Babylon Property & Cleaning Services Pty Ltd v Hormoz
[2005] NSWWCCPD 21
•24 March 2005
WORKERS COMPENSATION COMMISSION
APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:Babylon Property & Cleaning Services Pty Ltd v Hormoz [2005] NSW WCC PD 21
APPELLANT: Babylon Property & Cleaning Services Pty Ltd
RESPONDENT: Mikhail Hormoz
INSURER:Employers Mutual Indemnity (Workers Compensation) Limited
FILE NUMBER: WCC11499-03
DATE OF ARBITRATOR’S DECISION: 27 November 2003
DATE OF APPEAL DECISION: 24 March 2005
SUBJECT MATTER OF DECISION: Arbitrator’s discretion as to weight of evidence; adequacy of reasons.
PRESIDENTIAL MEMBER: Dr Gabriel Fleming, Deputy President.
HEARING:11 March 2005
REPRESENTATION: Appellant: Nevill & Edwards Solicitors
Respondent: Galluzzo Golotta Andriano Solicitors and Barristers
ORDERS MADE ON APPEAL: The decision of the Arbitrator, dated 27 November 2003, is revoked and the following decision is made in its place:
The Appellant is to pay the Respondent weekly compensation at the rate of $332 from 31 January 2003 to 24 March 2005 under section 40 of the Workers Compensation Act 1987.
Such weekly compensation is to continue in accordance with the provisions of the Workers Compensation Act 1987.
Background to the Appeal
Mikhail Hormoz was employed by Babylon Property & Cleaning Services Pty Ltd as a supermarket trolley collector when, on 23 August 2001, he injured his back whilst pushing trolleys up a ramp and onto a trailer. He was unable to return to work after the incident, and lodged a claim for compensation. The relevant workers compensation insurer is Employers Mutual Indemnity (Workers Compensation) Limited. It accepted liability for the injury and paid Mr Hormoz weekly benefits in accordance with his WorkCover medical certificates.
On 7 November 2002 the insurer advised Mr Hormoz it had obtained a medical opinion that he was only partially incapacitated and fit for suitable duties. His weekly payment was reduced (in accordance with section 38 of the Workers Compensation Act 1987 (‘the 1987 Act’)). The Insurer then wrote to Mr Hormoz on 18 December 2002 informing him that liability for his claim had been denied and that weekly payments would cease on 31 January 2003 on the basis of medical opinions declaring him fit for suitable duties on a full time basis.
On 26 June 2003 Mr Hormoz filed an ‘Application to Resolve a Dispute’ in the Workers Compensation Commission. He claimed workers compensation benefits by way of payment of weekly benefits, medical expenses and lump sums for permanent impairment and pain and suffering.
On 27 November 2003, the dispute proceeded to conciliation and arbitration before a Commission Arbitrator who found that Mr Hormoz was totally incapacitated for work. The Arbitrator’s decision was given orally, and is recorded in the written transcript of the arbitration. A Certificate of Determination was issued on 2 December 2003, ordering the Employer to pay Mr Hormoz weekly compensation under section 37 of the 1987 Act from 31 January 2003 and continuing. The Arbitrator also referred Mr Hormoz to an Approved Medical Specialist for assessment of permanent impairment.
On 18 December 2003 the Employer filed an appeal against the Arbitrator’s decision. Employer submits, in summary, that the Arbitrator failed to give due weight to the evidence in relation to whether or not Mr Hormoz was totally or partially incapacitated for work as a result of his injury. It argues that there was no probative evidence to support the Arbitrator’s finding that Mr Hormoz has been totally incapacitated for work from 31 January 2003. The Employer also argues that the Arbitrator failed to give adequate reasons for his decision.
The Employer submits that the decision of the Arbitrator should be revoked and the matter remitted to an arbitrator, with the direction that the parties make submissions as to Mr. Hormoz’s capacity to earn, and the type of work to which he is now suited.
Mr. Hormoz submits that the decision of the Arbitrator should be confirmed and that he should be awarded the costs of the appeal.
Leave to appeal the decision of the Arbitrator was granted on 3 February 2005.
The Arbitrator’s decision should not be disturbed unless, on review, it is found to contain an error of law, fact or discretion (Allesch v Maunz (2000) 203 CLR 172, Mayne Health Group t/as Nepean Private Hospital v Sandford [2002] NSW WCC PD 6). The error must be such that, but for it, a different decision would have been made (YG & GG v Minister for Community Services [2002] NSWCA 247).
Did the Arbitrator fail to give proper weight to the evidence of incapacity?
In this matter the Arbitrator had a number of medical reports before him that addressed the issue of Mr Hormoz’s incapacity. He expressly weighed the medical evidence as follows:
“The difficulty in this case is reconciling the differences between Dr Maniam and Dr Teychenne on the one hand and Dr Smith and Dr Dan on the other.
The difference between the doctors is that the treating doctors have been treating Mr Hormoz since about September 2001- in other words, for the last two years - and have had an opportunity to observe his symptoms over that period of time, and he has been extensively investigated over that period of time.
Dr Dan and Dr Smith appear to base their conclusions on observations made of Mr Hormoz on one occasion only- that is, when he saw them- and their conclusions are based on the fact that they conclude that Mr Hormoz, if not making up his symptoms he is certainly greatly exaggerating them, and I think that the doctors who are in a better place to make that decision are those who have seen Mr Hormoz over a long period of time. And, so, if there’s a contest, and there is, between the doctors, I would prefer the treating doctors, Dr Maniam and Dr Teychenne, who saw Mr Hormoz from early when he was injured up until the present time.
If I prefer the evidence of the doctors who have treated- that is Dr Maniam and Dr Teychenne who have treated the applicant, then their conclusions, and Dr Teychenne’s and Dr Maniam’s conclusions are consistent, and that is that Mr Hormoz is at the present time totally disabled to work, and I think he is entitled to be compensated on that basis.”
An Arbitrator’s decision must be based on logically probative evidence. Rule 70 of the Workers Compensation Commission Rules 2003 (‘the Rules’) provides that:
“When informing itself on any matter, the Commission is to bear in mind the following principles:
(a)evidence should be logical and probative,
(b)evidence should be relevant to the facts in issue and the issues in dispute,
(c)evidence based on speculation or unsubstantiated assumptions is unacceptable,
(d) unqualified opinions are unacceptable.”
The Employer submits that the Arbitrator erred in finding that Mr. Hormoz was totally incapacitated for work, as that finding was not open to him on the evidence. It argues that neither Dr Maniam nor Dr Teychenne were of the opinion that Mr. Hormoz was totally incapacitated, and that the opinion of Dr Teychenne was, in any case, not relevant to Mr. Hormoz’s level of incapacity in January 2003 because it was based upon observations made in October 2001. The Employer submits that the Arbitrator’s finding of total incapacity is against the weight of the evidence, and/or based on evidence “so scant and so vague that its weight would not be sufficient to discharge the onus carried by the worker in that respect” (transcript of appeal hearing at page 2). The Employer accepts that Mr. Hormoz may be partially incapacitated.
Mr. Hormoz argues that the Arbitrator was entitled to prefer his medical evidence. He argues that the option of making a finding of partial incapacity, as opposed to total incapacity, was open to the Arbitrator.
The consideration of the evidence and the weight to be attached to the evidence is entirely a matter for the Arbitrator. In the absence of demonstrable error by the Arbitrator in arriving at the decision it should not be disturbed. Presidential review (pursuant to section 352 of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’)) is not a rehearing where a matter is heard de novo based on all of the evidence available at a later time (Coal & Allied Operations Pty Limited v Australian Industrial Relations Commission (2000) 203 CLR 194; Builders Licensing Board v Sperway Constructions (Syd.) Pty Ltd (1976) 135 CLR 616).
The errors alleged by the Employer are largely matters of discretionary judgement by the Arbitrator, on the basis of his view of the evidence before him. As with any exercise of discretion by an administrative decision maker, this discretion must be exercised lawfully and fairly, taking into account the scope of the discretion and the objects of purpose for which it is conferred. It is only where the Arbitrator can be said to have failed to exercise his discretion fairly and according to law that his decision should be overturned. This occurs where the Arbitrator has: acted upon a wrong legal principle; allowed irrelevant considerations to influence the decision; made a material mistake as to the facts or failed to take into account relevant and material considerations (House v The King (1936) 55 CLR 499 at 504-505; Norbis v Norbis (1986) 161 CLR 513 at 520, National Roads and Motorists’ Association Ltd [2003] FCAFC 206 at [21] to [21]).
The fact that a doctor has treated the worker over time and seen him or her on more than one occasion is a relevant consideration that may be taken into account by an Arbitrator when assessing the probative value of the doctor’s evidence. To this extent the Arbitrator did not make any error. It is not however, the only relevant consideration to the task of assessing the weight to be given to medical evidence. Matters such as reliance upon the correct history of the injury, the experience and credentials of the medical expert, the persuasiveness of the reasons given for the expert opinion and the degree of consensus among experts may also be relevant in any particular case. The Employer’s argument is essentially that Doctors Teychenne and Maniam’s evidence did not, in fact, support the Arbitrator’s findings.
Dr Teychenne provided three medical reports dated 19 October 2001, 26 October 2001 and dated 22 January 2002.
The dispute before the Arbitrator concerned a claim for weekly benefits compensation from 31 January 2003 and continuing. The Reply filed by the Employer nominated the issue in dispute as the existence and/or extent of Mr Hormoz’s incapacity to work. It is difficult to see the probative value of the reports of Dr Teychenne, all of which pre-date the claim, other than to provide historical context and medical background to Mr Hormoz’s incapacity, if any, in the relevant period. I agree with the Employer’s argument that the “level of incapacity apparent to Dr Teychenne in October 2001 is not in fact relevant or of assistance in terms of assessing his level of incapacity as at January of 2003” (transcript of appeal at page 3).
In any event, Dr Teychenne’s report of 22 January 2002 does not conclude, as the Arbitrator finds, that “Mr Hormoz is at the present time totally disabled to work”. This report refers to an examination of Mr Hormoz on 26 October 2001 and does not note any later examination. The opinion given by Dr Teychenne is clearly and expressly based upon the presentation of Mr Hormoz at the time of his assessment in October 2001. At that time, Dr Teychenne considered that the “prognosis was fair”. He opined that Mr Hormoz was not suitable for a range of activities related to heavy lifting, sudden sharp movements of the lumbar spine, or prolonged standing and the like. Dr Teychenne’s earlier reports make no reference to Mr Hormoz’s capacity for work.
The Arbitrator erred in relying upon Dr Teychenne’s evidence to support a finding of total incapacity. The Arbitrator failed to take into consideration the fact that Dr Teychenne’s evidence was not probative of the issue of incapacity during the period of the claim, and made a mistake of fact in finding that Dr Teychenne concluded that Mr Hormoz was totally incapacitated during the relevant period.
Dr Maniam provided two reports, both dated 26 February 2003, one of which goes solely to the issue of the degree of permanent impairment suffered by Mr Hormoz. Dr Maniam stated that he initially saw Mr Hormoz on 24 September 2001 for chronic lower back pain, which was a result of an injury at work. He saw him again on 10 January 2003 and reported that Mr Hormoz’s condition appeared to have “reached a plateau”. In relation to Mr Hormoz’s capacity for work he opined:
“This man will not be capable of returning to his pre-accident duties. He continues to remain in a state of unemployment, having been unable to secure a selected light duty position. A rehabilitation process has also failed in its attempt to get this man back to some form of a remunerative position. Hence, there has been a total loss of earning capacity as a consequence of the injuries sustained in the manner described. As to whether this could be restored will need to be researched upon in the future. For the interim, he will continue with his attendance with the pain clinic”.
I accept the Employer’s submission that this does not evidence a conclusive view by Dr Maniam that Mr Hormoz is totally incapacitated for work. It implies an ability to earn in suitable duties but acknowledges that Mr Hormoz has been unable to obtain them. The Arbitrator acknowledged earlier in the course of the arbitration that “Dr Maniam . . . does leave it [the issue of capacity to work] open to some extent” (transcript of arbitration at page 5). The Arbitrator has made a mistake of fact in his interpretation of the report of Dr Maniam.
The Arbitrator erred in failing to properly exercise his discretion in relation to the weight to be given to the evidence of Dr Teychenne and Dr Maniam. The result is that he did not decide the matter fairly and lawfully. This failure was also a breach of Rule 70 of the Rules.
Did the Arbitrator fail to provide adequate reasons for the decision?
The Employer submits the Arbitrator has given inadequate reasons, or alternatively no reasons, for his decision that Mr. Hormoz is totally incapacitated for work. The Arbitrator’s preference for the evidence of Dr Teychenne and Dr Maniam was erroneously based only upon the fact that he had visited those doctors more often than he had Dr Dan and Dr Smith It is not the frequency of visits to a medical practitioner that is the relevant factor, rather the medical opinion given. The Employer further submits that given the ambiguity of opinion in the report of Dr Maniam, the Arbitrator was obliged to explain his findings when relying upon such report in regard to incapacity. In addition, the Arbitrator did not refer to Dr Davis when resolving the conflict which he himself identified” (transcript at page 19).
Mr. Hormoz argues that into every matter that is taken into account needs to be spelt out in the Arbitrator’s Reasons, and any inadequacy therein must be looked at in the context of the entire conciliation and arbitration process. Mr. Hormoz submits that even if the Arbitrator’s Reasons were inadequate, his decision was still correct, and therefore the inadequacy of Reasons does not amount to an error requiring the setting aside of the decision.
An Arbitrator has a statutory duty to provide adequate reasons for decision. Chapter 7 of the 1998 Act provides for a scheme for the resolution of workers compensation disputes by the Commission. Section 294 of the 1998 Act provides that:
“294 Certificate of Commission’s determination
(1) If a dispute is determined by the Commission, the Commission must as soon as practicable after the determination of the dispute, issue the parties to the dispute with a certificate as to the determination.
(2) A brief statement is to be attached to the certificate setting out the Commission’s reasons for the determination.
(3) . . . ”
Rule 73 of the Rules provides as follows:
“73Certificates of Determination
(1)A statement of the Commission’s reasons referred to in section 294(2) of the 1998 Act is to include:
(a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, and
(b) the Commission’s understanding of the applicable law, and
(c) the reasoning processes that lead the Commission to the conclusions it made.
(2)Without limiting subrule (1), the reasons set out in a statement referred to in subrule (1) are to be stated sufficiently (in the opinion of the Commission) to make the parties aware of the Commission’s view of the case made by each of them.”
Mr Hormoz is correct to assert that it is not necessary for an Arbitrator to give lengthy reasons for their decision. Provided that Rule 73 is complied with, the reasons will be adequate, notwithstanding that they do not set out the statutory provisions at length, nor specify and examine all relevant and judicial authority on the matters decided (Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme [2003] HCA 56; Fraternity Bowling & Recreation Club Ltd v Sartor [2004] NSW WCC PD 47 and Snow Confectionary Pty Ltd v Askin [2004] NSW WCC PD 56).
Review of the Decision
This appeal concerns a reasonably narrow issue and in my view it is preferable to finally determine the matter by setting aside the Arbitrator’s decision and substituting another decision in its place (Section 352(7) of the 1998 Act). A number of critical issues have been agreed by the parties, or alternatively are, in my view, established by the evidence, i.e.
· Mr Hormoz suffered an injury to his back at work on 23 August 2001.
· His employment was a substantial contributing factor to his injury,
· Liability was denied by the Insurer on 18 December 2002 on the ground that Mr Hormoz was capable of performing suitable duties on a full time basis.
· Mr Hormoz was paid weekly benefits compensation until 31 January 2003 when liability was denied.
· Mr Hormoz’s average weekly earnings prior to his injury were $482 per week.
The issue remaining in dispute between the parties is: Was Mr Hormoz incapacitated as a result of his injury of 23 August 2001, and if so to what extent? Medical evidence is most relevant to the determination of this issue. I have considered the medical evidence filed by both parties.
The reports of Dr Teychenne and Dr Maniam are not probative of the issue of incapacity from 31 January 2003. Mr Hormoz also relies upon a number of other medical reports, including clinical reports of x-ray and other investigative procedures, and reports of Dr Yousif, his General Practitioner, dated 6 November 2002, and Dr Davis, Occupational Physician, dated 18 March 2003.
Dr Yousif’s report pre-dates the period of the claim, however it provides a more detailed history of the progress of symptoms and medication from September 2001 to the date of the report in November 2002. On the issue of capacity to work Dr Yousif does not say a great deal. He recommended Mr Hormoz return to light duties in September 2001 but following later reports of chronic pain, Dr Yousif considered his “prognosis is guarded”. He considered that Mr Hormoz would not be able to return to his full injury work of handling trolleys without significant modification to that work.
Dr Davis examined Mr Hormoz before reporting, in March 2003. His report gives a clear and consistent history of Mr Hormoz’s injury and treatment. He reviewed the clinical reports of injury and gives an account of his own examination. He opined that Mr Hormoz :
“ . . . is significantly impaired and disabled at this time and is certainly unfit to return to any form of formalised employment. It is further likely that he has developed an adjustment to injury disorder which should be addressed by counselling . . . ”
The Employer relied upon medical reports of Doctors Dan, Korber (Radiologist) and Smith (Anthony).
Dr Dan, Neurosurgeon, reported on 6 August 2003 after having examined Mr Hormoz on 4 August 2003. He reviewed the clinical reports, MRI and Bone Scan and detailed the history of injury and current medication. Dr Dan considered Mr Hormoz’s “clinical presentation was histrionic”. In his view Mr Hormoz had a “very minor injury” and that his back strain should have “ceased long ago”. He considered that Mr Hormoz’s “clinical picture is due to adoption of a sick role rather than to an organic illness”. Dr Dan says nothing about capacity to work in suitable duties.
Dr Anthony Smith, Neurosurgeon, reported on 11 August 2003 after examining Mr Hormoz on the same day. He gives a detailed history of the injury and clinical investigations and reviewed the radiological material. He considered Mr Hormoz to “behave in a most bizarre and elaborate fashion”. He considered him fit for his pre-injury employment but qualifies this in that “in the event that his psychological condition prevents him from working that is outside my field of expertise”.
The Medical Assessment Certificate of Dr Hume, dated 1 May 2005, is also in evidence (section 326(2) of the 1998 Act, see Rohloff v Diacut Pty Limited (in Liquidation) [2005] NSW WCC PD 17). This report was not before the Arbitrator and, while not relevant to the determination of whether the Arbitrator made an error, it is relevant and now before me on the appeal. Dr Hume, Approved Medical Specialist, reported a history, given to him by Mr Hormoz, of his working for three weeks doing light duties two hours per day. Neither party has commented on this part of the report. Mr Hormoz has maintained a total incapacity for work and has not evidenced any pursuit of “suitable employment”. Section 38 of the 1987 Act is therefore not applicable to his circumstances.
Mr Hormoz has not satisfied the onus of proving that he is totally incapacitated for work as a result of his injury. Only the report of Dr Davis suggests this, and his opinion appears to be linked, as are others, to the resolution of psychological issues related to the injury. Reports of the treating doctors, Teychenne and Maniam are not probative on the issue of incapacity from January 2003. The most relevance that can be gained from them is the comments by Dr Maniam in February 2003, which infer that Mr Hormoz might be capable of “suitable duties” but is unlikely to find them. Conversely, Dr Smith’s report stands alone in opining that Mr Hormoz is capable of his pre-injury employment. In my view the reports of Dr Smith and Davis, when considered in the light of Dr Maniam’s comments in February 2003, and Dr Hume’s reported history in May 2004, support a conclusion that Mr Hormoz is not totally, but is partially, incapacitated for work as a result of his injury.
Mr Hormoz’s legal representative submitted that if a finding of partial incapacity were made the residual earning capacity of Mr Hormoz, was $150 per week, on the basis of minimal working hours on light duties. The Employer submits that Mr Hormoz is capable of earning $250-$300 per week in suitable duties, being for approximately 20 hours of work in sedentary occupations such as console operator or light process/cleaning work. These submissions were made in the absence of any evidence of Mr Hormoz’s ability to earn in suitable employment. This evidence should have been filed with the Application and the Reply and placed before the Arbitrator.
Section 43A(1) of the 1987 Act sets out the matters that must be considered in relation to the provision of “suitable employment”. Where the worker is not in fact earning anything, a notional sum may be taken into account for the purpose of calculating an entitlement under section 40 of the 1987 Act (J C Ludowici & Son Ltd v Cutri (1992) 26 NSWLR 580). In my view it is appropriate to nominate $150 per week as the amount that Mr Hormoz could earn in suitable employment, taking into account the nature of his injury, the restrictions on the duties that he can attend, the fact that he lives in a broad labour market in Sydney, his age, (39), his skills (he is untrained), his English language difficulties and his limited work experience. I have considered whether to exercise my discretion to further reduce the award and see no reason to do so, on the evidence before me. The rate of weekly compensation awarded in this decision reflects Mr Hormoz’s earning capacity of $150 per week.
Decision
The decision of the Arbitrator dated 27 November 2003, is revoked and the following decision is made in its place:
The Appellant is to pay the Respondent weekly compensation at the rate of $332 from 31 January 2003 to 24 March 2005 under section 40 of the Workers Compensation Act 1987.
Such weekly compensation is to continue in accordance with the provisions of the Workers Compensation Act 1987.
Future Conduct
Following the Arbitration, the matter was referred to an Approved Medical Specialist for an assessment of permanent impairment. A Medical Assessment Certificate was issued on 4 May 2004, and on 1 June 2004, the Employer lodged and appeal against the assessment. That appeal was not accepted however, having been rejected by the Registrar because she was not satisfied that grounds of appeal existed under section 327(3)(b), (c) or (d) of the 1998 Act.
COSTS
The Respondent Worker sought costs of the appeal. Such costs are governed by section 345 of the 1998 Act. The Employer has not been entirely successful on the appeal, nor has the Worker. The appropriate order is: No order as to Costs.
Dr Gabriel Fleming
Deputy President
24 March 2005
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF DR GABRIEL FLEMING, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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