| JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA LOCATION : PERTH CITATION : BHP BILLITON NICKEL WEST PTY LTD -v- LOCKWOOD-HALL [2014] WADC 67 CORAM : WISBEY AUDCJ HEARD : 6 MARCH 2014 DELIVERED : 19 MAY 2014 FILE NO/S : APP 71 of 2013 BETWEEN : BHP BILLITON NICKEL WEST PTY LTD Appellant
AND
SCOTT LOCKWOOD-HALL
Respondent
ON APPEAL FROM:
Jurisdiction : WORKCOVER WA Coram : ARBITRATOR POWLES Citation : APPLICATION NO. A2093 Catchwords: Workers' compensation - Damages at common law - Assessment of relevant degree of disability - Procedure for assessment of degree of disability Legislation: Workers' Compensation and Injury Management Act 1981 Result: Determination of arbitrator that respondent has a 40% degree of disability quashed
Representation: Counsel:
Appellant : Mr D W Williams
Respondent : Mr M J Lourey
Solicitors:
Appellant : WHL Legal Pty Ltd
Respondent : Chapmans
Case(s) referred to in judgment(s):
Administration of Territory of Papua and New Guinea v Guba (1973) 130 CLR 353
Beer v Duracraft Pty Ltd [2004] WASCA 192
BHP Billiton Nickel West Pty Ltd v Lockwood-Hall [2012] WADC 108
Everett v Griffiths [1921] 1 AC 631
Pettitt v Dunkley [1971] 1 NSWLR 376
Velez Pty Ltd v Tudor [2011] WASCA 218
1 WISBEY DCJ: The respondent, a mechanical fitter, was at all material times a maintenance technician at the appellant's Kwinana Nickel Refinery.
2 In or about June 2003 the respondent was diagnosed as having developed occupational asthma as a consequence of chemical exposure. It was accepted by the appellant that the condition was a disability as defined in the Workers' Compensation and Injury Management Act 1981 (the Act) and the respondent received his appropriate compensation entitlement. 3 Weekly payments having reached the prescribed amount, the respondent made application pursuant to s 217 of the Act for additional provision, and on 7 November 2011 an arbitrator ordered that he receive an additional amount of $65,000, thus determining the appellant's total liability under the Act. The arbitrator found as a necessary pre-condition to the s 217 order that the respondent's disability resulted in 'permanent total incapacity for work'. Appeals by both parties against the determination were dismissed on 18 May 2012. 4 The respondent wishes to pursue a claim for damages, however because of the provisions of pt IV of the Act, is precluded from doing so unless he can establish that he has a degree of disability not less than 30% (s 93E(3) of the Act). The degree of disability is to be assessed in accordance with s 93D(2) of the Act. The appellant not accepting that the degree of disability was of that order, the dispute was referred to arbitration pursuant to pt XI of the Act. A hearing took place on 8 and 9 January 2013, and in a decision published on 21 August 2013 the arbitrator determined that in respect of the condition of occupational asthma the respondent had a degree of disability of 40%. The arbitrator held that the respondent had not established any degree of disability in respect to claimed psychiatric, orthopaedic and olfactory sequelae. 5 The appellant, being dissatisfied with the arbitrated determination, appeals to this court pursuant to s 247 of the Act which relevantly provides that a party may with leave appeal to this court provided a question of law is involved. 6 The controversy now requiring resolution is restricted to the determination of the degree of disability consequent upon the condition of occupational asthma.
7 The grounds of appeal relied upon are: (a) there was no evidence to support the arbitrator's finding; (b) the arbitrator failed to properly apply the American Medical Association Guides to the Evaluation of Permanent Impairment (4th ed) (AMAG); (c) the arbitrator erred in finding that the respondent had a permanent degree of disability of 40%. Grounds (b) and (c) are inter-related. 8 The respondent contends that the arbitrator's determination was one of fact and not amenable to review by this court as no question of law arises. 9 The arbitrator noted in her reasons that she was required to determine the question of the applicant's degree of disability in respect to the injury that occurred on 18 June 2003 which comprises occupational asthma (respiratory injury) neck (Item 36B), back (Item 36A), left and right hips (Item 28), sense of smell (Item 12) and psychiatric disability. 10 The arbitrator observed that in determining the degree of disability she was required to make three findings: (i) the diagnosis of the condition; (ii) the extent of permanent loss of the use of, or permanent diminution of the full efficient use of the particular body part or function; (iii) the degree of disability, which necessitated consideration of the extent to which the injury had reduced the worker's ability to do work of any kind. 11 She noted that in November 2011 an order for total liability in the sum of $65,000 was made consequent upon an arbitrated determination that the compensable injury resulted in permanent total incapacity for work. 12 Having outlined the material adduced by way of evidence at the arbitration, the arbitrator briefly summarised the respondent's physical condition in so far as it was the product of the work-caused condition. She observed that he had not participated in the paid workforce since October 2009, and that his day-to-day activities were mainly restricted to domestic obligations. She then summarised the evidence of the medical specialists noting: 1. Dr Prichard, the respiratory physician, made an assessment utilising the Australian Government Comcare guidelines and determined that the respondent had a whole person impairment of 45%. Making allowance for a variation in severity of the condition, he found that the whole person impairment was at least 30%. He reported however that an assessment of the permanent degree of disability utilising the AMAG would result in permanent impairment of between 0% – 10%. 2. Professor Gabbay, also a respiratory physician, concluded the respondent came within Class 1 of the AMAG which resulted in a 0% whole person impairment. 3. Dr Silbert, an occupational physician, making an assessment using the AMAG, concluded the respondent had a Class 1 impairment of 0%. 13 The arbitrator stated that there was no dispute as to the respondent's respiratory injury, and that her task was 'to determine first of all the level of permanent whole person impairment under the US Guides and then to convert it to a degree of disability'. The arbitrator was guided by the principles referred to by McCann DCJ in BHP Billiton Nickel West Pty Ltd v Lockwood-Hall [2012] WADC 108 where his Honour observed: 14 The arbitrator stated that the consensus among the physicians was that the respondent fell within Class 1 of the AMAG which was a whole person impairment of 0% – 10%. She did not accept that the respondent had 0% impairment holding that he had, pursuant to the AMAG, a Class 1 whole person impairment which was up to 10% impairment. She stated that she was required to translate that impairment into a degree of disability, and that in order to determine the degree of disability it was necessary to consider the extent to which the occupational asthmatic condition had reduced the respondent's ability to perform any work. She noted that it had already been determined that the compensable injury of occupational asthma had resulted in the respondent's permanent total incapacity for work and held: Applying the relevant criteria to carry out the assessment of [the respondent's] permanent degree of disability, that is, having regard to both the assessment of impairment under the US Guides and the extent to which the condition has reduced [the respondent's] capacity to perform work of any kind, I determine that in respect of his condition of occupational asthma his degree of disability is 40%.
The relevant provisions of the Act 15 Section 93E(3) provides that damages can only be awarded if (relevantly) it is determined that the degree of disability is not less than 30%. 16 Section 93E(1) provides that the degree of disability means the degree of disability of the worker assessed in accordance with s 93D(2). 17 Section 93D(2) relevantly provides that for the purposes of s 93E, the degree of disability of the worker is to be assessed: (a) so far as sch 2 provides for such a disability, as a percentage equal to the percentage of the prescribed amount provided for by the relevant item as read with s 25; and if two or more items of the schedule apply to the disability, the sum of the percentages of the prescribed amount provided for by those items as read with s 25; (b) to the extent that par (a) does not apply, as the degree of permanent impairment assessed in accordance with AMAG Guides; and (c) to the extent, if any, that neither par (a) nor par (b) applies, then in accordance with the regulations. 18 Regulation 19IA provides that for the purposes of (c) above the degree of disability is to be assessed in accordance with the AMAG. 19 Section 25 provides that 'loss of' includes: (a) permanent loss of the use of; and (b) permanent loss of the efficient use of, but in such case such percentage of the appropriate amount payable as is equal to the percentage of the diminution of the full efficient use, may be awarded, in lieu of the full amount. 20 Section 188 provides (inter alia): (i) An arbitrator is bound by rules of natural justice. (ii) The Evidence Act 1906 does not apply to proceedings before an arbitrator who is to act according to equity, good conscience and the substantial merits of the case. (iii) An arbitrator may inform himself on any matter as the arbitrator thinks fit. (iv) An arbitrator may adopt, as the arbitrator thinks fit, any finding, decision, or judgment of a court or other person or body acting judicially. 21 Section 213(4) provides (inter alia) that the reasons for an arbitrator's decision: 22 Section 217B(1) provides that: (1) Except as otherwise provided by this Act a decision of an arbitrator is final and binding on the parties and is not subject to an appeal. 23 Section 219 provides that a person to whom money is to be paid pursuant to an arbitrator's decision may enforce the decision by filing it in a court of competent jurisdiction whereupon the decision is taken to be an order of that court.
The determination of permanent total incapacity for work made 7 November 2011 24 The appellant's counsel submitted that the arbitrator failed to consider, evaluate the evidence directed to, and make a finding as to the respondent's capacity for work. In this regard I have observed that the arbitrator noted that it had already been determined that the condition of occupational asthma had resulted in the respondent's permanent total incapacity for work, and clearly accepted that determination. Not only was she entitled to so conclude, but was bound to do so for a number of reasons. (i) Section 217B(1) of the Act makes the determination final and binding on the parties. (ii) Section 188 of the Act authorised the arbitrator to adopt any finding, decision or judgment of a person or body acting judicially. Clearly the arbitrator who made the determination of 7 November 2011 was acting judicially. See Everett v Griffiths [1921] 1 AC 631, 682 - 683 (Lord Atkinson). (iii) The November determination resolved as between the appellant and the respondent the issue as to the respondent's capacity for work. It thus foreclosed the appellant's ability to dispute that issue in subsequent proceedings under the Act. In Administration of Territory of Papua and New Guinea v Guba (1973) 130 CLR 353 his Honour Gibbs J stated at 453: The doctrine of estoppel extends to the decision of any tribunal which has jurisdiction to decide finally a question arising between parties, even if it is not called a court, and its jurisdiction is derived from statute or from the submission of parties, and it only has temporary authority to decide a matter ad hoc. 25 The other finding which the arbitrator used to arrive at the conclusion that the respondent had a 40% degree of disability was that the respondent had a Class 1 whole person impairment as assessed pursuant to the AMAG which was up to 10% impairment. She based that finding on her conclusion that the consensus among the physicians was that the respondent fell within Class 1 which was a whole person impairment of 0% – 10%. The evidence in fact discloses the following. 26 Dr Pritchard in a report of 30 September 2010, having wrongly applied the Australian Government Comcare Guidelines, concluded the respondent had a whole person impairment of 45%, stating that even allowing for a variation in severity the whole person impairment was at least 30%. In a further report dated 15 June 2011 he referred to material from Dr Michael Musk, Professor Gabbay and Dr Silbert and stated that utilising the AMAG the permanent degree of disability was 0% - 10%. 27 In a report dated 11 May 2010 Professor Gabbay stated that he concurred with Dr Musk's assessment of a 0% – 10% degree of whole person impairment. In a later report of 18 January 2011 he stated: Mr Lockwood-Hall has essentially normal resting lung function and on cardiopulmonary exercise test had a peak VO2 of >25 ml/min/kg. Based on these factors this equates to Class 1 or 0% impairment based on these guidelines. 28 Having discussed other diagnostic factors he concluded the report: Based on these objective witnessed and reliable measurements of respiratory function, Mr Lockwood-Hall does not reach values put to him in Class 2 (10 – 25% whole person impairment). Class 1 impairment in which Mr Lockwood-Hall falls allows 0% impairment of the whole person, but allowing for some variability in his symptomatology, my assessment is a range of 0 – 10% rather than a specific number. I note that this is in agreement with Dr Michael Musk's assessment in his letter dated 21 August 2009. 29 In his final report dated 22 October 2012, Professor Gabbay noted that in his previous assessment he had given a range because the diagnosis of occupational asthma presented a difficult problem with impairment and disability. However basing an assessment on the formal lung function tests and the contemporaneous evidence described by Dr Silbert, he reported: 'Based on these assessments I agree with Dr Silbert's report that the claimant has a 0% degree of disability as a result of occupational asthma'. 30 In a report dated 19 April 2011 Dr Silbert reported: Mr Lockwood-Hall presents with a 0% permanent impairment as assessed under Guides to the Evaluation of Permanent Impairment, American Medical Association (Fourth Edition). This remains within the range as ascribed by Associate Professor Gabbay, being 0 – 10% whole person impairment. … In my opinion, Mr Lockwood-Hall presents with a nil quantifiable whole person impairment as a direct manifestation of his reported occupational asthma and in accordance with Schedule 2 of the Workers' Compensation & Injury Management Act of Western Australia (1981) as amended. This remains within the range as ascribed by Associate Professor Gabbay in the medico-legal of 18 January 2011. 31 In the result the arbitrator's conclusion that there was a consensus amongst the physicians that the respondent fell within Class 1 of the AMAG which was a whole person impairment of 0% –10% was not in accordance with the evidence. Dr Pritchard who preferred the Australian Government Comcare Guidelines in making a determination belatedly stated that an assessment of the permanent degree of disability utilising the AMAG resulted in a permanent impairment of between 0% - 10%. Professor Gabbay and Dr Silbert were ultimately of the view that the respondent came within Class 1 of the AMAG with a 0% impairment. 32 Chapter 5 of the AMAG addresses assessment of the Respiratory System. Various classes of respiratory impairment 1 to 4 are classified in table 8 set out hereunder:
Class 1:
0% no impairment of the whole person | Class 2:
10-25%, mild impairment of the whole person | Class 3:
26-50% moderate impairment of the whole person | Class 4:
51-100% severe impairment of the whole person | | FVC FEV1 FEV1/FVC (%) Dco | FVC > 80% of predicted; and FEV1> 80% of predicted; and FEV1/FVC > 70%; and Dco> 70% of predicted. | FVC between 60% and 79% of predicted; or FEV1 between 60% and 79% of predicted; or Dco between 60% and 69% of predicted. | FVC between 51% and 59% of predicted; or FEV1 between 41% and 59% of predicted; or Dco between 41% and 59% of predicted. | FVC < 50% of predicted; or FEV1< 40% of predicted; or Dco< 40% of predicted. | | Or | or | or | or | | VO2 Max | > 25mL/(kg * min); or > 7.1 METS | Between 20 and 25 mL/(kg*min); or 5.7-7.1 METS | Between 15 and 20 mL/(kg*min); or 4.3-5.7 METS | < 15mL/(kg*min); or < 1.05 L/min; or < 4.3 METS | 33 Class 1, being the classification in which all specialists place the respondent is '0% no impairment of the whole person'. In the result the burden of the evidence before the arbitrator was that the respondent did not have any impairment of the whole person, and it was imperative to so find as it was critical to the determination. This was recognised by the arbitrator when she stated at: [26] My task is to determine first of all the level of permanent whole person impairment under the US guides and then to convert it to a degree of disability; [33] I am required to translate knowledge about impairment into a degree of disability. 34 The arbitrator was incorrect when she stated at [29] that Class 1 of the AMAG was indicative of impairment of the whole person of 0% - 10%. Although she stated that she did not accept that the respondent had 0% impairment believing it to be somewhere between 0% - 10% she overlooked the fact that Class 1 categorisation was 'no impairment of the whole person'. 35 A percentage impairment finding is essential because the relevant regulation provides that 'the degree of disability is to be assessed in accordance with the AMAG'. If the AMAG assessment is '0% no impairment of the whole person' it is not possible to determine a degree of disability since one would be left making the assessment using only a worker's capacity for employment instead of implementing the required conversion from an impairment rating. To make a determination based simply upon an assessment of the worker's capacity for employment would be contrary to the requirements of s 93D(2) as the AMAG would not form part of the equation. 36 In any event it is not possible to determine from the reasons how the arbitrator arrived at her conclusion that the respondent had a permanent degree of disability of 40%. 37 In Pettitt v Dunkley [1971] 1 NSWLR 376, 387 - 388 the President of the Court said: ... there is as much a duty or judicial obligation or an obligation imposed by law to give reasons in an appropriate case as there is otherwise a duty to act judicially, such as to hear arguments of counsel and hear evidence and admit relevant evidence of a witness. The reason why the judicial obligation to give reasons in an appropriate case exists, is that, where an appeal is provided, the trial at first instance does not exhaust the rights which parties may have. Just as an express statutory requirement to find facts and give a decision on the particular question of law which arises is directed to ensuring that the right of appeal in case of error of law is effective, so any general judicial duty to give reasons is similarly directed. 38 That this principle applies to arbitration determinations was confirmed in Velez Pty Ltd v Tudor [2011] WASCA 218. Murphy JA stated at [70]: In identifying the facts accepted and the reasons for doing so (s 213(4)(a)) and the law applied and the reasons for doing so (s 213(4)(b)), the arbitrator will in my view still be obliged to expose the reasoning process linking them, and justifying the ultimate result (cf AK v Western Australia [2008] 232 CLR 438). 39 Here is it not possible to dissect from the determination the manner by which or the reason why the arbitrator selected a disability figure of 40%. Clearly it was necessary to so demonstrate if there was to be an effective right of appeal. 40 In Beer v Duracraft Pty Ltd [2004] WASCA 192 McLure J stated at [109] – [110]: That leaves a dilemma - what is the basis for the conversion from impairment rating to percentage degree of disability. The Full Court in Clough Engineering was not asked to and did not volunteer any guidance on this question. It needs to be addressed in this case because this Court was asked to determine the degree of disability if (as I have concluded) the review officer had erred. Whether or not we could (or should) depends on what is required. Fundamental to the conversion process is an understanding of the statutory basis in s 93D of the Act for the calculation of the degree of disability. The various percentages in Sch 2 reflect a statutory assessment of the impact of the injury on a worker's ability to work. A percentage of 100 is intended to reflect total inability to work. Otherwise the percentages range from between 4 per cent (total loss of distal phalanx of the little finger) to 90 per cent (loss of arm at or above the elbow). The percentages reflect an objectively determined maximum degree of disability reflecting reduced ability or capacity to work. The focus is on the reduction of options or opportunities to perform work of any kind. Where a particular injured worker fits on the scale up to the relevant maximum is a subjective question. Under Item 8 which refers to permanent and incurable loss of mental capacity resulting in total inability to work, the relevant percentage is 100. I see no reason in principle why psychiatric impairment not provided for in Sch 2 should have a maximum less than 100. As the scheme of the Act is that 100 per cent reflects total (and permanent) incapacity to work, regard must be had to the extent to which the psychiatric condition in question has reduced the worker's ability to do work of any kind. That is a matter for the judgment of medical experts and review officers. It is not a matter for this Court. 41 I do not accept the appellant's submission that her Honour's reasons are not of general application. 42 In the present case, having accepted that the respondent was permanently totally incapacitated for work, it is difficult to see if that was used as the basis for determination, why the arbitrator would not have concluded that he had a 100% disability. 43 I am satisfied that the determination discloses errors of law. The proper finding on the evidence is that the respondent must be classified under the AMAG as Class 1 '0% no impairment of the whole person'. In the result it is not possible statutorily to make the necessary determination by conversion of a degree of disability. 44 There will be leave to appeal and the determination that the respondent has a 40% degree of disability quashed.
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