Arcade Pharmacy Pty Limited v Gauci
[2009] NSWWCCPD 107
•27 August 2009
| WORKERS COMPENSATION COMMISSION | ||||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | ||||||
| CITATION: | Arcade Pharmacy Pty Limited v Gauci [2009] NSWWCCPD 107 | |||||
| APPELLANT: | Arcade Pharmacy Pty Limited | |||||
| RESPONDENT: | Mary Rose Gauci | |||||
| INSURER: | Guild Insurance Limited | |||||
| FILE NUMBER: | A1-7914/08 | |||||
| ARBITRATOR: | Ms A Farrell | |||||
| DATE OF ARBITRATOR’S DECISION: | 22 April 2009 | |||||
| DATE OF APPEAL DECISION: | 27 August 2009 | |||||
| SUBJECT MATTER OF DECISION: | Sections 74, 289, 289A and 293 of the Workplace Injury Management and Workers Compensation Act 1998; section 65(3) of the Workers Compensation Act 1987; requirement for procedural fairness | |||||
| PRESIDENTIAL MEMBER: | Deputy President Kevin O’Grady | |||||
| REPRESENTATION: | Appellant: | Leigh Virtue & Associates | ||||
| Respondent: | Lamrocks | |||||
| ORDERS MADE ON APPEAL: | The decision of the Arbitrator dated 22 April 2009 is revoked and the matter is remitted to an arbitrator for determination of any application brought pursuant to section 289A(4) of the Workplace Injury Management and Workers Compensation Act 1998 following which the arbitrator is to make directions as to the further conduct of the proceedings. | |||||
BACKGROUND TO THE APPEAL
On 19 May 2009 Arcade Pharmacy 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 22 April 2009.
The Respondent to the Appeal is Mary Rose Gauci (‘the worker’).
The worker, who is 46 year of age, commenced employment with the appellant as a pharmacy assistant in approximately 1994. On 4 November 2004 the worker was injured as she was transferring stock from the ground floor to a storeroom located at the top of a stairway. The task involved the worker throwing boxes, each of which weighed about 4 kilograms, from the ground floor to a fellow employee who was positioned at a landing on the staircase. The worker was also required to stack the boxes in the storeroom. Following approximately 1 hour of this activity whilst in the course of throwing a box, she felt severe pain in her right shoulder. Notwithstanding her discomfort the worker completed her day’s work which included the throwing and stacking of the boxes.
The worker continued to perform her duties and her pain persisted. She sought medical treatment in January 2005 following which she was certified as being fit for selected duties by reason of the shoulder disability. The injury had been reported to the appellant on the day of its occurrence and a formal compensation claim was made following the first medical consultation. The worker’s general practitioner arranged for x-ray examination of the shoulder joint and referred her for chiropractic treatment. All medical expenses were met by the appellant’s insurer.
The appellant sold the pharmacy business in March 2005 at which time employment of the worker by the appellant was terminated and her services as employee were taken up by the incoming purchaser of the business. The worker’s hours of work were reduced by the new proprietor and she took steps to obtain part-time work as a casual receptionist for a medical practitioner at Wentworthville. That work regime, with some variation of hours, continued until January 2007 at which time the worker sought operative treatment which was carried out by Dr Frederick Hoe. The worker underwent right shoulder arthroscopy and arthroscopic acromioplasty on 30 January 2007. The worker was incapacitated for work between the date of operation and 26 March 2007 during which period weekly compensation was paid by the appellant’s insurer. The worker has returned to part-time work being three hours per day three days per week.
Following the operative procedure the worker continued to experience pain and discomfort in her right shoulder and has favoured her right arm. Since early 2007 the worker has noticed the gradual onset of left shoulder pain, particularly on reaching. On 18 August 2008 correspondence was forwarded by the worker’s solicitors to the appellant’s insurer which claimed lump sum compensation pursuant to section 66 of the Workers Compensation Act 1987 (‘the 1987 Act’). Enclosed with that correspondence was a Permanent Impairment Claim Form and a report of Dr Richard Deveridge dated 30 August 2007. Dr Deveridge had examined the worker on 30 August 2007 and had expressed the opinion that as a result of the subject injury the worker had suffered a 3 percent whole person impairment (WPI) by reason of left upper extremity disability and 4 percent WPI in respect of right upper extremity disability, being a total of 7 percent WPI.
The insurer responded to the claim for lump sum by letter dated 19 August 2008 which included advice that arrangements had been made to have the worker examined by Dr Donald Faithfull, orthopaedic surgeon, “for a section 66 assessment for the shoulders”. The worker attended that appointment following which, by letter dated 19 September 2008 addressed to the worker’s solicitors, the insurer advised that Dr Faithfull had assessed Mrs Gauci as having a 2 % WPI “based on the injury of 4 November 2004” and made a settlement offer in the sum of $2,500.00 being in respect of section 66 entitlement (2 % WPI).
On 2 October 2008 an Application to Resolve a Dispute (‘Application’) was filed with the Commission on behalf of the worker. That Application, in Part 1 – Matters in Dispute, particularised that the dispute was “for referral for medical assessment by an approved medical specialist (s293 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’). It was there stated that the medical assessment was in respect of “lump sum compensation where degree of permanent impairment in [sic] dispute”. That Application had attached to it a copy of the appellant’s insurer’s correspondence dated 19 September 2008 in which the settlement offer above mentioned was made.
On 21 October 2008 a Reply was filed on behalf of the appellant by its solicitors. At Part 3 of that Reply the “Matters in Dispute” were noted as follows:
“Confirmed as per dispute notice(s) attached to the Application Yes (ü)
Confirmed as per exchange of offers as per the Application Yes (ü)”
Part 7 of the Reply contained certification by the appellant’s representative in the following form:
“PART 7 – CERTIFICATION AND SIGNATURE
The Respondent certifies that:
The Respondent is entitled to lodge this reply because it satisfies the statutory procedural requirements under section 289 and 289A of the Workplace Injury Management and Workers Compensation Act 1998 and Clause 43, 43A & 43AA of the Workers Compensation Regulations 2003
The dispute is not limited to those matters identified in the Application to Resolve a Dispute lodged by the Applicant and those identified in Part 3
Respondent’s (or representatives) signature: _(signed)____________ Date: 21 October 2008”
The Reply had attached to it a number of documents one of which was headed “Schedule of Issues in Dispute” and another headed “Schedule of Directions Required”. The first of those documents listed the issues in dispute as follows:
“1. Employment
2. Insurance
3. Notice of injury
4. Duly made claim for compensation
5. Injury
6. Causation
7. Substantial contributing factor
8. Impairment
9. Section 323 deduction
10. Disease provisions (deemed date last Employer etc.)”
The second schedule contained the names of eight medical practitioners, one chiropractor, one general medical practice and two hospitals. It appears that it was the appellant’s intention to request the issue of a Direction to Produce (section 357 of the 1998 Act) addressed to each of those individuals/organisations.
On 22 October 2008 a Dispute Management Officer of the Commission, acting in accordance with authority delegated by the Registrar, referred the medical dispute for assessment by an approved medical specialist (AMS). The “body parts” nominated in that referral were “left upper extremity, right upper extremity”. The AMS nominated by the Registrar was Dr Philippa Harvey-Sutton.
Both the appellant and the worker were advised of the referral to Dr Harvey-Sutton and the details of an appointment for that practitioner’s examination of the worker which was to take place at 9am on 21 November 2008. That advice was contained in correspondence dated 24 October 2008 forwarded by a Dispute Management Officer of the Commission. It appears that the examination was conducted as arranged on that day following which Dr Harvey-Sutton requested production of an operation report from Dr Hoe, the worker’s treating surgeon. The Commission advised both parties, by facsimile transmission, of Dr Harvey-Sutton’s request concerning Dr Hoe’s records on the 27 November 2008.
By letter dated 28 November 2008 the worker’s solicitors forwarded to the Registrar of the Commission a copy of Dr Hoe’s operation report as well as copies of three reports from Dr Hoe to the worker’s general practitioner Dr Singh. It appears that Dr Harvey-Sutton was forwarded a copy of Dr Hoe’s operation report dated 20 January 2007.
The appellant’s solicitors responded to the Registrar’s facsimile communication dated 27 November 2008 by letter dated 10 December 2008. The content of that correspondence is as follows:
“We refer to your letter (facsimile transmission) of 27 November last and we advise that we require the opportunity of being heard in respect of any additional documents to be admitted in this matter, particularly having regard to the issues which remain in dispute.”
The records of the Commission indicate that a copy of Dr Harvey-Sutton’s medical assessment certificate (MAC) which issued on 10 December 2008 was forwarded to the solicitors for each party under cover of letter dated 10 December 2008.
In response to the Commission’s correspondence which enclosed the MAC the appellant’s solicitors wrote to the Commission on 19 December 2008. The content of that correspondence is as follows:
“We refer to our letter dated 10 December last and we advise that there are a large number of outstanding issues in dispute, in regard to this matter. In this regard, we refer you to the Reply filed and to the Schedule attached to same.
We also note that we are seeking the leave of the Commission, for the issuing of Directions, a list of which is also attached to the Reply.
In the circumstances, we would suggest that arrangements should be made for this matter to be listed for a Telephone Conference.”
An officer of the Commission, Manager of Dispute Services, responded by email communication to the correspondence dated 19 December 2008 on 23 December 2008. The content of that email is as follows:
“I refer to your letter dated 19 December 2008.
As the request for a further teleconference is not made by consent, the Commission will not set down a further conference.”
The MAC issued by Dr Harvey-Sutton contained an assessment concerning the right and left upper extremities being 9 percent WPI. The employer brought an appeal against that assessment pursuant to section 327 of the 1998 Act. The Registrar was satisfied in terms of section 327(4) that at least one of the grounds for appeal specified in subsection (3) had been made out and accordingly the Registrar referred the matter to an Appeal Panel for review. The MAC of Dr Harvey-Sutton was confirmed by the Appeal Panel and that decision and reasons for same were published on 20 March 2009.
On 22 April 2009 a Certificate of Determination (COD) concerning the dispute issued from the Commission. That COD was endorsed at the head of the document in the following terms:
“Issued in accordance with section 294 and 371(1) of the Workplace Injury Management and Workers Compensation Act 1998.”
The certificate was signed by Annette Farrell, Deputy Registrar Operations, Member of Commission.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 22 April 2009 records the Commission’s orders as follows:
“The Commission orders:
1.That the Respondent pay the Applicant, as lump sum compensation under section 66, $11,250 in respect of 9% permanent impairment resulting from injury on 4 November 2004.
2.That the Respondent pay the Applicant’s costs as agreed or assessed.
Brief statement of reasons
3.This Certificate of Determination is issued in accordance with the Medical Assessment Certificate issued under Part 7 of Chapter 7 of the Workplace Injury Management and Workers Compensation Act 1998.”
ISSUES IN DISPUTE
The issues in dispute in the appeal are:
(i) whether the appellant had been denied procedural fairness;
(ii) whether the Commission failed to give sufficient reasons for its determination, and
(iii) whether the determination was made within jurisdiction.
The issues summarised above are taken from the written submissions which accompany the appellant’s application seeking leave to appeal.
ON THE PAPERS REVIEW
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.”
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.
PRELIMINARY MATTERS
The determination which is the subject of this appeal is as stated in the Certificate of Determination dated 22 April 2009 signed by Annette Farrell who is described in that certificate as being “Deputy Registrar Operations, Member of Commission”. That certificate is the only record concerning the making of a determination in respect of the dispute between the parties.
Both parties in submissions on this appeal have raised arguments concerning the force and effect of the COD. The appellant has submitted that there has not been a determination by an arbitrator nor by the Registrar acting as arbitrator hence, it is put, “this Certificate does not constitute a Determination of the Commission”.
The worker in her submissions makes the terse assertion that: “Pursuant to section 371 of WIM the Registrar and/or her delegate can exercise all the functions of an arbitrator”. In the same paragraph the worker proceeds to argue that, should the appellant be correct in its assertion that the “matter has not been determined by an arbitrator”, this appeal which is brought pursuant to section 352 of the 1998 Act (that is one in respect of a decision of the Commission constituted by an arbitrator) must fail.
It is unnecessary to consider the correctness or otherwise of the worker’s assertion that section 371 of the 1998 Act empowers the Registrar to delegate functions of an arbitrator (cf Joppa Pty Limited t/as Tricia’s Clip-n-Snip v Edenden [2004] NSWWCCPD 50). This is so given that, as at the date of the issue of the COD, Annette Farrell, whose staff position with the Commission is that of Deputy Registrar Operations, held concurrently the office of an arbitrator. In the circumstances the determination which is evidenced by the COD signed by Ms Farrell was one made by an arbitrator and as such is a decision made by the Commission which may be the subject of an application for leave to appeal pursuant to section 352 of the 1998 Act.
LEAVE
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act.
The application concerning this appeal was received in the Commission’s registry on 19 May 2009. The appeal was thus made within 28 days of the Commissions decision in compliance with section 352(4) of the 1998 Act.
The amount of compensation at issue in the appeal is such that the subject matter of the appeal meets the relevant threshold prescribed in section 352(2) of the 1998 Act which must be met before leave to appeal may be granted by the Commission.
The requirements of section 352(2) and (4) having been satisfied and having regard to the subject matter of the appeal and to the arguments raised I order that leave be granted to the appellant to appeal to the Commission.
SUBMISSIONS, DISCUSSION AND FINDINGS
The appellant asserts that it has been denied procedural fairness in that the determination which is evidenced by the issue of the COD was made without it having “the opportunity of being heard”.
The appellant argues that the Reply filed on its behalf with the Registry raised “issues which required determination”. The appellant argues that it has been denied an opportunity to be heard with respect to the issues raised and denied an opportunity to seek leave, if it be found necessary, to “agitate those issues”.
Section 74 of the 1998 Act prescribes a mandatory obligation upon an insurer to give notice concerning a dispute as to liability in respect of a claim. The content of such notice is prescribed by the provisions of section 74(2). In the present case it is known that the worker’s claim was made on her behalf by her solicitors in correspondence referred in [6] above. There is no evidence before the Commission that the insurer has complied with its obligations pursuant to section 74. It should be noted that the worker at paragraph 7(a)(xiv) of submissions asserts that:
“At no stage has the Respondent worker ever been served with a Notice pursuant to section 74 of Workplace Injury Management Act 1998 (WIM), and in particular, no notice of dispute in relation to the over use injury to the Respondent’s left shoulder.”
There has been no response by the appellant to that last mentioned submission. I infer that the insurer has not complied with its obligations concerning notice as prescribed by the provisions of section 74 of the 1998 Act.
The 1998 Act places certain restrictions with respect to the circumstances in which a dispute may be referred to the Commission. Section 289 relevantly provides:
“…….
(3) A dispute about a claim for lump sum compensation cannot be referred for determination by the Commission unless the person on whom the claim is made:
(a) wholly disputes liability for the claim, or
(b) made an offer of settlement to the claimant pursuant to the determination of the claim as and when required by this Act and 1 month has elapsed since the offer was made, or
(c) fails to determine the claim as and when required by this Act.Note: The determination of a claim requires the making of a reasonable offer of settlement (if liability is wholly or partly accepted). Failure to make a reasonable offer of settlement constitutes a failure to determine the claim.
…
(5) The Commission may not hear or otherwise deal with any dispute if this section provides that the dispute cannot be referred for determination by the Commission.”
It is the worker’s submission that the dispute “was validly referred to the Commission after an offer of settlement had been made on 19 September 2008”. It is also asserted in submissions that, given the insurer’s failure to comply with its obligations pursuant to section 74, “the Registrar was correct to refer the matter direct to an AMS and that the decision of the AMS was confirmed by the Appeal Panel.” Neither party has addressed the terms of section 289(3)(b) in submissions.
The worker develops her argument concerning the correctness of the Registrar’s referral to the AMS by reference to the provisions of section 289A of the 1998 Act. That section provides:
“289A Further restrictions as to when a dispute can be referred to Commission
(1) A dispute cannot be referred for determination by the Commission unless it concerns only matters previously notified as disputed.
(2) A matter is taken to have been previously notified as disputed if:(a) it was notified in a notice of dispute under this Act or the 1987 Act after a claim was made or a claim was reviewed, or
(b) it concerns matters, raised in writing between the parties before the dispute is referred to the Registrar for determination by the Commission, concerning an offer of settlement of a claim for lump sum compensation.
(3) The Commission may not hear or otherwise deal with any dispute if this section provides that the dispute cannot be referred for determination by the Commission. However, the Commission may hear or otherwise deal with a matter subsequently arising out of such a dispute.
(4) Despite subsection (3), a dispute relating to previously unnotified matters may be heard or otherwise dealt with by the Commission if the Commission is of the opinion that it is in the interests of justice to do so.”
The worker, relying upon the provision of section 289A(2) asserts an argument that “…the appellant cannot raise a matter in dispute unless they have previously notified the respondent worker of the dispute.” It is again asserted that the Registrar “…was correct to refer the matter to an AMS and was entitled to disregard the glancing reference to the matters in dispute raised by the appellant in its Reply in the absence of any notice that complied with section 74 of WIM.”
The parties in their submission have not made reference to the provisions of section 65(3) of the 1987 Act which provides:
“(3) If there is a dispute about the degree of permanent impairment of an injured worker, the Commission may not award permanent impairment compensation or pain and suffering compensation unless the degree of permanent impairment has been assessed by an approved medical specialist.”
The resolution of a dispute concerning alleged permanent impairment by the Commission is further regulated by the provisions of section 293 of the 1998 Act and Practice Direction No. 11 dated 1 November 2006. Of significance in the present matter is section 293(3) which concerns the Registrar’s powers to refer a medical dispute for assessment under Part 7 of that Act. It provides:
“(3) The Registrar may not refer for assessment:
(a) a medical dispute concerning permanent impairment (including hearing loss) of an injured worker where liability is in issue and has not been determined by the Commission, or
(b) a medical dispute other than a dispute concerning permanent impairment (including hearing loss) of an injured worker, except when dealing with the dispute under Part 5 (Expedited assessment).”
The Practice Direction referred to above states, in part:
“Any dispute in respect of liability in relation to a claim for permanent impairment must be resolved or determined by the Commission constituted by an arbitrator, prior to the Registrar referring the dispute in relation to degree of permanent impairment for medical assessment.”
The question is raised, on the present facts, as to whether “liability is in issue” between the parties in terms of section 293(3)(a) of the 1998 Act. The argument implied from the submissions put on behalf of the worker is that the insurer’s non compliance with the provisions of section 74 precludes determination by the Commission of the dispute which is suggested by the appellant as it appears in the Reply. The difficulty with that argument is that section 289A(4) makes provision for the grant of a discretion in the Commission to permit “previously unnotified matters to be heard or otherwise dealt with”. That provision is as follows:
“(4) Despite subsection (3), a dispute relating to previously unnotified matters may be heard or otherwise dealt with by the Commission if the Commission is of the opinion that it is in the interests of justice to do so.”
The referral of the matter for an assessment by an AMS by the Registrar’s delegate appears to have been made in compliance with the provisions of Practice Direction No. 11 and was founded upon the assumption that there was no dispute as to liability. The existence of such a dispute had been raised in the Reply and the Schedule thereto and it is plain that the interests of justice required that the Commission deal with any application made on behalf of the appellant to have those matters not previously notified heard or otherwise dealt with by the Commission. It appears that the Registrar’s delegate, in referring the matter for assessment to an AMS, has relied solely upon the assertion made in the worker’s Application that (at Part 1.1B) the dispute relates to “lump sum compensation where degree of permanent impairment is in dispute”. No consideration, it seems, was given to the content of the appellant’s Reply. It is to be noted that the Registrar’s attention was drawn to those matters in correspondence from the appellant’s solicitors dated 10 December 2008 and 19 December 2008. I also note that the appellant’s suggestion that a further telephone conference be conducted, as contained in their letter of 19 December 2008, was rejected by the Registrar’s delegate.
On the face of the material which appears before the Commission it appears that the appellant has, through its insurer, failed to meet its obligations concerning notice of dispute and in a number of respects, as put by the worker in supplementary submissions dated 25 August 2009, has been somewhat dilatory in the conduct of its defence. The form of “Schedule” which appears attached to the Reply is both broad and vague in its terms and cannot be said to represent even a belated attempt to comply with the notice requirements of the legislation. Notwithstanding the manner of conduct of the defence I am of the opinion that there exists a dispute as to liability and further that the appellant has been denied procedural fairness in not being heard, at least in relation to an application pursuant to section 289A(4) to the Commission seeking an order that it be permitted to rely in its defence upon matters not previously notified. In the circumstances the determination evidenced by the COD dated 22 April 2009 must be revoked.
Having expressed my conclusion concerning the need for revocation of the determination it is unnecessary to address those matters raised on behalf of the appellant concerning the suggested failure on the part of the Commission to state sufficient reasons for its determination. I note in passing that the brief statement of reasons as appears in the COD would, in my view, suffice only in those circumstances where the only issue between the parties is the question of quantum of entitlement. It is only in those circumstances it may be seen appropriate that the dispute be determined without reference to an arbitrator of the Commission for adjudication.
DECISION
The orders numbered 1 and 2 in the Certificate of Determination dated 22 April 2009 are revoked and the matter is to be remitted to an arbitrator for determination of any application the appellant may wish to make with respect to its entitlement to rely on any matter not previously notified as required by section 74 of the 1998 Act. Any such application, to be brought pursuant to section 289A(4), is to be determined by the arbitrator following which directions should be made by the arbitrator as to the further conduct of proceedings.
The costs of proceedings incurred up to the date of the issue of the Certificate of Determination dated 22 April 2009 are to follow any order for costs made once the dispute is determined by the Commission.
COSTS
The question arises as to whether there should in this matter be a departure from the general rules and practice concerning costs. This subject has been the subject of discussion by Roche DP in Connor v Trustees of the Roman Catholic Church for the Archdiocese of Sydney [2006] NSWWCCPD 124 at [77] – [79]. I respectfully agree with the matters there discussed. I am of the view that a successful party, may, by reason of his/its conduct, be subject to a costs order against him/it.
I have earlier made observations concerning the manner in which the appellant has conducted its defence of this claim. The legislation grants the Commission a wide discretion concerning costs and I conclude that it is appropriate that the appellant pay the worker’s costs of this appeal.
Kevin O’Grady
Deputy President
27 August 2009
I, MARIE JOHNS, CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF KEVIN O’GRADY, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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