Autohaus Five Dock Pty Limited (wrongly sued as McMillan Prestige Pty Ltd) v Germanos
[2007] NSWWCCPD 86
•3 April 2007
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Autohaus Five Dock Pty Limited (wrongly sued as McMillan Prestige Pty Ltd) v Germanos [2007] NSWWCCPD 86
APPELLANT: Autohaus Five Dock Pty Limited
RESPONDENT: Peter Germanos
INSURER:Employers Mutual Indemnity (Workers Compensation) Limited
FILE NUMBER: WCC8775-06
DATE OF ARBITRATOR’S DECISION: 22 September 2006
DATE OF APPEAL DECISION: 3 April 2007
SUBJECT MATTER OF DECISION: Points not raised before the Arbitrator; section 40 Workers Compensation Act 1987; fresh evidence on appeal.
PRESIDENTIAL MEMBER: Deputy President Bill Roche
HEARING:On the papers
REPRESENTATION: Appellant: Edwards Michael Moroney
Respondent: Carroll & O’Dea
ORDERS MADE ON APPEAL: The Arbitrator’s orders and determinations made on 22 September 2006 are confirmed.
The Appellant Employer is to pay the Respondent Worker’s costs of the appeal.
BACKGROUND TO THE APPEAL
On 20 October 2006 Autohaus Five Dock Pty Limited (‘the Appellant Employer’) sought leave to bring an ‘Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘the Commission’) against a decision, dated 22 September 2006.
The Respondent to the Appeal is Peter Germanos (‘the Respondent Worker/Mr Germanos’).
The Appellant Employer conducts its business as a new and used car dealership selling and servicing cars at Five Dock.
On 13 December 2004 Mr Germanos started work for the Respondent Employer as a ‘driver/car washer’. His duties required him to hand wash cars, vacuum the interiors, blacken tyres, and clean windows. He also drove customers to work or home after they left their cars for servicing.
On 4 January 2005 Mr Germanos drove a customer to 37 Hawthorn Parade, Haberfield. After leaving the customer at that address, he attempted to do a u-turn when his vehicle was struck on the driver’s side by a van. As a result of the accident he was covered with broken glass and sustained multiple lacerations to his head and right side of his neck.
On 5 January 2005 Mr Germanos sought treatment from his general practitioner, Dr Sheiban. A claim was submitted and liability accepted. Voluntary compensation payments were made until liability was declined on 18 August 2005.
In his Application to Resolve a Dispute (‘the Application’) Mr Germanos alleged that he sustained the following injuries in the accident: “small disc protrusion at C5/C6 of the cervical spine, soft tissue injury to back and neck, musculo-skeletal sprain of the neck”. The Application claimed weekly compensation from 18 August 2005 to date and continuing, medical expenses and lump sum compensation in respect of a 20% whole person impairment.
The matter was listed for conciliation and arbitration on 4 September 2006 when Mr Germanos was cross-examined and the parties made submissions. In a reserved decision the Arbitrator found in favour of Mr Germanos and, among other things, awarded him weekly compensation on a continuing basis.
The Appellant Employer seeks leave to appeal that decision.
LEAVE TO APPEAL
Monetary Threshold
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 of compensation at issue on appeal exceeds $5,000.00 and more than 20% of the sum awarded is ‘at issue’ on appeal. The thresholds in section 352(2) are therefore satisfied.
Time
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.”
Having regard to Practice Directions Numbers 1 and 6, the documents that are before me, and the submission by the Appellant Employer 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.
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 22 September 2006, records the Arbitrator’s orders as follows:
“1.Respondent to pay $170.00 per week from 18 August 2005 to date and continuing pursuant to s40.
2.Respondent to pay s60 expenses.
3.I refer the assessment of WPI to an Approved Medical Specialist.
4.Respondent 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 that he failed to:
(a)properly exercise his discretion under section 40 (1) of the Workers Compensation Act 1987 (‘the 1987 Act’);
(b)analyse all of the evidence;
(c)consider the evidence from Mr Sladek about Mr Germanos’ poor work performance before the accident;
(d)take into account the fact that Mr Germanos’ employment with the Appellant Employer was terminated on 13 January 2005 for reasons unrelated to his accident or the injuries sustained in the accident;
(e)observe that Mr Germanos would not have secured a long lasting position with the Appellant Employer regardless of the accident or the injuries sustained in the accident;
(f)take into account the clinical notes from Dr Sheiban which showed that Mr Germanos had complained of neck and back problems in 2003 and 2004;
(g)take into account that, because of his prior neck and back problems, it was unlikely that Mr Germanos would have been able to withstand the rigours of car detailing, and
(h)adequately set out his reasons and the evidence upon which his findings were based.
An issue also arises as to whether the Medical Assessment Certificate (‘MAC’) issued to the parties on 18 December 2006 should be admitted into evidence as fresh evidence on appeal.
FRESH EVIDENCE
‘Fresh evidence’ on appeal is governed by section 352(6) of the 1998 Act, which provides as follows:
“(6) Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against may not be given on an appeal to the Commission except with the leave of the Commission.”
Practice Direction No.6 sets out the process for seeking leave of the Commission to give ‘new evidence’ on appeal. It provides as follows:
“New Evidence
Where a party seeks leave to give new evidence in relation to the decision appealed against, that party must serve a copy of the new evidence on the other parties to the dispute when serving the Application or Opposition.
In general, the Commission will allow new evidence to be introduced only where it can be demonstrated that the new evidence could not reasonably have been obtained by the party and tendered in proceedings before the Arbitrator and that failure to allow the new evidence would cause a substantial injustice in the circumstances of the individual case.”
Practice Direction No.6 also provides that if new evidence is sought to be relied upon, the Application or Opposition to the Appeal must contain:
“ -a schedule of the new evidence,
-a copy of the new evidence,
-a brief outline of the new evidence and the reasons why it was not given in the
proceedings before the Arbitrator, and
-submissions why the new evidence should be admitted.”
The Appellant Employer seeks to rely on fresh evidence on appeal in the form of the MAC issued to the parties on 18 December 2006. The application to rely on fresh evidence is in the form of an Application to Admit Late Documents filed on 12 January 2007. That is not the correct form to be used in such an application, but I have had regard to it as it covers all of the matters set out in Practice Direction No. 6.
It is submitted that the MAC should be admitted on appeal because:
a) the findings by the Approved Medical Specialist (‘AMS’) relating to the degree of permanent impairment might be considered relevant to assessment of Mr Germanos’ capacity to earn;
b) the AMS made observations regarding inconsistencies on examination of Mr Germanos and those observations are relevant to the assessment of Mr Germanos’ capacity to earn and in relation to the exercise of the section 40 discretion;
c) the MAC forms part of the Commission file in any event;
d) admission of the MAC will not offend any of the objectives of the Commission in terms of delay in the resolution of the matter and does not cause the Appellant Worker any prejudice, and
e) failure to admit the MAC will cause prejudice to the Appellant Employer given the findings made by the AMS.
The AMS made the following comments about Mr Germanos’ presentation:
a) there were inconsistencies between Mr Germanos’ range of movement of his neck at clinical examination compared to the movements demonstrated in video surveillance taken on several dates between March and May 2006 (page five);
b) Mr Germanos had decreased sensation in the whole of his right upper limb of a non-radicular/non-anatomical nature, and
c) Mr Germanos reported tenderness over myofascial tender points including over the medial border of the scapulae and over the iliac crests bilaterally, unrelated to the subject motor vehicle accident.
After noting the above matters, the AMS assessed Mr Germanos to have 7% whole person impairment as a result of injuries sustained in the car accident. This figure resulted from a DRE Impairment Category Rating II in respect of his cervical spine injury plus 2% whole person impairment for reduced activities of daily living.
In reaching her conclusions the AMS disagreed with the opinions of two of the Appellant Employer’s doctors, Drs Burke and Mills, who assessed Mr Germanos to have no whole person impairment. She also disagreed with Dr Mahony’s assessment of Mr Germanos’ back. The AMS was not asked to assess and did not assess or comment on Mr Germanos’ fitness for work.
Given that the AMS provided considerable support to Mr Germanos and rejected a large part of the Appellant Employer’s medical evidence, I do not believe that the failure to allow the MAC into evidence on appeal will result in any injustice let alone a substantial injustice.
The application to rely on fresh evidence is refused.
REVIEW
The nature of a review and the role and function of a Presidential Member on appeal has been considered in many cases in the Commission. In The King Island Company Limited v Deery [2005] NSWWCCPD 1 it was held at [19]:
“19. A Presidential Member on appeal has a specific and limited role in the review of a decision of an Arbitrator. The review is not a rehearing. The Presidential member is not dealing with the matter de novo and is not arriving at a fresh decision based on all of the evidence available at a later time (Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194; Builders Licensing Board v Sperway Constructions (Sydney) Pty Ltd (1976) 135 CLR 616). The powers of the Presidential Member to revoke the decision pursuant to section 352(7) of the 1998 Act and to substitute a new decision in its place, are exercisable only where it is demonstrated that the decision of the Arbitrator is affected by some legal, factual or discretionary error (Allesch v Maunz (2000) 203 CLR 172). Alternatively, the Presidential Member may remit the matter back to the Arbitrator concerned, or to another Arbitrator, for determination in accordance with any decision or directions made.”
Before an Arbitrator’s decision will be revoked on review it must by demonstrated that it contains or has resulted from an error of fact, law or discretion. The error must be such that, but for it, a different decision should have been made (see Snow Confectionary Pty Ltd v Askin [2004] NSWWCCPD 56; Section 294 of the 1998 Act; YG & GG v Minister for Community Services [2002] NSWCA 247; Absolon v NSW TAFE [1999] NSWCA 311).
I intend to apply the above principles in the matter before me.
SUBMISSIONS AND FINDINGS
The Appellant Employer submits that:
a) in Australia Wire Industries Pty Ltd v Nicholson (1985) 1 NSWCCR 50 (‘Nicholson’) the Court of Appeal held that the fact that a worker’s employment would not in fact have continued should be taken into account in the discretionary stage of a calculation under section 40;
b) the evidence of Mr Sladek, the Appellant Employer’s ‘dealer principal’, in his statement of 19 May 2006 was that Mr Germanos:
· was a lazy employee, was not proactive and was quite reserved;
· had a few problems getting along with people;
· was formally counselled “for his behaviour on 30 December 2004. This was due to his being argumentative, answering back, the quality of his work performance, driving poorly, asking to go home early, not eagre [sic] to perform tasks and poor attendance” (paragraph eight), and
· had problems operating manual vehicles.
c) Mr Sladek’s statement suggests that the counselling on 30 December 2004 was by way of a written warning and, as Mr Germanos did not rectify his performance after that warning, his employment was terminated on 13 January 2005;
d) the termination of Mr Germanos’ employment had nothing to do with the accident on 4 January 2005 but was because he was not suitable for the job;
e) the Arbitrator failed to examine the realities of Mr Germanos remaining in the industry and totally ignored the Appellant Employer’s evidence about Mr Germanos’ poor work performance;
f) the Arbitrator failed to observe that Mr Germanos would not have secured a long lasting position notwithstanding the accident and that Mr Germanos had only started work with the Appellant Employer on 13 December 2004;
g) the Arbitrator failed to properly apply section 40 in that he made an erroneous assessment of Mr Germanos’ ability to earn as required by section 40(2) and failed to follow the five steps set out in Mitchell v Central West Health Service (1997) 14 NSWCCR 526 (‘Mitchell’) for the purposes of section 40(2)(b);
h) the Arbitrator failed to consider all of the evidence and failed to take into account the clinical notes from Dr Sheiban, and
i) the Arbitrator failed to adequately set out his reasons and the evidence upon which his findings were based.
The Respondent Worker submits that the Arbitrator:
a) properly exercised his discretion under section 40;
b) took into consideration the written and oral evidence, including cross examination of Mr Germanos;
c) took into account the steps set out in Mitchell;
d) in his discretion the Arbitrator determined that Mr Germanos could do light duties in suitable employment and could earn about $400.00 per week;
e) properly made his decision, and that
f) the Appellant Employer has not demonstrated any legal, factual or discretionary error.
DISCUSSION AND FINDINGS
The difficulty with the Appellant Employer’s submissions is that none of the points argued on appeal were raised before the Arbitrator. At the Arbitration hearing, the Appellant Employer was represented by counsel who was given leave to cross-examine Mr Germanos about:
a) his efforts to find alternative employment;
b) the effects of a stroke he suffered in January 2005, and
c) the time he spent at the Burwood RSL playing poker machines (as revealed on video surveillance).
No application was made to cross-examine Mr Germanos on any other issues.
After brief re-examination by counsel for Mr Germanos, submissions were made for both sides. Because of the issues the Appellant Employer now seeks to argue on appeal, it is appropriate to set out in full its submissions before the Arbitrator. They started at page 10 line four of the transcript:
“EMPLOYER’S COUNSEL: Yeah. Well, you have, I think, before you as part of the applicant’s bundle a report from Dr Sheiban. It’s undated. Oh, no, it’s dated 24 October 2005. Dr Sheiban, of course, is the treating general practitioner. He says that the applicant presented with a history of a motor vehicle accident, he was alert, co‑operative on examination, shaken. There was a suggestion of X-rays.
ARBITRATOR: Just slow down for a second. Where do I find that?
MR HICKEY: It should be straight after Dr Mahony’s report.
EMPLOYER’S COUNSEL: It’s immediately before Dr Mahony on my file.
ARBITRATOR: In the schedules, and it’s immediately after. That’s intriguing. It doesn’t appear to actually be in my copy. Oh, hang on. No, that’s McLachlan. I’ve found it. Yep.
EMPLOYER’S COUNSEL: It looks like that. Have you found it?
ARBITRATOR: Yeah. I’ve found it, yes.
EMPLOYER’S COUNSEL: Well, the point I wanted to make there, Mr Arbitrator, is that at the time that he was examined, there were no neurological deficits, as I read the report.
ARBITRATOR: Yep.
EMPLOYER’S COUNSEL: It was not until about the date of this report, which appears on the face of it to be 24 October 2005, clearly well after the stroke, that there were complaints - he says:
At present, he complains of pain in the back of his neck with headaches and dizziness at times.
MR HICKEY: It’s before the stroke.
EMPLOYER’S COUNSEL: The stroke was in --
APPLICANT: January ‘06.
EMPLOYER’S COUNSEL: Oh, was it? I’ve made a note of 2005. I apologise.
ARBITRATOR: Yeah.
EMPLOYER’S COUNSEL: Well, Dr Mahony obviously put the case at its highest:
Considered unfit for work. I suggest he restrict his activities to activities not involving significant bending or lifting or significant use of the upper limbs.
It’s clear that even without reference to the respondent’s reports, which do not give support like that at all, but even allowing for Dr Mahony to be right, there’s no prohibition on the applicant working in the job that he’s described to you this afternoon.
ARBITRATOR: So you would put he’s fit for menswear and --
EMPLOYER’S COUNSEL: Fit for menswear or something like that. He’s clearly skilled in sales. It doesn’t have to be menswear. There would be an array of sales position out there presumably for him. You could infer that they’re still there. He’s declared himself willing to do that work. He’s obviously got time on his hands - witness the surveillance film. The surveillance report is not stunning by any means, but it certainly shows the applicant to be having a lot of time on his hands without any apparent discomfort, given that he is very conservative in his movements, anyway.
ARBITRATOR: Yes.
EMPLOYER’S COUNSEL: But you could comfortably find, in my submission, on all of the evidence that this man has a very high level of residual earning capacity.
ARBITRATOR: It’s essentially a section 40, isn’t it?
EMPLOYER’S COUNSEL: Yeah. Oh, yeah. And I’d suggest that his capacity for work is as high as the comparable work that he was doing at the time, in dollar terms.
ARBITRATOR: If I found he was fit for doing menswear, it doesn’t come out at zero, does it, because it would seem on Professor McLeod, for example, the car washing is out, so there’s some disadvantage on the open labour market.
EMPLOYER’S COUNSEL: Some disadvantage.
ARBITRATOR: It equals something --
EMPLOYER’S COUNSEL: It becomes a notional assessment in my respectful submission.
ARBITRATOR: Yes. Anything else?
EMPLOYER’S COUNSEL: No.”
No other submissions were made on behalf of the Appellant Employer. The above submissions did not touch on any of the matters raised on appeal. The Appellant Employer’s case was presented in a certain way by experienced counsel.
The first question is whether the Appellant Employer should now be permitted to present a substantially different case on appeal to that presented before the Arbitrator. The raising of fresh arguments on appeal was considered in Department of Corrective Services v Evans [2005] NSWWCCPD 58 (‘Evans’) where Deputy President Fleming stated:
“23. Secondly it would be unfair to allow a party to raise an issue on appeal, which was not argued before the Arbitrator. This is the legal principle applicable to proceedings in a court and, for essentially the same reasons, it is applicable in proceedings in the Commission. Review by a Presidential Member is not an opportunity for a party to re-litigate their case or to raise fresh arguments on appeal that were not raised at first instance (see Commissioner of Corrective Services v Aldridge (No. 2) [2002] NSWADTAP 6, where this principle was applied in a ‘tribunal’ appeal proceeding). In this matter there was no application to lodge fresh evidence in the appeal. By putting in dispute on the appeal the issue of whether the PTSD suffered by Mr Evans ‘arose out of or in the course of his employment’ GIO is effectively raising a fresh issue not in dispute before the Arbitrator (see Zamovisa Pty Ltd v Kavanagh [2004] NSWWCCPD 53). The High Court set out the principle in Metwally (No 2) v University of Wollongong (1985) 60 ALR 68 as follows:
‘It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had an opportunity to do so.’
24. The principle was applied by the High Court in Coulton v Holcombe (1986) 162 CLR 1 in relation to an appeal by way of rehearing. The Court held (per Gibbs CJ, Wilson, Brennan, and Dawson JJ) that:
‘It is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at the trial. If it were not so the main arena for the settlement of disputes would move from the court of first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish....’.”
Proceedings before the Commission’s Arbitrators are not a ‘preliminary skirmish’ or a ‘trial run’. All issues should be properly and fully ventilated before an Arbitrator so that the opposing side has the opportunity to answer, either with evidence or submissions, the arguments and issues raised. A review is not a second hearing. In Mayne Group Limited v Roberts & Faulding Health Care Pty Ltd [2005] NSWWCCPD 15 (‘Mayne Group’) it was held at [39]:
“A Presidential Member on appeal has a specific and limited role in the review of the decision of an Arbitrator. The review is not a rehearing, nor is the Presidential Member dealing with the matter de novo, nor is he or she arriving at a fresh decision based upon all of the evidence available at a later time (Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194; Builders Licensing Board v Sperway Constructions (Sydney) Pty Ltd (1976) 135 CLR 616). The powers of the Presidential Member to revoke the decision pursuant to section 352(7) of the 1998 Act and to substitute a new decision in its place, are exercisable only where it is demonstrated that the decision of the Arbitrator is affected by some legal, factual or discretionary error (Allesch v Maunz (2000) 203 CLR 172). Alternatively, the Presidential Member may remit the matter back to the Arbitrator concerned, or to another Arbitrator, for determination in accordance with any decision or directions made.”
Apart from the argument about inadequate reasons and the relevance of Dr Sheiban’s clinical notes, all of the points raised on appeal could and should have been argued before the Arbitrator. Not only were they not raised in cross-examination, but they were not even alluded to in submissions. The fact that they were not raised has deprived Mr Germanos of the opportunity to properly and fully respond to them and the Appellant Employer should not be allowed to raise new issues on appeal when to do so would severely prejudice the Respondent Worker.
If I am wrong in my application of the principles discussed in Evans and Mayne Group, and noting that the Respondent Worker has not objected to the Appellant Employer raising new issues on appeal, I make the following findings in respect of the Appellant Employer’s submissions (excluding, at this stage, the challenge about Dr Sheiban’s notes and the adequacy of the Arbitrator’s reasons).
Calculating a worker’s ability to earn uninjured (section 40(2)(a)) is a hypothetical calculation, which assumes that the worker’s pre injury employment continued (Australian Iron & Steel Pty Ltd v Elliott (1966) 67 SR (NSW) 87). This issue was also discussed in Nicholson where McHugh JA (as he then was) held that the compulsory retirement of the worker was irrelevant to the calculation of probable earnings in step one but was relevant to the exercise of the discretion. These principles were discussed and applied by the Court of Appeal in Singh v TAJ (Sydney) Pty Limited [2006] NSWCA 330. The Arbitrator correctly assumed, for the purpose of the section 40(2)(a) calculation, that Mr Germanos’ employment with the Appellant Employer would have continued and that his earnings but for injury were $570.00 per week.
In respect of whether Mr Germanos’ employment would have continued had he been uninjured, the Appellant Employer relies on the evidence from Mr Sladek summarised at paragraph [32 (b)] above. For the following reasons, I do not accept that it was more probable than not that Mr Germanos’ employment would have been terminated regardless of the car accident:
a) Mr Sladek’s statement that the Respondent Worker’s performance was poor and he was lazy was inconsistent with the statement from Mr Iannazzo, the Appellant Employer’s service manager (and Mr Germanos’ direct supervisor), dated 23 May 2006, at paragraph eight where he said that Mr Germanos was “a keen employee when he first started however he seemed to have a few emotional problems”;
b) Mr Iannazzo also stated that Mr Germanos was an “average employee” but there were “a few quality issues” (paragraph eight);
c) the decision to terminate Mr Germanos was made after the accident though the alleged problems with his performance were said to have been known before the accident;
d) though Mr Sladek referred to Mr Germanos having been given a written warning, no such document was tendered in evidence;
e) Mr Iannazzo made no reference to a written warning but did refer to Mr Germanos having been “formally counselled on one occasion for a few issues that arose in relation to the misunderstandings and arguments with other staff and also a few quality issues” (paragraph eight);
f) in the absence of the written warning it is difficult to accept Mr Sladek’s assertion that “Peter did not rectify his performance issues after this written warning and as a result we terminated his employment on 13 January 2005” (statement Mr Sladek, paragraph eight);
g) Mr Germanos’ accident was on 4 January 2005. According to his statement of 24 May 2006, he was declared unfit to work from 5 January until 1 March 2005. This statement is confirmed by Dr Sheiban’s report of 24 October 2005. I prefer this evidence to the evidence of Mr Iannazzo that Mr Germanos worked his full duties for the remainder of the week of 4 January 2005. That being so, it seems that Mr Germanos worked for only a few days after the counselling in December 2004 before his employment was terminated on 13 January 2005 because of his failure to “rectify his performance issues”. I do not accept the termination of employment had nothing to do with the car accident.
In reaching the above conclusion I have had regard to the whole of the evidence, including the fact that Mr Germanos started work with the Appellant Employer on 13 December 2004 and that there were some performance and personality issues in his first few weeks. I am not satisfied that there were any relevant discretionary factors that would warrant the reduction in the wage differential of $170.00 per week found by the Arbitrator.
The Appellant Employer’s argument about Dr Sheiban’s notes raises additional issues. Those notes were not in the Commission’s file. As a result, I issued the following direction on 9 March 2007:
1. “The Appellant Employer’s submissions make reference to clinical notes from Dr Sheiban. No such notes were before the Arbitrator and they are not in the Commission’s file. If the Appellant Employer wishes to rely on Dr Sheiban’s notes, an appropriate application will have to be made for leave to rely on fresh evidence under sec 352(6) of the Workplace Injury Management and Workers Compensation Act 1998 and Practice Direction 6. Such application must be made on or before 5.00pm on Monday 26 March 2007.
2. The Respondent Worker is to, on or before 5pm on Tuesday 10 April 2007, file and serve submissions in reply to any application to file fresh evidence and in response to the matters raised in Appellant Employer’s written submissions dated 20 October 2006.”
The Appellant Employer responded to this direction by letter dated 13 March 2007 attaching a copy of Dr Sheiban’s notes and submitting that the notes “were admitted by [the Arbitrator] at the teleconference on 17 August 2006”. The following submissions were also made:
“4.The Arbitrator also extended time for compliance by Dr Sheiban to comply with a Direction for Production of records (other than clinical notes) until 31 August 2006.
5.Page 1, point 37 of the Transcript of 4 September 2006 and the failure of the Respondent Worker’s submissions to address the absence of Dr Sheiban’s notes from the evidence would seem to support the Appellant’s contentions regarding that evidence.
6.The absence of the clinical notes from the Commission’s file appears to arise due to a failure in the Commission processes.
7.As such, the Appellant Employer submits that there is no prejudice to the Respondent Worker, and that the evidence should be included and considered for the purpose of the Appeal.
8.The Appellant submits that failure to consider the evidence would be grossly unfair to the Appellant Employer.”
In response, the Respondent Worker’s solicitor wrote to the Commission on 19 March 2007 and submitted:
“We note that the clinical notes of Dr Sheiban were before [the Arbitrator].
We note the clinical notes were before the Arbitrator when he made his decision in his [sic] discretion.”
Given the firm assertions by the legal representatives for both parties that the doctor’s notes were before the Arbitrator, I accept that that was the case. I also accept that the Appellant Employer is entitled to rely on them on appeal.
The Appellant Employer’s submission in respect of Dr Sheiban’s notes is as follows:
“Dr Sheiban was the Worker’s General Practitioner. The clinical notes clearly show that the Worker was complaining of neck and back problems well before he started working for the Employer. Entries recorded between 2003 and 2004 on pages 14, 15 and 16 demonstrate significant pre-accident problems. The Worker was unlikely to be able to withstand the rigours of car detailing well before he got the job. The Arbitrator failed to take these matters into account.”
It is correct that the Arbitrator did not refer to Dr Sheiban’s notes. It is an error for an Arbitrator to ignore relevant evidence. However, in the present case it was hardly surprising that the Arbitrator did not refer to the notes as neither of the parties addressed on their relevance.
I have carefully read Dr Sheiban’s notes. They make several references to Mr Germanos complaining of back and neck pain before the car accident on 4 January 2005. Though it is difficult to decipher precisely, the last entry in the notes for back and neck pain appears to be several months before January 2005. However, there is no evidence that Mr Germanos underwent any radiological investigations before January 2005 or that he was considered to be unfit for work because of his prior neck and back symptoms. It was never put to him in cross examination that he would not have been able to continue his work with the Appellant Employer, regardless of the consequences of the January 2005 accident, because of his pre-existing neck and back symptoms. Nor did the Appellant Employer’s doctors, who were apparently not asked to comment on the relevance of the notes, deal with this issue.
In these circumstances I do not accept that the Arbitrator’s failure to refer to the notes has affected the outcome of the Arbitration. I reject the Appellant Employer’s submission that it was unlikely that Mr Germanos would have been able to “withstand the rigours of car detailing well before he got the job”. The submission is speculative and unsupported by any persuasive evidence. It is an argument that the Appellant Employer’s experienced counsel chose not to present at the arbitration hearing. In my view, it has no merit.
The Appellant Employer also submits that the Arbitrator’s “Statement of Reasons inadequately set out the reasons and the evidence upon which his findings are based” (page six). Other than this bald statement, no submissions are made to identify the basis of the Arbitrator’s error. It is clearly correct that an Arbitrator must give reasons in support of his or her decision (Mayne Health Group t/as Nepean Private Hospital v Sandford [2002] NSWWCCPD 6, Cakir v Western Sydney Area Health Sevice t/as Parramatta Linen Service [2004] NSWWCCPD 1 and Part 15 Rule 15.6 of the Workers Compensation Commission Rules 2006).
In my view, the Arbitrator’s Statement of Reasons for Decision (‘Reasons’) complied with his obligation to give reasons. He referred to and carefully considered the medical evidence tendered by each side. At paragraphs 22, 23, 24 and 25 the Arbitrator set out in detail the medical evidence relied on by the Appellant Employer. At paragraph 26 he referred to the fact that he had the advantage of hearing oral evidence from Mr Germanos. He then stated:
“I accept that the Applicant does suffer from the pain of which he complains. The investigations disclose degenerative change in the spine. The Applicant’s complaints are consistent with the aggravation of those degenerative changes in the car accident.”
The Arbitrator then referred to the video surveillance and stated, “there was nothing in the surveillance that is inconsistent with the complaints made by the Applicant” (Reasons, paragraph 27).
The Arbitrator’s finding that Mr Germanos was unfit for work as a car detailer (Reasons, paragraph 28) was open on the evidence and well supported by the reasons given.
In assessing Mr Germanos’ entitlement under section 40 of the 1987 Act the Arbitrator made the following findings:
a) Mr Germanos’ earnings but for his injury (section 40(2)(a)) were $570.00 per week (Reasons, paragraph 28);
b) Mr Germanos was fit for a range of light work that did not involve heavy lifting and was able to earn in some suitable employment the sum of $400.00 per week (section 40(2)(b)) (Reasons, paragraph 30), and
c) the Appellant Employer did not point to any matter that required the “reduction from the simple difference between the two figures found” (section 40(1)) and accordingly there would be an award for Mr Germanos in the sum of $170.00 per week from 18 August 2005 to date and continuing (Reasons, paragraph 31).
The above analysis was appropriate, supported by the available evidence and consistent with the principles set out in Mitchell. I reject the Appellant Employer’s submission that the Arbitrator did not correctly apply the steps set out in Mitchell, he clearly did.
For the reasons set out at [43], [44] and [57] above, I reject the Appellant Employer’s argument that the figure of $170.00 per week should have been reduced in the exercise of the Arbitrator’s discretion under section 40(1) of the 1987 Act.
DECISION
The Arbitrator’s orders and determinations made on 22 September 2006 are confirmed.
COSTS
The Appellant Employer is to pay the Respondent Worker’s costs of the appeal.
Bill Roche
Deputy President
3 April 2007
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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