BlueScope Steel (AIS) Pty Ltd v Khourey and Australian Trust for Conservation Volunteers and Co Pty Ltd
[2006] NSWWCCPD 303
•13 November 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:BlueScope Steel (AIS) Pty Ltd v Khourey and Australian Trust for Conservation Volunteers and Co Pty Ltd [2006] NSWWCCPD 303
APPELLANT: BlueScope Steel (AIS) Pty Ltd
FIRST RESPONDENT: Zachary Michael Khourey
SECOND RESPONDENT: Australian Trust for Conservation Volunteers and Co Pty Ltd
APPELLANT’S INSURER: Self insurer
SECOND RESPONDENT’S INSURER: GIO Workers Compensation (NSW) Limited
FILE NUMBER: WCC18906-05
DATE OF ARBITRATOR’S DECISION: 6 March 2006
DATE OF APPEAL DECISION: 13 November 2006
SUBJECT MATTER OF DECISION: Sections 60 and section 22A, Workers Compensation Act 1987; adequacy of reasons
PRESIDENTIAL MEMBER: Acting Deputy President Bill Roche
HEARING:On the papers
REPRESENTATION: Appellant: Sparke Helmore Jones
First Respondent: Slater and Gordon
Second Respondent: Abbott and Tout
ORDERS MADE ON APPEAL: For the reasons stated in this decision, the decision and findings of the Arbitrator dated 6 March 2006 are confirmed.
The BlueScope Steel (AIS) Pty Ltd is ordered
to pay the appeal costs of Australian Trust for Conservation Volunteers and Co Pty Ltd and of Zachary Michael Khourey.
BACKGROUND TO THE APPLICATION TO APPEAL
On 29 March 2006, BlueScope Steel (AIS) Pty Ltd (‘BlueScope’) lodged an ‘Application to Appeal Against Decision of Arbitrator’ in the Workers Compensation Commission (‘Commission’) against a decision of an Arbitrator dated 6 March 2006.
The First Respondent to the appeal is the Applicant worker, Zachary Michael Khourey (‘Mr Khourey’). The Second Respondent to the appeal is Australian Trust for Conservation Volunteers and Co Pty Ltd (‘Conservation Volunteers’). Before the Arbitrator the Second Respondent was the first respondent and first employer in time and the Appellant was the second respondent and second employer in time.
Mr Khourey was born on 20 December 1981. He has suffered multiple injuries to his left knee over the years, but three are of particular relevance. The first occurred in non compensable circumstances when he was surfing at the age of 16. The second occurred on 13 September 2000 when he was working with Conservation Volunteers and was playing sport (‘the 2000 injury/first injury’). The third occurred almost four years later, on 1 September 2004, when he was employed by BlueScope and jumped off the top step of a roll car and landed awkwardly on his left knee (‘the 2004 injury/second injury’).
GIO Workers Compensation (NSW) Limited (‘GIO’) is the relevant workers compensation insurer for Conservation Volunteers. BlueScope is self-insured.
Mr Khourey’s ‘Application to Resolve a Dispute’ (‘the Application’), in which he sought weekly compensation and hospital and medical expenses pursuant to section 60 of the Workers Compensation Act 1987 (‘the 1987 Act’), was registered in the Commission on 7 November 2005.
The claim for weekly compensation was discontinued at a teleconference on 11 January 2006.
The Application for Mr Khourey’s section 60 expenses came before a Commission Arbitrator for determination on 17 February 2006. He claimed:
· $333.50 for expenses incurred;
· an unspecified amount in respect of treatment provided by Dr Puri, and
· $28,239.00 in respect of proposed surgery to and treatment for his left knee.
It was not disputed that Mr Khourey suffered two work injuries to his left knee but it was disputed that the surgery and other treatment proposed for Mr Khourey’s knee is reasonably necessary as a result of either or both of those injuries. In the event that the Arbitrator held that such treatment is reasonably necessary, liability for the payment of such treatment was and is disputed between the Conservation Volunteers and BlueScope. Liability in respect of the sum of $333.50 for section 60 expenses already incurred was also disputed.
On 6 March 2006, the Arbitrator’s ‘Certificate of Determination’ was issued as follows:
“1. The Respondents [Conservation Volunteers and BlueScope] to pay the Applicant’s [Mr Khourey’s] medical and treatment expenses pursuant to s. 60 of the Workers Compensation Act 1987.
2. The Respondents to pay the Applicant’s costs as agreed or assessed.
3. Such compensation and costs to be paid by the Respondents in equal proportions pursuant to s.22 of the Act.
The Commission also finds that the proposed surgery to the Applicant’s knee is reasonably necessary as a result of the injuries as alleged.”
ISSUES IN DISPUTE
BlueScope appeals the Arbitrator’s determination on the following grounds:
A.The Arbitrator applied an incorrect test in determining the injury of 1 September 2004 in the employ of BlueScope was causative of the need for the proposed surgery.
B.The Arbitrator failed to provide any adequate reasons for the determination that the injury of 1 September 2004 in the employ of BlueScope was causative of the need for the proposed surgery.
C.The Arbitrator in determining what was essentially a medical issue failed to pay due or indeed any regard to the expert medical evidence presented on the question of causation.
D.That even if it be determined that the Arbitrator was correct in finding that the injury of 1 September 2004 in the employ of BlueScope was causative of the need for further operative treatment (such conclusion BlueScope submits was not open on the facts), the Arbitrator applied the wrong test when purporting to deal with the question of apportionment pursuant to section 22 of the Act.
E.That even if the Arbitrator was correct in finding that the injury of 1 September 2004 in the employ of BlueScope was causative of the need for the proposed surgery (such conclusion BlueScope submits was not open on the facts), the Arbitrator failed to give adequate reasons for her decision in dealing with the question of apportionment pursuant to section 22 of the Act.
Essentially, the grounds of appeal challenge:
·the tests applied by the Arbitrator in relation to causation and apportionment, and
·the weight given to the medical evidence in relation to causation and the adequacy of the Arbitrator’s reasons in dealing with the causation and apportionment issues.
If successful, BlueScope seeks that the determination of 3 March 2006 be set aside to the extent that it relates to it and that an award be made in its favour. Alternatively, BlueScope seeks that the matter be remitted for further determination.
Conservation Volunteers in their ‘Notice of Opposition to Appeal Against Decision of Arbitrator’ lodged on 19 April 2006 seek confirmation of the Arbitrator’s determination. Mr Khourey’s ‘Notice of Opposition to Appeal Against Decision of Arbitrator’ lodged on 24 April 2006 notes that his right to compensation is not disputed on appeal and he makes no submission as to the correct apportionment.
ON THE PAPERS REVIEW
Section 354(6) of the Workplace Injury Management and Workers Compensation Act 1998 (‘the 1998 Act’) provides:
“(6)If the Commission is satisfied that sufficient information has been supplied to it in connection with proceedings, the Commission may exercise functions under this Act without holding any conference or formal hearing.”
The parties agree to the determination of this matter on the papers. Although I have a copy of the Commission files, a copy of the transcript of the arbitration is not available.
Mr Khourey gave oral evidence at the arbitration that, according to the Arbitrator, involved “limited questions on cross-examination at the hearing.” (Statement of Reasons (‘Reasons’), paragraph 21). The Arbitrator appears to recite the substance of that evidence at paragraphs 24 to 26 of her Reasons. On appeal, BlueScope refers to that evidence. Conservation Volunteers refer to the events at the Arbitration simply to make a submission regarding the test of causation relied upon by BlueScope. BlueScope has not challenged this contention.
Though the absence of the transcript can be a ‘serious shortcoming’, I am satisfied that its absence in the present matter does not, in the circumstances of this appeal and in light of the matters raised on appeal, adversely affect the due exercise of the review process under section 352 and does not require the matter to be reheard (Aluminum Louvres & Ceilings Pty Limited v Xue Qin Zheng [2006] NSWCA 34).
Consequently, having regard to Practice Directions Numbers 1 and 6, I am satisfied that I have sufficient information to proceed ‘on the papers’, without holding any conference or formal hearing.
LEAVE
Monetary Threshold
Before proceeding to deal with an appeal the Commission must determine whether the application meets the requirements of section 352 of the 1998 Act.
The quantum in issue on the appeal is in excess of $5,000.00 and therefore the threshold in section 352(2)(a) of the 1998 Act is satisfied. At least 20% of the amount awarded is “at issue” on appeal and, therefore, the condition in section 352(2)(b) is also satisfied.
Time
The appeal was lodged within 28 days of the Arbitrator’s decision in compliance with section 352(4) of the 1998 Act.
I grant leave to appeal.
ARBITRATOR’S FINDINGS
As indicated, the injuries of 13 September 2000 and 1 September 2004 were not disputed. However, at the Arbitration, both Conservation Volunteers and BlueScope disputed:
·liability with respect to the payment of medical expenses for treatment after the 2004 injury;
·whether the proposed surgery is ‘reasonably necessary’ as a result of either or both injuries, and
·if such surgery was found to be reasonably necessary, liability for the cost of that surgery and consequential treatment (estimated at $28,239.00).
The expenses for treatment from 2000 to 2004 relating to the 2000 injury have been paid by the GIO (Reasons, paragraph 29).
The Arbitrator noted that the past expenses were accounts from Dr Haber (the orthopaedic surgeon who will undertake the proposed knee surgery), Dr Puri and a Health Insurance Commission charge related to the treatment immediately following the 2004 injury. She concluded that the expenses from 1 September 2004 to date should paid by both Conservation Volunteers and BlueScope equally given her findings in relation to the liability for medical expenses and the fact that some of the outstanding accounts relate to the referral to Dr Haber and the possibility of surgery.
Having dealt with the past expenses, the Arbitrator then turned to consider the proposed surgery. First, she considered whether the proposed surgery is, as required by section 60, “reasonably necessary”. After examining the case law and the conflicting evidence the Arbitrator found that the proposed surgery is reasonably necessary as a result of the injury or injuries as alleged (Reasons, paragraph 40). This finding is not challenged on appeal. Second, she considered the issue of apportionment between the two employers. It is the Arbitrator’s findings in relation to apportionment that are challenged on appeal.
The Arbitrator considered section 22 and the test of causation in that section. She recited the parties’ submissions in relation to the medical evidence and concluded that, as submitted by Mr Khourey, the need for the proposed surgery resulted from the effects of both the first and second injury. After determining that both injuries caused the need for the surgery she proceeded to apportion the liability equally between BlueScope and Conservation Volunteers.
THE EVIDENCE
Mr Khourey gave evidence that he first injured his left knee when he was surfing at the age of 16 (Mr Khourey’s statement 25 October 2005, paragraph one). At that time he sought treatment from his local general practitioner and “may have had some physiotherapy” and the knee came good.
As noted earlier, Mr Khourey’s oral evidence has not been transcribed but a summary of it has been reproduced in the Arbitrator’s Reasons at paragraphs 24 to 26 inclusive. On appeal, the parties have not challenged the accuracy of this summary. Essentially, Mr Khourey’s oral evidence was to the following effect:
· after his surfing injury he was advised that he needed an arthroscopy but did not have one as he recovered after being on crutches for six weeks and resting;
· after the 2000 injury and arthroscopy his knee settled enough for him to join the Australia Defence Force;
· he was able to perform the strenuous activities required of him by the Defence Force;
· following his discharge from the Defence Force, he was able to work as a builder’s labourer and as a labourer on the railways;
· the 2004 injury was not an insignificant injury;
· the 2000 injury was “the most significant of all the injuries” (Reasons, paragraph 26), and
· since the 2000 injury he protected the left knee and he could not play contact sports.
The injury on 1 September 2000 occurred when Mr Khourey was playing sport during his lunch break when he jumped and landed heavily on his left leg, twisting his knee and falling to the ground.
He sought medical attention from his local doctor and was referred for x rays and then to Dr Puri, orthopaedic surgeon, of Wollongong. X rays taken on 15 September 2000 revealed:
“There is a small bone fragment fracture from the medial articular surface of the patella. A small bone fragment is also seen within the tibiofemoral joint space and this probably arises from a defect seen in the articular surface of the lateral femoral condyle. There is a large joint effusion.”
On examination on 18 September 2000 Dr Puri found moderate effusion in the knee joint with movements restricted from 0° to 60° of flexion. Dr Puri recommended arthroscopic surgery which was carried out at Wollongong Hospital on 28 September 2000. The surgery confirmed that Mr Khourey had “an osteochondral fracture arising from [the] patello-femoral part of the knee, which needed trimming and detachment” (Dr Puri, report 21 September 2004). Dr Puri added in his September 2004 report that he felt it was possible that Mr Khourey “has a subluxating [sic] left patella, which predisposes him to this injury”. The surgery confirmed that Mr Khourey’s patella was unstable but there was no significant damage to the menisci or cruciate ligaments (Dr Puri, report 3 October 2000).
Mr Khourey made a good recovery from the surgery and at review on 11 December 2000 he reported to Dr Puri that his knee was asymptomatic. He was discharged from further treatment and follow up. Dr Puri’s opinion was that the excessive rotational strain on Mr Khourey’s left knee during sport had caused “subluxation of his patella leading to an osteochondral injury accompanied by some soft tissue damage”.
At paragraph three of his statement of 25 October 2005 Mr Khourey states that his left knee was “never 100 per cent normal again” after the 2000 injury but he “was not having any real problems with it”.
On 19 June 2001 Mr Khourey joined the Australian Army where he underwent the usual medical examinations before being accepted. He also successfully completed all necessary basic training and served in the army for approximately 16 months before being voluntarily discharged for reasons unrelated to his knee.
In June 2004 he started work for BlueScope as an ‘operator’ which merely involved him in pushing buttons to operate machinery. On 1 September 2004 Mr Khourey was on a ‘roll car’ checking the rolls were in position to go into the machine. There were two steps from the roll car to the ground. As they were small and slippery, Mr Khourey jumped to the ground and landed awkwardly on his left leg feeling pain in his left knee. In his statement of 20 September 2004 Mr Khourey says that the pain passed after standing still a short time, but returned later that afternoon restricting his walking. The pain did not subside as he had hope and he saw Dr Tague on 3 September 2004. He was again referred for x rays and to an orthopaedic surgeon (Dr Haber).
The x ray report dated 9 September 2004 revealed:
“Ther [sic] is some local irregularity of the articular surface of the lateral femoral condyle towards its anterior aspect which is consistent with an old osteochondritis.
No intra-articular loose bodies are seen. There is no sign of joint effusion.”
Mr Khourey saw Dr Haber on 9 September 2004 complaining of moderate pain in his left knee and being unable to perform his usual work or recreational activities due to pain. On examination Dr Haber noted moderate wasting, a large effusion and a mild valgus deformity. The range of motion of the left knee was restricted with “pseudo laxity…suggesting significant lateral compartment wear” (Dr Haber, report 9 September 2004). Arrangements were made for an MRI scan.
About three weeks after starting with BlueScope a medical examination was arranged by the company with Dr Parish. In his report of 17 September 2004 Dr Parish does not give the date of his examination of Mr Khourey, but the clear inference is that the examination took place before the 1 September 2004 injury. On examination Dr Parish noted that Mr Khourey did not have full flexion of the left knee and that the McMurray’s test was positive, suggesting “that something was pathological in his medial compartment”. The doctor noted that there had been an aggravation at work on 1 September 2004 but he was not sure what the details were. He felt that the findings on the x ray of 9 September 2004 indicated a pre existing condition which had been exacerbated by the incident on 1 September 2004.
An MRI scan was performed on 20 September 2004 by Dr Chan who stated under ‘comment’:
“1.The ACL [anterior cruciate ligament] shows high grade near full thickness tear. There does not appear to be complete disruption of continuity.
2.An osteochondral lesion 1.2 x 1.2 cms in extent is noted related to the lateral femoral condyle.
3.There is an impression of two osseous bodies 5 and 7 mms in size at the postero-medial aspect of the intercondylar notch.
4.A small osteochondral lesion 9 x 9 mms in extent is noted at the anterior aspect of the lateral femoral condyle associated with a partially detached osseous body 6 mms in size.
5Tiny joint effusion in the supra-patella bursa.”
In a report by Dr Haber to BlueScope date 23 September 2004 the doctor reviewed the MRI scan and noted that subjectively Mr Khourey’s knee had “settled down but he had recurrent episodes of exacerbation and has been unable to return to sport”. The doctor’s opinion was that:
“…due to persistent symptoms, athroscopic debridement of the knee is indicated. At the time, if a significant chondral defect is identified, a need for future chondral grafting may by identified, then chondral harvesting with a second stage grafting may be required. There is also a small possibility an ACL reconstruction will be required in the future.
I therefore suggested initially an athroscopic debridement and if indicated a chrondral harvest, in preparation for a second stage reinsertion. Alternatively, a debridement only could be performed at this stage.” (emphasis added)
In a report to Mr Khourey’s solicitors dated 1 November 2004 Dr Haber confirmed the history set out in his earlier reports and stated under ‘conclusion’:
“This patient has a significant injury to the cartilage on the outside of his knee and may have potentially an ACL tear as well. At his young age, a cartilage defect may progress to frank osteoarthritis quite rapidly if not appropriately treated. I note he has had a previous arthroscopy in September 2000 by Dr Puri at Wollongong Hospital. An osteochondral injury was noted at that stage at the lateral femoral condyle. It is therefore feasible that the initial injury in 2000 has initiated his current problem, but his re-injury has exacerbated the condition which was I understand asymptotic [sic] up until the injury dated the 1st September 2004.” (emphasis added)
On 16 February 2005 Mr Khourey’s solicitor wrote to Dr Haber stating, among other things:
“The essential question we need answered in this case is whether the need for this surgery at this point in time arises from the original injury in 2000 or the aggravation at Bluescope Steel (AIS) Pty Limited in 2004.
In particular we note Mr Khourey states that he was basically a symptomatic [sic] prior to this incident is it therefore unlikely that he would have required this surgery at any time in the near future had the aggravating incident in September 2004 not occurred [?]”
Dr Haber replied to this letter on 23 February 2005 as follows:
“I did also understand that he was asymptomatic prior to the incident in 2004 and the aggravation at Bluscope in 2004 made his current condition symptomatic and therefore I agree without this incident he may not have needed to proceed with surgery. Nevertheless, the underlying disorder would have resulted in some symptoms at some stage, but clearly the 2004 incident brought this on earlier than it may have otherwise occurred. Of course it is impossible to speculate, had he not had the incident in 2004, when this would have become a significant problem.” (emphasis added)
On behalf of BlueScope Mr Khourey was examined by Dr Lyons on 27 October 2004 (report 29 October 2004). In his opinion Mr Khourey’s problem is that of recurrent dislocation or subluxation of the patella. He added:
“I consider that an unstable patella has been his continuing problem over the subsequent years with repeated episodes and he obviously developed a major ostechondral lesion of the lateral femoral condyle in the past which has left a surprising degree of deformity and narrowing of the lateral joint line. This represents a major lesion of longstanding with a poor longterm prognosis in a man of twenty-three years of age.
The incident at BlueScope Steel was obviously associated with a giving way of the knee almost certainly due to a minor patellar subluxation when he jumped down 600mm to the ground. This has caused temporary aggravation of his knee in the form of an acute synovitis but I consider that this aggravation is settling and should do so completely by the end of the year.
I do not consider that you have longterm liability here for this major chronic lesion. Dr Haber is obviously concerned and needs to do a preliminary arthroscopy which would be perfectly reasonable to assess the lesion.”
In his report of 6 December 2004 Dr Lyons commented on film of Mr Khourey riding a bike, running and walking. He felt that the film was:
“…not absolute but to a degree supports my diagnosis that this man has a recurrent dislocation or subluxation of his left patella, apparently aggravated from time to time by episodes of instability, from each of which he recovers satisfactorily”.
On 16 January 2006 Mr Khourey was examined by Dr Bornstein on behalf of BlueScope. Under ‘opinion’ the document stated:
“Having regard to the fact that the x ray taken a matter of five days after the incident does show irregularity in the lateral femoral condyle, it seems quite likely that this dates back to the earlier injury incidents that this young man has sustained in his knee joint. I cannot say whether it is due to the 2000 incident or to the incident while body-surfing. Nevertheless, the patient certainly has had problems in his knee joint in the past.
Following the current injury incident it is uncertain as to what damage may have been caused. He was experiencing problems at the time of the most current injury incident. He did not lose any particular time following on the most current injury incident for your client.”
In response to the specific questions put to him BlueScope’s solicitors, Dr Bornstein stated:
“The patient has made a fairly good recovery but he did have pre-existing problems and I would believe that the incident under discussion would have aggravated those on a temporary basis only. I don’t believe that any new injury was caused to the knee joint.”
On behalf of Conservation Volunteers Mr Khourey was examined by Dr Ho, orthopaedic surgeon, on 12 January 2006. In his report of the same date Dr Ho recorded that Mr Khourey “constantly noticed problems in the left knee” and it is always painful and swollen if he uses it too much. On examination there was obvious wasting (Dr Bornstein said he found no wasting at his examination on 16 January 2006). Under ‘opinion’ Dr Ho stated:
“I believe this man has some osteochondritis condition of the knee and probably a certain degree of patello-femoral joint dysplacia [sic] with underlying rotational malalignments [sic] of the left lower limb. So he was predisposed to patella dislocations. He probably had some injury when he was only 16 which seemed to be settling down after a few months as he was still very young. This condition was aggravated and significantly exacerbated by the injury in the year 2000 because there was acute dislocation of the knee cap. So he is left with chondral problems in the patellar and femoral condyle even though the arthroscopy [was] able to remove some loose bone fragments, there was still some residual bone fragments in those areas. Now he has residual problems due to instability of the patello-femoral joint. Osteochondral lesions which are causing the irregularity in the articular surface and hence predisposing him to pain and lose [sic] of full function of the left knee.”
In answer to a question posed by the solicitors for Conservation Volunteers about the cause of Mr Khourey’s restrictions for work, Dr Ho stated that:
“The cause of this is certainly related to the existing conditions of osteochondritis and certainly related to the injury occurring in the year 2000 which caused an acute dislocation and dislodgment of loose bodies” (report, 12 January 2006 page three).
Dr Ho assessed Mr Khourey to have a 10% impairment of the left lower limb at and above the knee and stated that he believed “¾ of the permanent impairment [was] sustained in the year 2000. The remaining quarter is due to pre-existing problems”.
The solicitors for Conservation Volunteers wrote to Dr Ho on 7 February 2006 requesting the doctor to, among other things, apportion liability for Mr Khourey’s permanent loss of use of left knee in percentage terms between the incidents on 13 September 2000 and 1 September 2004. The doctor responded on 8 February 2006 as follows:
“In my previous report dated 12 January 2006, I assessed one-quarter of the present disability was due to a pre-existing condition (what we call osteochondritis dissecans), and three-quarters was due to the subsequent injury.
To try to apportion the liability in percentage terms between the incident on 13 September 2000 and 1 September 2004, I believe the first injury on 13 September 2000 should account for at least fifty per cent of the present disability, while the injury on 1 September 2004 would account for twenty-five per cent of the present disability.”
The doctor was also asked whether he agreed that the need for arthroscopic debridement of Mr Khourey’s left knee had arisen as a consequence of the further injury sustained on 1 September 2004. The doctor was referred to the reports of Dr Haber of 1 November 2004 and 23 February 2005. Dr Ho replied as follows:
“I would tend to agree the need for arthroscopic debridement of the applicant’s left knee has arisen as a consequence of the further injury sustained on 1 September 2004 because this has caused the further problems in the knee and required intervention. However, in terms of percentage disability, I still believe that most of it was contributed to by the injury on 13 September 2000, and I assess it to account for fifty per cent. The pre-existing condition and the injury on 1 September 2004, I would assess as accounting for twenty-five percent each.” (emphasis added)
DISCUSSION AND FINDINGS
Ground A – Incorrect Test of Causation
BlueScope submits that the Arbitrator applied an incorrect test in determining that the 2004 injury was causative of the need for the proposed surgery.
The test of causation for the purposes of the 1987 Act is that laid down in Kooragang Cement Pty Ltd v Bates (1994) 35 NSWLR 452 (‘Kooragang’).
In that case Kirby P (as he then was) noted that there had been a number of authorities, including Pickersgill v Freight Base Pty Ltd (1983) 3 NSWLR 117 (‘Pickersgill’), in which the view was expounded that the phrase “results from” is limited to the immediate or proximate cause of incapacity or death.
His Honour considered the authorities and stated at 463-4:
“The result of the cases is that each case where causation is in issue in a workers compensation claim, must be determined on its own facts. Whether death or incapacity results from a relevant work injury is a question of fact. The importation of notions of proximate cause by the use of the phrase ‘results from, is not now accepted. By the same token, the mere proof that certain events occurred which predisposed a worker to subsequent injury or death, will not, of itself, be sufficient to establish that such incapacity or death ‘results from’ a work injury. What is required is a common sense evaluation of the causal chain. As the early cases demonstrate, the mere passage of time between a work incident and subsequent incapacity or death, is not determinative of the entitlement to compensation. In each case, the question whether the incapacity or death ‘results from’ the impugned work injury...is a question of fact to be determined on the basis of the evidence, including, where applicable, expert opinion.”
In Kooragang Kirby P also noted the division in the authorities as to whether the common law principles of causation apply to workers compensation cases.
The test in Kooragang was affirmed by Clarke JA in Sutherland Shire Council v Baltica (1996) 39 NSWLR 87 (‘Baltica’). In obiter comments Clarke JA expressed the view that the test of causation for the workers compensation legislation could be equated with the test at common law.
In the present case, the Arbitrator considered the issues of causation and apportionment under section 22 of the 1987 Act commencing at paragraph 43 of her Reasons where she outlined the relevant law as follows:
“In Sutherland Shire Council v Baltica General Insurance Co Ltd (1996) 39 NSWLR 87, Clarke JA expressed the view (obiter) that the correct test of causation under the Act was that applied under the law of tort and as expressed by the High Court of Australia in March v E and MH Stramare Pty Ltd (1991) 171 CLR 506. I interpret this to mean that my task is to look at the question of whether or not a liability to pay medical and treatment expenses ‘results from more than one injury’ and that this is to ‘be determined by a value judgment involving ordinary notions of language and common sense’ (per Deane J. March v Stramare).”
The Arbitrator then considered the medical evidence and reached the following conclusions about causation and apportionment at paragraphs 48 to 50 inclusive of her Reasons:
“Applying a commonsense approach to the above evidence, I am unable to separate the two injuries as far as the need for surgery resulting from one or the other. They have each played a role. The injury in 2000 did not completely settle. There is no doubt that the Applicant had a weakness prior to 2000, and that the weakness increased as a result of the injury in 2000. There is also no doubt that the Applicant sustained a significant injury in 2004. The first injury had the greater effect in respect to any change in pathology however; it is the second injury that was the most proximate cause of the current incapacity.
I note that Dr Ho seeks to apportion liability between the injuries and the pre-existing condition (as a result of the surfing injury). However, Dr Ho does not explain his change of opinion as expressed on 8 February 2006 and I have given his opinions lesser weight as a result.
The commonsense approach demands that I find that the First and Second Respondents are both liable for the payment of medical and treatment expenses that the Applicant may elect to have in the future, subject of course to those being reasonably necessary as a result of the injuries as alleged. The liability to pay compensation shall be apportioned accordingly.” (emphasis added)
BlueScope submits that paragraph 48 of the Arbitrator’s determination is the “essential paragraph on causation” and is fundamentally flawed. It is submitted that the Arbitrator has erroneously based her determination on the “proximate cause” notion (as contained in Pickersgill) which was rejected in Kooragang. It is also argued that, as incapacity was not in issue in the case, there is no basis in logic or law to determine the need for prospective surgery with reference to the proximate cause of the current incapacity. Consequently, BlueScope submits that the Arbitrator’s finding that each of the injuries played a role is incorrect.
Conservation Volunteers submits that the Arbitrator’s reference to “current incapacity” is clearly erroneous and it is apparent the she intended to refer to the need for medical treatment. I am not sure that that is the correct interpretation of the Arbitrator’s Reasons. The application of the ‘proximate cause test’ in relation to incapacity or medical expenses would involve an error.
The difficulty in the present case is that the Arbitrator made a finding with respect to causation at the commencement of paragraph 48 of her Reasons where she stated “applying a commonsense approach to the above evidence, I am unable to separate the two injuries as far as the need for surgery resulting from one or the other. They have each played a role”. The Arbitrator’s reference to the “commonsense approach” reflects her summary of the law at paragraph 43 of her Reasons and it is clear that, using that approach, she found that both the 2000 injury and the 2004 injury have resulted in the need for Mr Khourey’s further treatment.
As submitted by the Conservation Volunteers, if the Arbitrator had applied the incorrect test, namely, the test expounded in Pickersgill, she would have determined that BlueScope pay for the whole of the treatment expenses because that test limited causation to the immediate proximate cause and the proximate cause of Mr Khourey’s problem is, on one view of the evidence, the 2004 injury. The Arbitrator did not do that. She merely referred to the proximate cause as being a factor in her determination as to why BlueScope carried some liability. Therefore, I reject this ground of appeal.
Although not raised by this ground of appeal, I note that rather than referring to the test of causation in Kooragang, the Arbitrator referred to the test in March v E & MH Stramare Pty Ltd (1991) 171 CLR 506 (‘March’). Clarke JA in Baltica refers to that case in relation to the concept of causation at common law and notes that it involves a “commonsense” test. However, Clarke JA’s view that the test of causation for the workers compensation legislation can be equated with the test at common law was (as the Arbitrator noted) obiter. Conservation Volunteers assert that at the arbitration BlueScope submitted that March contained the relevant test. As Kirby P in Kooragang stated, what is required is a “common sense evaluation of the causal chain” and the test in March requires a “commonsense” approach. The Arbitrator’s determination is consistent with both tests and discloses no error of fact, law or discretion.
Ground B – Failure to Give Adequate Reasons
BlueScope submits that the Arbitrator failed to provide any adequate reasons for the determination that the 2004 injury was causative of the need for the proposed surgery.
In particular, BlueScope argues that:
“It is not enough that the Arbitrator listed in her judgment every piece of evidence given in the case, nor is it enough that there is a bland restatement of the contents of the medical reports. What are required are adequately stated reasons. The second respondent [BlueScope] submits that this involves a consideration of any conflict between the opinions of competing expert medical evidence and reasons which show the thought processes of the decisionmaker [sic]; why one medical opinion is accepted over another medical opinion, if this be the case, and the basis upon which the decisionmaker [sic] came to the decision that they did.”
In reply, Conservation Volunteers note that the essence of the complaint is that the Arbitrator did not deal adequately with the reports and opinions of medical experts as to which injury the need for treatment resulted from and say which she accepted and which she rejected. Conservation Volunteers note, amongst other things, that the Arbitrator summarised the relevant medical evidence and submit that:
“…[s]he states she is unable to separate the effects of each injury in relation to the need for surgery. She then gives a very brief conclusion of her view of all of the evidence in terms of continuing pathology and the traumatic effect of the last incident. Her reference to incapacity is clearly erroneous and it is apparent she intended to refer to the need for medical treatment.
Whilst the Arbitrator has combined her determination in relation to whether both injuries have resulted in a need for treatment by surgery and apportionment of that liability as between the Respondents [BlueScope and Conservation Volunteers], and she has not been more specific in relation to the various medical opinions, her reasons provide sufficient insight into her reasoning in accordance with Kirby J’s observations in Minister for Immigration and Multicultural Affairs v Wu Shu Liang (1996) 185 CLR 259 (Liang).” (Conservation Volunteers submissions, paragraphs 19 and 20)
The failure to provide adequate reasons constitutes an error of law and may be a ground to set aside the Arbitrator’s decision. It is clear that Arbitrators have a statutory obligation to provide adequate reasons for their decisions (section 294(2) of the 1998 Act; Part 15 Rule 15.6 of the Workers Compensation Commission Rules 2006 (‘the Rules’); Absolon v NSW TAFE [1999] NSWCA 311).
Relevantly, Rule 15.6 provides that:
“(1) A statement of the Commission’s reasons referred to in section 294(2) of the 1998 Act is to include:
(a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, and
(b) the Commission’s understanding of the applicable law, and
(c)the reasoning processes that lead the Commission to the conclusions it made.
(2) Without limiting subrule (1), the reasons set out in a statement referred to in subrule (1) are to be stated sufficiently (in the opinion of the Commission) to make the parties aware of the Commission’s view of the case made by each of them.”
To succeed in having the decision set aside on this ground BlueScope must demonstrate not only that the reasons are inadequate, but that their inadequacy discloses that the Arbitrator has failed to exercise the statutory duty to fairly and lawfully determine the application (YG & GG v Minister for Community Services [2002] NSWCA 247; Absolon v NSW TAFE [1999] NSWCA 311; ADCO Constructions Pty Ltd v Ferguson [2003] NSWWCCPD 21).
The standard by which the adequacy of reasons must be determined is relative to the nature of the decision itself and the decision-maker (Mayne Health Group t/as Nepean Private Hospital v Sandford [2002] NSWWCCPD 6). An Arbitrator’s reasons should be read as a whole and it is not for a Presidential Member on review to comb through the Arbitrator’s findings and reasons in search of error (Beale v GIO (NSW) (1997) 48 NSWLR 430 at 444; Minister for Immigration and Multicultural Affairs v Wu Shu Liang (1996) 185 CLR 259).
The Arbitrator’s only explicit reference to an evaluation of the medical evidence occurs at paragraph 49 of her Reasons where she refers to Dr Ho’s evidence (relied on by Conservation Volunteers). The Arbitrator noted that Dr Ho did not explain his change of opinion as expressed in his report of 8 February 2006 and, as a result, she gave his opinion less weight.
Apart from the comments about Dr Ho’s evidence, the Arbitrator made no findings as to which medical evidence she accepted or rejected. That failure is a breach of an Arbitrator’s duty to state his or her reasons for reaching a particular conclusion. Reading the decision as a whole I am unsure of the basis for the conclusions expressed and for this reason the Arbitrator has erred in law. However, as there were no credit findings I believe I am in as good a position as the Arbitrator to redetermine the matter and that is the course I propose to adopt.
Ground C – Failure to Consider the Expert Medical Evidence on the Issue of Causation
BlueScope submits that the Arbitrator “in determining what was essentially a medical issue failed to pay due or indeed any regard to the expert medical evidence presented on the question of causation.” It is argued that there was a large body of medical evidence dealing directly with the question whether the injury in the employ of BlueScope was causative of the need for the proposed further surgery and none of this evidence was properly addressed or considered.
BlueScope challenges what it asserts is the acceptance by the Arbitrator of the evidence of Dr Haber that prior to the 2004 injury Mr Khourey was asymptomatic. They assert that this history was clearly incorrect. A consideration of the Arbitrator’s Reasons at paragraph 48 reveals that she was not of the view Mr Khourey’s left knee was asymptomatic in the period before the 2004 injury.
What at first appears to be an analysis of the medical evidence at paragraphs 44 to 47 inclusive of the Arbitrator’s reasons is in fact a recitation of the parties’ submissions at the Arbitration. There is no considered scrutiny of the evidence and no findings of which evidence is accepted and which evidence is rejected. This involves an error of law.
Conservation Volunteers submit that as the ultimate arbiter of fact, the Arbitrator’s conclusions and findings cannot be disturbed even on a review basis (citing Watson v Hanimex Colour Services Pty Ltd (1991) 8 NSWCCR 190 per Kirby P at 208 A-G (‘Watson’)). A consideration of the passage cited does not appear to support the submission made. In fact, Watson is more appropriately cited as authority for the principle that, on review, a Presidential Member must not overturn findings based on credit unless they are clearly based on an obvious mistake or misapprehension of the relevant facts (see for example, Star City Pty Ltd v Azam [2004] NSWWCCPD 34; Goodman Fielder Limited v Alasmar [2004] NSWWCCPD 43; and Dive v Sutherland Shire Council and Linfox Australia Pty Ltd [2006] NSWWCCPD 104).
Grounds D and E
The submissions with respect to Grounds D and E are set out together in the submissions in support of BlueScope’s Application for Leave to Appeal. Ground D is stated as follows:
“That even if it be determined that the Arbitrator was correct in finding that the injury of 1 September 2004 in the employ of the second respondent was causative of the need for further operative treatment (such conclusion the second respondent submits was not open on the facts), the Arbitrator applied a wrong test when purporting to deal with the question of apportionment pursuant to s22 of the Workers Compensation Act 1987.”
This ground of appeal is directed to the Arbitrator using an “incorrect test” for apportionment. BlueScope’s submissions assert that the Arbitrator appears to have determined liability of each of the respondents presumably on the basis that there were two respondents which, they assert, is not an appropriate exercise of discretion and ought to be overturned. The submissions do not identify the test that should have been applied by the Arbitrator.
Ground E is expressed similarly to Ground D as follows:
“That even if it be determined that the Arbitrator was correct in finding that the injury of 1 September 2004 in the employ of the second respondent was causative of the need for further operative treatment (such conclusion the second respondent submits was not open on the facts), the Arbitrator failed to give adequate reasons for her decision in dealing with the question of apportionment pursuant to s22 of the Act.”
BlueScope assert that the Arbitrator did not attempt any rational analysis of the medical reports and then indicates that she is unable to separate the two injuries as far as the need for surgery is concerned. It is submitted that the Arbitrator provided no reasons as to why she was so unable and that there was “ample basis” upon which she could have determined the question of apportionment.
In reply, Conservation Volunteers submit that the Arbitrator’s statement that she is unable to distinguish between competing conclusions as to whether the need for treatment results from either injury or both injuries is logical. They submit that she set out at paragraphs 16 to 18 of her Reasons the evidence to which she attached greater weight and in paragraphs 44 to 47 the arguments in relation to that evidence. I note that paragraphs 16 to 18 are referred to by the Arbitrator as setting out the “relevant medical evidence” and are not located with the Arbitrator’s findings. As such it does not appear that these paragraphs contain the Arbitrator’s reasoning in relation to the weight she was attaching to the various medical opinions. There is no indication of which of the various opinions the Arbitrator accepted and which she rejected.
With respect to the adequacy of the Arbitrator’s reasons, I refer to my finding at paragraph [75] above.
Further issue
In support of their Notice of Opposition, Conservation Volunteers submit that as a general matter, the Appeal by BlueScope is an attempt to re-litigate issues properly determined by the Arbitrator citing Despotellis v Franklins Limited (2004) NSWWCCPD 65 and Evans v Halcrow Bros Transport Specialists Pty Ltd (2004) NSWWCCPD 82.
Neither of those determinations is relevant to this appeal. Both cases concerned the question of leave to appeal in which context an attempt to re-litigate issues before the Arbitrator is relevant. However, once leave to appeal is granted (which it has been in this matter) a determination of an Arbitrator (and issues raised before the Arbitrator) may be challenged on review on the basis of an error of law, fact or discretion (Allesch v Maunz (2000) 203 CLR 172, as applied to the Commission in Mayne Health Group t/as Nepean Private Hospital v Sandford [2002] NSWWCCPD 6; The King Island Company Limited v Deery [2005] NSWWCCPD 1).
REDETERMINATION
I have set out the evidence in this case in detail above. Applying the test of causation set out in Kooragang, I believe that the need for future surgery and treatment on Mr Khourey’s left knee is reasonably necessary under section 60 of the 1987 Act as a result of the combined effect of both the 2000 injury and the 2004 injury. My reasons for this finding are set out below.
First, both injuries have caused damage to Mr Khourey’s left knee. That is evidenced by the additional pathology shown on the investigations done in 2004 compared to the operative findings at the surgery in 2000 (see MRI scan 20 September 2004).
Second, the effect of the 2000 injury had not ceased by 2004. Mr Khourey was symptomatic shortly before the 2004 injury though the nature and extent of those symptoms is not known in any great detail. Dr Haber’s history that Mr Khourey was asymptomatic until 2004 was incorrect.
Third, Mr Khourey never fully recovered from the effects of the 2004 injury. The evidence for this is found in Dr Ho’s report of 12 January 2006 referred to at paragraph [49] above, which I accept. Neither party has submitted that Mr Khourey was cross examined on this issue or that he conceded that he had made a full recovery from the 2004 injury. Therefore, I reject the evidence of Drs Bornstein and Lyons that the 2004 injury was only a temporary aggravation of a pre existing problem. Dr Bornstein concedes that it is uncertain what damage may have been caused by the 2004 injury and then states, on the basis that Mr Khourey had made a fairly good recovery that he did not believe any new injury was caused to the knee joint at that time. On the basis of the history to Dr Ho, I do not accept that Mr Khourey made a ‘fairly good recovery’ from the 2004 injury. Dr Lyons took a history in October 2004 that Mr Khourey’s left knee had “moderately settled” (page two) but it was “intermittently a little swollen and he could not fully bend it”. The doctor thought that the 2004 incident had caused a temporary aggravation of the knee in the form of acute synovitis but the aggravation was “settling and should do so completely by the end of the year” (page three). The more recent history from Dr Ho makes it clear that Dr Lyons’ optimism was misplaced. Mr Khourey’s knee did not settle by the end of 2004 and had not settled by January 2006.
Fourth, due to the persisting symptoms resulting from the 2004 injury, Dr Haber felt that arthroscopic debridement of the left knee was “indicated” (Dr Haber, 23 September 2004). This evidence would justify a finding that the need for that arthroscopy had resulted solely from the 2004 injury. This opinion is supported by Dr Ho at page two of his report of 8 February 2006 quoted at [53] above.
However, Dr Haber’s opinion that the arthroscopy was “indicated” due to the persisting symptoms resulting from the 2004 injury is tainted by his incorrect history that Mr Khourey was asymptomatic before the 2004 injury. However, this error did not lead the doctor to conclude that the 2000 injury was irrelevant. He correctly noted that the 2000 injury “initiated his current problem” (report, 1 November 2004) and the “underlying disorder would have resulted in some symptoms at some stage” (report 23 February 2005). Dr Ho had a full history but provided two reports giving different percentages on apportionment. The difference can be explained by the fact that the doctor was asked different questions in each report. Whilst he was aware of the 2004 injury when he prepared his first report, he was not asked to give an opinion about the consequence of that event until he received the letter of 7 February 2006.
BlueScope attacks Dr Ho saying that it “is hard to fathom his logic” (BlueScope’s submissions A4). His logic is simple. Mr Khourey was functioning reasonably well without the need for treatment until the 2004 injury. The injury in 2004 caused an increase in symptoms and a need for exploratory surgery. The need for the exploratory surgery has resulted from the 2004 injury. However, to make such a finding would not be appropriate in light of the evidence of Mr Khourey’s problems resulting from the 2000 injury.
Dr Parrish’s report is of little assistance. It notes that Mr Khourey had reduced flexion in his knee and a positive ‘McMurray’s test’. However, the doctor conceded that “very little would be needed to exacerbate this problem”. He did not examine Mr Khourey after the 2004 injury but he thought that that injury had “obviously” exacerbated the pre existing problem. His report related to an examination done before that injury. Though his notes from that examination were not tendered, he presumably certified Mr Khourey fit for work at that examination. This would tend to indicate that whatever Dr Parrish found on examination was not particularly significant as BlueScope was happy for Mr Khourey to continue working for them.
The method by which liability is to be apportioned under the 1987 Act is set out in section 22A which provides that in the case of liability between employers, apportionment is to be on the basis of the relative length of the worker’s service, or on “such other basis as the Commission considers just and equitable in the special circumstances of the case” (section 22A(1)(a)). The length of service test is not appropriate in the present case which concerns the effect of two frank injuries.
Apportionment of section 60 expenses is not an exact science. The evidence in this case is far from ideal. No doctor was called to give oral evidence and be cross examined about the shortcomings in his reports. Dr Ho apportions liability for Mr Khourey’s ‘disability’ 50% to the 2000 injury and 25% to the 2004 injury. He does not apportion liability for the proposed initial arthroscopy at all but states that the need for that treatment has “arisen as a consequence of the further injury” in 2004. Drs Lyons and Bornstein do not provide any opinion on apportionment but merely state that any aggravation with BlueScope has ceased. Dr Haber has an incorrect history about the prior symptoms but acknowledges that Mr Khourey had an underlying disorder. Dr Puri, the doctor who performed the surgery in 2000, did not see Mr Khourey after the 2004 injury and offers no opinion on the issue I have to determine.
In these circumstances the determination of a ‘just and equitable’ apportionment is extremely difficult. It is neither just nor equitable that BlueScope should pay for all of the cost of the proposed surgery though that conclusion is quite logical on one view of the evidence. It is simply not possible to do other than conclude that the proposed treatment has resulted from both injuries. In other words, the result of the combined effect of the two injuries is that Mr Khourey requires surgery on his left knee. Doing the best I can with the available evidence it is my opinion that a ‘just and equitable’ apportionment of liability for reasonably incurred section 60 expenses in the present case is 50:50 between BlueScope and Conservation.
DECISION
It follows from the above reasons that whilst the Arbitrator’s reasons were inadequate, her conclusion was correct.
For the reasons stated in this decision, the Arbitrator’s decision and findings dated 6 March are confirmed.
COSTS
BlueScope is ordered to pay the costs of Conservation Volunteers and of Mr Khourey in respect of the appeal.
Bill Roche
Acting Deputy President
13 November 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF BILL ROCHE, ACTING DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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