BHP Billiton Nickel West Pty Ltd v Lockwood-Hall
[2012] WADC 108
•6 JULY 2012
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: BHP BILLITON NICKEL WEST PTY LTD -v- LOCKWOOD-HALL [2012] WADC 108
CORAM: MCCANN DCJ
HEARD: 13 APRIL 2012
DELIVERED : 6 JULY 2012
FILE NO/S: APP 90 of 2011
BETWEEN: BHP BILLITON NICKEL WEST PTY LTD
Appellant
AND
SCOTT LOCKWOOD-HALL
Respondent
Catchwords:
Workers' compensation - Statutory constraints on common law damages - Appeal from an arbitrator of the Dispute Resolution Directorate - Relevant principles - Turns on own facts
Practice and procedure - Jurisdictional objection to the application for leave to appeal - Over-ruled
Evidence - Whether the arbitrator misconstrued evidence - Turns on own facts
Legislation:
Workers' Compensation and Injury Management Act 2011 s 93D, s 247
Workers' Compensation and Injury Management Amendment Act 2011
Workers' Compensation Reform Act 2004
Result:
Leave to appeal granted
Appeal allowed
Notice of contention upheld
Representation:
Counsel:
Appellant: Mr D Williams
Respondent: Mr M Lourey
Solicitors:
Appellant: WHL Legal Pty Ltd
Respondent: Chapmans
Case(s) referred to in judgment(s):
Beer v Duracraft Pty Ltd [2004] WASCA 192
Beltreco v Tucker [2010] WACC C18‑2010
Beltreco v Tucker [2010] WACC C4 – 2010
Bloomfield v Liebherr Australia Pty Ltd [2007] WASCA 154
Brien v Pilbara Iron Pty Ltd [2011] WACC C6‑2011
Century Drilling Ltd v Stevens [2007] WASCA 131
Clarke–Martin v Australian Pacific Hotels (Perth) Pty Ltd [2010] WACC C6–2010
Clough Engineering v Thomas [2004] WASCA 36
Comfort Inn Suites v LKB [2012] WACC C1-2012
Compass Group (Australia) Pty Ltd v McGrath [2009] C25-2009
Girrawheen Tavern v Joseph [2003] WASCA 244
Hammond Worthington v Da Silva [2006] WASCA 180
Hart v Griffin Coal Mining Co Pty Ltd [2005] WASCA 130
Hood v Royal Perth Hospital (Unreported, WASCA, Library No 970658, 5 December 1997)
Lamb v Tony's Auto Auctions Pty Ltd [2007] WACC C33–2007
Lockwood‑Hall v BHP Billiton Nickel West Pty Ltd [2012] WACC C5‑2012
Nardi v Department of Education and Training [2006] WACC C22‑2006
Pacific Industrial Co v Jakovlevic [2008] WASCA 60
Public Transport Authority v Djano [2010] WACC C9‑2010
Re Croser; Ex parte Rutherford (2001) 25 WAR 170
Re Monger; Ex parte Cook's Construction Pty Ltd [2004] WASCA 165
Sotico Pty Ltd v Wilson [2007] WASCA 112
Suero v Georgiou Group Pty Ltd [2009] WACC C12-2009
Velez Pty Ltd v Tudor [2011] WASCA 218
MCCANN DCJ:
Introduction
This is an application by BHP Billiton Nickel West Pty Ltd (BHP) for leave to appeal from the decision of an arbitrator of the Dispute Resolution Directorate of Workcover that was made on 10 November 2011 whereby Mr Lockwood‑Hall's degree of disability was determined to be 33.8% and thus not less than 30% for the purposes of the statutory constraints on common law damages provided for in div 2, pt IV of the Workers' Compensation and Injury Management Act 1981, as amended (the Act).
The application for leave to appeal is brought pursuant to subsection 247(2) of the Act. It was heard at the same time as the party's applications for leave to appeal from an earlier decision of the same arbitrator (in DRD matter SD88/2011) in which an order was made as to total liability in the sum of $65,000. On 18 May 2012 I gave my decision in that matter. Mr Lockwood‑Hall's application for leave to appeal was dismissed, leave to appeal was granted to BHP and their appeal dismissed (see Lockwood‑Hall v BHP Billiton Nickel West Pty Ltd [2012] WACC C5‑2012).
Mr Lockwood‑Hall has objected to the District Court's jurisdiction to deal with BHP's application for leave to appeal in this matter. He also filed a Notice of Contention in which he seeks an increase in the arbitrator's determination of the overall degree of disability (and thus further support the ultimate finding that the degree of disability was not less than 30%).
Factual background
Mr Lockwood‑Hall was born on 22 November 1970. He left school at the age of 16 years and qualified as a mechanical fitter four years later.
He was employed by BHP (or WMC Resources Ltd as it was formerly known) as a mechanical maintenance technician at its Kwinana nickel refinery between 1998 and 2009. On or about 16 June 2003 he contracted occupational asthma as a result of long term exposure to industrial gases (the respiratory injury). He suffered many periods of incapacity for work due to complications of this sickness, including pneumonia. He claimed compensation under the Act in August 2005.
BHP accepted liability. Mr Lockwood‑Hall received weekly payments for a number of periods of incapacity until the prescribed amount was reached in or about May 2011. He then sought and obtained the abovementioned order as to total liability which predicates that he is permanently and totally incapacitated for work.
He has also received pay-outs from two superannuation funds on the basis of total and permanent disability.
Mr Lockwood‑Hall commenced these proceedings (colloquially known as 'Form 22 proceedings') by filing a Form 22 at the DRD on 26 October 2010 in which the relevant level of disability was said to be not less than 30%. As amended in the arbitration, he contended that his degree of disability should be assessed in respect of a number of conditions which were said to be sequellae of the respiratory injury and/or treatment for the same. BHP disputed both the diagnosis and the degree of disability in respect of all of the conditions, save for the diagnosis of the respiratory injury.
The arbitrator determined the degree of disability as follows:
(i)the respiratory injury: 10%;
(ii)the cervical spine (sch 2, item 36B): nil;
(iii)the lumbo-sacral spine (item 36A): 6%;
(iv)left and right hips ie, lower limbs at or above the knee (item 28): 4.9% each;
(v)psychiatric disability: 8%;
(vi)sense of smell (item 12): nil;
Total degree of disability: 33.8%
BHP challenges findings: (i), (iii), (iv) and (v). Mr Lockwood‑Hall's Notice of Contention challenges findings (ii), (v) and (vi).
The application for leave to appeal was heard on the basis that the appeal will also be determined if leave is granted.
The statutory constraints on damages
The statutory constraints on common law damages which apply to this matter (the 1993 scheme) applied to injuries which occurred prior to 14 November 2005 when the Workers' Compensation Reform Act 2004 came into operation.
The general principles in relation to the 1993 scheme are well established:
(i)The purpose of so–called Form 22 proceedings is to obtain a determination of a worker's 'degree of disability' for the purposes of ascertaining what constraints, if any, should apply to the award of damages in common law proceedings. It has been held in a series of cases that the term 'degree of disability' is not synonymous with the term 'injury' as it is defined in subsection 5(1)(a) ‑ (d) of the Act (formerly known as a 'disability') and directs attention to the worker's 'condition' (see Girrawheen Tavern v Joseph [2003] WASCA 244; Hart v Griffin Coal Mining Co Pty Ltd[2005] WASCA 130; Hammond Worthington v Da Silva[2006] WASCA 180). The degree of disability in respect of that condition must be determined in accordance with the principles set out in subsection 93D(1) ‑ (4). When subsection 93D(2)(a), pt I of sch 2 and s 25 are read together, the 'degree of disability' is to be expressed (for injuries mentioned in pt I) as a percentage based upon the 'permanent loss of the use of' or the 'permanent loss of the efficient use of' ('he PLOFEU) the particular body part or function.
(ii)The term 'permanent' connotes that an injury will continue indefinitely or for the foreseeable future (see Re Croser; Ex parte Rutherford(2001) 25 WAR 170 (Olsen AUJ) [94] and Lamb v Tony's Auto Auctions Pty Ltd [2007] WACC C33–2007 [26]). The degree of disability is determined as at the time of the determination having regard to current knowledge about the available treatment and circumstances of the individual worker (see Century Drilling Ltd v Stevens [2007] WASCA 131 per the Court [6]). It follows that it is permissible for an arbitrator to take into account evidence relevant to the impact of past and future treatments provided that the assessment is based on facts and not speculation (see Girrawheen Tavern (Wheeler J) [35] and Lamb [26]), and bearing in mind that medications may relieve the symptoms of a condition without necessarily curing it or removing the underlying condition (See Beer v Duracraft Pty Ltd[2004] WASCA 192, (McLure J) [97]).
(iii)In determining these issues the arbitrator is not required to have regard to the existence or otherwise of any causal connection between the worker's original injury (or the events which caused it) and the overall condition for which the degree of disability is being determined. This is an issue for the court to decide in the common law proceedings. (See Girrawheen Tavern (Wheeler J) [52] ‑ [53] and Hart (Pullin JA) [19]).
(iv)That issue is not to be confused with the aetiology and permanency of each disease or component injury, which are relevant considerations. It is relevant to enquire whether a putative symptom is indeed a symptom of (ie, caused by) a particular injury or disease nominated in the Form 22, or whether a symptom will be permanent. Both questions inevitably involve questions of causation, but not that which is proscribed by the authorities. (See Bloomfield v Liebherr Australia Pty Ltd [2007] WASCA 154 (Steytler P), with whom Wheeler JA agreed, [14], Nardi v Department of Education and Training [2006] WACC C22‑2006 [45] and Clarke–Martin v Australian Pacific Hotels (Perth) Pty Ltd [2010] WACC C6–2010 [35]).
(v)In determining the degree of disability the arbitrator must make three findings. First, the diagnosis of the condition (the diagnostic issue). Second, the PLOFEU (the prognostic issue). Third, the degree of disability. The diagnostic and prognostic issues may overlap (see Brien v Pilbara Iron Pty Ltd [2011] WACC C6‑2011 [16]).
So far as the psychiatric illness is concerned, it was common ground between the parties that item 8 of sch 2 (which relates to permanent and incurable loss of mental capacity resulting in total inability to work) was not applicable. There being no other relevant item in sch 2, and pursuant to subsection 93(2)(b) of the Act, the worker's degree of disability for his psychiatric illness fell 'to be assessed … as the degree of permanent impairment assessed in accordance with the AMA Guides'. Pursuant to subsection 93D(2) and reg 19IA(1) of the Worker's Compensation and Injury Management Regulations 1981, the AMA Guides are defined to mean, in effect, the first edition of the Assessment of Disability Guides which was published by the Western Australian branch of the Australian Medical Association in January 1994.
Chapter 14 of the AMA Guides stipulates that the assessment of impairment in respect of a psychiatric disability 'should be provided with possible reference to the Commonwealth Social Security Rating of Impairment' (the SSRI). The SSRI provides a list of 'impairment ratings' of nil, 5, 10, 15, 20, 30, 40, 50, 60 and 70, each of which correlates to a progressively more serious matrix of symptoms of a diagnosed illness. It expressly states that the ratings are 'not percentages and in individual cases a rating of 20 may be incompatible with work'.
The provisions of the SSRI which are relevant to this matter are as follows:
TEN:Mild but regular symptoms which tend to cause subjective distress. On most occasions able to distract themselves from this stress. Minor interference with function in everyday situations. Exacerbation of symptoms may cause occasional days off work (eg, There may be some loss of interest in some activities previously enjoyed. There may be occasional friction with family, colleagues or friends. Medical therapy or some supportive treatment from treating doctor may be required, and if not commenced may be recognised as being useful).
FIFTEEN:Moderate and regular symptoms OR generally functioning with some difficulty (eg: as manifested by short periods of absence from work, noticeable reduction in social contacts or recreational activities, or the beginnings of permanent family conflict. Likely to have received psychiatric treatment which has stabilised their condition).
It has been held that an SSRI rating cannot be automatically equated to a degree of disability because the two numbers represent different things. The SSRI rating is a score which corresponds to certain qualitative criteria, whereas the degree of disability represents a percentage of permanent disability. Further, the SSRI rating cannot be converted to a percentage by the simple device of dividing the score by the maximum rating of 70 and multiplying the result by 100. The percentage degree of disability is a matter of opinion having regard to the criteria in the SSRI and the evidence bearing on the condition of the particular worker. (See: Clough Engineering v Thomas[2004] WASCA 36 (Steytler J) [10] and (Hasluck J) [93] and [98] and Re Monger; Ex parte Cook's Construction Pty Ltd [2004] WASCA 165 (Steytler J) [22]). Regard must also be had to the extent to which the psychiatric condition has reduced the worker's ability to do work of any kind (See: Beer (McLure J) [109] – [110], Beltreco v Tucker [2010] WACC C4 – 2010 [13] and Beltreco v Tucker [2010] WACC C18‑2010).
Pursuant to subsection 93D (2)(c) and reg 19I A(2), conditions which are not referred to in sch 2 of the Act or dealt with in the AMA Guides (subsection (2)(b) matters) must 'be assessed in accordance with the American Medical Association's Guides to the Evaluation of Permanent Impairment (4th Edition)' which were published in 1993 (the US Guides). These have since been superseded by a 5th edition, but this matter was determined in accordance with the 4th edition in accordance with the regulations.
The 4th edition of the US Guides is divided into 15 chapters. Chapters 1 and 2 deal with procedural aspects of the making of a diagnosis and the evaluation of 'whole person impairment levels' which must be expressed as a percentage. According to ch 1, the Guides are designed to provide 'a standard framework and method of analysis through which physicians can evaluate, report on, and communicate information about the impairments of any human organ system'. Chapters 3 to 14 deal with various organ systems. Chapter 5 deals with respiratory disorders. There is also a glossary of terms.
The US Guides draw a distinction between the concepts of 'impairment' and 'disability'. An 'impairment' is defined (in ch 1.1) as 'a deviation from normal in a body part or organ system and its functioning' and is present if a medical condition interferes with an individual's 'activities of daily living' which include, for example, self‑care and personal hygiene, eating and preparing food, communication, walking, travelling and moving about.
'Disability' is defined, relevantly, as an 'alteration of an individual's capacity to meet personal, social or occupational demands because of an impairment' and is present when an individual cannot accomplish 'a necessary activity or task'. An impaired individual is not necessarily disabled, as evidenced, for example, by the varying levels of disability which could be suffered by a concert pianist, a financier or different types of doctor who suffered the loss of the little finger of the right hand.
Under the heading 'Impairment and Workers' Compensation' ch 1.5 states (emphasis in the original):
Each administrative or legal system that uses permanent impairment as a basis for disability ratings should define its own means for translating knowledge about an impairment into an estimate of the degree to which the impairment limits the individual's capacity to meet personal, social, occupational and other demands to meet statutory requirements.
It must be emphasised and clearly understood that impairment percentages derived according to Guides criteria should not be used to make direct financial reward or direct estimates of disabilities.
It follows that it is not the intention of the US Guides, and thus of reg 19IA(2)(c), that a level of permanent whole person impairment is to be regarded as the equivalent of, or automatically convertible to, a worker's degree of disability.
So, what means are available under the Act for 'translating knowledge about an impairment' into a degree of disability? It is necessary to consider the extent to which the injury has reduced the worker's ability to perform work of any kind, on the basis that a total and permanent incapacity for work of any kind amounts to a degree of disability of 100%. (See McLure J in Beer [109]). In Beltreco [26] I summarized the following principles:
(i)A percentage level of whole person impairment under the US Guides cannot be automatically equated to the degree of disability under the Act. The percentage degree of disability is a matter of judgment having regard to the criteria in the US Guides and the evidence bearing on the condition of the worker.
(ii)Regard must be had to the extent to which the injury or disease has reduced the worker's ability to perform work of any kind on the basis that a permanent and total loss equates to a degree of disability of 100%.
(iii)It is not the case that a percentage level of whole person impairment under the US Guides represents the minimum degree of disability. A particular impairment level may, or may not, be compatible with the worker performing work, leaving open a possible range of degrees of disability between nil and 100%.
The concept of 'ability to perform work of any kind' was further explained in my second decision in Beltreco ([10] – [21] and [24]).
Dispute resolution under the Act prior to 1 December 2011
Prior to the enactment of the Workers' Compensation and Injury Management Amendment Act 2011 (the 2011 Amending Act), which came into force on 1 December 2011 (the commencement day), the dispute resolution and appellate provisions of the Act were contained in pts XI, XII and XIII. Part XI dealt with the conciliation and arbitration of disputes, subject to pt XII which provided for the summary or expedited determination of minor claims and the making of interim orders.
Pursuant to s 181 of the Act, a pt XI proceeding commenced when an application was filed and accepted by the Director of the DRD, but subject (in the case of Form 22 proceedings) to subsection 93D(10) which provided that the failure of the referral and quasi‑conciliation process contemplated by subsections 93D(5) - (9) gave rise to a dispute which was deemed to be referred to an arbitrator without the need for an application under s 181.
Part XIII provided for the determination of referred questions of law and appeals from decisions of arbitrators by the Commissioner of the DRD and thence the Court of Appeal. Pursuant to subsections 247(2) and (3), an appeal lay, by leave of the Commissioner, against a decision in respect of a dispute by an arbitrator under pt XI. Leave could not be given unless a question of law was involved and the application for leave to appeal was made within 28 days of the making of the decision appealed against.
The jurisdictional objection
Mr Lockwood‑Hall's jurisdictional objection is based on the contention that the amended version of s 247 which came into force on the commencement date does not confer any right to seek leave to appeal in respect of decisions which pre-dated the commencement date unless an application for leave was pending before the Commissioner on the commencement date. This application for leave to appeal (to the District Court) was not filed until 8 December 2011.
Section 247 provided as follows prior to the enactment of the 2011 Amending Act:
247.Appeal against decision of arbitrator
(1)A party to a dispute may, with the leave of the Commissioner, appeal to the Commissioner against a decision in respect of the dispute by an arbitrator under Part XI.
(2)Subject to subsection (3), the Commissioner is not to grant leave to appeal unless –
(a)in the case of an appeal in which an amount of compensation is at issue –
(i)a question of law is involved and the amount at issue in the appeal is both –
(I)at least $5 000 or such other amount as may be prescribed by the regulations;
and
(II)at least 20% of the amount awarded in the decision appealed against;
or
(ii)a question of law is involved and, in the opinion of the Commissioner, the matter is of such importance that, in the public interest, an appeal should lie;
and
(b)in any other case, a question of law is involved.
(3)The Commissioner may grant leave to appeal from a decision of an arbitrator on a matter referred under section 93D(10) if the appeal involves a question of law.
(4)An application for leave to appeal cannot be made later than 28 days after the making of the decision appealed against.
(5)An appeal under this section is to be by way of review of the decision appealed against.
(6)Evidence that is fresh evidence or evidence in addition to or in substitution for the evidence received in relation to the decision appealed against cannot be given on an appeal to the Commissioner except with the leave of the Commissioner.
(7)On hearing an appeal made under this section, the Commissioner may –
(a)affirm, vary, or quash the decision appealed against, or substitute, and make in addition, any decision that should have been made in the first instance; and
(b)subject to section 267, make any further or other decision, as to costs or otherwise, as the Commissioner thinks fit.
As can be seen, this provision contemplated three categories of application for leave to appeal, first when an amount of compensation was at issue in the appeal (par (a) of subsection (2)), second, when the proposed appeal was in respect of a determination made in Form 22 proceedings (subsection (3)) and, third, 'in any other case' (par (b) of subsection (2)).
This categorisation predicated that different criteria would apply to the categories. Relevantly, the question of leave in respect of appeals against interlocutory decisions generally (par (b)) and in respect of appeals against Form 22 determinations might be approached differently, notwithstanding that both decisions were essentially interlocutory (ie, not final) in nature. (See Pacific Industrial Co v Jakovlevic [2008] WASCA 60, (Wheeler JA) [17]). Having said that, in the case of both par (b) and subsection (3) matters it was necessary for the applicant to demonstrate that an arguable question of law was involved (as explained in Jakovlevic [18]) and that a substantial injustice could arise if the error was not corrected (see, respectively, Suero v Georgiou Group Pty Ltd [2009] WACC C12-2009 [10] and Comfort Inn Suites v LKB [2012] WACC C1‑2012 [26]).
Pursuant to subsection 15(3) of the 2011 Amending Act, subsection (3) was repealed (but, by an oversight, the proviso to subsection (2) was not). Subsections 93D(9) – (10) were also repealed, which abolished the form of quasi-conciliation and then deemed referral to arbitration which took place under the 1993 scheme.
Schedule 8 of the Act (as amended) contains transitional provisions relating to appeals from arbitral decisions which were given before the commencement date. In their express terms they are limited to 'pending pt XIII matters' which are defined to mean references of a question of law to the Commissioner (under s 246 of the former provisions, which has also been repealed) or an appeal under s 247 (including an application for leave to appeal) which had not been determined by the Commissioner before the commencement date. Subclause 5(1) provides that pending matters are 'to continue to be dealt with and determined by the Commissioner as if the amending Act had not been enacted'. There were a number of pending matters on the commencement date, including the other Lockwood-Hall appeal.
Mr Lourey submitted that the present legislative scheme (ie, the Act as amended, including the transitional provisions) created a kind of lacuna (my word, not his) in respect of arbitral decisions which were given within the 28 day period prior to the commencement day and for which an application for leave to appeal (or an appeal) was not pending on that day (such as this matter). He submitted that Parliament's intention was made clear, at least in respect of Form 22 proceedings, by the repeal of subsections 93D(9) ‑ (10) and 247(3).
I do not accept that submission for the following reasons.
First, the repeal of subsections 93D(9) - (10) must be understood in the context of the other amendments enacted by the 2011 Amending Act. Under the former provisions the conciliation and arbitration services were conducted jointly by the arbitrator under pt XI of the Act in accordance with the DRD Rules 2005. The 2011 Amending Act abolished the DRD and established two separate dispute resolution services, namely the Conciliation Service and the Arbitration Service (constituted by divs 3 and 4 of pt XI respectively). The current provisions contemplate separate and consecutive processes involving compulsory conciliation and then arbitration (if necessary), which obviates the need for subsections 93D(9 – (10) in Form 22 proceedings. As such, the repeal of those subsections does not necessarily inform the legislative intention in relation to appeals from arbitral determinations.
In my opinion the transitional provisions are not intended to apply to decisions (of any kind) that were not the subject of a pending appeal on the commencement date. Otherwise (ie, if Mr Lourey's submission is correct) the period prescribed for the bringing of an application for leave to appeal would have shrunk from 28 days to one day and then nil depending on the date of the arbitral decision. I very much doubt that such was the legislature's intention because it left affected parties exposed to an arbitrarily and increasingly impractical (and thus unfair) period of time within which to bring an application for leave. There would seem to be no purpose for such an approach and, in any event, no reason to single out Form 22 proceedings for such treatment if such was the intention.
In my opinion it is the intention of the Act that applications for leave to appeal in respect of any appellate proceedings which were not pending on the commencement day would fall within subsection (2) of the current provisions. In other words, that provision has prospective effect in respect of all arbitral decisions for which there was no pending appeal. That construction predicates an intention to bring Form 22 decisions under the same appellate provision, and thus criteria, as all other interlocutory matters, namely subsection (2)(b).
Accordingly, I am satisfied that the District Court has jurisdiction to determine BHP's application for leave to appeal pursuant to subsection 247(2)(b) and Mr Lockwood‑Hall's jurisdictional objection is over-ruled.
I turn now to deal with the merits of the proposed appeal and the Notice of Contention.
Determination
Ground (1): The respiratory injury
As I have said, there is no dispute that Mr Lockwood‑Hall suffers from the respiratory injury; nor is it disputed that he suffers from intermittent complications which can range from relatively symptom-free to completely debilitating (as when he contracts some form of respiratory infection, influenza or other cold‑like virus). Furthermore, it is not disputed that Mr Lockwood‑Hall returned relatively normal results when clinically tested for respiratory performance (eg, by spirometry tests). There was evidence of impairment by way of self-administered peak‑flow measurements.
The respiratory injury is not provided for in sch 2 or the AMA Guides. This enlivens par (c) of subsection 93D(2) and the principles referred to above at [18] – [25].
I turn now to summarise the parties' evidence.
Mr Lockwood‑Hall tendered reports of Dr M Prichard (his respiratory physician) and Dr D Kennedy. Dr Prichard eschewed the US Guides because, in his opinion, Mr Lockwood‑Hall's impairment was not appropriately measured by objective clinical testing such as spirometry (as contemplated by those Guides). In his opinion the gravamen of the respiratory injury was Mr Lockwood‑Hall's susceptibility to recurrent respiratory infections and other reactive airway symptoms, none of which could be assessed by spirometry and other clinical tests administered when he was well. Accordingly, he elected to assess the whole person impairment on the basis of a diagnosis of asthma pursuant to the Australian Government Comcare guidelines and arrived at an impairment of 45%.
Dr Kennedy used the US Guides (4th and 5th editions) but, in the arbitrator's opinion, failed to set out his methodology and, as such, she did not rely on that evidence. There is no challenge to that reasoning.
BHP's experts, namely Dr J Silbert (consultant occupational physician), Dr M Musk (respiratory physician) and Associate Professor E Gabbay (respiratory physician), all applied the US Guides.
As with other chapters of the US Guides, ch 5 requires the assessment of respiratory impairment to start with the identification of an appropriate class (or percentage range) from which an impairment figure is then assessed. Classes 1 and 2 provide for 0 ‑ 10% and 10 ‑ 25% whole person impairment respectively. The criteria for those classes relate to the results of spirometry, DCO (diffusing capacity of carbon monoxide) and VO2 (measured exercise capacity) tests.
Based on Mr Lockwood‑Hall's normal spirometry results, and in the absence of any other relevant, adverse results, BHP's experts considered that he fell within Class 1 (ie, 0 ‑ 10%). Dr Prichard agreed with this if recourse was to be had to the US Guides.
Dr Silbert assessed Mr Lockwood‑Hall's impairment at 0%, whereas Dr Musk and Professor Gabbay left the matter on the basis that the figure lay anywhere in the range of 0 ‑ 10%. They were all critical of the self-administered peak flow measurements.
Professor Gabbay recognised that the application of the US Guides could operate harshly in this case and to some extent he accepted that there was scope for departing from them. This was an appropriate concession in all the circumstances, including the principles relating to subsection 93D(2)(c).
It is helpful to set out some extracts of his report dated 18 January 2011:
… [A]ll of the spirometry results … [are] normal and as noted there is a much more reliable measurement of airways disease than self‑administered and self‑recorded peak flow measurements. The bronchial provocation test is only mildly normal.
… Mr Lockwood‑Hall has essentially normal resting lung function and on cardiopulmonary exercise test had a peak VO2 of > 25ml/min/kg. Based on these factors this equates to Class 1 or 0% impairment based on the [US Guides]. However, as pointed out by the guidelines and in the letter from Dr Michael Prichard, asthma can present a difficult problem in impairment and disability evaluation because results of pulmonary function studies may be normal or near normal between attacks.
…
Based on these objective witnessed and reliable measurements of respiratory function, Mr Lockwood‑Hall does not reach values put to him in Class 2 … Class 1 impairment in which Mr Lockwood‑Hall falls allows 0% impairment of the whole person, but allowing for some variability in his symptomology, my assessment is a range of 0 – 10% rather than a specific number. …
The arbitrator preferred the approach of Drs Silbert, Musk and Gubbay and held that Dr Prichard's methodology 'must be attributed less weight than the [US Guide] approved methodologies'. There is no challenge to this finding.
So, the arbitrator determined that Class 1 (the 0 ‑ 10% category of impairment) applied. She then turned to consider 'what percentile should be adopted'. She quoted the following passage from chapter 5 of the US Guides (page 153):
Assessment of the respiratory system should begin with the patient's description of the specific complaints related to respiration. Then a review should follow of personal habits and workplace exposures to potentially toxic substances that might explain or contribute to the existence of the symptoms… [these techniques are mainly] diagnostic and qualitative rather than quantitative [and] pulmonary function testing [is considered to] provide an objective assessment of the severity of respiratory abnormality. (The intercalations are the arbitrator's)
She then held as follows the (intercalation is mine):
68.In reliance upon the agreed diagnosis of chronic 'occupational asthma' stated by Dr Prichard and Prof Gabbay, together with the radiological evidence showing bronchiolitis, air trapping and (at least) 2 episodes of pneumonia (see [exhibit] R2 pp 7‑8), I am satisfied that the worker's respiratory disability should attract a percentage at the uppermost point of the Class 1 scale.
69.I find that the worker's respiratory disability, as measured by the [US] Guides is 10%.
Ground (1) contends that the arbitrator's reasons for this finding were inadequate.
The legal requirements of reasons for decision contemplated by subclause 213(4) of the Act have been considered in a number of authorities, including Sotico Pty Ltd v Wilson[2007] WASCA 112, Velez Pty Ltd v Tudor[2011] WASCA 218 [57] – [70] and Public Transport Authority v Djano [2010] WACC C9‑2010 [49]. I adopt what was said in the passages just cited. Put shortly, it is necessary for the reasons to adequately explain the findings and why substantive competing issues were determined in the way in which they were determined. But, it has been held that it is not always necessary for reasons to expose every single link or step in an arbitrator's reasoning. This is especially so in a case such as the present in which the arbitrator was required to exercise a judgment upon a matter about which minds might reasonably differ.
Mr Williams submitted that the arbitrator failed to give adequate reasons for deciding upon a figure of 10% when a range of 0 – 10% was available to her. He submitted that she had, in effect, simply alighted 10% (an ipse dixit in effect).
In my opinion, these contentions are arguable and leave to appeal should be granted. However, I am not satisfied that ground (1) should be upheld for the following reasons.
Ultimately, the determination of the PLOFEU and/or degree of disability (as the case may be) is a matter of judgment on which views may vary and it is not always necessary for every step in the arithmetic to be exposed.
In this case the arbitrator gave a number of reasons in par 68 for adopting a figure at the 'uppermost point' (ie, 10%) of the available range, namely the respiratory injury was chronic, there was radiological evidence showing bronchiolitis, there was evidence of air trapping and there had been at least two episodes of pneumonia. Irrespective of what one may think as to the combined force of those reasons, they expose the arbitrator's thinking in deciding that the uppermost (ie, the highest) end of the range was appropriate.
It could be said that there was uncertainty in BHP's experts' assessments (leaving Dr Silbert to one side for now). However, the arbitrator did not wholly defer to that body of opinion and her reasons cannot simply be inferred from it. (Compare Tudor). In this case she derived no more from BHP's evidence than the fact that Mr Lockwood‑Hall's whole person impairment under the US Guides could be as high as 10%.
She did not completely exclude Dr Prichard's views either, nor did she limit herself to the criteria provided for in Class 1 of the US Guides. That was entirely appropriate. In doing so the arbitrator quoted the following passage regarding asthma from Table 10 of the US Guides (page 164):
Asthma presents a difficult problem in impairment evaluation because results of pulmonary function studies may be normal or near normal between attacks. Despite the intermittent nature of the disease, severe impairment may be diagnosed when the individual is receiving optimum medical therapy and has physiologic test results in the severely impaired range on three successive tests performed at least one week apart. The frequency of attacks also should be taken into consideration when deciding on the level of impairment.
This should be read with the following passage in sub-chapter 5.3:
Sleep Disorders, Asthma, Lung Cancer and Other Impairments
Certain respiratory conditions may cause impairment that is not readily quantifiable by testing pulmonary function, spirometry, diffusing capacity or measured exercise testing…
In my opinion the arbitrator recognised (correctly) that an assessment may be made in a case in which symptoms are intermittent and pulmonary function or other clinical studies are normal (or near normal) between attacks and, further, that the impairment assessment in such circumstances could result in a whole person impairment assessment of 10%. I am satisfied that the arbitrator directed herself accordingly and that such has been adequately exposed in her reasons.
Mr Williams submitted that the arbitrator failed to mention Dr Silbert's opinion that there was 0% impairment in par 68 of her reasons. That is correct, but it is clear from the reasons as a whole that she read Dr Silbert's opinion and took it into account. It is also clear from her reasons (and her other findings) that she found that Mr Lockwood‑Hall had some respiratory impairment. That was sufficient to dispose of Dr Silbert's opinion and it was not necessary for the arbitrator to explicitly state this in par 68 or anywhere else.
In conclusion, I am satisfied that the arbitrator adequately exposed her reasoning and ground (1) must fail.
Having regard to the principles of law relating to subsection 93D(2)(c) conditions, the arbitrator's reasons might be criticised for their treatment (or the lack of it) of the impact of the respiratory injury on Mr Lockwood-Hall's capacity for work of any kind. As a result, she made no mention in this part of her reasons of the fact that Mr Lockwood-Hall was permanently and totally incapacitated for work (as found in matter SD 88/2011). However, neither party took this issue up in the appeal. That is understandable from BHP's point of view since the arbitrator's oversight could hardly have been detrimental to BHP's interests. But the position is less understandable from Mr Lockwood‑Hall's point of view. Mr Lourey referred to the arbitrator's finding as to permanent and total incapacity in his submissions, but only to support the 10% determination and not to vary it (ts 34).
Grounds (2) to (6) and Notice of Contention: neck, hips and spine (cervical and lumbo-sacral)
Mr Lockwood-Hall claims to have suffered a number of orthopaedic complications from the long-term use of steroidal medicines (such as Prednisolone) which he has taken to treat his asthma. It is not disputed, and the arbitrator found, that he has developed a degenerative bone condition known as osteopenia (a form of osteoporosis). The diagnosis was established by Bone Mineral Density (BMD) tests carried out in November 2008 and May 2010. These disclosed a mild worsening over the 18 month period, namely an increase in Mr Lockwood-Hall's risk of fracture, most notably in the lumbar spine where his 'T-score' was -1.8 (his lowest). The arbitrator accepted Mr Lockwood-Hall's evidence that he has been suffering rib fractures as a result of the osteopenia (reasons pars 95, 97 and 101).
Mr Lockwood-Hall testified that he has also developed a matrix of symptoms in his neck, back, hips and groin as a result of the osteopenia. The arbitrator accepted that he had an assessable PLOFEU in respect of both hips and the lower back, but not in respect of the neck.
As to the neck, Mr Lockwood-Hall relied on the opinion of Dr Kennedy who considered that there was a PLOFEU of the cervical spine in the amount of 10% (see his report dated 17 June 2011). The arbitrator found no evidence of a BMD assessment of the neck (par 74) or that Mr Lockwood-Hall was suffering from any neck pain (pars 75 – 77). Further, she accepted Dr Silbert's evidence that there was a 'full range of pain free movement' in the neck on clinical examination (par 78a).
Notwithstanding that Dr Kennedy found some tenderness and restricted range of motion, the arbitrator accepted Dr Silbert's opinion and found that the PLOFEU of the neck was nil.
Mr Lockwood-Hall challenges this finding. Mr Lourey submitted that it was not open to the arbitrator given that she accepted the diagnosis of osteopenia in the lumbar spine. I do not accept that contention for the following reasons. The arbitrator recognised that the extent of Mr Lockwood-Hall's osteopenia varied (the lumbar spine was said to be 'the focal point') and found that the neck was asymptomatic. In my opinion her conclusions were open to her on the evidence and incontrovertible, and they were adequately explained. So, the Notice of Contention fails on this point.
As to the hips and lumbar spine, Mr Lockwood‑Hall relied on Dr Kennedy's report dated 17 June 2011 in which he assessed PLOFEU's of 10% and 7% (which equated to degrees of disability of 6% and 4.9%) in respect of the lower back and each of the upper legs respectively. In doing so Dr Kennedy took into account a history given to him of pain in the hips and lower back 'because of the osteopenia from the prolonged use of Prednisolone'. On clinical examination Dr Kennedy noted tenderness over the lumbar regions of the spine, tightness of the extremes of flexion, extension and lateral flexion. As to the hips, Dr Kennedy found 'tenderness anteriorly and laterally with tightness through a full range of movements'.
The arbitrator found that Mr Lockwood-Hall suffered from 'pain in the hip[s]/groin/lower back area' which, she said, was supported by the fact that he had suffered fractured ribs (due to coughing). She preferred the evidence of Dr Kennedy over that of Dr Silbert (nil percent for each area; see his report dated 19 August 2011) on the ground, basically, that Dr Kennedy had taken into account the diagnosis of osteopenia whilst, she said, Dr Silbert had not done so.
The arbitrator's reasons in this last respect were as follows. First, Dr Silbert was aware of the diagnosis of osteopenia. Second, he was also aware of Mr Lockwood-Hall's reported back, groin and hip symptoms and that both Dr Kennedy and Mr Lockwood-Hall attributed the same to the osteopenia. In other words, he was aware of that Mr Lockwood-Hall was seeking to make a connection between the osteopenia and his symptoms. Third, Dr Silbert did not indicate in his report whether he had taken the symptoms and osteopenia into account or had rejected them, or why he disagreed with Dr Kennedy if such was the case.
Therefore, the arbitrator concluded that Dr Silbert's opinion carried less weight because he had not 'exposed his reason/s for disconnecting or rejecting the worker's hip/groin pain and osteopenia…' (par 92). She accepted Dr Kennedy's assessments because he had made and adequately expressed the connection between 'low bone density, increased risk of fracture (as has occurred with the worker's ribs) and loss of efficient use of the lower back and both hips' (par 97).
BHP challenges these findings and reasons.
Ground (2) contends that the arbitrator misconstrued the evidence of Dr Silbert. Mr Williams submitted that Dr Silbert did consider the interrelationship, if any, between osteopenia and Mr Lockwood-Hall's symptoms in his report of 19 August 2011. I accept that contention for the following reasons.
Dr Silbert first alluded to the diagnosis of osteopenia in his report dated 19 April 2011 in which he referred to the BMD test performed on 18 May 2010 and noted that there was 'a mild increase in fracture risk'. He went on to address Mr Lockwood‑Hall's physical capabilities in terms which suggested that he foresaw little or no other complications from the osteopenia.
In addressing Mr Lockwood‑Hall's 'current symptoms' in his report of 19 August 2011, Dr Silbert said as follows:
Mr Lockwood‑Hall also reports investigation and management for osteopenia. He advises of completion of bone and densitrometry on 14 June 2011. Mr Lockwood‑Hall reports continuation of his currently prescribed treatment.
Dr Silbert then went on to set out Mr Lockwood‑Hall's subjectively reported symptoms, which included a denial of any lumbo‑sacral symptomology and variable symptoms in both hips. In particular, he reported stiffness whilst seated and occasional niggling background discomfort deteriorating to a maximum severity of 8/10 and becoming burning or aching in nature.
On examination, Dr Silbert found a full range of pain-free movement of the lumbo‑sacral spine. In his formal assessment he found 'nil quantifiable permanent disability relating to any ongoing problems involving' the back or left or right legs. In each case he pointed out that Mr Lockwood‑Hall 'presents with a full range of pain free movement' and continued to say that there was 'no evidence of any direct causal, temporal or other relationship between the reported symptoms (if any) and the respiratory injury'.
In my respectful opinion the arbitrator misconstrued this evidence. On its clear (and only) construction Dr Silbert's reasons were to the following effect. Firstly he accepted the diagnosis of osteopenia. Next, he had a subjective history which indicated variable symptoms in the hips and no symptoms in the back. Next, his findings on examination disclosed no restriction. Finally, he said that there was no direct causal relationship between the reported symptoms and the respiratory injury.
It might be said that Dr Silbert misdirected himself by addressing whether there was a 'direct … relationship', given that complications from the treatment of the respiratory injury would be assessable even if they were an indirect result of it, and even if they did not result from it at all, provided that the symptoms represented a diagnosable condition. However, from reading the report as a whole I am satisfied that Dr Silbert did not preclude the possible aetiological significance of the osteopenia in assessing the symptoms. Rather, he found that there was no evidence, or no sufficient evidence, of any dysfunction that was related to the osteopenia to warrant the assessment of a PLOFEU. In other words, the reported symptoms were simply a group of non-specific symptoms of uncertain aetiology (or diagnosis) and permanence.
Mr Lourey submitted the arbitrator's reasoning was entirely factual and that her findings were open to her. That is correct up to a point, because Dr Kennedy based his opinion on the facts as found by the arbitrator and Dr Silbert did not. However, that does not remove the force of ground (2) which correctly criticizes the arbitrator's reasons for putting Dr Silbert's opinion aside. In effect, the relative weight of each doctor's opinion was not considered on its merits and the implications of Dr Silbert's evidence were not addressed. As a result the arbitrator avoided the obligation to reconcile the quite different facts with which each doctor worked (and she made no findings rejecting Dr Silbert's findings on examination or addressing the reliability or implications of the history that he was given, especially in respect of the back). In my opinion this was an important point because there was no expert evidence as to how or why osteopenia, a degenerative disease, becomes symptomatic, other than that it contributes to fractures. It is relevant to note that the onus lay on Mr Lockwood-Hall to prove (ie explain) the connection between the hip, groin and back symptoms found by the arbitrator and the osteopenia, which could be entirely coincidental and transient (as Dr Silbert was given to understand). Dr Kennedy did not explicitly do so. For his part, there was very little more that Dr Silbert could have said based on the benign facts as he understood them to be.
I am satisfied that the arbitrator materially mis-construed Dr Silbert's evidence and thus made an error of law (See Hood v Royal Perth Hospital (Unreported, WASCA, Library No 970658, 5 December 1997) 9, 12 (Wheeler J). The assessment of the degree of disability in respect of the hips and back should be set aside.
Ground (3) challenges the arbitrator's finding (par 89) that Mr Lockwood-Hall's groin pain 'was likely to relate to the area subjected to the BMD assessment in May 2010' that is to say, the lumbar spine. BHP contends that the arbitrator failed to give any, or any adequate, reasons for this finding.
I do not accept that contention. Paragraph 89 must be read with the balance of the arbitrator's reasons, which included her acceptance of Dr Kennedy's evidence that there was a causal connection between Mr Lockwood‑Hall's hip and back symptoms and the osteopenia. In my opinion, it was open to the arbitrator to find, as a matter of fact, that groin symptoms could be related to the back, as this is a very common presentation. The flaw in the arbitrator's reasoning lay in her misconstruction of Dr Silbert's reasoning, and thus its exclusion, rather than the adequacy of her reasons.
Grounds (4) and (5) relate to the arbitrator's finding (par 97) that Mr Lockwood-Hall had 'noticeably reduced bone density in the lower back' (emphasis added) which, BHP contends, she wrongly attributed to Dr Kennedy's report dated 17 June 2011. Mr Williams submitted that the arbitrator misconstrued this report, and or failed to give adequate reasons for her construction of the report.
I reject this submission. The word 'noticeably' was the arbitrator's word, not Dr Kennedy's, and it was open to her to employ it as a matter of comment having regard to the evidence of the BMD scores.
Ground (6) challenges the arbitrator's finding in relation to the PLOFEU of Mr Lockwood-Hall's hips on the ground that she misconstrued the evidence. One of BHP's contentions relies on an obvious misprint in the reasons for decision (the arbitrator referred to item 36A of sch 2 instead of item 28) and can be ignored. The other contention relies on a misreading of the phrase in Dr Kennedy's report dated 17 June 2011 in which he said that on clinical examination Mr Lockwood-Hall had, inter alia, 'tightness through a full range of movements' (emphasis added). It was submitted that this meant that Dr Kennedy had found a full range of movement to correlate with Dr Silbert's findings on 19 August 2011 and, as such, the PLOFEU must be nil. Considering the relevant sentence and the report as a whole, it is obvious that Dr Kennedy intended to say that Mr Lockwood-Hall had tightness in all ranges of movements and not a full range of movement. So ground (6) also fails.
Grounds (7) to (11) and notice of contention: psychiatric issues
The arbitrator made unchallenged findings as to Mr Lockwood‑Hall's psychological or psychiatric symptoms, as disclosed in oral histories given to Drs Tay (consultant psychiatric) and Kennedy, and in evidence. These symptoms commenced in or about late 2008 to early 2009 when Mr Lockwood‑Hall's employment (or redeployment) prospects began to pall and comprised:
•mood swings and angry or violent outbursts, which he believed were caused by his use of steroidal medications
•episodes of tearfulness
•withdrawal and decreased socialisation with workmates and friends
•feelings of failure due to being unable to do the job he loved
•feelings of embarrassment
•loss of control of what he says and to whom, which was out of character
•worry about the future
His general practitioner, Dr Walsh, placed him on anti‑depressant medication in January 2009 (which he still takes) and arranged for counselling.
The arbitrator found that these symptoms were 'primarily being driven' by two factors. First, 'long term problems which were significantly affecting Mr Lockwood-Hall's life, when all he wanted to do was work as a mechanical fitter' (par 149 emphasis added) or, in other words, 'the loss of his role and identity as a mechanical fitter' (par 166a). Second, his permanent incapacity for work in either his pre‑injury employment or any other employment (par 166b).
In her report dated 18 July 2011 Dr Tay (for BHP) diagnosed a reactive adjustment disorder with symptoms of anxiety and a depressive nature.
In support of her diagnosis, and in accordance with the criteria set out in DSM‑IV, Dr Tay said as follows:
At most, Mr Lockwood‑Hall would fit criteria for an Adjustment Disorder as opposed to Major Depression or anxiety. The adjustment issues relate to him decompensating when he discovered that he had to attend occupational health physician assessment and independent medico‑legal assessments regarding his respiratory condition and asthma [in late 2008]. He also decompensated further when he found out that his grandmother had passed away in 2009. It was also in 2009 that he commenced antidepressant medication.
…
Adjustment Disorders can be chronic and can be severe however it is reactive in nature, namely in reaction to being notified by his employer of further actions the employer was going to take with respect to the time off he has required over the years on account of his respiratory condition and not on account of previous depression or anxiety.
Dr Tay went on to exclude a diagnosis of Major Depression 'on account of the symptoms being triggered in late 2008 when he was informed that he had to attend an independent occupational health physician assessment, and that that assessment would determine his future employability'. Dr Tay reiterated this assessment of the aetiology later in her report. These triggers (or stressors) were not the same as the stressors defined by the arbitrator (see [94] above).
Later Dr Tay stated that she did not believe that Mr Lockwood-Hall developed 'any permanent psychiatric disability as a result of the accident on or around 18 June 2003' but as far as I can discern she did not address whether the Adjustment Disorder itself was permanent. It may well be that she intended to cover that issue, but her report is, at best, ambiguous. The problem arises because Dr Tay was asked to advise whether there was 'any permanent psychiatric disability as a result of the accident on or around 18 June 2003' and purported to do so. She did not ask herself the same question once she diagnosed the adjustment disorder relating to the incidents of late 2008, and there was no request for a follow-up report.
In his report Dr Kennedy diagnosed depression with anxiety and post‑traumatic stress disorder (PTSD). He assessed Mr Lockwood‑Hall as having 12% permanent disability under item 8 of sch 2. I pause at this point to immediately disclose my misgivings about these opinions. First, I find it very difficult to envisage how Dr Kennedy could make a diagnosis of PTSD, which is a nasty illness with well-known triggers (such as the direct experience of a sudden and terrifying event or events) and symptoms (such as nightmares and avoidant behaviours) which appear to be lacking in this case. Further, it was not appropriate for Dr Kennedy to rely on item 8 of sch 2 which relates to a worker who is permanently and totally incapacitated for work on incurable psychiatric grounds, which is obviously not this case.
As to the diagnostic issue, the arbitrator was critical of both Drs Tay and Kennedy in terms which indicated that she was not minded to accept either doctor's opinion. She said:
152.Dr Kennedy does not expose his reasoning for the diagnosis of depression or make reference to the DSM‑IV.
153.Beyond noting the worker's description of feeling anxiety, tearfulness, worry about the future and lost in terms of his identity because all he ever had wanted to be was a mechanical fitter, Dr Tay does not expose her reasoning for rejecting a diagnosis of depression. Nor does she explain how these symptoms are properly accommodated within a diagnosis of adjustment disorder.
154.Notwithstanding that Drs Kennedy and Tay apply different terminology to the psychiatric condition they diagnose in the worker, I am satisfied that the medical evidence does establish, from a diagnostic viewpoint, that the worker is suffering from a psychiatric condition.
This last finding is problematic because the arbitrator did not identify the psychiatric condition itself.
The arbitrator proceeded to address the appropriate SSRI rating. In doing so, she might have identified her diagnosis, ie, depression with symptoms of anxiety. She said as follows (emphasis added):
157.Leaving aside evidence of mood swings and occasional angry responses (which may be related to alcohol or steroid use) I am satisfied that the worker currently suffers 'subjective distress' by way of anxiety on a daily basis. I accept his evidence that 'anxiety is always there each day I open my eyes' …
160.Taking care not to attribute symptoms that arise from alcohol or steroid use, it is my view there is evidence to establish Mr Lockwood‑Hall currently meets a number of the criteria in levels 5 and 10 of the SSRI scale. In particular, level 5 applies to the worker's depressed mood and the difficulty he has functioning (in terms of controlling what he says and who he says it to). Level 10 applies to anxiety and tearfulness symptoms which cause Mr Lockwood‑Hall subjective distress as well as the medical therapy (by way of anti‑depressants used since early 2009) and counselling incorporated in his mental health plan.
So, it would appear that the arbitrator regarded the diagnosis to be depression with symptoms of anxiety. That inference is consistent with her dissatisfaction with Dr Tay's reasons for rejecting a diagnosis of depression, but that predicates that the arbitrator made her own diagnosis (given that she rejected that of Dr Kennedy).
Turning to the prognostic issue, the arbitrator rejected Dr Tay's opinion that the psychiatric condition was not permanent and accepted Dr Kennedy's opinion, principally because Dr Tay had not taken into account Mr Lockwood‑Hall's total and permanent incapacity for work, whereas Dr Kennedy had done so (pars 165 and 167). Once again, this reasoning is problematic. Having ostensibly rejected Dr Kennedy's opinion on the diagnostic issue (on grounds which were entirely appropriate in my view), the arbitrator then gave weight to his opinion on the prognostic issue. Whilst it is always open to a decision‑maker to accept part of the evidence of a witness and reject (or put to one side) other evidence of the same witness, the two findings or approaches are difficult to reconcile in this matter since the diagnostic and prognostic issues are closely interrelated.
Lastly, the arbitrator addressed the degree of disability. She directed herself (correctly in my opinion) as to the principles set out at [13] - [17] above and is to be taken (again correctly) to have rejected Dr Kennedy's recourse to item 8. She said as follows (at pars 172 – 173; emphasis added):
172.Taking into account all the medical evidence before me, together with the evidence of Mr Lockwood‑Hall, I find that due to his anxiety, ruminations, low self‑esteem and challenges in controlling inappropriate speech, the worker is functioning with some difficulty. I am further satisfied that these symptoms (which I find are unrelated to alcohol or steroid use) are likely to impact on Mr Lockwood‑Hall's ability to perform work.
173.Guided by the authorities …, I find that a conversion of Mr Lockwood‑Hall's impairment rating to a percentage of permanent psychiatric disability of 8% is appropriate. I therefore find that Mr Lockwood‑Hall has a permanent psychiatric disability of 8%.
BHP challenges the arbitrator's findings and reasons on a number of grounds.
I propose to commence with ground (8), which contends that the arbitrator erred in law by failing to make an explicit finding as to the diagnosis. Mr Williams submitted that it was not sufficient to merely state that Mr Lockwood‑Hall had 'a psychiatric condition' or to say that he had symptoms of depression or anxiety. He submitted that the diagnosis was an essential fact.
In my opinion there is force in Mr Williams' submission, but it is necessary to proceed carefully before accepting it. As I have pointed out, it could be said that the arbitrator said that Mr Lockwood-Hall suffered from depression and anxiety caused by the stressors referred to at [94] above.
However, there was more to the diagnostic issue than that. The making of a finding in relation to the diagnosis involved a correlation of proven symptoms to diagnostic criteria which are set out in DSM IV. (In this respect I stress that the criteria set out in the SSRI relate to impairment levels for all psychiatric illnesses and are not diagnostic tools). The arbitrator rejected the diagnoses of both Dr Kennedy and Dr Tay because she felt that they had not adequately explained their opinion or related the symptoms to the diagnostic criteria. With all due respect to her, the same strictures applied to her own fact-finding function but were not followed. I would go further and suggest that the arbitrator was overly severe on Dr Tay's report. In my opinion Dr Tay did explain her diagnosis and why she differentiated the same from depression. In particular, she pointed out that an Adjustment Disorder was a potentially treatable reactive illness and then identified the relevant stressors, namely the events and circumstances which occurred in connection with the occupational health process that commenced (contemporaneously with the symptoms) in late 2008.
The arbitrator felt that Dr Tay had focused 'too narrowly' on events that had caused Mr Lockwood‑Hall's psychiatric condition including those 'on and around 18 June 2003'. In my view that misconceived Dr Tay's reasoning because she only touched on the causal significance (or the lack of any) of the events on and around 18 June 2003 because she was expressly asked to do so.
The arbitrator was entitled to take into account the fact that Dr Tay did not allow for the fact (as found) that Mr Lockwood‑Hall was physically permanently and totally incapacitated for work which went same way towards gainsaying the view that the Adjustment Disorder could be treated. However, Mr Lockwood‑Hall's permanent incapacity for work and the aetiological factors that caused any Adjustment Disorder (on Dr Tay's evidence) were not co‑extensive and the prospect cannot be ruled out that the latter could be treated with consequential effect on the issues of permanency and the degree of disability favourably to BHP's case within a context of permanent incapacity for work.
In my opinion, and with all due respect to her, the arbitrator simply glossed over the diagnostic issue and thus failed to come to grips with the aetiology and treatment requirements, and hence the prognosis and permanent degree of disability. In so doing she fell into a similar error to that which was made by an arbitrator in Nardi (albeit that case related to compensation). Accordingly, in my opinion ground (8) should be upheld.
Against this background it is not necessary for me to deal with grounds (7), (9), (10) and (11), but for completeness I shall briefly touch on them.
Ground (7) contends that Dr Tay's opinion should have been preferred to that of Dr Kennedy merely because she is a psychiatrist. There is no merit in that ground as a matter of law. All the relevant facts and circumstances must be taken into consideration, although it would be open to an arbitrator to give additional weight to superior qualifications as a matter of general approach. (See Compass Group (Australia) Pty Ltd v McGrath [2009] C25-2009, [30]).
Ground (9) challenges the arbitrator's findings in relation to Mr Lockwood‑Hall's SSRI rating on the basis that his symptoms did not correlate to the criteria provided in respect of ratings 5 and 10. I do not accept that contention. The symptoms as found by the arbitrator clearly correspond to symptoms of the kind set out in those ratings. Leaving aside the diagnostic issue, the arbitrator's findings were open to her.
Grounds (10) and (11) contend that the arbitrator took an irrelevant consideration into account when dealing with Dr Tay's and Dr Kennedy's evidence, namely Mr Lockwood‑Hall's total and permanent incapacity for work. I do not accept that contention since a worker's incapacity for work is obviously capable of bringing on a psychiatric illness such as depression.
Ground (11) also contends that the arbitrator misconstrued Dr Kennedy's evidence by wrongly attributing him with acknowledging Mr Lockwood‑Hall's loss of his role and identity as a mechanical fitter as a causal factor. I am satisfied that Dr Kennedy did in fact do so and the arbitrator construed his evidence correctly. Dr Kennedy said as follows:
[Mr Lockwood‑Hall] gets very depressed and anxious because of the long term problems that have affected his life significantly and all he wanted to do was work as a Mechanical Fitter.
Moreover, I am satisfied that this was a relevant consideration.
Turning to the Notice of Contention, Mr Lockwood-Hall contends that in sidelining symptoms attributable to Mr Lockwood‑Hall's alcohol and steroid use from the assessment of the degree of disability the arbitrator wrongly took into account proscribed causal considerations. I accept this submission. On the evidence, those symptoms were complications of his use of steroids for the respiratory injury and self‑medication (alcohol) for his psychiatric symptoms. The symptoms were assessable and, moreover, were likely to be as permanent as the respiratory injury or psychiatric illness, as the case may be.
In summary, the arbitrator's finding in respect of the degree of psychiatric disability should be set aside.
Notice of contention: sense of smell
Mr Lockwood‑Hall testified that he became de-sensitised to a number of chemical smells as a result of exposure to ammonia gas in the course of his employment. The arbitrator found (unchallenged) that he is now 'unable to detect (or discern the difference between) ammonia‑type smells' (reasons par 111). By 'ammonia‑type smells' the arbitrator meant the smells of substances such as turpentine, kerosene, thinners, cleaning solvents, bleaches and household cleaning products (pars 109 ‑ 110).
Item 12 of sch 2 provides for a degree of disability of 25% for a total loss of the sense of smell. Dr Kennedy concluded that Mr Lockwood‑Hall had a PLOFEU of 60%, but he gave no reasons as to either the percentage or why it was permanent. Dr Silbert declined to comment saying that this was a matter which called for the input of an ear, nose and throat specialist.
BHP also tendered a report of such a specialist, namely Mr Bernadt. On examination he found no abnormality in Mr Lockwood‑Hall's 'olfactory apparatus' and noted that he was able to detect and discern smells (and taste) things such as tea and coffee, grilled bacon and balsamic vinegar. In his opinion the history of being unable to smell solvents 'did not make physiological sense'. The arbitrator declined to 'place a great deal of weight' on this opinion because it neither allowed for, or adequately explained, why Mr Lockwood‑Hall was unable to smell or distinguish between ammonia‑type products (par 125).
Accordingly, the arbitrator was attracted to Dr Kennedy's opinion, but even then she stated that she was 'unable to find' that his opinion 'supports a conclusion that' the impairment was permanent because, in her opinion, this was outside his area of specialist expertise and he had failed to articulate his reasoning (pars 126 ‑ 127)
Accordingly, the arbitrator held that Mr Lockwood‑Hall's PLOFEU in respect of item 12 was nil.
Mr Lourey submitted that the arbitrator should have made some formal assessment even a small amount. He submitted that the evidence of permanency lay in the fact that the limited sensory impairment found on the facts was chronic and there was no evidence that it could ever be recovered.
It is to be noted that Mr Lourey did not submit that the arbitrator overlooked any technical or specialist evidence. In effect, he submitted that the diagnostic and prognostic questions could be determined purely on the history and in a non‑technical way.
Ultimately the outcome was a matter of fact for the arbitrator, as Mr Lourey submitted. In this case she found that Dr Kennedy had failed to explain his opinion in relation to permanency (which view was clearly correct). I accept that the chronic nature of Mr Lockwood‑Hall's symptoms supported a finding that the symptoms would continue indefinitely or for the foreseeable future, but it was entirely up to the arbitrator to decide.
Accordingly, Mr Lockwood‑Hall's Notice of Contention is dismissed in this respect.
Conclusion
For these reasons I find that grounds (2) and (8) have been made out. The Notice of Contention has also been made in respect of the psychiatric illness.
I propose to make the following orders:
(1)Leave to appeal is granted.
(2)The appeal is allowed.
(3)The order of the arbitrator made on 10 November 2011 is set aside.
I will hear the parties in relation to the further disposition of the matter on the basis that the worker's degree of disability (if any) in relation to his back, left and right upper leg and the psychiatric illness must be re-determined.
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