Berri Limited v Khaey - [2010] NSWWCCPD 65

WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:		Berri Limited v Khaey [2010] NSWWCCPD 65
APPELLANT:		Berri Limited
RESPONDENT:		Dawood Khaey
INSURER:		QBE Workers Compensation (NSW) Limited
FILE NUMBER:		A1-8617/09
ARBITRATOR:	Mr M Douglas
DATE OF ARBITRATOR’S DECISION:		11 March 2010
DATE OF APPEAL DECISION:		9 June 2010
SUBJECT MATTER OF DECISION:		Injury; consideration of evidence; section 40 of the Workers Compensation Act 1987; application of Mitchell v Central West Area Health Service (1997) 14 NSWCCR 526; unmeritorious appeal; obligation of legal practitioners to comply with section 345 of the Legal Profession Act 2004 when certifying reasonable prospects of success in Part 3 of Appeal Against Decision of Arbitrator
PRESIDENTIAL MEMBER:		Deputy President Bill Roche
HEARING:		On the papers
REPRESENTATION:		Appellant:	Sparke Helmore Lawyers
Respondent:	Lex Fori Lawyers
ORDERS MADE ON APPEAL:		The Arbitrator’s determination of 11 March 2009 is confirmed. The appellant employer is to pay the respondent worker’s costs of the appeal, as agreed or assessed.

BACKGROUND

The respondent worker, Dawood Khaey, started work for the appellant employer, Berri Limited (‘Berri’), as a leading hand in July 2000. Working nightshift, his job required him to mix juices. He had to carry loads of up to 25 kg up stairs.

In the early hours of the morning on 7 January 2009, he carried a bowl of citric acid up a set of stairs. Whilst climbing the stairs (described by the Arbitrator as more like a ladder than stairs because of their steep angle), his right foot slipped, causing him to fall down seven or eight steps onto his back. As he fell, his left leg “dangled” on the hand rail post.

His co-workers heard his fall and went to his assistance. An ambulance took him to Westmead Hospital, where he was admitted until 15 January 2009. The hospital notes reveal that Mr Khaey demonstrated intermittent and migrating quadriparesis (incomplete or partial paralysis) of uncertain aetiology.

In an Application to Resolve a Dispute (‘the Application’) registered in the Commission on 22 October 2009, Mr Khaey claimed weekly compensation from 7 January 2009 to date and continuing, together with hospital and medical expenses. He alleged that he received injuries to his head, neck, back, forearm and left knee.

Berri’s insurer, QBE Workers Compensation (NSW) Limited (‘QBE’), disputed liability for the claim on the ground that either Mr Khaey did not suffer any pathological or physiological consequences from the incident on 7 January 2009, or, if he did, the effects of any injury had ceased.
The Commission listed the matter for conciliation and arbitration on 12 February 2009. The matter could not be concluded on that day and was adjourned until 19 February 2009 to enable the parties to obtain further evidence concerning Mr Khaey’s award rate of pay.
The real dispute centred on whether Mr Khaey had injured his back and/or left knee in the fall and, if so, the extent of any incapacity as a result of those injuries. Mr Khaey had previously injured his left knee playing soccer in 2005 and an issue arose as to whether that injury had been aggravated in the work accident.
After hearing brief oral evidence from the worker and lengthy submissions from the parties, the Arbitrator delivered a reserved decision on 11 March 2010 in which he found in favour of Mr Khaey on all issues. The Commission issued a Certificate of Determination on 11 March 2010.
“The Commission determines:
1.     That the Respondent make weekly payments of compensation to the Applicant as follows:
a. $978.50 a week under s36 of the Workers Compensation Act 1987 for the period 7 January 2009 to 26 June 2009;
b.$978.50 a week under s40 for the period 27 June 2009 to 7 July 2009;
c.$856.30 a week under s40 for the period 8 July 2009 to 30 September 2009;
d. $873.70 a week under s40 for the period 1 October 2009 to date and continuing in accordance with the provisions of the Act.
2.     That the Respondent pay the Applicant as compensation under s60 the Applicant’s expenses in obtaining reasonably necessary treatment for his injury.
3.     That the Respondent pay the Applicant’s costs as agreed or assessed.
4.     That the matter be certified as complex and the costs of each party be increased by 30%.”

In an appeal filed on 8 April 2010, Berri 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) of the 1998 Act are 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.

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.

ISSUES IN DISPUTE

The issues in dispute in the appeal are whether the Arbitrator erred in:

(a)     finding that the worker’s previous knee injury in 2005 was aggravated in the January 2009 work accident;
(b)     finding that the worker was unfit for his pre-injuries;
(c)     observing that the worker’s presentation of gross incapacity was the appropriate basis on which to judge his residual earning capacity;

(d) concluding that the worker’s presentation in any way reflected his real earning capacity;

(e) failing to sufficiently explain why he considered the worker could not return to his pre-injury duties;

(f) concluding that the worker’s non-organic presentation precluded him from performing his pre-injury duties, and

(g) failing to use his discretion under section 40(1) of the Workers Compensation Act 1987 (‘the 1987 Act’) to reduce the “arithmetic formulation under section 40”.

SUBMISSIONS, DISCUSSION AND FINDINGS

The appellant employer’s submissions may be summarised as follows:
(a)     the Arbitrator failed to have regard to inconsistencies in the worker’s presentation or to the worker’s embellishment of his symptoms;
(b)     the Arbitrator failed to note that the issue in relation to the alleged injury to the left knee was that there was no outward sign of injury to that knee following the fall. He did not adequately address the absence of a contemporaneous report of injury and/or complaint regarding the left knee. Given that the worker’s complaints regarding the left knee did not emerge in any of the medical certification until 19 March 2009 (two months after the accident), it was argued that the Arbitrator erred in concluding that the worker’s previous left knee injury in 2005 had been aggravated at the time of the January 2009 accident. The only organic basis for the left knee condition was a finding of laxity in the ligaments;
(c)     the Arbitrator failed to analyse how the worker’s “non-organic presentation and lack of incapacity” should have been considered in determining the worker’s fitness for work;
(d)     having concluded that the worker was “feigning” his symptoms to a large degree, the Arbitrator should have attempted to determine the true extent of any real incapacity and judge the incapacity ( if any) on that basis. It should not have advantaged the worker to have presented in a “grossly incapacitated manner when the evidence and the Arbitrator’s own conclusions suggest[ed] otherwise”;
(e)     the Arbitrator failed to sufficiently explain why he considered the worker could not return to his pre-injury duties and erred in concluding that the worker’s non-organic presentation precluded him from performing those duties;
(f) given the Arbitrator’s acknowledgment of the worker’s “improper and misleading presentation”, it was incumbent upon him to use his discretion under section 40(1) of the 1987 Act to reduce the arithmetic formulation under section 40, and
(g)     the award of 11 March 2010 should be set aside and an award entered in favour of the employer. In the alternative, the matter should be remitted to a different Arbitrator for determination in accordance with the law.
I do not accept the appellant employer’s submissions.
It is not disputed that Mr Khaey fell down several stairs in the course of his employment on 7 January 2009. He was conveyed by ambulance to hospital on that day. The hospital records confirm that he had a seizure and lapsed into unconsciousness. Whilst hospitalised, he had periods of paralysis in his lower limbs and, initially, a lack of strength/movement in his upper limbs.
His symptoms improved over time, but on his discharge from hospital he was noted to have suffered from “intermittent/migrating quadriparesis of uncertain aetiology”. Whilst in hospital, Mr Khaey complained of back pain and paralysis followed by weakness and reduced movement in his left lower limb and knee. It is understandable that, in these circumstances, his left knee was not the focus of attention.
It follows that there was no issue that Mr Khaey suffered an injury in the course of his employment on 7 January 2009. The issues in dispute were whether Mr Khaey injured his lower back and/or left knee in the fall.
After a detailed review of the hospital records, the Arbitrator concluded that Mr Khaey had embellished his symptoms during his admission to hospital. However, contrary to the appellant employer’s submission that the Arbitrator failed to have regard to that fact, the Arbitrator stated, at [39] of his Statement of Reasons (‘Reasons’):
“In my view, the fact that Mr Khaey embellished his symptoms during his admission in hospital means that I must, before accepting his evidence, analyse it carefully and establish whether it is corroborated by any other evidence with regards to, firstly, the symptoms he says he has suffered as a consequence of his fall, secondly, what he says his ability to work is as a consequence of those symptoms, but it is not reason to reject his evidence in its entirety.”
It follows that the Arbitrator was acutely aware of the need to carefully analyse the evidence and to look for corroboration, both in regard to the alleged symptoms following the fall and in regard to the worker’s alleged restrictions as a consequence of those symptoms. His decision reveals that that is exactly what he did.
Dealing with the left knee, the Arbitrator referred to the evidence of the worker’s left knee injury in 2005 when playing soccer. He noted that the worker underwent an anterior cruciate ligament reconstruction at the hands of Dr Davé, orthopaedic surgeon, on 9 July 2007. Dr Davé examined the worker on 24 July 2007 and reported that Mr Khaey was doing extremely well and had started “running, side stepping and posting [sic] on his knee”. Mr Khaey said, and the Arbitrator accepted, that in the period immediately preceding his January 2009 fall, he had no problems with his left knee. In his statement of 17 February 2010, Mr Khaey said that his left knee was then in the condition it was in before the surgery on 9 July 2007.
Dr Davé examined the worker again on 26 June 2009 and found him to have a grade 2 medial lateral ligament laxity and grade 2 anterior cruciate ligament laxity. He stated in his report of 21 September 2009 that the ligament laxity he observed in June 2009 was “increased in relationship to the laxity that he [Mr Khaey] had immediately post surgery in 2007”. Dr Davé concluded:
“I am of the opinion that Mr Khaey’s left knee was further injured and aggravated as a result of the fall on 7 January 2009 as the laxity that I have now noted is more and [sic] than what it was just after the surgery.”
Associate Professor Fearnside, neurological surgeon, reported on Mr Khaey on 20 March 2009. He recorded that Mr Khaey complained of pain in his left knee that was worse on standing. He noted the history of the previous left knee injury. On examination, he found there to be crepitus, but no locking. He observed the worker to have mild gait impairment because of pain in his knee. He concluded that Mr Khaey had aggravated his prior knee injury when he fell down stairs at work on 7 January 2009.
Dr Stening, consultant neurosurgeon, examined Mr Khaey on 2 March 2009 at the request of QBE. He took a history that the worker’s left knee had been caught in the hand rail during the fall at work on 7 January 2009. However, Dr Stening does not appear to have examined the left knee and he expressed no opinion on whether the worker injured the knee in the fall.
After referring to the above evidence and to the appellant employer’s submissions, the Arbitrator concluded that there was no reason to reject Dr Davé’s evidence about the condition of the worker’s left knee now compared to how it was in 2007. I agree.
Dealing with Dr Davé’s history, the Arbitrator recorded that the doctor listed the worker’s injuries to be:
“1. lower back injury.
2. bruising to various aspects of the body including the thoracic spine, the forearm, and left knee injury.”

The employer submitted at the arbitration that, as the hospital notes made no reference to bruising to the left knee, Dr Davé incorrectly recorded that the worker had bruised his knee in the fall. The Arbitrator rejected that submission and correctly noted that Dr Davé’s history was of bruising to the worker’s spine and forearm, and of an injury to the left knee. Dr Davé did not record a history of bruising to the left knee. His history was consistent with the worker’s evidence that his left leg “tangled in the hand rail post”. That history was also consistent with the history recorded by Dr Stening that the worker’s “left leg caught in the hand rail”.
Having reviewed the above evidence in respect of the left knee injury, the Arbitrator concluded (at [51]):
“Having regard to, firstly, the fact that Mr. Khaey’s left knee was asymptomatic immediately preceding his ascent of the stairs on 7 January 2009, and this notwithstanding Mr Khaey having a prior and severe injury to his knee that necessitated an anterior cruciate ligament reconstruction; secondly, the fact that his left leg got caught on a handrail during his fall; and, lastly, the fact that he has greater ligament laxity now in his left knee that he did immediately after the fall, I am satisfied that, more likely than not, Mr Khaey did suffer an injury to the ligaments of his left knee in his fall down the stairs on 7 January 2009, that injury causing an increase in the laxity of the ligaments of his knee.”
The Arbitrator’s conclusion was logical and consistent with the evidence. Indeed, given that the appellant employer called no medical evidence to rebut Dr Davé’s conclusion, it was the only reasonable conclusion open. The appellant employer’s submission that the Arbitrator did not adequately address the absence of contemporaneous reports of injury regarding the left knee was without merit. I agreed with the Arbitrator’s conclusion and with his reasons. Given the evidence and the history of this matter, the absence of a contemporaneous report of an injury to the left knee was not determinative. I am satisfied that Mr Khaey injured his left knee in the fall on 7 January 2009.
The appellant employer’s submission that there was no basis for finding that Mr Khaey was unfit for his pre-injury occupation must be considered in light of the Arbitrator’s finding as to the nature of the injuries sustained. He found that Mr Khaey injured the ligaments in his left knee and suffered an aggravation of a pre-existing degenerative condition in his lumbar spine. He also found that the worker suffered a minor brain injury in the fall and an intermittent and migrating quadriparesis. In light of these injuries, the Arbitrator then considered the issue of incapacity.
The Arbitrator reviewed the relevant medical evidence in detail. He noted that Dr Stening observed the degree of stiffness in Mr Khaey’s back was disproportionate to what was indicated by the radiological findings. Notwithstanding that observation, Dr Stening concluded that the worker had aggravated a degenerative condition in his back and that he had low-grade muscle spasm. Dr Stening anticipated that the worker’s condition would improve, but that he would have some residual back stiffness due to the aggravation.
Associate Professor Fearnside concluded that the worker was unfit for his pre-injury work because of his low back pain. The worker’s general practitioner certified him to be unfit for work on several occasions from March through to July 2009. He diagnosed lumbar pain and spasm and pain radiating to the left knee and leg. A different general practitioner certified Mr Khaey to be unfit for work from September 2009 to 20 December 2009 on the basis of his spinal injury and left knee injury. Dr Davé assessed Mr Khaey to be fit for selected duties that did not involve carrying heavy weights or climbing ladders.
The Arbitrator observed that Mr Khaey presented to all of the medical experts in the case with a severe disability. It was noted that his presentation was explained by a “non-organic component”. He concluded that that component of the worker’s presentation was “unrelated, in a causative sense, to the fall on 7 January 2009” (Reasons at [73]).
The Arbitrator accepted, and it has not been challenged on appeal, that the worker was totally unfit for work between 7 January 2009 and 26 June 2009. He did not accept the evidence from the worker’s general practitioners that he remained totally unfit beyond 26 June 2009. However, based on the evidence from Drs Davé and Stening, the Arbitrator concluded that by late June 2009 the only work Mr Khaey was physically unable to perform was work that involved carrying heavy weights or climbing ladders.
The Arbitrator correctly noted that the stairs down which Mr Khaey fell in January 2009 were so steep as to be “tantamount to his climbing a ladder” (Reasons at [76]). Therefore, given the worker’s physical limitations, as found by Drs Davé and Stening, he found that Mr Khaey was unable to work in his pre-injury employment, which involved carrying up stairs ingredients weighing up to 25 kg (Associate Professor Fearnside’s report 20 March 2009). That finding was perfectly consistent with the evidence and I agree with it. The appellant employer’s submission that there was no basis for finding that the worker was unfit for his pre-injury duties was without foundation.
In terms of the worker’s fitness for work in general, the Arbitrator concluded that, in all likelihood, Mr Khaey remained partially incapacitated for work in that he remained unable to perform work that involved carrying heavy weights and climbing ladders or steep stairs (Reasons at [78]). That finding was perfectly consistent with the evidence and I agree with it.
I do not accept that the Arbitrator provided no analysis as to how the worker’s non-organic presentation should have been considered in determining the worker’s fitness for work. He made it crystal clear that there was a non-organic component to the worker’s presentation and that he did not regard that component to be work-related. He then analysed the specialist medical evidence from Drs Davé and Stening that dealt with the physical basis for Mr Khaey’s restrictions and accepted that evidence. I also accept that evidence and the conclusions that flow from it.

The appellant employer wrongly submitted that the Arbitrator concluded that the worker was “feigning” his symptoms. The Arbitrator made no such finding. He noted that there had been a “non-organic component” to the worker’s presentation to the various doctors and he excluded that component from Mr Khaey’s entitlement to weekly compensation. As I noted above, the Arbitrator based his finding of partial incapacity on the specialist opinion of Drs Davé and Stening to the effect that, because of Mr Khaey’s injuries to his back and left knee, he was unfit for work that involved carrying heavy weights and/or climbing ladders or steep stairs. Contrary to the appellant employer’s submission, the Arbitrator did not find that the worker’s “presentation of gross incapacity was the appropriate basis to adjudge his residual earning capacity”.
Having regard to the matters in section 43A of the 1987 Act, and contrary to Mr Khaey’s presentation of significant incapacity, the Arbitrator assessed him to be fit for full-time alternative employment in clerical positions, courier driving involving small parcel deliveries, and process work (Reasons at [93]). He then found that, having regard to the worker’s “extreme presentation” (Reasons at [95]) and the extensive non-organic factors, there was really no position in which the worker could be effectively employed. He did not, however, award compensation on that basis.
The Arbitrator also found that “it would not be proper in the circumstances” (Reasons at [98]) to award Mr Khaey compensation under section 40 for the whole of the reduction in his earning capacity. That was because Mr Khaey’s inability to work as a clerk, courier driver, or process worker was because of the non-organic factors that had not resulted from the injury. He concluded that the “proper amount” (Reasons at [98]) to award Mr Khaey was the amount by which probable earnings but for the injury (in this case agreed to be the statutory cap in section 40(2)(a)) exceeded the weighted average of the remuneration paid for the positions of a full-time clerk, courier driver and process worker ($605.20 per week). Deducting $605.20 per week from the statutory cap in section 40(2)(a) entitled Mr Khaey to a maximum award for a worker with a dependent wife and four dependent children.
Essentially, the Arbitrator has done exactly what the appellant employer has urged on appeal. He has used the terminology in the section 40(1) discretion to reduce the difference between probable earnings and ability to earn to the amount that was “proper in all the circumstances of the case”. He did not accept that Mr Khaey’s presentation represented the true extent of his incapacity as a result of the work injury. If that had been his finding, he would have found Mr Khaey to be entitled to an award for total incapacity.
However, as the respondent worker has conceded in his submissions on appeal, the Arbitrator arguably erred in his approach to the section 40 calculation. Having found that there was a significant non-organic component to the worker’s presentation, and that that non-organic component had not resulted from the accident, the Arbitrator should have assessed Mr Khaey’s ability to earn in the light of that fact at step two of the five step process in Mitchell v Central West Area Health Service (1997) 14 NSWCCR 526 (‘Mitchell’).
In the present case, the proper analysis required a finding that, as a result of his physical injuries, Mr Khaey was unable to perform his pre-injury duties, but had a residual earning capacity, having regard to the matters in section 43A, of $605.20 per week working full time as a clerk, courier driver or process worker. The appellant employer has not suggested any other employment for which Mr Khaey would be fit having regard to the evidence and the terms of section 43A. That figure is generous to the employer because the evidence suggests that Mr Khaey’s ability to work as a clerk is restricted because of his limited English skills. In addition, it makes no allowance for the difficulty he will have in obtaining and retaining employment given that he has had no rehabilitation or re-training.
Once a calculation is made for ability to earn (step two) by making allowance for any exaggeration or non-organic factors, and that figure is deducted from probable earnings but for injury (step one), it is not appropriate to then reduce the step three figure because of the non-organic factors or exaggeration in the exercise of the discretion. A worker’s exaggeration is a factor to be taken into account when assessing his or her ability to earn at step two, not step four. In this case, the step two figure ($605.20) should be deducted from the section 40(2)(a) statutory cap, which was $1654.40 from 1 April to 30 September 2009 and $1684.30 from 1 October 2009 to 30 April 2010. Making that calculation leaves a difference of over $1000, which is in excess of the statutory maximum compensation payable for a worker with a dependent wife and four dependent children.
Once the above calculations have been made, it is then appropriate to consider whether there are any discretionary factors that justify a reduction in the difference between steps one and two (Australian Wire Industries Pty Ltd v Nicholson (1985) 1 NSWCCR 50). As Mr Khaey’s exaggeration and non-organic presentation have been taken into account in assessing his ability to earn at step two, it is not permissible to use exaggeration as a reason for the exercise of the discretion. In these circumstances, there are no factors that justify the exercise of the discretion in this case.
It follows that the appellant employer’s submissions were misconceived. The Arbitrator did not conclude that Mr Khaey presented in a way that “reflected his real earning ability”. He concluded the opposite, namely that, contrary to the worker’s presentation, he was fit to work full time as a clerk, courier driver or process worker and he made his award on that basis. Though that result should have been arrived at by finding at step two that Mr Khaey was capable of earning $605.20 per week as a full-time clerk, courier or process worker, rather than by an adjustment of the discretion, on the facts of this case, that makes no difference to the end result. Adopting the correct analysis leads to the same conclusion.

CONCLUSION

Having conducted a review on the merits, I have determined that the Arbitrator’s determination is true and correct. This appeal was completely without merit and had no prospects of success. It should never have been filed. On the face of it, there was no basis for the certification signed by the appellant employer’s solicitor under section 352(7A) of the 1998 Act in Part 3 of the Appeal Against Decision of Arbitrator and the costs associated with it were unreasonably incurred.
Practitioners are reminded that the provision of legal services by a legal practice in an appeal without reasonable prospects of success is capable of amounting to unsatisfactory professional conduct or professional misconduct by a legal practitioner (section 345 of the Legal Profession Act 2004; Beale v Walgett District Hospital and anor [2009] NSWWCCPD 60).

DECISION

The Arbitrator’s determination of 11 March 2009 is confirmed.

COSTS

The appellant employer is to pay the respondent worker’s costs of the appeal, as agreed or assessed.

Bill Roche
Deputy President

9 June 2010

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