Babylon Property & Cleaning Services Pty Limited v Hormoz
[2009] NSWWCCPD 161
•22 December 2009
| WORKERS COMPENSATION COMMISSION | |||||
| DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR | |||||
| CITATION: | Babylon Property & Cleaning Services Pty Limited v Hormoz [2009] NSWWCCPD 161 | ||||
| APPELLANT: | Babylon Property & Cleaning Services Pty Limited | ||||
| RESPONDENT: | Mikhail Zaya Hormoz | ||||
| INSURER: | Employers Mutual NSW Limited | ||||
| FILE NUMBER: | A1-4834/09 | ||||
| ARBITRATOR: | Mr G Adelstein | ||||
| DATE OF ARBITRATOR’S DECISION: | 25August 2009 | ||||
| DATE OF APPEAL DECISION: | 22 December 2009 | ||||
| SUBJECT MATTER OF DECISION: | Application for review of prior award; section 55 Workers Compensation Act 1987; change of circumstances; unnotified issues; section 289A(4) Workplace Injury Management and Workers Compensation Act 1998; admission of evidence; failure to deal with issues in dispute | ||||
| PRESIDENTIAL MEMBER: | Deputy President Bill Roche | ||||
| HEARING: | On the papers | ||||
| REPRESENTATION: | Appellant: | Edwards Michael Lawyers | |||
| Respondent: | Galluzzo Andriano | ||||
| ORDERS MADE ON APPEAL: | Paragraph one of the Arbitrator’s determination of 25 August 2009 is revoked and the matter is remitted to another Arbitrator for re-determination in accordance with the reasons and findings in this decision. Paragraphs two, three, four, and five of the Arbitrator’s determination are confirmed. | ||||
| The appellant employer is ordered to pay the respondent worker’s costs of the appeal, as agreed or assessed. | |||||
BACKGROUND
The respondent worker, Mr Hormoz, injured his back whilst pushing trolleys up a ramp in the course of his employment with Babylon Property & Cleaning Services Pty Limited (‘Babylon’) on 23 August 2001. He ceased work and claimed weekly compensation. His claim was initially accepted and compensation paid until 31 January 2003.
On 26 June 2003, Mr Hormoz filed an Application to Resolve a Dispute in the Commission seeking weekly compensation, lump sum compensation, and payment of hospital and medical expenses. In a decision delivered on 27 November 2003, an Arbitrator determined that claim in favour of Mr Hormoz and made an award for total incapacity.
On 24 February 2004, Dr Hume, Approved Medical Specialist, issued a Medical Assessment Certificate (‘MAC’) in which he assessed Mr Hormoz to have the following impairments and losses under the Table of Disabilities for injuries received before 1 January 2002:
(a) 20 per cent impairment of the back;
(b) 10 per cent loss of efficient use of the right leg at or above the knee;
(c) 5 per cent loss of efficient use of the left leg at or above the knee, and
(d) 20 per cent loss of use of sexual organs.
Babylon appealed the Arbitrator’s decision and after a hearing on 11 March 2005, Deputy President Fleming delivered a decision on 24 March 2005 in which she revoked the Arbitrator’s determination and made an award in favour of Mr Hormoz in the sum of $332.00 per week from 31 January 2003 to date and continuing based on partial incapacity.
In or about October 2005, the parties settled the claim for lump sum compensation on the basis of the assessments in a section 66A agreement.
By letter dated 21 October 2008, Mr Hormoz’s solicitor made the following claims on his behalf:
(a) “Weekly benefits at the statutory rate for a worker with a dependent wife and two dependent children on the basis of total incapacity, capped at the pre-injury earning of $482.00 gross per week with increases”;
(b) $3,000.00 in respect of an additional 5 per cent permanent impairment of Mr Hormoz’s back, and
(c) $10,000.00 in respect of additional compensation for pain and suffering.
In support of the claim, Mr Hormoz’s solicitor served with the letter of 21 October 2008 reports from Dr Weisz dated 3 and 12 September 2007 and statements from Mr Hormoz dated 10 July 2003 and 16 October 2008, together with a permanent impairment claim form.
Babylon’s insurer, Employers Mutual NSW Limited (‘Employers Mutual’) responded by letter dated 30 October 2008. Though this letter is not in evidence, it apparently referred to and enclosed a copy of Deputy President Fleming’s decision of 24 March 2005 (T6.14).
Employers Mutual again wrote to Mr Hormoz’s solicitor on 16 January 2009 declining to make an offer in respect of the claim for additional lump sum compensation on the ground that Mr Hormoz had not suffered any further permanent impairment or disability as a result of his injury. The insurer based its decision on medical reports from Dr Machart dated 23 November 2008 and 5 January 2009, which it served with the letter.
By letter dated 10 February 2009, Mr Hormoz’s solicitors sought a review of the insurer’s decision in its letter of 16 January 2009. The letter stated, among other things, that the worker requested a review of the following decisions:
“Amount of weekly payments.
Whole person impairment increase.”
The reason given for the request for review was that Dr Machart’s report was “against the weight of the evidence”.
By letter dated 18 February 2009, Employers Mutual again declined to make an offer of settlement and essentially repeated the reasons set out in the letter dated 16 January 2009.
By letter dated 11 March 2009, Mr Hormoz’s solicitors again sought a review of that decision on the basis of a report from Dr Yousif dated 1 March 2009. The insurer responded on 18 March 2009 in the same terms as its letter of 16 January 2009.
In an Application to Resolve a Dispute (‘the Application’) registered in the Commission on 22 June 2009, Mr Hormoz claimed weekly compensation in the sum of $482.00 from 15 April 2005 to date and continuing, hospital and medical expenses, and additional lump sum compensation in the sum of $5,000.00 in respect of an additional 5 per cent impairment of his back. Part 2 of the Application referred to the previous proceedings and the previous award for partial incapacity of $332.00 per week.
In a Reply filed on 13 July 2009, Babylon sought leave to include the following as issues in dispute:
“1. The Respondent does not admit the Applicant’s Wages Schedule.
2. The Respondent submits the parties are bound by the Decision of Deputy President Fleming dated 24 March 2005, finding pre-injury earnings of $482.00 per week.”
The Commission listed the matter for conciliation and arbitration on 18 August 2009. Counsel for Mr Hormoz, Mr Batchelor, discontinued the claim for hospital and medical expenses. Counsel for Babylon, Mr Flett, conceded that there was no liability issue in respect of the claim for additional lump sum compensation and that part of the claim was, by consent, referred to an Approved Medical Specialist (‘AMS’) for assessment.
In respect of the claim for weekly compensation, Mr Flett argued that the insurer had put Mr Hormoz on notice that he had to “go through the argument of change of circumstances” and “bring evidence which would justify the Commission to change the circumstances of the award” (T8.30). In the alternative, he argued that it was in the interests of justice that his client be permitted to dispute the claim for weekly compensation. The Arbitrator rejected both arguments and determined that the “real issue” was whether or not he allowed (into evidence) “the documents in support of the Reply” (T12.22).
The Arbitrator determined that Mr Hormoz was prejudiced in having to deal with the documents attached to the Reply after the filing of the Application (T12.46). He therefore excluded the Reply and the documents attached to it (T13.33). The Arbitrator then heard lengthy submissions on the merits of the worker’s application for an increase in the weekly compensation awarded by Deputy President Fleming.
In a reserved decision delivered on 25 August 2009, the Arbitrator found that there had been a change of circumstances since Deputy President Fleming’s decision on 24 March 2005 and he accordingly varied the previous orders made by the Deputy President. The Commission issued a Certificate of Determination on 25 August 2009 in the following terms:
“The Commission determines:
1. The Respondent is to pay the Applicant’s weekly benefits as follows:-
1.1 For the period 15 April 2005 to 5 July 2005 - $360.80
1.2 For the period 6 July 2005 to 23 July 2006 - $377.80
1.3 For the period 24 July 2006 to 25 July 2007 - $397.80
1.4 For the period 26 July 2007 to 27 July 2008 - $417.80
1.5 For the period 28 July 2008 to date - $441.10
2.The matter is referred back to the Commission to enable the Registrar to refer the matter off to an Approved Medical Specialist. The date of injury is 23 August 2001 and the injured body part is the lumbar spine (the Applicant seeking an increase on the previous AMS allowance).
3.The Commission is to ensure that an Assyrian speaking interpreter is available for the medical appointment.
4.The medical reports attached to the Application together with the two reports of Dr Machart are to be made available to the Approved Medical Specialist at the time of consideration.
5.The Respondent is to pay the Applicant’s costs of these proceedings. On the Applicant’s submissions I accept that this is a complex matter and I agree to an uplift of 20% available to both parties.”
In an appeal filed on 22 September 2009, Babylon seeks leave to appeal the Arbitrator’s determination.
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’).
It is not disputed that the monetary thresholds in section 352(2)(a) of the 1998 Act are satisfied.
Time
Babylon lodged its appeal within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
I grant leave to appeal.
ON THE PAPERS
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 submissions 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.
FRESH EVIDENCE
Since the Arbitrator’s decision on 25 August 2009, a second AMS, Dr Khan, assessed Mr Hormoz’s back impairment under the Table of Disabilities to be 25 per cent. By consent, on 1 December 2009 the Commission ordered Babylon to pay Mr Hormoz $3,000.00 in respect of an additional 5 per cent impairment of his back and $1,500.00 in respect of additional compensation for pain and suffering.
In light of this development, I held a teleconference on 14 December 2009 to determine if either party wished to tender Dr Khan’s MAC as additional evidence on appeal. Mr Andriano, solicitor, represented Mr Hormoz and Mr Wardell, solicitor, represented Babylon at the teleconference. Mr Andriano sought leave to tender Dr Khan’s MAC on appeal.
Mr Wardell conceded that the MAC is fresh evidence that was not available at the arbitration, but submitted that a MAC is not determinative of a worker’s entitlement to weekly compensation. He conceded that if the Commission admitted Dr Machart’s reports, he could point to no prejudice to his client.
In circumstances where there is no prejudice to Babylon and where Dr Khan’s MAC is relevant evidence of a change of Mr Hormoz’s circumstances, it is in the interests of justice that it be admitted on appeal and I admit it as fresh evidence under section 352(6) of the 1998 Act.
I gave the parties leave to file additional submissions dealing with the MAC on or before 4.30 pm on Friday 18 December 2009. Both parties have filed further submissions and I have taken those submissions into account in this review.
DEPUTY PRESIDENT FLEMING’S DECISION
The Deputy President reviewed the evidence and found or noted:
(a) the parties agreed that Mr Hormoz’s average weekly earnings prior to his injury were $482.00 per week;
(b) Dr Yousif, Mr Hormoz’s general practitioner, recommended that Mr Hormoz return to light duties in September 2001 but following later reports of chronic pain, the doctor considered Mr Hormoz’s prognosis to be guarded;
(c) Dr Davis, occupational physician, reported on 18 March 2003 that Mr Hormoz was “significantly impaired and disabled” and was unfit to return to “any form of formalised employment”. Dr Davis thought it likely that Mr Hormoz had developed an “adjustment to injury disorder” which needed to be addressed by counselling;
(d) Dr Dan, neurosurgeon, reported on 6 August 2003 that Mr Hormoz’s “clinical presentation was histrionic”. In his view, Mr Hormoz sustained a “very minor injury” and that his back strain should have “ceased long ago”. He felt that Mr Hormoz’s “clinical picture [was] due to [the] adoption of a sick role rather than to an organic illness”. Dr Dan said nothing about Mr Hormoz’s capacity to work in suitable duties;
(e) Dr Anthony Smith, neurosurgeon, reported on 11 August 2003 that he considered Mr Hormoz to “behave in a most bizarre and elaborate fashion”. He considered him fit for his pre-injury employment, but added that “in the event that his psychological condition prevents him from working that is outside my field of expertise”;
(f) Mr Hormoz maintained a total incapacity for work and had not sought suitable employment;
(g) Mr Hormoz was not totally incapacitated for work as a result of his injury. There was no evidence of Mr Hormoz’s ability to earn in suitable employment. Having regard to the terms of section 43A(1) of the Workers Compensation Act 1987 (‘the 1987 Act’), Mr Hormoz had an ability to earn $150.00 per week in suitable employment. Deducting this figure from probable earnings of $482.00 per week left a difference of $332.00, and
(h) there were no reasons to reduce the sum of $332.00 per week in the exercise of the section 40(1) discretion and the employer was ordered to pay weekly compensation at that rate from 31 January 2003 to date and continuing.
THE EVIDENCE
Mr Hormoz’s evidence
Mr Hormoz’s evidence is set out in two statements dated 10 July 2003 and 16 October 2008. He was born in Iraq in 1965. He finished his education in 1986 when he qualified as a toolmaker. He moved to Australia in February 1994 where he worked as a storeman and packer, then as a cement renderer’s labourer and then, in 1997, as a trolley collector with Babylon. He injured his back whilst pushing trolleys in the course of his employment on 23 August 2001. He rested at home during the following week, expecting that he had pulled a muscle and it would come good. Eventually, he attended at a medical centre at Fairfield Heights on 29 August 2001.
Mr Hormoz described the effect of his injury at paragraph 25 of his 2003 statement. He stated:
(a) his life had changed considerably since his injury in August 2001;
(b) he had greatly diminished movement and simply sitting in a chair for any length of time was extremely painful. His only relief from extreme pain was to stand;
(c) he had great trouble sleeping;
(d) he could not walk for longer than about 10 minutes before having pain in his right leg;
(e) he could not play with his children;
(f) he could not “partake of any work, exercise or any other physical activity”;
(g) his sex life was non-existent;
(h) his medication left him in a semi-permanent state of what appeared to be “drunkenness”;
(i) he could no longer drive a car under medication, and
(j) he felt he had become an old man overnight and he had no joy for life.
In his October 2008 statement, Mr Hormoz referred to his earlier statement and added:
(a) he continued to reside with his wife and two children, Daniel born in January 1991 and Daniella born in February 1996;
(b) his wife had been working as a self-employed cleaner for about one year working four hours per day Monday to Friday. Daniel had finished school but was not working and Daniella was in year seven;
(c) after being referred to CRS in September 2001, Mr Hormoz returned to light duties with Babylon in December 2001. Those duties required him to dust tables for one hour per day two days per week. The duties aggravated his pain and he stopped work in early 2002 and was admitted to Westside Private Hospital at Concord for two weeks where he had traction and acupuncture. He has not worked since that time;
(d) he continued to see Dr Yousif, who provided him with WorkCover certificates and scripts for medication. He has attended physiotherapy on a few occasions, but had not seen his specialist, Dr Maniam, for about one year;
(e) his medication included cipramil, doloxene, somac, cialis, and panamax. He also used a TENS machine which provided some pain relief, but it was not long lasting;
(f) his pain had gotten worse and he felt pain everywhere, in his back, legs and neck. He also felt numbness in his lower arms. The pain was constant and he could not walk for longer than 15 minutes, or stand or sit for very long. He walked with a limp. He had trouble sleeping. His doctor referred him to a psychologist and for pain management, which he attended for a short time, until the insurance company stopped paying;
(g) because of his pain he is short-tempered and gets angry or sad easily. He cannot do work around his house;
(h) his driver’s licence restricts him to driving no more than 30 kilometres from his house because of his medication;
(i) Dr Maniam certified him fit to work light duties two hours per day three days per week. He has looked for work and filled out job seeking forms sent to him by the insurer, but he has not obtained any employment, and
(j) his first language is Assyrian. His spoken English is okay but he cannot write very well in English. All of his past work has been physical work, which he can no longer do because of his injuries.
Medical evidence
An MRI scan on 11 October 2001 revealed a broad based diffuse disc bulge and annular tear at the L5/S1 level. The remaining lumbar discs maintained their height and signal characteristics, without significant bulging, herniation, canal stenosis or neural compression.
A second MRI scan on 25 March 2002 revealed a left posterolateral disc protrusion at the L4/5 level and a small posterior disc protrusion at the L5/S1 level.
Dr Weisz, orthopaedic surgeon, examined Mr Hormoz for medico-legal purposes on 27 February 2003. In his report of 4 March 2003, Dr Weisz took a history of the August 2001 injury and that Mr Hormoz experienced sudden low back pain with radiation into his right leg. He experienced pain daily and was severely restricted in his daily activities such as sitting, standing, travelling and climbing stairs. He also suffered from disturbed sleep.
On examination, Dr Weisz noted Mr Hormoz to walk with a limp and that his spine was “spastic and significantly restricted in mobility”. Straight leg raising was up to 30 degrees and his left thigh had one centimetre of wasting. Neurological examination was normal. Mr Hormoz experienced some erectile dysfunction.
Dr Weisz appears to have examined the October 2001 MRI scan (described by him as the November 2001 scan) and concluded that his clinical findings and history were “corroborated with [sic, by] the radiology”. He diagnosed Mr Hormoz to have an acutely protruding lumbar disc. He felt that the mechanism of injury as described was “plausibly the cause of the detected pathology.” He felt Mr Hormoz was unfit for any kind of work.
The first AMS, Dr Hume, examined Mr Hormoz on 24 February 2004 for the purpose of assessing the extent of his impairments and losses under the Table of Disabilities for injuries received before 1 January 2002. Dr Hume took a consistent history of Mr Hormoz developing low back and right leg pain whilst pushing trolleys in the course of his employment in August 2001. He was treated with physiotherapy, swimming, and a two week period in hospital. He also used a TENS machine and had worn a corset. Mr Hormoz said that he had become worse.
Mr Hormoz complained to Dr Hume of persistent, severe, and increasing pain in the lower back and right leg. He also complained of some left leg pain. He said he was “unable to do anything during the day” and rested for most of the day. He had great difficulty sleeping at night. Mr Hormoz did light duties for two hours a day for approximately three weeks, but had not been able to do any other work.
On examination, Dr Hume noted that Mr Hormoz walked with a marked limp on his right leg. He had no flexion of the lumbar spine and straight leg raising was 30 degrees on the right and 60 degrees on the left. Both thighs were equal in circumference, but the right calf was one centimetre less than the left. Power and sensation in the legs was normal.
Dr Hume reviewed several radiological reports and several reports commenting on the radiology, but did not examine any of the scans. He noted that the L4/5 disc protrusion could have occurred after the October 2001 MRI scan, but Mr Hormoz gave no history of any injury after that date. He concluded that Mr Hormoz suffered a back injury with damage to the L4/5 and L5/S1 discs and that the injury was consistent with the work episode he described. Whilst he noted that Mr Hormoz was in pain, he had no doubt that there was a “functional component” which was causing some of Mr Hormoz’s pain. The doctor was convinced that Mr Hormoz had an established “chronic pain syndrome.”
He assessed Mr Hormoz to have a 20 per cent permanent impairment of his back, 10 per cent loss of efficient use of the right leg at or above the right knee, 5 per cent loss of efficient use of the left leg at or above the knee and a 20 per cent loss of efficient use of the sexual organs. Dr Hume agreed with Dr Maniam’s opinion that Mr Hormoz would not be capable of returning to his pre-accident duties. He also agreed with Dr Teychenne’s opinion that Mr Hormoz was not a surgical candidate and that he was not suited for activity that required heavy lifting.
Dr Hume noted that Dr Anthony Smith (qualified by the insurer) considered Mr Hormoz to have no impairment of his back or loss of efficient use of either leg. He also noted the opinion of Dr R Smith (qualified by the insurer) that there was nothing wrong with Mr Hormoz. Despite these opinions, Dr Hume concluded that Mr Hormoz suffered pain in his back and some radiation of pain into the legs and he stood by his impairment assessments.
Dr Weisz re-examined Mr Hormoz on 23 July 2007. In his report of 3 September 2007, Dr Weisz recorded that Mr Hormoz stated repeatedly that his condition had worsened. Whereas before his lump sum compensation settlement in early 2006, he was able to walk up to 10 minutes at a time, he was now “incapacitated to such an extent that even a short walk would be impossible.” He was not able to sit for prolonged periods. He complained of intensified right leg sciatic pain.
On examination, Mr Hormoz’s walk was slow, but unrestricted. He sat with obvious discomfort and stood up frequently during the interview. He was “spastic and quite rigid in mobility in all directions.” He had a tender right-sided lumbar muscular spasticity. His straight leg raising was 45 degrees. Neurological examination was normal. His right thigh was one centimetre smaller than his left thigh. He complained of a non-anatomical loss of sensation in the whole of his right leg.
Dr Weisz examined a CT scan dated May 2006 and compared it with the old films. He stated, “on the last test a clear persistent, fairly prominent disc protrusion (say GR.II) was visible at lumbar 4/5 level and a slightly smaller protrusion (say GR.I) at the L5/S1 level.”
Dr Weisz concluded that the radiology corroborated his clinical findings and history and he confirmed his previous diagnosis of “two level lumbar disc protrusion”. Despite Mr Hormoz’s non-organic presentation, he had objective pathology and the doctor again recommended surgery. He again concluded that Mr Hormoz was not fit for any type of work.
Dr Yousif reported on 1 March 2009. Whilst he referred to his earlier report of 6 November 2002, that report is not in evidence. He apparently resumed treating Mr Hormoz in February 2007 after an undisclosed break and saw him regularly between that date and February 2009. Mr Hormoz complained of low back pain radiating into his right leg, depression, and erectile dysfunction consequent upon his back injury. Repeated clinical examinations revealed a distressed and depressed young man who walked with a painful limp. He was always uncomfortable whilst sitting. He was unable to bend forward. Straight leg raising was positive at about 15-25 degrees, more restricted and painful on the right. Knee reflexes were normal bilaterally, but ankle reflexes were lost bilaterally.
Because Dr Maniam had been providing Mr Hormoz with WorkCover certificates, Dr Yousif was unsure about the period that Mr Hormoz was unfit for work. He assumes that Mr Hormoz would have been always unfit for pre-injury duties and “practically unable to earn money through a useful full-time job.” At the date of Dr Yousif’s report, Mr Hormoz was certified fit for part-time light duties, three hours per day on three days per week with a travelling limit of 30 kilometres and a lifting limit of five kilograms, avoiding repetitive bending, pushing, pulling, straining and awkward posturing.
Mr Hormoz also relies on several medical certificates from Dr Maniam, from 15 March 2005 until 13 December 2007. Those certificates certified Mr Hormoz to be unfit for work until 15 April 2006 and fit for suitable duties for two hours per day three days per week from 16 March 2006 until 16 September 2006, and for three hours per day three days per week from 16 September 2006. From March 2008, Dr Yousif declared Mr Hormoz fit for suitable duties for three hours per day three days per week with a lifting restriction of five kilograms. Those restrictions continued until Dr Yousif’s last certificate on 11 June 2009.
Dr Machart, orthopaedic surgeon, examined Mr Hormoz at the request of Employers Mutual on 20 November 2008 and reported on 23 November 2008. Mr Hormoz reported that the severity of his pain was gradually increasing and that he was unable to walk for more than 10 minutes or sit for prolonged periods.
On examination, there was no spasm in the back, but Mr Hormoz reported tenderness in a wide area. Mr Hormoz demonstrated minimum flexion. Reflexes were present at the knees, but were bilaterally absent at the ankles. There was no muscle wasting. Dr Machart examined a CT scan dated 24 May 2006, which revealed bulges at L4/5 and L5/S1. He also noted the October 2001 MRI scan, which revealed a minor annular tear at L5/S1.
Dr Machart diagnosed “two-level disc disease” which had not been caused by the specified injury. Dr Machart stated that it was probable that the injury caused a strain of a disc, possibly causing an annular tear or a bulge, but it was not a severe injury. He added, “much improvement would have been part of the prognosis following injury in 2001”. The fact that Mr Hormoz’s symptoms were allegedly increasing in severity and symptoms were reported away from the specified injury site of L5/S1, was not consistent with the injury and indicated that the severity of the symptoms as presented by Mr Hormoz was overstated and maximised.
In spite of these comments, Dr Machart concluded that there was a contribution from the 2001 injury to the pathology in the spine, but Mr Hormoz’s symptoms were out of proportion to the degree of injury. The displayed incapacity was disproportionate to the expected prognosis and the impact from injury was “only minor”. Dr Machart felt that the worker was fit for full-time duties that did not involve repetitive bending or heavy lifting (greater than 10 kilograms). He suggested that suitable work options included sales, production line work, supervision, and office work. He assessed a 10 per cent permanent impairment of the back and a 10 per cent permanent loss of efficient use of the right leg at or above the knee.
Employers Mutual asked Dr Machart if he had considered Dr Hume’s assessment. In a supplementary report dated 5 January 2009, Dr Machart responded that he was aware of Dr Hume’s assessment, but he reached a different conclusion because:
(a) the injury was not severe;
(b) pathology was not confined to a single spinal segment;
(c) pathology at multiple levels was not caused by the injury, and
(d) the severity of the symptoms at presentation was not consistent with the severity of pathology evident objectively.
Dr Machart confirmed that his assessment of a 10 per cent impairment of the back and a 10 per cent loss of efficient use of the right leg at or above the knee was not an additional impairment or loss, but was his assessment of the total current impairment and loss as a result of the injury “having subtracted impairment for degenerative condition (multi-level pathology) and for the non-organic factors in his behaviour.”
Dr Khan prepared his MAC on 22 October 2009, having examined Mr Hormoz on 14 September 2009. He noted that Mr Hormoz had been referred to Dr Salmon for pain management three or four years ago and was due to see him in October 2009. Dr Khan took a history that Mr Hormoz’s symptoms were getting worse. Walking, standing and sitting for long periods caused a worsening of symptoms.
Dr Khan reviewed the radiological reports and concluded that they confirmed the presence of disc trauma at the L4/5 and L5/S1 levels with a degree of nerve root irritation. Subsequent radiological investigations (presumably subsequent to Dr Hume’s MAC in 2004) did not reveal any significant structural deterioration in the scans, but there had been subjective deterioration of his symptoms.
Physical examination revealed significant restriction of back movements and evidence of persistent nerve root irritation in both legs, the right more than the left. Based on the history and examination, Dr Khan concluded there had been a degree of deterioration since 2004. There was also a degree of demonstrative pain behaviour and an inconsistent global reduction of sensation in the whole of the right leg, which was non-anatomical and suggestive of exaggeration. He assessed a 25 per cent impairment of the back, compared to Dr Hume’s assessment of 20 per cent.
THE ARBITRATOR’S REASONS
In a reserved Statement of Reasons (‘Reasons’) delivered on 25 August 2009, the Arbitrator made the following rulings and findings:
(a) the section 74 notice issued by Employers Mutual dealt only with the claim for additional lump sum compensation (Reasons at [17]);
(b) the material relied on by the insurer did not alert Mr Hormoz to the likelihood that the employer was challenging the claim, beyond the need for Mr Hormoz to emphasise a proper basis for an increase in weekly benefits (Reasons at [18]);
(c) as the reports from Drs Machart and Assem were in existence before Employers Mutual issued its section 74 notice, and as no issue had been raised at the teleconference on 27 July 2009, the interests of justice did not invite the Arbitrator to accept the material (Reasons at [20]);
(d) based on Dr Weisz’s second report and Mr Hormoz’s evidence, he was satisfied that Mr Hormoz’s condition had deteriorated since 2003 (Reasons at [29] and [30]);
(e) Mr Hormoz’s probable earning but for the injury were agreed at:
(i)$525.80 per week from 15 April 2005 to 5 July 2005;
(ii)$542.80 per week from 6 July 2005 to 23 July 2006;
(iii)$562.80 per week from 24 July 2006 to 25 July 2007;
(iv)$582.80 per week from 26 July 2007 to 27 July 2008, and
(v)$606.10 per week from 28 July 2008 to date.
(f) Mr Hormoz’s ability to earn since March 2005 was, on average, $165.00 per week (Reasons at [33]), and
(g) Mr Hormoz was entitled to receive the difference between the above probable earnings and his ability to earn.
ISSUES IN DISPUTE
The issues in dispute in the appeal are whether the Arbitrator erred in:
(a) failing to distinguish between issues in dispute and material relied upon in support of a dispute (‘issues in dispute and evidence relied upon’);
(b) excluding material that was properly in evidence before the Commission (Dr Machart’s reports) (‘issues in dispute and evidence relied upon’);
(c) finding that there had been a deterioration in the worker’s condition when such finding was against the weight of the evidence (‘whether Mr Hormoz’s condition has deteriorated’);
(d) finding that there had been a deterioration in the worker’s earning capacity when such finding was contrary to the approach actually adopted by the Arbitrator (‘whether Mr Hormoz’s earning capacity has deteriorated’);
(e) failing to give any or any adequate reasons for the finding that the worker’s ability to earn in some suitable employment was $165.00 per week throughout the whole period the subject of the award (‘failure to give reasons’);
(f) applying an averaged amount for the ability to earn over the whole period of the claim (‘failure to give reasons’);
(g) finding a change of circumstances warranting an increase in the award from a date three weeks after the decision of Deputy President Fleming dated 24 March 2005 (‘change of circumstances three weeks after Deputy President Fleming’s decision’), and
(h) making an award in excess of the maximum statutory rate for a single worker without making any findings as to dependency (‘dependency’).
SUBMISSIONS, DISCUSSION AND FINDINGS
Issues in dispute and evidence relied upon
Babylon concedes that Employers Mutual’s letters of 18 February 2009 and 18 March 2009 did not clearly constitute a dispute notice directly addressing a claim for an increase in weekly benefits. It nevertheless submits that those letters operated to dispute the claim in that they asserted that “your client has not suffered any further permanent impairment or disability as a result of the injury” (emphasis added) and that Mr Hormoz’s weekly benefits were “subject to a section 40 award in the amount of $332.00 per week in accordance with the decision of Deputy President Fleming dated 24 March 2005”.
Babylon argues that these assertions must be viewed in the context of the worker’s letter of claim dated 21 October 2008 in which the claim for weekly benefits made no reference to the existence of a previous award or the fact that the worker sought an increase in that award under section 55 of the 1987 Act. Even the Application made no clear reference to the fact that there was an existing award of weekly compensation or that Mr Hormoz sought an increase under section 55. In these circumstances, it is submitted that the insurer’s response was appropriate to the claim Mr Hormoz particularised and the Arbitrator should have granted leave under section 289A(4) of the 1998 Act for Babylon to raise issues relevant to the claim as it was ultimately presented.
The matter is further complicated because, though the Arbitrator apparently refused leave to Babylon to dispute the claim for additional weekly compensation, he then heard submissions from Babylon’s counsel on that issue. Therefore, the Arbitrator’s real error, it is argued, is that he failed to distinguish between the issues relevant to a dispute and the material relied upon by the insurer in support of the issues raised regarding the dispute.
Mr Hormoz submits that the letter of claim must be read with Deputy President Fleming’s decision of 24 March 2005. The insurer’s response only addressed the claim for additional lump sum compensation and made no reference to the claim for weekly compensation. It was therefore appropriate, so it is argued, that the Arbitrator excluded Dr Machart’s reports from the claim for weekly compensation, but permitted them to be referred to the AMS in relation to the claim for additional lump sum compensation.
The manner in which Mr Hormoz’s solicitors claimed compensation and the insurer denied liability were both unsatisfactory. A worker claiming lump sum or weekly compensation is obliged to clearly state and fully particularise the grounds on which the relief is sought. Where a claim seeks an order that a previous award of the Commission be varied by way of a review under section 55, that fact must be made clear in the initial notice of claim and in the Application to Resolve a Dispute (Pages Hire Centre Kogarah v Chapman [2009] NSWWCCPD 9 at [34]).
Mr Hormoz’s letter of claim did not properly particularise the nature of his claim for weekly compensation. It did not refer to the previous award or indicate that he was seeking an increase in that award. It merely claimed weekly benefits at the statutory rate for a worker with a dependent wife and two dependent children based on total incapacity, capped at the pre-injury earnings of $482.00 per week. That was clearly inadequate. The notice of claim should, at the least, have identified the previous award, indicated the variation Mr Hormoz sought to that award, and the basis for that variation. The letter of claim dated 21 October 2008 did none of those things.
On the other hand, however, it is not acceptable for an insurer to merely put its head in the sand and pretend it has no idea that a worker is seeking a variation of a previous award in circumstances where it clearly should have known better. If it was genuinely in doubt about the nature of Mr Hormoz’s claim, the insurer could and should have sought clarification.
Therefore, in the circumstances of the present case, both parties were at fault. Mr Hormoz failed to properly particularise his claim on the one hand and, on the other hand, the insurer acted with a level of feigned ignorance that was surprising and unacceptable. Quite clearly, the issue in dispute was and is whether there has been a change of circumstances since Deputy President Fleming’s decision on 24 March 2005 and, if so, whether that change justifies the orders made by Deputy President Fleming being varied.
As Mr Hormoz had not properly particularised his claim and as he can point to no prejudice he would suffer if the insurer is permitted to dispute the claim for an increase in weekly compensation, this is an appropriate case for the Commission to exercise its discretion in section 289A(4) to permit the insurer to dispute previously unnotified matters. In practical terms, that is what the Arbitrator did in that he allowed counsel for Babylon to contest the worker’s claim that there had been a change of circumstances. Having effectively allowed Babylon to dispute the claim for an increase in weekly compensation, the Arbitrator then excluded all of the insurer’s evidence, including the Reply itself. Babylon challenges this ruling.
Babylon has made no submissions about the Arbitrator’s rejection of Dr Assem’s report of 27 October 2008, which it filed with an Application to Admit Late Documents on 3 August 2009. The insurer received Dr Assem’s report on 27 October 2005. It has offered no explanation for not serving the report prior to 3 August 2009. That report was an injury management report and did not deal specifically with the claim currently in dispute. I therefore agree with the Arbitrator’s decision that it was not in the interests of justice that it be admitted into evidence.
Dr Machart’s reports fall into a different category. The insurer served them on 16 January 2009. They clearly deal with Mr Hormoz’s condition in general and his “ongoing fitness for work” though they do not specifically deal with whether Mr Hormoz’s condition had deteriorated. Given that Mr Hormoz has had these reports since January 2009, it is difficult to see what prejudice he will suffer if they are admitted. Counsel for Mr Hormoz suggested none in submissions before the Arbitrator and none has been suggested in submissions on Appeal.
The Commission has a statutory obligation to determine disputes according to their substantial merits (section 354(3) of the 1998 Act). In the circumstances of the present case, it is appropriate that relevant evidence that the insurer served several months before Mr Hormoz filed his Application with the Commission be admitted into evidence and considered in the resolution of the issues in dispute. That is the course I propose to adopt.
Whether Mr Hormoz’s condition has deteriorated
Babylon challenges the finding that Mr Hormoz’s overall medical condition had deteriorated since 24 March 2005. It submits that Deputy President Fleming did not accept Dr Weisz’s opinions in their entirety and, in addition, at no point in his report of 3 September 2007 did Dr Weisz state that Mr Hormoz’s condition had deteriorated when compared to his previous examination.
Babylon argues that, in objective terms, Dr Weisz clearly considered the worker’s clinical presentation to be much the same as it had been when he examined him in 2003. It also argues that a comparison of Mr Hormoz’s statements dated 10 July 2003 and 16 October 2008 reveal that his complaints have remained much the same. Similarly, Mr Hormoz’s complaints since 24 March 2005 and his complaints recorded by Dr Hume in February 2004 reveal “a remarkable similarity”.
Babylon also submits that, contrary to the Arbitrator’s finding, there is no evidence of increased attendances upon Mr Hormoz’s general practitioner and no evidence of any increase in medication. In respect of the Arbitrator’s reliance on Mr Hormoz’s complaint of temporary loss of sensation over the right leg, as recorded by Dr Weisz, Babylon argues that the doctor conceded that such a complaint was “not anatomical in distribution”. It is further argued that Mr Hormoz’s “non-organic presentation” renders it unsafe to baldly accept, as the Arbitrator did, the worker’s assertion that he has deteriorated.
Babylon submits that the reality is that Mr Hormoz’s complaints have always been florid and he has always asserted an “extreme degree of disability”. Consequently, there is no objective clinical evidence to suggest that Mr Hormoz’s condition has deteriorated. In summary, it is submitted that there is no convincing evidence that Mr Hormoz has established a change of circumstances in the nature of a deterioration in his clinical condition since 24 March 2005.
In its supplementary submissions filed on 18 December 2009, Babylon argues that the deterioration found by Dr Khan was subjective and related to Mr Hormoz’s symptoms rather than pathology. Moreover, the AMS acknowledged the presence of “functional overlay” and exaggeration. It is also argued that the relevant change in circumstances for the purposes of a review under section 55 must be one relevant to weekly benefits and an additional 5 per cent permanent impairment of the back is not reflective of any change in the worker’s capacity for suitable employment.
Mr Hormoz submits that the evidence establishes the following change of circumstances since 24 March 2005:
(a) probable earnings but for the injury have increased from 15 April 2005 to date;
(b) Dr Maniam declared Mr Hormoz unfit for work from 15 April 2005 until 15 April 2006, and
(c) Dr Yousif’s report of 1 March 2009 corroborates Mr Hormoz’s evidence in his second statement.
In his supplementary submissions filed on 16 December 2009, Mr Hormoz submits that the finding of an additional 5 per cent impairment of the back by Dr Khan is significant as it demonstrates a “change of circumstances”.
Given the unsatisfactory state of preparation of this matter (commented on by Deputy President Fleming in the 2005 appeal) the assessment of this case is more difficult than should have been the case. That is especially so since Mr Hormoz’s 2008 statement is of limited assistance because it merely makes a general assertion that he is worse, but makes no proper attempt to explain the change in his symptoms since March 2005.
Despite the shortcomings in the preparation of Mr Hormoz’s case, I have, after a careful review of the medical and lay evidence, determined that Mr Hormoz’s condition as a result of his work accident has deteriorated since March 2005, albeit only slightly. My reasons are as follows:
(a) in 2004, Dr Hume noted Mr Hormoz’s straight leg raising to be 30 degrees on the right and 60 degrees on the left compared with Dr Khan’s finding of 20 degrees on both sides in 2009. Whilst Dr Weisz recorded straight leg raising of 45 degrees in his 2007 report, I believe that Dr Khan’s assessment, which is similar to Dr Yousif’s (15-25 degrees), provides clinical evidence of a worsening of Mr Hormoz’s symptoms over time;
(b) Dr Hume recorded no wasting of Mr Hormoz’s thighs in 2004 compared to Dr Weisz’s finding (confirmed by Dr Khan in 2009) of one centimetre of wasting of the right thigh in 2007. This is consistent with Dr Weisz’s note in 2007 that Mr Hormoz complained of “intensified right leg area sciatic pain”;
(c) whilst Dr Khan accepted that there was no evidence of any “significant structural deterioration” since 2004, based on the history and examination he concluded there had been “a degree of deterioration of [Mr Hormoz’s] condition since 2004”. As an independent assessor who specifically compared Mr Hormoz’s condition in 2009 to that found by Dr Hume in 2004, I place considerable weight on Dr Khan’s findings and conclusions;
(d) Dr Weisz noted in 2007 that whereas before the settlement in early 2006 (presumably, October 2005) Mr Hormoz had been able to walk for up to 10 minutes at a time, he now found even a short walk impossible. I note that this history conflicts with Mr Hormoz’s 2008 statement where he said he could walk for 15 minutes, however, I accept Dr Weisz’s history as it is consistent with the finding of muscle wasting, and
(e) Dr Khan assessed a 25 per cent permanent impairment of Mr Hormoz’s back in 2009 as opposed to Dr Hume’s assessment of a 20 per cent impairment in 2004.
Given the findings by Drs Weisz and Khan, which I accept, that Mr Hormoz suffered disc trauma at the L4/5 and L5/S1 levels with a degree of nerve root irritation, I do not accept Dr Machart’s statement that the impact of the injury was “only minor” or that “much improvement would have been part of the prognosis following injury in 2001”. Where Dr Machart’s evidence conflicts with the evidence from Drs Khan and Weisz, I prefer and accept the latter as their evidence is consistent with the radiological investigations and, in general, with Mr Hormoz’s complaints. Though I believe that Mr Hormoz has exaggerated his symptoms to a degree, there is objective radiological evidence for his complaints and, in general, I accept that his symptoms have deteriorated slightly since March 2005.
Whether Mr Hormoz’s earning capacity has deteriorated
Having found that Mr Hormoz’s symptoms had deteriorated since March 2005, the Arbitrator then found that his physical capacity for suitable duties had not changed and only adjusted the figure for Mr Hormoz’s ability to earn on the basis that those figures would have moved over time, just as the figure for probable earnings had moved.
However, instead of adjusting that figure on the same percentage basis as the adjustments for probable earnings, the Arbitrator took what he described as an average and allowed $165.00 over the whole period from 15 April 2005 to date. This approach is plainly inconsistent with his finding that Mr Hormoz’s condition had deteriorated. If it had deteriorated then one would have expected a finding that his ability to earn had decreased.
Mr Hormoz submits that the Arbitrator’s “broad brush” approach closely reflected the increase in probable earnings over the same period.
Mr Hormoz’s submission misses the point. If the Arbitrator considered that Mr Hormoz’s condition had deteriorated, he should then have assessed what impact that deterioration had on his ability to earn. He erred in failing to do so.
Failure to give reasons
Babylon argues that the Arbitrator erred in applying the figure $165.00 per week as representing Mr Hormoz’s ability to earn in some suitable employment from April 2005 to date and continuing without providing any adequate explanation of the basis for using that figure.
Mr Hormoz has made no submissions in respect to this ground of appeal but I infer that he relies on the same submission made at [89] above, namely that the Arbitrator was entitled to take a “broad brush” approach.
In many cases where wage levels fluctuate over time, it is appropriate for the Commission to adopt an average to determine a worker’s probable earnings or ability to earn over a given period. When an Arbitrator adopts that approach, however, he or she will always be obliged to state the method used in arriving at the average.
The Arbitrator gave no indication of how he arrived at the figure of $165.00 per week. That figure is not consistent with the annual adjustments to the figures for probable earnings, or with any other approach. The Arbitrator erred in finding Mr Hormoz had an ability to earn of $165.00 per week from 15 April 2005 without explanation.
Change of circumstances three weeks after Deputy President Fleming’s Decision
Babylon argues that the Arbitrator erred in varying the award from 15 April 2005, just three weeks after Deputy President Fleming’s decision. It submits that if a change of circumstances has occurred, the relevant change should date from 3 September 2007, the date of Dr Weisz’s second report.
Mr Hormoz submits that the Arbitrator accepted that Mr Hormoz’s condition had deteriorated over time and to pick an arbitrary date of 3 September 2007 would deprive him of an increase in weekly compensation to which he is entitled prior to that date. He also refers to the fact that probable earnings increased to $525.80 per week from 15 April 2005.
The parties agreed that probable earnings but for the injury changed from 15 April 2005. A change in wage levels provides evidence of a change of circumstances under section 55 (Coalcliff Collieries Ltd v Campbell (1964) 112 CLR 349). Therefore, Mr Hormoz is entitled to have his awarded weekly compensation reviewed from the date of that change. However, had Mr Hormoz based his claim solely on a deterioration in his physical condition since March 2005, it would not have been appropriate to vary the award from 15 April 2005. There must always be evidence to support a claimed change of circumstances. In the present case, that evidence comes from Dr Weisz and Dr Khan.
Dependency
Babylon challenges the Arbitrator’s award on the basis that it exceeds the maximum statutory rate for a worker with no dependants in circumstances where he made no finding as to dependency. This submission overlooks the fact that the insurer never disputed, or sought leave to dispute, the issue of dependency. It is therefore not surprising that the Arbitrator did not make a finding on that issue.
Mr Hormoz has always claimed a dependent wife and two dependent children. The evidence as to the wife’s dependency is unsatisfactory as it merely states that she returned to part-time employment about one year prior to Mr Hormoz’s second statement. There is no evidence of her earnings in that employment or of the extent to which she is now financially independent. In respect of Daniel, the evidence is that he has finished school but is not working, but it is not known when he finished school. Daniella Hormoz remains at school and, on the evidence, is dependent on Mr Hormoz for support.
RE-DETERMINATION
Whilst I agree (for the reasons given in this decision) with the Arbitrator that Mr Hormoz’s condition has deteriorated since March 2005, the above errors mean that the matter must be re-determined.
The assessment of the proper figure for Mr Hormoz’s ability to earn is not aided by the unsatisfactory state of the evidence and the failure to tender the medical evidence tendered in the proceedings before Deputy President Fleming.
Doing the best I can, I note that the medical certificates fall into three main categories:
(a) Dr Maniam certified Mr Hormoz totally unfit from 15 April 2005 until 15 April 2006, with the last such certificate dated 30 January 2006;
(b) Dr Maniam certified Mr Hormoz fit for suitable duties for two hours per day three days per week with a five kilogram lifting restriction from 16 March 2006 until 16 September 2006, and
(c) initially Dr Maniam and then Dr Yousif certified Mr Hormoz fit for suitable duties three hours per day three days per week with a five kilogram lifting restriction from 16 September 2006 until 11 June 2009.
Contrary to the weight of the evidence, and my finding at [85] above, these certificates suggest a slight improvement in Mr Hormoz’s condition since April 2005. In light of Deputy President Fleming’s finding of partial incapacity in March 2005 and in light of the level of exaggeration noted by the medical experts, and in the absence of any report from Dr Maniam to explain his certification of total incapacity, I do not accept that Mr Hormoz was totally unfit for employment between April 2005 and March 2006. The claim will therefore be determined as one of partial incapacity under section 40 of the 1987 Act. That requires the application of the five steps in Mitchell v Central West Area Health Service (1997) 14 NSWCCR 526 (‘Mitchell’).
The parties agreed on step one in Mitchell (probable earnings but for injury) at the arbitration (save for point (f), which is discussed at [111] below) in the following amounts:
(a) $525.80 from 15 April 2005 to 5 July 2005
(b) $542.80 from 6 July 2005 to 23 July 2006
(c) $562.80 from 24 July 2006 to 25 July 2007
(d) $582.80 from 26 July 2007 to 27 July 2008
(e) $606.10 from 28 July 2008 to 27 July 2009
(f) $624.28 from 28 July 2009 to date.
The determination of the effect the deterioration of Mr Hormoz’s condition has had on his ability to earn (step two in Mitchell) is made more difficult because, apart from referring to section 43A of the 1987 Act, Deputy President Fleming did not indicate the basis for her finding that Mr Hormoz was capable of earning $150.00 per week. Nevertheless, an acceptance of that finding is the starting point in a section 55 review.
Given the certificates certifying Mr Hormoz fit for light duties for three hours per day three days per week from September 2006, I do not, in the absence of some explanation, accept that he was only fit for to work for two hours per day two days per week between March and September 2006.
For the reasons stated at [86] above, I do not accept Dr Machart’s opinion that Mr Hormoz is fit for full-time duties which do not involve repetitive bending or heavy lifting under 10 kilograms. Dr Machart’s opinion involves a finding that is inconsistent with Deputy President Fleming’s decision in circumstances where Babylon has not filed an application that that award be decreased. It also assumes a significant improvement in Mr Hormoz’s condition, which is inconsistent with the weight of the evidence and my finding.
I do accept, however, that, given the slight deterioration in Mr Hormoz’s condition over time, his ability to earn from the date of Dr Weisz’s examination on 23 July 2007 had decreased slightly to $135.00 per week. I have determined this figure on the basis that, by that date, Mr Hormoz was fit for suitable employment (such as light process work) avoiding bending, pushing, pulling, straining and awkward posturing for nine hours per week at $15.00 per hour. Adjusting that figure at 3 per cent in 2008 and 2009 gives $139.00 and $143.00 respectively, rounded down to the nearest whole dollar.
In respect of the period up to 23 July 2007, Babylon submits that the figure for ability to earn found by Deputy President Fleming should be adjusted by the same percentage as the adjustment for probable earnings from 15 April 2005 to date. Whilst that has a superficial attraction and will be appropriate in many cases, it is not appropriate in the present case. The adjustment of the probable earnings is distorted due to the sharp increase in probable earnings on 15 April 2005 (9 per cent), which came about because Deputy President Fleming based her calculation of probable earnings on the agreed figure of $482.00 per week. That figure was the 2001 award rate (see the Employer’s Report of Injury form dated 11 September 2001) and was therefore approximately four years out of date by March 2005, thus resulting in the 9 per cent increase in April 2005. Therefore, in respect of the period from 2005, I find that the appropriate adjustment is 3 per cent per annum with the figures rounded down to the nearest whole dollar. As the prior award dates from 24 March 2005, it is appropriate that the first adjustment be made from July 2006 rather than July 2005. This adjustment approximates the annual adjustments in the probable earnings from July 2005 until July 2008.
I find Mr Hormoz’s ability to earn in some suitable employment (section 40(2)(b)) (step two in Mitchell) to be:
(a) $150.00 per week from 15 April 2005 to 23 July 2006
(b) $154.00 per week from 24 July 2006 to 22 July 2007
(c) $135.00 per week from 23 July 2007 to 22 July 2008
(d) $139.00 per week from 23 July 2008 to 24 July 2009
(e) $143.00 per week from 25 July 2009 to date.
The adjustment at paragraph [104(f)] above was not agreed at the arbitration, but is appropriate having regard to the previous agreed annual adjustments and is consistent with the adjustment I have made to Mr Hormoz’s ability to earn at [110].
Deducting the figures for Mr Hormoz’s ability to earn from probable earnings but for the injury (step three in Mitchell) gives:
(a) $375.80 from 15 April 2005 to 5 July 2005
(b) $392.80 from 6 July 2005 to 23 July 2006
(c) $408.80 from 24 July 2006 to 22 July 2007
(d) $427.80 from 23 July 2007 to 25 July 2007
(e) $447.80 from 26 July 2007 to 22 July 2008
(f) $443.80 from 23 July 2008 to 27 July 2008
(g) $467.10 from 28 July 2008 to 24 July 2009
(h) $463.10 from 25 July 2009 to 27 July 2009
(i) $481.28 from 28 July 2009 to date.
Step four in Mitchell requires the exercise of the section 40(1) discretion. I do not believe there are any discretionary factors that warrant a reduction in the step three figures.
Step five requires the making of an award. The evidence is clear that Daniella, having been born in February 1996 and continuing to reside with Mr Hormoz, is totally or mainly dependent for support on him. Mrs Hormoz’s return to part-time work has not altered that fact (see Coles Myer Ltd v Rudzinski [2006] NSWCA 161; (2008) 5 DDCR 36). From 15 April 2005 until 25 July 2007, the step three figures are below the maximum statutory rate for a worker with one dependent child and Mr Hormoz is entitled to an award in the amounts calculated at [112]. However, for the period from 26 July 2007 to date, the step three figures exceed the maximum statutory rate for a worker with one dependent child for all periods except 23 July 2008 to 27 July 2008 ([112(f)]). It is therefore necessary to determine dependency from 26 July 2007 to date before any award can be entered.
The parties agreed at the teleconference on 14 December 2009 that, if it became necessary, it would be appropriate to remit any outstanding issue of dependency in respect of Mrs Hormoz and Daniella to another Arbitrator for determination and that is the course I propose to adopt. Though the insurer has acted tardily in this matter and it will need to seek leave to dispute dependency, it is appropriate that I note that there is no possible prejudice to Mr Hormoz if the insurer is given leave to dispute dependency and that matters must be determined according to their substantial merits. In the event that dependency is disputed, Mr Hormoz will no doubt be given leave to file additional evidence on that issue.
CONCLUSION
Having conducted a review on the merits (State Transit Authority of NSW v Fritzi Chemler [2007] NSWCA 249; (2007) 5 DDCR 286) I have determined the true and correct position with respect to Mr Hormoz’s application to vary Deputy President Fleming’s award of 24 March 2005 to be as set out above. It is not possible to make final orders until the issue of dependency is determined and the matter will be remitted to another Arbitrator for that purpose and for the making of formal orders consistent with the findings in this decision.
As I have observed throughout this decision, the parties have not properly prepared their respective cases. Mr Hormoz’s solicitors failed to do the most basic preparation, namely take a proper statement from their client and tender the medical evidence from the first hearing. Babylon’s solicitors made no effort to correct the obvious inadequacies in the insurer’s section 74 notice. As a result, the matter has still not concluded and will be remitted for a further arbitration. In future, preparation of the kind demonstrated in this matter may well result in a costs penalty.
DECISION
Paragraph one of the Arbitrator’s determination of 25 August 2009 is revoked and the matter is remitted to another Arbitrator for re-determination in accordance with the reasons and findings in this decision. Paragraphs two, three, four, and five of the Arbitrator’s determination are confirmed.
COSTS
The appellant employer is ordered to pay the respondent worker’s costs of the appeal, as agreed or assessed.
Bill Roche
Deputy President
22 December 2009
I, TUYET WALLIS, 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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