BlueScope Steel Limited v Zancolich
[2006] NSWWCCPD 149
•13 July 2006
WORKERS COMPENSATION COMMISSION
DETERMINATION OF APPEAL AGAINST A DECISION OF THE COMMISSION CONSTITUTED BY AN ARBITRATOR
CITATION:BlueScope Steel Limited v Zancolich [2006] NSWWCCPD 149
APPELLANT: BlueScope Steel Limited
RESPONDENT: Paul Zancolich
INSURER:Self insurer
FILE NUMBER: WCC17950-05
DATE OF ARBITRATOR’S DECISION: 14 February 2006
DATE OF APPEAL DECISION: 13 July 2006
SUBJECT MATTER OF DECISION: Sections 38 and 40 of the Workers Compensation Act 1987; inadequate reasons for decision and evaluation of the evidence.
PRESIDENTIAL MEMBER: Deputy President Gary Byron
HEARING:Determined on the papers
REPRESENTATION: Appellant: Sparke Helmore, Lawyers
Respondent: Russell McLelland Brown, Lawyers
ORDERS MADE ON APPEAL: The decision of the Arbitrator, dated 14 February 2006, in relation to orders 1 and 2 of her award, is revoked, and the matter is remitted to the Arbitrator concerned for determination afresh in accordance with these reasons. The Arbitrator is directed to prepare and provide a written Statement of Reasons for Decision.
No order is made as to the costs of this appeal.
BACKGROUND
Mr Paul Zancolich, the Respondent Worker in this appeal, was employed with BlueScope Steel Limited (‘BlueScope’), the Appellant, from January 1986 until the termination of his employment on 16 June 2005. He was employed as a Crane Driver/Operator. BlueScope Steel Limited (‘the Insurer’) was the Insurer at all relevant times.
Mr Zancolich claims to have suffered an injury to his back. The injury occurred on 6 December 2003 while he was operating a crane removing a heavy coil from a conveyor, which caused a severe jolt in the crane cabin. Mr Zancolich states that he immediately experienced a sharp pain in his lower back, and pain in his buttocks and left leg.
On 12 December 2003 Mr Zancolich notified BlueScope of the injury.
On 13 December 2003 Mr Zancolich lodged a claim with BlueScope for weekly benefits and non-economic loss compensation, and claims that he suffered a total incapacity for work as a result of the injury that arose out of and in the course of his employment with BlueScope.
Mr Zancolich was absent from work until May 2004 during which time he was in receipt of workers compensation weekly benefits. From May 2004 he returned to work performing selected duties until 28 October 2004 when he suffered a second injury to his back while operating a crane, which resulted in the exacerbation of his condition. On 28 November 2004 Mr Zancolich commenced receipt of weekly payments pursuant to section 38 of the Workers Compensation Act 1987 (‘the 1987 Act’), as BlueScope had refused to provide him with suitable duties. On 16 June 2005 his services were terminated, as he was incapable of performing his duties as a crane driver. BlueScope could not provide him with any other suitable duties.
On 16 August 2005 BlueScope advised Mr Zancolich that it denied liability for the claim under section 9A of the 1987 Act as Dr D Bornstein’s report included the opinion that work was not a substantial contributing factor. Mr Zancolich continued to receive benefits pursuant to section 38 of the 1987 Act until 26 September 2005.
On 20 October 2005 Mr Zancolich lodged an ‘Application to Resolve a Dispute’ (‘Application’) with the Workers Compensation Commission (‘Commission’). The basis of his claim is that he suffered injury to his back as a result of an injury sustained on 6 December 2003, which arose out of and in the course of his employment with BlueScope. The claim is for weekly benefits, medical expenses and non-economic loss compensation.
The matter was listed for an arbitration hearing on 10 February 2006. The Arbitrator’s determination was made ex tempore, on that date.
A ‘Certificate of Determination’ and a ‘Statement of Reasons – Ex Tempore Orders’ (‘Reasons’) were issued by the Arbitrator on 14 February 2006. The Arbitrator also directed that Mr Zancolich “is to continue to be referred to an Approved Medical Specialist (AMS) for assessment of his whole person [sic] impermanent”. Reference to the date of the Arbitrator’s decision from this point, will be to the date of the ‘Certificate of Determination’, that is 14 February 2006.
On 24 February 2006 Mr Zancolich attended an appointment with an AMS, Dr David Maxwell, for assessment of the degree of permanent impairment of the lumbar spine.
On 10 March 2006 BlueScope lodged an ‘Appeal Against Decision of Arbitrator’ (‘Appeal’) in the Commission, against the decision of the Arbitrator, dated 14 February 2006. This was rejected under cover of a letter dated 13 March 2006 from the Registrar, for the following reason:
“The application has been rejected for failure to comply with the following requirements:
1.Failure to attach submissions on threshold issues relating to the granting of leave, including the amount of compensation the subject of the appeal and the percentage of the amount awarded which is the subject of the appeal.”
A further Appeal was lodged by BlueScope in the Commission on 18 March 2006, that included a brief submission on the threshold issues. A copy of the Appeal was served on Mr Zancolich on 5 April 2006.
Mr Zancolich did not lodge a ‘Notice of Opposition to Appeal’ with the Commission.
On 12 April 2006 the Commission scheduled a teleconference before me, on 18 May 2006 to hear and determine the issues in dispute in the appeal.
On 8 May 2006 Mr Zancolich attended an appointment with an AMS, Dr Edward Korbel, for assessment of the degree of permanent impairment in regard to loss of sexual functions.
On 8 May 2006 both parties were provided with the medical assessment certificates, (MAC(s)) of Dr David Maxwell and Dr Edward Korbel.
Upon reading the file including the submissions, evidence and documents that were before me and noting that Mr Zancolich had not provided any submissions in reply to the Appeal, I decided not to proceed with the teleconference on 18 May 2006, and issued directions on 9 May 2006 directing BlueScope to lodge in the Commission and serve upon Mr Zancolich, full and final written submissions in support of its grounds of appeal by 19 May 2006. Mr Zancolich was directed to lodge in the Commission and serve upon BlueScope, full and final written submissions with, and in support of, any reply/notice of opposition that he wished to be taken into account in this Appeal, by 2 June 2006. The telephone conference set down before me on 18 May 2006 was formally cancelled.
On 16 May 2006 BlueScope lodged submissions in support of its Appeal with the Commission, and duly served a copy on Mr Zancolich.
On 2 June 2006 Mr Zancolich lodged a ‘Notice of Opposition to Appeal Against Decision of Arbitrator’ and submissions in support, with the Commission.
For the sake of completeness, I note that on 20 June 2006 a ‘Certificate of Determination – Consent Orders’ in the proceedings at first instance, was issued by an Arbitrator of the Commission in relation to a post-MAC teleconference, which was held on 19 June 2006. The Arbitrator’s orders were as follows:
“1.That the Respondent pay the Applicant as lump-sum compensation under s66 of the Workers Compensation Act 1987 as follows, $7,500 in respect of 6% whole person impairment in relation to the Applicant’s lumbar spine only.
2. That the Respondent pay the Applicant’s costs as agreed or assessed.”
THE DECISION UNDER REVIEW
The ‘Certificate of Determination’, dated 14 February 2006 records the Arbitrator’s orders as follows:
“1.That the Respondent pay the Applicant weekly compensation from 26 September 2005 to 28 November 2005 of $560 per week under section 38 of the Workers Compensation Act 1987.
2.That the Respondent pay the Applicant weekly compensation at the maximum statutory rate under section 38 of the Workers Compensation Act 1987 for a worker with two dependent children from 29 November 2005 to date and continuing in the future.
3.That the Respondent pay the Applicant’s expenses under Section 60 of the Workers Compensation Act 1987 on production of accounts or receipts.
4.That the Respondent pay the Applicant’s costs as agreed or assessed.”
This Appeal is not concerned with orders 3 and 4 of the Arbitrator’s award.
The Arbitrator in her Reasons also made the following direction:
“7. The balance of the Applicant’s claims are [sic] adjourned until the Medical Assessment Certificate is issued”.
This does not form any part of this appeal.
ISSUES IN DISPUTE
The issues in dispute in the appeal are:
· whether the Arbitrator erred in awarding weekly payments under section 38 of the 1987 Act “from 28 November 2005 and continuing”;
· whether the Arbitrator, intending to make a section 40 [of the 1987 Act] award, and erred by failing to properly apply the test as outlined in Mitchell v Central West Health Service (1997) 14 NSWCCR 527 (Mitchell), and
· whether the Arbitrator erred by failing to provide adequate reasons for her decision and in failing to properly evaluate the evidence before her, in relation to the section 40 order (if she purported to make the order under section 40 of the 1987 Act).
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 Appellant, BlueScope, submits that the Appeal can be determined on the papers. The Respondent, Mr Zancolich submits, “Bearing in mind the inaccuracies in the transcript, it is inappropriate to decide this appeal on the papers.” Having read the transcript and the submissions of the parties, I consider that the inaccuracies, which have been drawn to my attention, do not prevent this appeal being determined on the papers. I note that in its initial Appeal, BlueScope’s submissions dated 18 March 2006 include the statement that it “reserve[s] its position to bring further grounds of appeal when a transcript of the proceedings and decision becomes available”. The Commission file reveals that a copy of the transcript was provided to both parties on 30 March 2006. In addition, both parties have now filed detailed written submissions in response to my directions dated 9 May 2006.
Having regard to the submissions, evidence and documents that are before me, I am satisfied that I have sufficient information to proceed on the papers without holding any conference or formal hearing, and that this is the appropriate course in the circumstances.
LEAVE
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 monetary threshold prescribed in section 352(2)(a) and (b) of the 1998 Act is satisfied.
The Appeal was initially lodged on 10 March 2006, within 28 days after the making of the decision of the Arbitrator. However the Appeal was rejected by the Commission on 13 March 2006 because of the failure to include submissions on threshold issues.
BlueScope lodged a further Appeal on 18 March 2006, which was outside the 28 day timeframe for making an appeal, and have sought leave for an extension to appeal. BlueScope makes the following submissions:
·the solicitor with carriage of the Appeal Application was under the incorrect impression that there are were no threshold issues relating to the granting of leave and therefore did not attach submissions; the error was corrected and submissions in relation to the threshold issues have now been attached to the Appeal;
·Mr Zancolich will suffer no prejudice if the Commission grants BlueScope leave to appeal, on the basis that the unsealed Appeal was served by facsimile on Mr Zancolich’s solicitors on 10 March 2006, and
·BlueScope would suffer a substantial injustice if leave is not granted and it loses its right to appeal against the orders it disputes, made by the Arbitrator.
Mr Zancolich has not provided any submissions in reply to BlueScope’s request for an extension of time for leave to appeal.
Rule 77 of the Workers Compensation Commission Rules 2003 (‘the Rules’) provides, in part:
“(1)A party to any proceedings applying for leave to appeal under section 352 of the 1998 Act against a decision of an Arbitrator must lodge the application within 28 days after the making of the decision, or within such extended time for making the appeal as may be ordered under subrule (8).
(2)For the purposes of subrule (1), a decision is made, in respect of a dispute, when the Commission issues a certificate as to the determination of the dispute as required by section 294(1) of the 1998 Act.”
Rule 77 further provides, in part:
“(8)The Commission constituted by a Presidential member may, if a party satisfies the Presidential member, in exceptional circumstances, that to lose the right to seek leave to appeal would work demonstrable and substantial injustice, by order extend the time for making an appeal.
(9)A party who seeks an extension of time as referred to in subrule (8) must:
(a) as soon as practicable give notice to the other parties of the
intention to seek the extension, and
(b) lodge and serve with the application for leave to appeal an application for the extension of time, including full details of the arguments to be put in favour of granting the extension.”
The Rules do not set out the factors to be considered in the exercise of the discretion to extend the time for filing an appeal against the decision of an Arbitrator. Nevertheless, the issue has been the subject of a considerable amount of judicial consideration (Gallo v Dawson (1990) 93 ALR 479 (Gallo); Wykanak v Rockdale City Council & Ors [1999] NSW CA 65; Halliday v High Performance Personnel Pty Ltd (in Liquidation) (formerly SACS Group Pty Ltd) (1993) 113 ALR 637), and the principles established have been applied in a number of Commission appeal proceedings, including Howell v Stringvale Pty Ltd [2004] NSW WCC PD 22; Alexandru v State Rail Authority of NSW [2004] NSW WCC PD 54; Uniting Care NSW.ACT t/as Uniting Care Caroona v Thomas [2004] NSW WCC PD 63, and more recently in Department of Education & Training v Mekhail [2006] NSW WCC PD 1, and Piening-Cochrane v P L and M R Wilde trading as Wilde Earthmoving [2006] NSW WCC PD 22.
In accordance with Rule 77(9)(a) of the Rules, BlueScope’s solicitors gave notice to Mr Zancolich of its intention to seek the extension of time for making an appeal, in the submissions that were served on his solicitors on 5 April 2006.
As noted previously, the Appeal was initially rejected by the Commission for failure to include submissions on certain threshold issues. On 18 March 2006 BlueScope promptly and successfully re-lodged the Appeal, including submissions on the threshold issues as well as addressing the requirements of Rule 77(8) set out above.
I am mindful that Mr Zancolich has offered no objection to the application for extending time in which to appeal. While an extension of time is not routinely granted in the Commission, I have regard to the whole of the circumstances of this matter and in particular, that while the Appeal was initially lodged in time, it was rejected specifically for the failure to address threshold issues. BlueScope attended to the matter and promptly lodged the Appeal again, within a matter of days. Further to this, I agree with BlueScope that there is no indication that injustice or prejudice would be occasioned to Mr Zancolich if time for lodging the Appeal is extended. Having regard to what is before me, I consider that it would give rise to injustice to BlueScope if extension time to lodge the appeal was to be refused, particularly as no injustice to Mr Zancolich is alleged by him.
In the circumstances, I find that there is a proper basis for extending the time in which the appeal might be lodged, in accordance with Rule 77. Accordingly, time for lodging the Appeal is extended to 18 March 2006.
Leave to appeal is granted.
APPEAL TO A PRESIDENTIAL MEMBER
A Presidential member has a specific and limited role in the review of a decision of an Arbitrator. The review is not a rehearing. The Presidential member is not dealing with the matter de novo and is not arriving at fresh decision based on all of the evidence available at a later time (Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194; Builders Licensing Board v Sperway Constructions (Sydney) Pty Ltd (1976) 135 CLR 616).
The powers of a Presidential member to revoke a decision pursuant to section 352(7) of the 1998 Act and to substitute a new decision in its place, or to remit to the same Arbitrator or a different Arbitrator, for determination in accordance with a decision of or directions by, a Presidential member, are exercisable only where it is demonstrated that the decision is affected by some legal, factual or discretionary error (Allesch v Maunz (2002) 203 CLR 172; Mayne Health Group t/as Nepean Private Hospital v Sandford [2002] NSWWCCPD 6). The general principle was highlighted by Gleeson CJ in Swain v Waverley Municipal Council (2005) 79 ALJR 249; 213 ALR 249 (Swain). His Honour said, “The question for an appellate court is whether it was reasonably open to the jury to make an assessment unfavourable to the respondent, not whether the appellate court agrees with it.” Moreover, the position must be such that, but for the error, a different decision may have been made in its place (YG & GG v Minister for Community Services [2002] NSWCA 247).
EVIDENCE AND SUBMISSIONS
BlueScope’s submissions
BlueScope’s submissions on appeal, dated 16 May 2006, may be summarised as follows:
·the transcript contains several errors including, for the majority of the transcript, Mr Shepherd’s (solicitor for Mr Zancolich) name has been substituted for Mr Beauchamp’s (Counsel for BlueScope) and at times the submissions of Mr Boulton (Counsel for BlueScope) and Mr Beauchamp are juxtaposed;
·it is agreed between the parties that the statutory entitlement to payments under section 38 of the 1987 Act, ceased on 28 November 2005, accordingly there is no basis upon which the section 38 award beyond 28 November 2005 can be justified;
·in fairness to Mr Zancolich, the rate between 26 September 2005 and 28 November 2005 should be $563 per week and not $560 per week, as ordered by the Arbitrator;
·the Arbitrator may have intended the award to be made under section 40 of the 1987 Act however nothing in the Arbitrator’s Reasons provides section 40 findings or suggests that section 40 forms the basis of the award - [However, notwithstanding this submission, I note that at page 35, line 15 of the transcript the Arbitrator makes reference to “… the maximum statutory rate from 29/11 on section 40.” There is a further exchange with the Arbitrator recorded at page 40, lines 8 to 15, that “… the rate of compensation under section 40 should continue…”. At the commencement of the arbitral proceedings, at page 4, lines 39 and 40 of the transcript there is an exchange between one of the legal representatives and the Arbitrator, as follows: “Thereafter, it reverts to a section 40 claim. ARBITRATOR: And then section 40 from 29/11/05 to date.” Later, at line 50, of the same page, the Arbitrator states, “because it’s section 40, yes…”.];
·if the Arbitrator had intended to make a section 40 award, she failed to give adequate reasons, failed to evaluate all the evidence before her and failed to apply the Mitchell test, and in particular she gave no consideration to step 4, as outlined in Mitchell;
·however, the parties “agreed the appropriate figure pursuant to s. 40(2)(a) of the 1987 Act”;
·the Arbitrator erred in finding that “the maximum capacity that anybody has put his [Mr Zancolich’s] ability to work is 20 hours per week” as evidenced by:
(i)Dr Bornstein placed no restrictions upon Mr Zancolich’s capacity to work 38 hours per week but did place some constitutionally based restrictions upon his capacity to lift heavy weights or to constantly bend. It is submitted that this report was not considered by the Arbitrator, and
(ii)the video film calls into question the restrictions of total incapacity found by Dr Searle, however the video was not viewed and the Arbitrator made no reference to the investigation reports and still photographs or their impact upon Mr Zancolich’s presentation to the various doctors.
·the Arbitrator failed to take psychological injury into account because it was not pleaded or relied upon, but it is submitted that it was incumbent on her to consider the impact of non-compensable components upon Mr Zancolich’s capacity to work, and
·the paucity of the Arbitrator’s reasoning is so manifest that it is impossible to know which aspects of the evidence the Arbitrator actually considered.
BlueScope seeks to have the matter remitted to a different Arbitrator to determine the matter ‘ab initio’ for proper determination according to law.
Mr Zancolich’s submissions
Mr Zancolich’s submissions on appeal, dated 2 June 2006, may be summarised as follows:
·[agrees that] the transcript in general is inaccurate in recording the name of the legal representatives;
·BlueScope’s position in regard to the video evidence was that it added nothing to the written reports of the investigators or the other photographs taken from the video and included in the written reports [page 31, lines 6 to 8 of the transcript];
·[agrees that] there was no basis upon which the award beyond 28 November 2005 can have been made under section 38 and it was agreed that BlueScope had already paid Mr Zancolich section 38 benefits from 28 November 2004 until 26 September 2005 (approximately 44 weeks);
·it is common ground that any award beyond 28 November 2005 could not be made under section 38 and would revert to a section 40 claim, and that it is also agreed that the maximum award pursuant to section 40 would be for a worker with two dependent children and the appropriate maximum rate was $484.60 [page 4 lines 40-45];
·the Arbitrator’s determination, “[T]hat the respondent pay the Appellant weekly compensation at the maximum statutory rate under section 38 of the …. Act for a worker with 2 dependent children…” merely contains a slip in that “under section 38” should have been “under section 40” to clearly reflect the intention of the Arbitrator and the common understanding of the parties;
·there is no merit in the argument that the award contains an error of law in that regard - it merely contains a slip which can be corrected;
·it was agreed that Mr Zancolich’s probable earnings, but for injury were $1,400 per week. The Arbitrator clearly found that the worker in his injured state had an ability to earn in full-time employment $700 per week, this figure being obtained by the Arbitrator by rejecting the evidence of Dr Searle, accepting the evidence of Dr Bornstein and finding an intermediate figure between Mr Zancolich’s estimate of $600 to $630 per week and BlueScope’s estimated figure of $900 to $1,000 per week;
·the Arbitrator did not fail to consider all the evidence at the arbitration, as BlueScope had invited the Arbitrator not to view the video, and the Arbitrator did take into account the evidence of Dr Bornstein; who provided a medical opinion for BlueScope’
·the Arbitrator did not fail to give adequate reasons and that all the Arbitrator had to do was explain the basis or grounds for finding of fact (Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 (Soulemezis); Mayne Health Group v Sandford (2002) NSW WCC PD 6 (Sandford); Liverpool City Council v Trovato (2004) NSW WCC PD 15 (Trovato) and Snow Confectionary Pty Ltd v Askin [2004] NSWWCC PD 56) (Askin);
·the Arbitrator did not fail to apply the test in section 40 of the 1987 Act. The appropriate figure for section 40(2)(a) was the agreed figure of $1,400 per week; the figure found under section 40(2)(b) was $700 per week therefore the inferential finding of the reduction in the worker’s weekly earnings was $700 per week. It is submitted that BlueScopes’s allegation that there was no step 4, (assessing the relation of the weekly payment to the weekly reduction in accordance with her discretion) cannot be inferred as there were no factors warranting the exercise of a discretion pursuant to step 4. This evidence was as follows:
othere was ample evidence of Mr Zancolich’s attempts to seek work;
othere was no cross-examination of Mr Zancolich;
othere were no findings adverse to Mr Zancolich’s credit;
othere was no evidence of any job offered but rejected by Mr Zancolich, and
othere was no evidence that Mr Zancolich placed restrictions upon himself, and all the doctors, including Dr Bornstein, placed restrictions on Mr Zancolich.
·any factors were therefore matters for inference from investigators’ reports, which it is submitted, did not logically lead to the drawing of those inferences;
·the factors that were relevant to Mr Zancolich’s ability to earn (step 2) could not be used to base a further reduction under step 4 (Mitchell at pp 534F-535B). Furthermore, factors relevant to the exercise of discretion under step 4 in the Mitchell process were not clearly present in this case (eg maternity leave; imprisonment; absences overseas, or retirement). The only relevant factor remotely applicable on the facts would have been a deliberate decision by Mr Zancolich to take himself out of the labour market for some reason unconnected with his work related incapacity, however there is no “compelling evidence of such”;
·the fact that the Arbitrator did not refer to the exercise of discretion may constitute a reason for review of the determination but would not be such as to persuade the Presidential member that any error occurred in that regard in the section 40 process. No significant discretionary grounds for reduction of the difference of $700 are made out and the determination should therefore be for $700 per week “but subject to statute”;
·as to BlueScope’s submission that the Arbitrator failed to take psychological injury into account, it is submitted that this was not pleaded, but that there was ample evidence that Mr Zancolich suffered psychological conditions as a result of his physical injuries;
·upon review Mr Zancolich seeks that the determination should be set aside and the following new determination be made:
“1.Order BlueScope to pay Mr Zancolich pursuant to section 38 in the sum of $563.00 per week from 26 September 2005 to 28 November 2005.
2.Order BlueScope to pay Mr Zancolich pursuant to section 40 from 28 November 2005 to date and continuing weekly compensation at the statutory rate for a worker with 2 children.
3. Order BlueScope to pay Mr Zancolich’s section 60 expenses.
4.Order BlueScope to pay Mr Zancolich’s costs before the Arbitrator and of the Appeal.”
·The amendment of “$560” to “$563” in the first order is simply to correct a clear error “by way of slip”.
DECISION
It is agreed between the parties that the statutory entitlement to payments pursuant to section 38 of the 1987 Act ceased on 28 November 2005 and accordingly, there is no legal basis upon which the award made by the Arbitrator under that section for payments beyond that date, if that is what she intended, could have been made. I concur in that proposition and find accordingly.
Mr Zancolich concedes that BlueScope had already paid him benefits pursuant to section 38 of the 1987 Act, from 28 November 2004 until 26 September 2005.
BlueScope concedes that the rate of payment between 26 September 2005 and 28 November 2005, pursuant to section 38 of the 1987 Act, should be $563 per week and not $560 per week, as erroneously ordered by the Arbitrator. It is clear from a reading of the transcript that the Arbitrator accepted that the correct rate is $563 per week and that is what she intended. That is agreed between the parties and I concur. I find, accordingly. This error is not necessarily fatal to the Arbitrator’s substantive decision.
It is common ground between the parties that a valid award pursuant to section 40 of the 1987 Act would be for a worker with two dependent children and if such an order was to be made, the appropriate maximum weekly rate would be $484.60. However, whether or not the Arbitrator did in fact make a valid award under section 40 remains in dispute.
The order made by the Arbitrator as to the payment of medical expenses under section 60 of the 1987 Act, and the order made as to payment of the costs of proceedings before the Arbitrator, are not in dispute in this appeal.
The principal issues in dispute in this appeal are: whether the Arbitrator purported to make an award for continuing weekly payments under section 38 of the 1987 Act “from 28 November 2005 and continuing”, or whether, intending to make an award pursuant to section 40 of that Act, she failed to properly apply the test in Mitchell.
Associated with the second of those issues, is whether the Arbitrator provided adequate reasons for her decision and whether she properly evaluated the evidence before her in the determination of the dispute, in relation to section 40 of the 1987 Act.
Did the Arbitrator purport to make a “continuing” award under section 38 or under section 40 of the 1987 Act?
There is adequate reference in the transcript by the Arbitrator to indicate that she was aware of the necessity to apply section 40 of the 1987 Act, and that she was well aware of the difference between that section and section 38 of the Act. For example, at page 4, lines 39 and 40 of the transcript, there is an exchange between one of the legal representatives and the Arbitrator, as follows, “Thereafter, it reverts to a section 40 claim. ARBITRATOR: And then section 40 from 29/11/05 to date.” On the same page at line 50 of the transcript the Arbitrator states, “Because it’s section 40, yes…”. At page 35, line 15 of the transcript the Arbitrator makes reference to, “the maximum statutory rate from 29/11 on section 40.” There is a further exchange with the Arbitrator recorded at page 40, lines 8 to 15 that, “…the rate of compensation under section 40 should continue…”.
I am satisfied that the Arbitrator intended to make the order, as set out in the second order of the award, under section 40, and not section 38 as she has mistakenly recorded in the ‘Certificate of Determination’ and her “Statement of Reasons – Extempore Orders”. Clearly, this is an error on the part of the Arbitrator who has failed to record accurately the order that she intended to make.
While the ground of appeal strictly fails, I find that the Arbitrator, while purporting to make order “2” in her determination of 14 February 2006 under section 40 of the 1987 Act, she erroneously recorded that the order was made under section 38 of the Act. As with her previous error noted at paragraph 48 above, this error can also be cured and, of itself, is not fatal to her substantive decision.
In proceeding to deal with the issue of the proper application or otherwise, of the ‘Mitchell’ steps, it is necessary to determine whether the Arbitrator provided adequate reasons for her decision and whether she properly evaluated the evidence before her.
Did the Arbitrator err by failing to give adequate reasons for her decision; by failing to properly evaluate the evidence before her, and by failing to properly apply the ‘Mitchell’ steps?
(a)The Mitchell steps
The Arbitrator’s ex tempore decision is found at pages 33 to 36 of the transcript. BlueScope submits:
“The certificate of determination annexes a Statement of reasons – Extempore
Orders.
Unfortunately nothing in this document provides s.40 findings or suggests
section 40 forms the basis of the award.”
And further:
“The transcript of reasons for decision purports to commence at T33.22, however, the Arbitrator then became involved in a discussion with Counsel and no findings emerge other than what is set out in T34.30 to T34.55.”
I note that some findings made by the Arbitrator, other than those that relate to the issues under consideration in this appeal, are recorded in the transcript outside of the transcript page and paragraph parameters suggested by BlueScope. However, such findings are not strictly in issue in this appeal.
In her ‘Statement of Reasons – Extempore Orders’, dated 14 February 2006, the Arbitrator states, inter alia:
“To ensure the parties received a timely determination of their dispute the reasons for the orders set out below were given orally at the arbitration hearing. I found that on 6 December 2003 the Applicant, Paul Zancolich, received an injury to his lumbar spine arising out of or in the course of his employment with BlueScope Steel (AIS) Pty Limited. His employment was a substantial contributing factor to that injury.
A sound recording of the reasons given is available to the parties.
The parties having agreed that the Applicant’s two children are totally dependent on him, I made the following orders: …”.
The Arbitrator then went on to set out the orders that are formally recorded in the ‘Certificate of Determination’ of the same date. As BlueScope correctly submits, there are no findings or reasons recorded in the ‘Statement of Reasons – Extempore Orders’ that refer to an order made under section 40 of the 1987 Act. However, as I have already found, I am satisfied that the Arbitrator intended to make order 2 of her award pursuant to that section, but erroneously recorded section 38 instead. She has incorporated the error that she made in the arbitral proceedings, as recorded in the transcript, into the documents, ‘Certificate of Determination’ and ‘Statement of Reasons – Extempore Orders’. However, there is nothing of relevance in the document, ‘Statement of Reasons – Extempore Orders’, that adds to the Arbitrator’s findings and decision, over and above what is recorded in the transcript, that is of material assistance in this appeal.
The Court of Appeal in Mitchell, laid down five steps for determination of entitlement to weekly payments of compensation during partial incapacity. It said at 529:
“… the Court is required:
1.to determine the weekly amount the worker would probably have been earning if uninjured (section 40(2)(a)) …
2.to determine ‘the average weekly amount that the worker is earning or would be able to earn in some suitable employment from time to time after the injury’ (section 40(2)(b)). Section 40(3) provides that the determination of this amount is subject to the following:
‘(a)the determination is to be based on the worker’s ability to earn in the general labour market reasonably accessible to the worker;
(b)the determination is to be made having regard to suitable employment for the worker within the meaning of section 43A’ …
3.to subtract the figure derived from 2 from the figure derived from 1 (section 40(2)).
4.to decide whether and to what extent the reduction calculated as above bears ‘such relation to the amount of that reduction as may appear proper in the circumstances of the case (section 40(1)) …
5.To make an award in the amount arrived at in Step 4.”
Nowhere in the Arbitrator’s findings or reasons is there any mention of the Mitchell steps. However, it is the correct application of the section in accordance with the steps outlined in Mitchell that is critical, and not necessarily a formal reference to, or a recital of, those steps.
With regard to step 1, the parties have agreed that Mr Zancolich’s comparable or probable earnings had he remained employed by BlueScope or engaged in similar employment, would be $1400 per week. That is acknowledged by the Arbitrator, according to the transcript at page 34, line 50.
I am unable to draw from the transcript at page 34, lines 43-49, with any degree of confidence, the conclusions drawn by Mr Zancolich in his submissions, in relation to steps 2 and 3. The Arbitrator’s conclusion is noted, but she does not state how or why she arrived at it. She makes insufficient findings and gives inadequate reasons in this regard. Mr Zancolich submits that the “Arbitrator clearly found an intermediate figure being $700.00 per week which is expressed (perhaps not using precisely appropriate language) at T 34, 48-49.” However, the Arbitrator makes no reference to the evidence or factors on which her conclusions in steps 2 and 3 are based, notwithstanding that there is evidence before her upon which, even as Mr Zancolich suggests, she could have articulated findings.
In relation to step 4, Mr Zancolich submits that an inference can be drawn from the Arbitrator’s award, “that there were no factors warranting the exercise of a discretion pursuant to step 4.” The Arbitrator may have had that in mind, but in the absence of any indication by her, that is not clear. BlueScope submits that no consideration of step 4 has been made at all, and thereby invites that inference or conclusion to be drawn. In my view the Arbitrator could have and should have, said something at least about step 4, but she has remained silent. Regardless of the conflicting inferences that may be drawn, in light of the presence of relevant evidence before her, the Arbitrator was obliged to make, and could have made, findings based on her view of the evidence, in support of her conclusions. I can find no reason why she would fail to do so, in this matter. Certain considerations to be taken into account are put forward in paragraph 21 of Mr Zancolich’s submissions on appeal, but it was a matter for the Arbitrator to turn her attention to and deal with those and any other relevant considerations. It is not appropriate to merely assume or infer that she did so. Mr Zancolich submits that the Arbitrator had “a statutory duty to apply logic”. I agree, but it must be evident that she has done so, in fairness to both of the parties to the dispute before her.
(b) Reasons and Evidence
I agree with BlueScope that the proper application of the Mitchell steps as outlined by the Court of Appeal, is not sufficiently articulated in the findings and reasons of the Arbitrator. Notwithstanding submissions to the contrary by Mr Zancolich, there is little or nothing in the transcript or anywhere else for that matter, that indicates that the factors included in those submissions and the issues that he himself now puts forward in the appeal, were ever considered properly or perhaps at all, by the Arbitrator, in the proceedings before her. The proceedings on appeal before me are not in the nature of a determination de novo, but constitute a review of the decision of the Arbitrator to ascertain whether or not she fell into error in arriving at her decision. It is not for me to routinely determine the matter afresh, or to speculate about what the Arbitrator might have had in mind or meant to say. It is the responsibility of the Arbitrator to make findings based on the evidence and the weight of the evidence, and to provide a properly and adequately reasoned decision.
The inadequate exposition of the application of the Mitchell steps is a manifestation of a wider problem in the Arbitrator’s decision. BlueScope submits, “[T]he paucity of reasoning is so manifest as to make it impossible to know which aspects of the evidence the Arbitrator actually considered.” It is difficult to disagree.
Arbitrators have a statutory duty to give adequate reasons for decisions. Section 294(2) of the 1998 Act provides:
“(2)A brief statement is to be attached to the certificate [of determination] setting out the Commission’s reasons for the determination.”
It is sufficient for the purposes of this provision, in the case of an ex tempore decision, for an Arbitrator to refer specifically, in the “brief statement” attached to the ‘Certificate of Determination’, to reasons set out in a transcript of the relevant proceedings.
Rule 73 of the Rules, provides:
“73 Certificates of determination
(1)A statement of the Commission’s reasons referred to in section 294(2) of the 1998 Act is to include:
(a)the findings on material questions of fact, referring to the evidence or other material on which those findings were based, and
(b)the Commission’s understanding of the applicable law, and
(c)the reasoning processes that lead the Commission to the conclusions it made.
(2)Without limiting subrule (1), the reasons set out in a statement referred to in subrule (1) are to be stated sufficiently (in the opinion of the Commission) to make the parties aware of the Commission’s view of the case made by each of them.”
A reading of the Arbitrator’s reasons for decision in the transcript of the arbitral proceedings and in the document ‘Statement of Reasons – Extempore Orders’, reveals that the Arbitrator has failed to comply with her statutory obligation. The requirements of rule 73 have not been met. The reasons and the elements required by Rule 73(1) are either not there or are inadequate, and the test in Rule 73(2) cannot be satisfied, on any view. Reasons for decision need not be lengthy or elaborate, but must be adequate to the point that the essential ground or grounds upon which the decision rests, are stated (Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 (Soulemezis)). In that case, Mahoney JA stated at 273:
“Where, in the decision of an ordinary dispute, reasons are necessary, they are necessary because of the expectation that, being a judicial decision, a sufficient explanation will be given of why the order was made.”
In my view, the Arbitrator has failed to meet her statutory obligation, and further, she has not met the test of adequacy, in that she has not articulated the essential bases upon which her findings and decision rest (Soulemezis). The reasons are not only inadequate, but the inadequacy is such that the Arbitrator has failed to exercise her duty to lawfully determine the dispute before her (M & S Shipman Pty Limited v Matters [2003] NSWWCCPD19; YG & GG v Minister for Community Services [2002] NSWCA 247); Absolon v NSW TAFE [1999] NSWCA 311). Not only does this situation pose difficulties for the parties, it necessarily inhibits a proper review on appeal, of the Arbitrator’s decision.
.
I find that the Arbitrator has failed to provide adequate reasons for decision in this matter and has thereby made an error of law.
In order to meet the obligation to provide adequate reasons for decision, it is fundamental that an Arbitrator must undertake at least a basic analysis and weighing of the relevant factors and evidence, and indicate the particular evidence that is preferred and upon which reliance is placed, and why. The relevant law must then be applied in light of the material facts. Not only is all of this essential in order to discharge the legal obligation referred to above, but it is also critical to the rational, intellectual process of making findings and arriving at soundly based decisions. Decisions must not only be made; they must have a logical foundation and be substantiated by adequate reasons. The basic elements of a proper decision made by an Arbitrator must be present, regardless of whether a decision is delivered ex tempore or reduced to written form.
There are a number of residual issues that are raised in this appeal. However, as I propose to remit the matter to the Arbitrator to determine afresh, I will leave those issues for her to consider. It is open to the Arbitrator to decide how she wishes to deal with the matter afresh, but she should take into account the submissions made by the parties in this appeal, and if she considers it to be necessary or desirable, seek further submissions from them. BlueScope has requested that the matter be remitted to another Arbitrator, but as both parties have observed, the evidence is before the Arbitrator concerned and in my view, it ought to be possible for her to make a properly reasoned decision, based upon that evidence, in addition to anything else that might be put before her in the process of her determination of the matter, afresh.
In determining the matter afresh, the Arbitrator should correct in her decision as appropriate, her erroneous references to section 38 and replace them with references to section 40 of the 1987 Act. Furthermore, the Arbitrator should amend the section 38 [of the 1987 Act] order in her award, from the incorrect amount of $560 to the correct amount of $563, per week.
As stated above, orders 3 and 4 of the award made by the Arbitrator on 14 February 2006 are not issues in dispute in this appeal. In the circumstances, I am not required to either confirm or revoke them.
DECISION
The decision of the Arbitrator of 14 February 2006, in relation to orders 1 and 2 of her award, is revoked, and the matter is remitted to the Arbitrator concerned, for determination afresh in accordance with these reasons. The Arbitrator is directed to prepare and provide a written Statement of Reasons for Decision.
COSTS
No order is made as to the costs of this appeal.
Gary Byron
Deputy President
13 July 2006
I CERTIFY THAT THIS IS A TRUE AND ACCURATE RECORD OF THE REASONS FOR DECISION OF GARY BYRON, DEPUTY PRESIDENT OF THE WORKERS COMPENSATION COMMISSION.
ASSOCIATE
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