECISION: Section 40 Workers Compensation Act 1987; exercise of discretion.
PRESIDENTIAL MEMBER: Acting Deputy President Bill Roche
HEARING:On the papers
REPRESENTATION: Appellant: Edwards Michael Lawyers
Respondent: McIntosh McPhillamy & Co
ORDERS MADE ON APPEAL: The decision of the Arbitrator dated 13 July 2005 is confirmed.
The Appellant Employer is to pay the Respondent Worker's costs of the appeal.
BACKGROUND TO THE APPEAL
On 10 August 2005 Anijies Pty Limited t/as Anita Villa (‘the Appellant Employer/Nursing Home’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 13 July 2005.
The Respondent to the Appeal is Marjorie June Marchant (‘the Respondent Worker/ Mrs Marchant’).
Mrs Marchant was born on 29 June 1951 and in about 1966 started work as a cleaner/kitchen hand with Marella Mission where she resided. From about 1970 until 1988 she worked in various domestic cleaning positions. She started work with the Appellant Employer as a kitchen hand at its nursing home in about 1993 and continued until she slipped and fell sustaining serious injury to her left ankle on 21 June 1999. Attempts at rehabilitation were unsuccessful and after two bouts of surgery she was certified totally unfit for work in May 2001. Her position with the Nursing Home was terminated in October 2003.
In 2002 Mrs Marchant brought a claim for lump sum compensation in the Compensation Court of NSW (matter 16284 of 2002) which was settled on 2 June 2003 with a consent award being made in her favour in the sum of $14,000.00 in respect of 20% loss of use of the left leg below the knee plus $11,000 compensation for pain and suffering. Voluntary weekly compensation payments were made until 21 October 2004 when they ceased pursuant to a notice served on Mrs Marchant on 9 September 2004. The notice raised issues under section 52A of the Workers Compensation Act 1987 ('the 1987 Act') which were resolved in Mrs Marchant’s favour and do not arise in this appeal.
On 16 February 2005 Mrs Marchant filed an Application to Resolve a Dispute ('the Application') in the Commission seeking weekly compensation from 21 October 2004 to date and continuing. The matter was heard in a conciliation and arbitration at Katoomba on 3 June 2005 and decided in a reserved decision in favour of the Respondent Worker delivered on 13 July 2005.
The Appellant Employer appeals against that decision.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 13 July 2005 records the Arbitrator’s orders as follows:
“1.The Respondent pay the Applicant weekly compensation pursuant to s40 of the Workers Compensation Act 1987 at the maximum statutory rate for a single worker with no dependents from 21 October 2004 to date. Such payments to continue in accordance with the provisions of the Act.
2.The Respondent is to pay the Applicant’s costs as agreed or assessed.”
ISSUES IN DISPUTE
The issues in dispute in the appeal are whether the Arbitrator erred in:
(a)finding that the Respondent Worker was only capable of working in a light duty capacity for one hour per day five days per week, (‘ability to earn – section 40(2)(b)’) and
(b)declining to exercise the discretion under section 40(1) of the 1987 Act when there was ‘clear evidence of an external factor which decreased the Respondent Worker's earning capacity on the open labour market’ (‘section 40 discretion’).
LEAVE TO APPEAL
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’).
The quantum in issue on the appeal is in excess of $5,000.00 and therefore the threshold in section 352(2)(a) of the 1998 Act is satisfied. The Appellant Employer submits that the award should be reduced by just over 50% and therefore the test in section 352(2)(b) is also satisfied.
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
I grant leave to appeal.
PRELIMINARY MATTERS
Section 354(6) of 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.”
The Appellant Employer submits that if leave to appeal is granted there should be an oral hearing so each party may more adequately deal with any competing submissions of the other. The Respondent Worker consents to the matter being dealt with on the papers. The issues on appeal fall with a narrow compass. I have a transcript of the evidence and submissions before the Arbitrator.
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by the Respondent Worker 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.
SUBMISSIONS AND FINDINGS
(a) Ability to Earn – Section 40(2)(b)
The Appellant Employer challenges the Arbitrator's finding that the Respondent Worker is only capable of working for one hour per day for five days per week and is therefore only able to earn in some suitable employment the sum of $73.70 per week pursuant to section 40(2)(b) of the 1987 Act.
Before considering the Appellant Employer's medical case in detail it is appropriate to consider the nature of the Respondent Worker's injury. After her fall Mrs Marchant was taken to Katoomba District Hospital by ambulance and then transferred to Liverpool Hospital where she came under the care of Dr Powell who performed an open reduction with internal fixation with a plate and screws. She was discharged from hospital after one week. Ultimately the screws were removed in August 1999 but Mrs Marchant continued to have restricted mobility and needed a walking stick to aid her mobility. Her discomfort was such that an arthroscopic debridement was performed at Merrylands Private Hospital in April 2000. The arthroscopy revealed a full thickness cartilage defect one centimetre in diameter down to the bone. This surgery was of no benefit and she still found it painful to walk and continued to need the assistance of a walking stick. From time to time she would lose her balance because of pain in her left ankle.
Mrs Marchant returned to work on very restricted light duties in February 2000. Those duties consisted of cutting up vegetables, washing up and making sandwiches; all done while sitting. In May 2001 no further light duties were available and her employment was terminated in October 2003. Since then the Respondent Worker has continued to have constant and significant pain and restricted movement in her ankle. In her statement of 6 May 2005 she listed her disabilities as follows:
(a)unable to walk without a walking stick;
(b)unable to support herself on her left ankle;
(c)unable to perform most tasks around the house;
(d)difficulty with stairs;
(e)needs assistance to get out of bed;
(f)unable to use public transport;
(g)unable to participate in games with her children and
(h)difficulty travelling in cars as she needs frequent breaks to relieve her ankle pain.
In his report of 9 January 2001 Dr Burgess described her injury as a dislocated ankle, rupturing the medial ligament and shattering the distal end of the fibula. The Appellant Empoyer submits that Dr Burgess does not offer an opinion about Mrs Marchant’s residual earning capacity. In his report of 17 November 2001 Dr Burgess stated that the work injury had a “profound effect on her comfort, lifestyle and future employability”.
On 22 February 2001 she was examined by Dr Slater, orthopaedic surgeon, on referral from Dr Kamalaharan. Dr Slater doubted she would ever regain fitness for her pre injury duties and thought it likely she would require further surgery.
For the Appellant Employer Mrs Marchant has seen numerous doctors and rehabilitation experts. Dr Wilding, orthopaedic surgeon, examined and reported on her condition on three occasions. In his report of 20 August 2003 he records that on a ‘bad day’ Mrs Marchant would only be able to walk for 10-15 minutes before having to stop and rest. On a ‘good day’ she would be able to walk for half an hour. He confirmed her limp and that she used a walking stick. He noted that there was already evidence of osteoarthritis in the ankle as a direct consequence of the injury. The doctor thought Mrs Marchant was unfit for work as a kitchen hand and that “light sedentary would be appropriate work for her but I agree with her own assessment that her lack of literacy skills will make it difficult to find appropriate work”.
In his report of 21 April 2004 Dr Wilding took a history that Mrs Marchant had suffered a stroke on 15 November 2003 which initially caused right sided weakness from which she had recovered by April 2004. However she still had problems with her speech. That problem continued up to the time of the Arbitration and was noted during the hearing. Dr Wilding thought the condition of her left ankle had not changed. He thought that “the other conditions will make it difficult for her to obtain employment”. The ‘other conditions’ were the Respondent Worker's speech difficulties and her poor literacy skills. In his opinion her difficulty in returning to work was ‘multifactorial’ but from an orthopaedic viewpoint he agreed with Dr O’Reilly that she was fit to work 20 hours per week in sedentary process work with no prolonged standing.
In his final report of 11 April 2005 Dr Wilding noted that Mrs Marchant still had significant symptoms in her left ankle. He noted slight right sided facial droop and slightly diminished grip strength in the right hand due to her stroke. His opinion regarding her employability had not changed, she was still unfit for work that required prolonged standing or walking but was fit for sedentary work. He thought her problems with her speech and her literacy skills would make it difficult for her to obtain employment.
In a report of 10 April 2003 Dr Susan O’Reilly, a general practitioner qualified by the Appellant Employer, stated that Mrs Marchant had features consistent with chronic regional pain syndrome affecting the left ankle. She felt that light processing work would be suitable but not office work. Specifically she identified light manufacturing and ironing for 20 hours per week as being appropriate. At review on 16 October 2003 Dr O’Reilly thought that 20 hours of sedentary work was appropriate provided Mrs Marchant could change position from seated to standing as required, avoided driving for more than one hour and took test breaks en route.
At a further review on 29 January 2004 Dr O’Reilly took a history of the Respondent Worker's stroke and was informed by Dr Harget that whilst it was thought Mrs Marchant had suffered a stroke her MRI scan was normal. It was also thought that Mrs Marchant’s speech disorder was not neurologically based but would impact of her ability to be employed. She concluded that in a physical sense the Respondent Worker was ‘probably’ fit for part time sedentary work but her “non work related mental and emotional state suggests that she is not fit for work” and the “employer’s liability in this regard is questionable”.
Dr O’Reilly’s assessment of fitness for work for 20 hours per week was so heavily hedged as to be of very limited value. For example, Dr O’Reilly thought that the Respondent Worker would need to change position alternating between sitting and standing ‘as required’.
The Appellant Employer sent Mrs Marchant to Dr Potter for examination in August 2003 and his report is dated 18 August 2003. In his opinion she was fit for “sedentary and clerical duties for which she is otherwise not educated”. He added “the patient is fit for restricted duties and restricted hours in a very modified sense. Her weight would limit her; her education would limit her; pain would limit her and safety factors would limit her” (see report 18 August 2003 page six). He made the rather astute observation at page six that “it would be unlikely that a future employer would look kindly on the prospect of the double jeopardy of hiring somebody with an unstable left ankle which is a clinically apparent issue”.
Maurine Edwards, rehabilitation counsellor, reported on 21 March 2004 that the Respondent Worker's employment opportunities “were considered extremely limited because of Mrs Marchant’s narrow range of work experience and lack of basic skills” (report 21 March 2004 page seven). The only options recommended were factory process or packaging work which could be performed whilst sitting.
A further rehabilitation assessment was carried out by Francine Thompson in June and July 2004 (report 21 July 2004) in which she assessed the Respondent Worker to “not be employable within the open labour market at this time” (report 21 July 2004 page eight). Particular reference was made to the fact that the Respondent Worker's transferable skills base could not be matched with employment within Mrs Marchant’s functional capacity.
Dr Peter Slezak reported on the Respondent Worker at the request of the Appellant Employer on 18 April 2005. He records that Mrs Marchant made a satisfactory recovery from her stroke but still has some weakness and clumsiness of her right hand and a significant speech impediment (dysarthria/dyspraxia). He thought her symptomatic left ankle joint arthrosis was related to her morbid obesity. In his opinion she had recovered from the fracture to her left ankle but was totally unfit for work because of other factors. Dr Slezak is the only doctor who thinks the Respondent Worker has recovered from her fracture. I reject his evidence as it is inconsistent with the Respondent Worker's evidence (which was accepted by the Arbitrator) and inconsistent with every other medical expert in the case.
For the Respondent Worker evidence was tendered from Dr Burgess (see above) and from Dr Harget, her treating general practitioner. On 4 April 2003 Dr Harget reported in detail on the Respondent Worker's fitness for work and concluded that she was totally unfit for paid employment. On 15 April 2003 Dr Harget issued a medical certificate stating the Respondent Worker was fit for suitable duties but added “NOT MY OPINION – THAT OF REHAB SPEC [sic] & ARC REHAB”. In a later certificate ( 20 August 2004) Dr Harget assessed the Respondent Worker fit for suitable duties for one hour per day five days per week with significant limitations on lifting (five kilograms), sitting (half an hour),standing (15-20 minutes), travelling (half an hour) and walking (20 minutes).
The evidence was considered by the Arbitrator and, after having heard and assessed the Respondent Worker, she accepted her evidence supported by her treating general practitioner. It was open to the Arbitrator to make such a finding. At paragraph 39 of her Statement of Reasons for Decision (‘Reasons’) the Arbitrator concluded that:
“Mrs Marchant has a significant disability as a result of her injury. She has walked with the aid of a walking stick since the accident…..The fact is that she has significant restrictions as a result of her injury which severely impede her ability to compete in the open labour market.”
I agree with the above assessment of the evidence.
On the issue of why the Respondent Worker has not obtained employment it is submitted that “it was however apparent at the Arbitration that the respondent/worker had difficulties with her speech and that this was the main reason why she had been unable to find work” (see Appellant Employer's submissions paragraph 10). The Respondent Worker's evidence on this issue is at page 17 of the transcript where she said that her job applications were unsuccessful because of her ankle (see transcript page 17 line 49) not because of her speech. The Respondent Worker did not seek work as a receptionist (for which she had no training or experience in any event) where good speaking skills would be of high importance. She sought light labouring type work where it is understandable that employers would be reluctant to hire someone with a severe ankle impairment.
In respect of the Respondent Worker's stroke Dr Harget stated on 2 January 2004 that steady improvement had been made and by 15 December 2003 she was capable of performing duties as described on her last certificate. I assume this is a reference to the certificate of 27 October 2003 which is in very similar terms to the certificate of 20 August 2004 but sitting was only up to 10 minutes, travelling was up to one hour, walking was 5-10 minutes and standing was 10 minutes. The doctor then adds to her January 2004 report:
“Mrs Marchant’s agreed and established injury is the substantial and contributing factor to her inability to work, not her stroke related problems.
Mrs Marchant can communicate well and is as mobile as she was prior to the stroke. The stroke is an unrelated event and not the principal reason for Mrs Marchant’s inability to work.”
In a further report of 9 May 2005 Dr Harget states:
“Mrs Marchant still experiences daily pain and can only walk with the help of a walking aid. Mrs Marchant’s agreed and established injury in the only reason for her continued inability to work.
In my opinion her prognosis is poor. I do not feel that after this length of time and with her residual disability that she will ever be able to work in the future. This is all a direct consequence of her established injury at Anita Villa.” (emphasis added)
Dr Harget, who treated the Respondent Worker over several years and has been involved in her management both before and after the stroke, was ideally placed to assess Mrs Marchant’s capacity to work. On this evidence the Respondent Worker could count herself unlucky not to have received an award for total incapacity under section 37 of the 1987 Act (see Lawarra Nominees Pty Ltd v Wilson (1996) 25 NSWCCR 206 at 213).
It is submitted that the Arbitrator's finding under section 40 of the 1987 Act was wrong and the Respondent Worker has a residual earning capacity of at least $292.80 per week in some suitable employment. The factors the Arbitrator took into account in assessing the Respondent Worker's ability to earn are set out in paragraph 49 of her Reasons where the following points are noted:
(a)the Respondent Worker's pre injury employment history was as a kitchen hand and cleaner and she is no longer fit for that work;
(b)the Respondent Worker's age (54), lack of formal qualifications and limited literacy skills;
(c)that the Respondent Worker lives in Katoomba in the Blue Mountains;
(d)that the Respondent Worker has been certified fit for light duties for one hour per day, five days per week;
(e)there was no evidence of a management plan in place;
(f)there was no evidence of a current rehabilitation plan;
(g)the Respondent Worker has not worked in some years and has been registered for employment with employment agencies in the Blue Mountains and has sought work unsuccessfully in Lithgow and Penrith, and
(h)the Respondent Worker had a stroke in 2003 which has impeded her ability to find employment.
After setting out the above matters the Arbitrator stated that “after watching and listening to the applicant as she gave evidence” (Reasons paragraph 50) she accepted the evidence of the treating general practitioner that the Respondent Worker was only capable of working one hour per day for five days per week. The Arbitrator added:
“She is clearly restricted in her movements as a result of her need to use a walking stick and cannot remain in a seated position for extended periods without discomfort. She had difficulty concentrating and answering questions clearly, some of which is due to the stroke in 2003. However, even without the stroke it would be difficult to imagine the Applicant sustaining employment for up to 4 hours per day without severe and detrimental affects on her health.”
The Arbitrator then calculated the Respondent Worker's ability to earn to be $73.70 per week. There is no challenge made to the method used to make the arithmetical calculation. The above finding was open to the Arbitrator and I see no error of fact, law or discretion in her approach.
(b) Section 40 Discretion
The Arbitrator calculated the difference between the Respondent Worker's ability to earn (section 40(2)(b) and her earnings but for her injury (section 40(2)(a)) to be $442.20 per week and declined to reduce that amount in the exercise of her discretion under section 40(1) of the 1987 Act. The Appellant Employer submits that it was obvious at the Arbitration hearing that the Respondent Worker has very significant speech difficulties and this “external factor depresses the respondent/worker’s ability to earn” (see Appellant Employer's submissions paragraph 15).
The exercise of the discretion was considered by the Court of Appeal in Australian Wire Industries v Nicholson (1985) 1 NSWCCR 50 (‘Nicholson’). That case concerned a claim under section 11 of the Workers Compensation Act 1926 (‘the 1926 Act’) which had virtually identical wording (on this issue) as the current section 40 of the 1987 Act. In that case Justice McHugh held that at the discretionary stage the Compensation Court had to examine all the facts. His Honour added at 55:
“The matters which can be examined include such matters as retirement, other supervening illnesses or injuries, the personal employment history of the worker, and so on.”
This authority requires that ‘supervening illnesses’ are to be considered when assessing whether the “weekly payment of compensation to an injured worker” is an amount that is “proper in the circumstances of the case” (section 40(1)). The Appellant Employer submits that the Respondent Worker's impaired speech would be a “major barrier” to her obtaining any form of employment. Reference is made to the reports of Dr Wilding, Dr O’Reilly and Maureen Edwards.
The report of Maureen Edwards of 21 March 2004 states at page three that the stroke affected the Respondent Worker's right side and her speech. It adds that Mrs Marchant regained function of her right side but still had difficulties with her speech. The difficulty is with word finding and stuttering. Ms Edwards observed these problems during her interview and added that at times Mrs Marchant was quite fluent.
Dr Wilding’s opinion about the Respondent Worker's fitness for work does not alter after her stroke. In August 2003 he thought she would find it ‘difficult’ to find appropriate work. In April 2004 he expressed the same opinion but added that her inability to find work was ‘multifactorial’. The additional factor in April 2004 was the Respondent Worker's problem with her speech. As noted above the evidence from Mrs Marchant was that she was unsuccessful in her job applications because of her ankle disability and not because of her speech.
Reliance is placed on Dr O’Reilly’s report of 29 January 2004. At page three of that report Dr O’Reilly states that “with regards to her recent CVA the residual dysarthria would be a major barrier to her obtaining any form of employment which involves oral communication” (emphasis added). Nowhere is it suggested that the Respondent Worker would have ever been suitable for that kind of employment in any event. Her poor literacy skills alone would rule it out. She was never a candidate for a job that required good oral skills. Her work experience was in manual work as a kitchen hand and cleaner.
The impact of the stroke was best assessed by Dr Harget in her report of 2 January 2004 where she assessed the Respondent Worker's abilities and concluded that “Mrs Marchant can communicate well and is as mobile as she was prior to the stroke”. On this evidence and given that the Respondent Worker only ever worked in areas that did not require fluent communication skills, I believe it was open to the Arbitrator to make no reduction under section 40(1) of the 1987 Act.
The Arbitrator considered the impact of the stroke on the Respondent Worker and concluded that she was not satisfied that it had “impeded her ability to earn in the open labour market beyond the impediments as a result of the injury” (Reasons paragraph 54). This finding was open to the Arbitrator. In assessing whether an error has been made in the exercise of discretion the Commission noted in Rohloff v Diacut Pty Limited (in Liquidation) [2005] NSWWCCPD 17 at [26]:
“It is only where the Arbitrator can be said to have failed to exercise his discretion fairly and according to law that his decision should be overturned. This occurs where the Arbitrator has acted upon a wrong legal principle, allowed irrelevant considerations to influence the decision, made a material mistake as to the facts or failed to take into account relevant and material considerations (House v The King (1936) 55 CLR 499 at 504-505; Norbis v Norbis (1986) 161 CLR 513 at 520, Re National Roads and Motorists’ Association Ltd [2003] FCAFC 206 at [21] to [21]).”
In my opinion the conclusion reached by the Arbitrator discloses no error of fact, law or discretion. Her discretion was exercised fairly and according to law. It was not suggested on appeal the Arbitrator acted upon some wrong legal principle, allowed irrelevant considerations to influence the decision, made a material mistake as to the facts or failed to take into account relevant material. The argument that the “overwhelming weight of the medical and other evidence was that the CVA and its consequences constituted an external factor which must give rise to the exercise of discretion” (see Appellant Employer's submissions at paragraph 20) is not substantiated on the evidence. In fact the evidence establishes that the Respondent Worker was unable to find suitable employment because of her severe ankle injury and her poor literacy skills.
DECISION
The Arbitrator's decision of 13 July 2005 is confirmed.
COSTS
The Appellant Employer is to pay the Respondent Worker's costs of the appeal.
Bill Roche
Acting Deputy President
14 June 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
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